Café Encuentro - Interview with Fabio Farchetto SKRB Córdoba Argentina
Currently, local companies and the technology industry face a critical need: accelerated digital transformation. In an environment where global competition is intensifying and market demands are evolving rapidly, companies must adapt to remain relevant. The key lies not only in the implementation of advanced technology but also in aligning their processes, talent, and organizational culture. This proves especially challenging for many companies that, although they have taken their first steps towards digitization, still find themselves lagging in the strategic use of data and artificial intelligence (AI).
The ability to integrate AI into operations not only enhances efficiency but also opens up new business opportunities. Companies in diverse sectors such as agro-industry have demonstrated that innovation is not merely a matter of money but of strategic vision, appropriate talent, and organizational culture. It is in this context that companies from other countries in the region began several years ago to incorporate advisors into their boards to help define the strategic path to win or at least stay in the competitive race. Local companies, and especially medium to large-sized companies in Córdoba, have not even consolidated boards that assist the CEO or General Manager with strategic direction, and even less so, they have not incorporated key roles that facilitate this transition. However, what we do find are technology companies that are prepared and offer a service model and resources that can introduce vision and talent to their businesses.
SKRB has developed an accelerated digital transformation model that integrates within a broader strategic framework. This model is based on a methodology called SPEED AI, which refers to the speed and accuracy necessary in this process. Strategy, product, engineering, and development are essential components for participating in a digital transformation process that incorporates artificial intelligence (AI) at its core, ensuring successful implementation.
The process begins with a product called SCAN AI, designed for organizational boards. Through an interdisciplinary team, an accurate diagnosis is produced that allows for determining the maturity level in data usage and establishes a logical path for implementing improvements.
In many cases, companies have been executing proof of concepts (P.O.C.) or pilots, but in limited usage areas. These initiatives, focused on small gains, often do not generate a significant impact on the company's EBITDA and tend to be driven by middle management without a vision aligned with the board, which prevents the allocation of necessary resources or adopting the appropriate format. As a result, these companies fall short in their efforts, as P.O.C.s fail to address the challenges faced by those companies that are falling behind. These companies, lacking sufficient time to traverse the path of leaders, risk being sidelined in the market. They cease to be competitive in using information to generate additional value for their products. For instance, an agricultural company that, through partnerships with startups, has managed to create new products now sells agricultural machines with all associated data. An example is John Deere, which, in collaboration with others, has developed and marketed harvesters and tractors with a data package, transforming its business model to sell data instead of just machines.
These types of developments cannot be resolved solely with money; factors such as time, processes, culture, and talent are equally critical. Therefore, no digital strategy with AI is viable without a deep organizational restructuring, approached organically, starting with management. Our model is based on others where board alignment is key to effecting change. One of our favorites is the EOS model by Gino Wickman, which addresses common problems faced by companies and the six key components of an advancing organization where it is strong in them: Vision, People, Data, Issues, Processes, and Traction. From Europe, the concept of advisory with external directors or “advisory board seats” has been introduced, which helps boards understand the transformation. In Argentina, this approach is not common, and boards must begin to apply it, not only at the executive level but also at the board level.
Previously, companies focused on the customer; today they must focus on software, which is the core of organizational processes. That’s why our consulting also advises on the CXO positions that each board should have, such as a Chief Intelligence Officer, a Chief Strategy Officer, or a Chief Digital Transformation Officer, as the basis for an organized board.
Another important aspect is having tools that help align the vision. Regarding talent, last year the demand for data-related profiles, such as Chief Data Officers and Chief Intelligence Officers, doubled, although the market still does not have enough resources to meet this demand. Business units demand these profiles, but factors such as limited budgets and a narrow vision prevent the search for ideal talent. Therefore, technology companies that possess talent, processes, knowledge, and technology can provide this talent in a “staff augmentation” format (or outsourced talent), offering higher quality and efficiency services and deliverables. By having a knowledge and resource forum, these companies can provide superior value compared to internal resources, as long as they are well guided towards results and the quality of deliverables.
In summary, companies like SKRB implement the plan, provide the talent and technology, and based on data resources, deliver sustained value to your organization.
In relation to budgets, it can be stated that the implementation of AI in at least one business function has varied annually between 33% and 65% in large companies. This represents a 100% increase in AI applications in these companies. An interesting fact is that of all implementations, only 15% are having a significant impact. This is because, in most cases, they were implemented through P.O.C.s led by middle management. That’s why our organization encourages such middle managers to present business cases to the board for model validation.
Furthermore, companies today must manage an increasing complexity related to data. We have a client with 70 systems operating simultaneously, making it crucial to identify what truly contributes to the company and what does not, as well as to assess cybersecurity and the data governance model. Building connections between all these systems and a repository (data lake), and from there, creating an open data-based organization, with a governance model, cybersecurity, and informed decision-making, will create the transformational change that John Deere achieved with its model.
In Córdoba, I feel privileged to have an ecosystem that includes government, academia, forums, and companies, all focused on digital transformation in various industrial verticals. An AI engineering school is already being developed, which will help local technology companies be highly competitive at the regional and global levels.
It is important to clarify that in many companies, talking about AI translates to whether they use ChatGPT or not, but the true harnessing of data goes far beyond a single tool, which in this case is mainly focused on text generation. Large language models (LLMs) are algorithmic neural networks designed to develop texts, but this brings us back to the strategic vision of the board. When you focus on the tool, you lose sight of strategy, product, experience, and development, which are more important and urgent. The true goals should be: to improve the customer experience and increase the company's EBITDA. Depending on what one wishes to achieve, it is necessary to activate different layers.
The importance for a local company, based on the previous experience of having created, scaled, and sold a startup, lies in being agile, offering value-added services, and also in creating products. In our company, we have created products from projects that can be sold completely (spin-offs), allowing the company to continue providing its services while capitalizing to transform repeatedly.
Argentina seeks to become a hub for artificial intelligence, and we are on the path to generating a replicable, scalable, and global model. Accompanied by economic change and foreign investment, we are prepared to compete worldwide. However, compared to other Argentine companies, traditional ones do not have the practice of innovation as embedded. Therefore, every company should have an internal startup to keep pace with the changes ahead and to generate the necessary digital transformation.
In a world where digital transformation is a key factor for competitiveness, local companies must ask themselves if they are truly prepared to face this challenge. The implementation of artificial intelligence and the strategic use of data not only require technological changes but also a profound organizational restructuring. Are the boards aligned with this vision for the future? Do they have the advisors and appropriate profiles to steer the company towards a sustainable and successful digital transformation? Is your company equipped with a Chief Intelligence Officer, a Chief Strategy Officer, or a Chief Digital Transformation Officer? Is it time to incorporate new perspectives that drive innovation from the core of the organization? These questions invite deep reflection on the future of each company in an environment where change is the only constant.
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