Group Project
Networked Economy
Today, Brazil is one of the most famous IT outsourcing target country. We can explain it in two perspectives:
- Brazil has high demand for IT workforce
The reason is many International companies set subsidiaries, both in traditional manufacture and IT fields, in Brazil . According to report provided by Brazil IT, there are at least six fields attracting international companies to conduct IT outsourcing.
-Software Industry
• Brazil has a lot of experience in development of new Solution in the field of software.
-IT Service
• Brazil offers off-shore IT service
-Pricing
• Comparing to the US , Brazil has relatively lower labor cost, and also is decreasing its IT infrastructure price
-Time Zone
• The same time zone as the US , the biggest IT outsourcing buyer.
-Labor Force
• Brazil has high educated and experienced workforce.
-R&D Investment
• Brazilian government invests in variety of industry. Then, international companies could get support of advanced technology easily in Brazil .
Figure 1 National expenditures on research and development (R&D), by researcher, in available recent years, selected countries (source: Brazil IT)
There are plentiful supplies of IT workforce
The high demand for IT workforce indirectly brings high-educated and experienced labors.For example, we visited the Pontificia Universidade Catolica do Rio de Janeiro , PUC-Rio, the first private university in Brazil , which is committed to high-quality teaching, applied research and scientific development, in order to constantly contribute for the education of critical and conscious citizens. We visited this school and were very impressed with the students from there. Also, they informed us that it is very normal for students to start their career when they are sophomores. That means that employers can easily have access to obtain experienced workforces in Brazil .
In conclusion, the IT demand of international companies drives Brazil 's IT market. This is also the motivation attracting more workforces jumping into IT labor market. Thus, we can say that the level of ICT employment opportunity is high, maybe reaching stage 4.
The largest Internet market in Latin America
Brazil is the largest Internet market in Latin America with the most advanced Internet and e-commerce industries. According to the Brazilian Chamber of Electronic Commerce (Camara-e.net), e-commerce reached revenues of US $20 billion in 2005.
Otherwise, according to the report from US commercial service, Customer Relationship Management in Brazil (2006),
“Online shopping is one of the key drivers for CRM demand. Market experts estimate that by 2005 the Latin American market will total more than 200 million Internet users “.
CRM is the key
Also, CRM solution is top priority IT investments across Latin America, and Brazil owns 31% of Latin America 's CRM Application Market. Thus, we can understand that B 2C in Brazil is normally acceptable.
Access the Internet
The only problem we are concerning is the utility of the Internet in Brazil is not as conventional as it in the US . However, people can access the Internet via the following way:
• Internet Cafe. It helps Brazilian to use the Internet easily, especially because its fee is relative low.
• Chain bookstore. Some of these kinds of stores provide PC to customers even though the wireless is not provided.
• Fast food restaurant, such as McDonald's. Some McDonald's provide Internet service.
Through the reading material, Readiness for the Networked World, the criteria to be on stage four of B 2C is that many business in the community have incorporate the world wide web into their sales, marketing, and customer service systems. Right now, CRM is the key to across Brazilian market, so we can say that they have reached stage four.
Enterprise-level IT market is growing quickly now
According to the speaking given by EDS in Brazil , enterprise-level IT market is growing quickly now. However, EDS is even NO. 2 in the relevant market, but it own 5% of the potential market. That is, there is a lot of space to improve the IT environment in the business area and the concept of the IT is acceptable in Brazil .
Information Technology is acceptable
Using information technology to handle daily business process to reduce operation cost is normal and acceptable. On the other hand, through the IDC report about manufacturing companies in Brazil ( Brazil IT Opportunity : Manufacturing, 2004) , we can understand that using information technology to handle daily business process to reduce operation cost is normal and acceptable in Brazilian industries.
In that report, when employers want to reduce cost, the top five concerns are:
• Infrastructure standardization (14%)
• Using open source software (13%)
• Using system management software (12.5%), such as ERP and CRM software.
• Using VoIP (9.5%)
• Layoff (4.5%)
Thus, we can understand that, in Brazil , using IT is conventional concept.
Price is the Key
Even IT is acceptable, but IT infrastructure is relative expensive, which causes that Small-and-Median sized company not use IT.
Market Situation
Today's Brazilian IT market can be mainly divided into to segments.
• Large sized Company market:
This market mainly occupied by international IT company like EDS and Accenture. One of features of this market is that transaction between companies is requested.
• Small-and-Median Sized Company market:
Small local IT companies are the main players. Most of them provide JAVA-based or open source software. The main requirement for the buyers is to management inner business process, but outer transaction.
Actually, during this trip, we also found that there are a lot of small IT companies emerging in Brazil . Many of them use free software like open source or JAVA. For example, Woodrow/Neki technology in Rio is a JAVA-based information technology company. In their opinion, the requirement of IT for small and medium sized companies is getting higher and higher in today's Brazilian market. Thus, although many companies, especially in small and medium sized, still use fax, telephone, or email to communicate with each other, the stage of B2B e-commerce could be probably shifted from stage two to stage three.
Many government websites are under construct
According the report from IDC, there is over 50% of IT governance usage of the Brazilian government institutes is still under development, and around 20% of that does not use (IT Brazil IT Opportunity: Government, 2004) .
After exploring their website, http://www.brasil.gov.br , we also found out that they provide important information a lot, and also, this website provides some useful links. However, most pages are static, which means they do not provide interactive functions very well. On the other hand, we found out that the main way to contact the government is to use email or phone.
Thus, we can say that they just reach stage 2 or 3.