Latin America Can Lead the Way in SMAC Evolution But Challenges Remain

The importance of solutions that offer integration of Social, Mobile, Analytics and Cloud – often abbreviated to the acronym SMAC – is increasingly difficult to ignore. Although the …

Patrick Millar, Co-Founder and CMO at Formatic.Ly, believes in Latin America's potential to innovate in SMAC.

The importance of solutions that offer integration of Social, Mobile, Analytics and Cloud – often abbreviated to the acronym SMAC – is increasingly difficult to ignore. Although the term was coined a few years ago, it is rapidly becoming the key buzz-term in IT, whether on-, off- or nearshore. As SMAC continues to evolve and client needs change, Latin American companies are embracing the change and tackling aspects of this type of integration.

Katharine Rudd, Managing Director of Transformation Services at Alsbridge explained that SMAC is a pretty broad spectrum of services and technologies that is moving quite quickly with regards to evolution.

Alsbridge's Katharine Rudd, Managing Director of Transformation Services, said Latin American companies need to consider SMAC in the context of customer interaction and analytics.
Alsbridge’s Katharine Rudd said Latin American companies need to consider SMAC in the context of customer interaction and analytics.

Patrick Millar, Co-Founder and CMO at Formatic.Ly, emphasized that “Everybody is social, everybody is mobile; so from the perspective of the customer (all of us), the need for companies to have good social media engagement and good mobile technology is critical. This is a given; Darwinism will thin out the ranks of companies that don’t have excellent social and mobile strategies.”

He added that analytics and cloud are critical for providers of mobile and social. “Consumers don’t care about how their social and mobile solutions are provided, as long as they are easy to use, reliable and secure,” Millar said. “Providers of the social and mobile services need to stay on top of the rapidly changing analytics and cloud ecosystem so they can deliver best in class services.”

Minacs’ VP of Solutions Architecture & IT Governance Neri Basque added that, for companies trying to stay on top, integration of SMAC is of paramount importance. “Expectations are such that consumers will only prove loyal to the solution of the moment, the innovative and customer-centric solution,” he said. “The next generation has very limited loyalty and patience, thus it’s important to be ready and flexible.” The message from all seems clear: ignore SMAC at your peril.

The SMAC Evolution

While the current emphasis on SMAC is gaining attention, SMAC itself is evolving. Millar noted that the trend continues to shift radically toward more mobile and more social. He cited the Kleiner Perkins annual state of the internet slide deck which shows massive shifts in usage that are happening on very short timelines.

Millar added that the buyer of software development services for social and mobile is switching – arguably has switched – from the technology group to the marketing team. “The CMO will be outspending the CIO in these areas,” he said.

In addition, he noted, cycle times are shorter than ever. “Formal releases every few months (or years) are going the way of the dinosaurs. Apps and cloud-based platforms are being continuously updated, which creates the need for excellent DevOps skillsets,” Millar said.

Millar emphasized the increasingly greater demand for analytics to measure how well the social or mobile solutions are working. “Gone are the days of assuming that an app will help polish the company’s brand. That app now needs to have demonstrable ROI. Analytics are not just ‘chart porn’; they are critical to understanding customer behavior and shifting trends at a detailed level,” he said.

According to Millar, the level of analytics now being delivered is resulting in new classes of employees being needed. “The much-hyped Data Scientist is a real need to go through the statistics being generated and make sense of them,” he said.

Minacs’ VP of Solutions Architecture & IT Governance Neri Basque said SMAC will have great impact on user experience and the Internet of Things.
Minacs’ VP of Solutions Architecture & IT Governance Neri Basque said SMAC will have great impact on user experience and the Internet of Things.

Basque highlighted two areas where he sees the most impact with regards to SMAC: User Experience and the Internet of Things (IoT). “With the evolution of SMAC, the next generation of enterprise applications is beginning to focus on usability, end-user experience, and easy portability,” he said. “These measures will ensure the architecture is integrated, managed, and personalized providing a contextually relevant experience to end users supporting their new work style.”

With the expectation that there will be 20 billion connected IoT devices by 2020, Basque said that IT departments will need to provide an information infrastructure layer capable of processing vast amounts of data streaming into the enterprise in real-time, as well as learning from this information and making real-time intelligent decisions.

Millar added that security is front and center for consumers of social and mobile. “While common sense, it should be stressed that social and mobile applications are not an area to take short-cuts. The power of the infrastructure can work for you, but also massively against you if your security is breached,” he cautioned. “It is quite possible that a failure of your mobile and social stack due to a security breach could also mean a failure of your company due to massive loss of consumer trust.”

He noted the need for significant advances in testing methodologies and services. “Due to the scale that consumer apps and cloud solutions can experience, they need to be tested in very different ways to understand how the systems will handle potentially extreme loads,” Millar said.

Latin America Makes Its Mark

With shifting and evolving focus areas, it is easy to assume that the U.S is keeping in step while other parts of the world – Latin America included – rush to keep up. That is not quite the case, however.

