Digital transformation is, or at least should be, among the top priorities for companies that want to survive in the fourth industrial revolution. A company that lags in digital innovation is at risk of disappearing as new, highly digitized competitors move in.
But Austria-based jewelry giant Swarovski, a company that dates back to 1895 and with presence in 170 countries, knows how to thrive in this environment. Despite economic sluggishness in parts of Latin America, the company increased its stores in the region from 600 in 2013, to 800 last year. And the future looks even brighter.
We spoke with the company’s Head of Finance Mauro Echeverri to learn more about digital transformation in the 123-year-old company.
Q: What does evolution in the business world mean to you?
A: I think of it in terms of Darwinism. Only companies that can adapt to change and the environment can survive. For me, a firsthand example of this is software firm NCR Corporation. They were the leaders in what is now an almost extinct cash register machine market, but after they went through a transformation process, they are now the world leaders in the ATM industry.
Digital transformation can be intimidating. It brings to mind high costs and significant changes. But, at the same time, it’s important because it can be a tool that provides a better understanding of the internal aspects of a company and its interaction with clients. This makes it easier to make decisions.
Q: How can you make the leadership of a company more open to digital transformation?
A: The process begins with changing the way the top executives think. The role of the chief financial officer in this process is key. CFOs have to be simultaneously accountants, engineers, and psychologists. We are responsible for aligning the rest of the company’s top executives to this process of change.
Q: What are the priorities when it comes to transformation?
A: First and foremost, the company must define what it is they want to transform; this is what will determine whether or not they meet their goals. Many companies expect to save money, but many fail to set a clear goal for digital transformation, get the right people involved, or they even fail in establishing how those goals align with their overall strategy and corporate culture. At least 60 percent of digital transformation initiatives will fail due to poor planning and goal setting.
Q: What is your outlook for Latin America?
A: I’m quite optimistic about our expansion in the region in the short-term. We are seeing very good momentum in Argentina and we see a promising market there. Argentina’s political change opened up the doors to international trade, and we believe consumption will improve this year.
Brazil is another interesting country. As its economy recovers, consumption is growing. We’re focusing on services and we expect a very positive 2018 due to a recovery in confidence.
This interview was conducted by Latin Trade for Council of the Americas.