Basque explained: “The Latin American region is addressing the SMAC trend, in a lot of cases even better than we are in North America. Latin American companies have had to adapt a lot faster, case in point is the growing service models through WhatsApp driven by sheer customer demands.”

He added that companies in the region are more advanced and creative, younger, smaller and able to take more risks. “Local teams are trying to be innovative and competitive. Take Guadalajara, for example; they are known to be the Silicon Valley of Mexico due to the number of IT-related engineers, proximity to California, and the investment that companies like IBM and HP have made there.”

Tyler Pharr of Alsbridge noted LatAm's visible interest and investment in SMAC, particularly in Mexico.
Tyler Pharr of Alsbridge noted LatAm’s visible interest and investment in SMAC, particularly in Mexico.

Tyler Pharr, a Director at Alsbridge based in Mexico City, said: “There is visible growth and interest and investment around SMAC, certainly in Mexico.  IBM recently announced their opening of a cloud center in Querétaro, featuring their SoftLayer cloud technology, that will deliver cloud services locally to Mexican clients as well as nearshore to U.S customers.” He added: “Providers like Argentina-based Globant focus on newer technologies, value-added services and innovative solutions that include SMAC as well as Big Data, gaming, consumer experience and wearables.”

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Millar added that there is more than a little irony in the fact that Latin American markets are sometimes more advanced than the U.S in their use of SMAC technologies. “The primary computing device in much of Latin America is the smart phone – and people are doing more with their smart phones there than many people in the U.S,” he said. “I would love to see more of this innovation and creativity make its way into the software development projects that are worked on by teams in this market.”

The trend can yield increased interest in nearshore, too. “The most obvious Latin American connection is with regards to customer interaction and analytics. Offshore and nearshore contact center and client interaction and engagement will be greatly affected by mobile integration and business analytics, via big data and cloud,” Rudd said. “Every consulting and services company now has digital advisory services and offerings, which SMAC falls right in the middle of.  How to deliver digital transformation and how to leverage outsourcing will be key in the next five years.”

Alsbridge MD Bill Huber highlighted SMAC’s significant potential for Latin America.

Bill Huber, Managing Director at Alsbridge noted that SMAC has significant potential for Latin America. “For one thing, SMAC technologies, together with automation, neutralize some of the advantages of offshore labor costs. In addition, a significant percentage of customer-facing ‘digital’ application development is being performed in an ‘agile computing’ model – meaning closer to the business with accelerated development times, with social media and mobile apps at the forefront,” he said, emphasizing that this type of work favors geographic and time-zone proximity.

“At the same time, the large-scale offshore “factories” are becoming less advantageous. This means that smaller-scale development shops with greater cultural affinity – such as can be found in LATAM – can be an advantage,” Huber said.

Avoiding Obstacles

It is not all smooth sailing for Latin America, however. “The A in SMAC is not well served in the nearshore community,” Millar noted. “This is potentially a great growth opportunity for nearshore companies as there is a dire shortage of people in this space in the U.S also.”

He added that analytics is not only about providing interesting data sets and charts, but also about interpreting the data and providing meaningful commentary. “I am only aware of one nearshore company that is looking into this with the eye to hiring data scientists,” Millar said.

Millar went on to say that cloud presence would continue to be a tough issue to work through. “At this time I am only aware of Amazon and Microsoft having big cloud data centers in South America and these are only in Brazil – Sao Paulo for both, Rio also for Amazon. I believe that IBM may have more data centers in South America but am not aware of the details. Working remotely in North American data centers will be slow and painful – there is no avoiding the latency involved in the long round trips for data.”

Other challenges for Latin American companies include English skills and client business understanding. Basque emphasized: “The challenge is to make sure that every project keeps SMAC top of mind; that it actually becomes second nature, in your development DNA.”

He emphasized that Latin American companies need to demonstrate:

  • Technological relevance: When LatAm developers are consistently and appropriately showing U.S developers cool new ways to do things in the new SMAC world, then they will have arrived. This is only happening in selective instances at this time and has much room for improvement across the industry.
  • Cutting edge methodologies: While Agile has been fairly broadly adopted in Latin America, it has not been adopted uniformly well. There is plenty of room for growth, but there are stand-outs who are doing well.
  • Demonstrated innovation: If providers in LatAm want to succeed with SMAC technologies, they need to do better in the innovation space. The world is flat in terms of talent and ideas, so we should be hearing of more ideas coming from Latin American firms rather than the assumption that the clients have all the ideas.
  • Design thinking: Design is often left as a last minute consideration or, in the case of nearshore, something that is done in the US. The most progressive firms are encouraging clients to incorporate design in the overall flow of the project.

Millar cautioned that evolution is not a smooth process; it is one of punctuated equilibrium, where longish periods of slow change are interspersed with rapid explosions of diversity. “In the fossil record we have events such as the Cambrian explosion. In IT, this period will be looked back on as one where many companies that could not adapt either died or were absorbed my more successful ones,” he said.

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