Ricardo del Razo, CIO and Digital Transformation Leader at Grupo SADA, talks about the challenges and successes of adopting new processes, technologies, and delivery methods in the aftermath of the pandemic.
Zeo Solomon: Tell us about Grupo SADA and how it’s structured.
Ricardo del Razo: We’re a conglomerate of forty different companies with all business models you can imagine, including a newspaper, various media outlets, dealerships, transportation & logistic companies, bioenergy, and even a very successful volleyball team that’s won four world championships!
ZS: What a fascinating concept! And how did you become Grupo SADA’s CIO?
RR: I was born in Mexico City and spent most of my life there until I joined General Electric and enrolled in their leadership program, which gave me the chance to spend time in the US, Europe, and Asia. When I finished the program in 2014, GE offered me a great position in Brazil. I had never been to Brazil and didn’t speak Portuguese, but I decided to take the risk and accept the position, and I ended up loving it!
I stayed for a couple of years before going back to Chicago, and then in 2018 I decided to move back to Brazil for personal reasons and take the job with Grupo SADA. I worked for GE for a total of twelve years and have been with Grupo SADA for the last three and a half years.
ZS: Let me ask you about something that we tech leaders in Silicon Valley are struggling to get right: We started delivering technology using Waterfall methodologies, then XP, and now Agile. Right now the fundamentals of Agile seem to be serving us well as we adapt to the new paradigm of distributed teams, but Agile in this context is still new. How do you see the world beyond Agile?
RR: I think there are still a lot of unknowns. As you mentioned, delivery methods used to be more black and white: either you followed Waterfall or you followed Agile, or some mixture of the two. But the pandemic has introduced unexplored terrain. Right now, for example, we’re in the middle of implementing a very important system at Grupo SADA, but we can’t gather twenty people in the same room for user acceptance testing like we used to. So we’re trying to figure out how to adapt the process to a remote environment.
In my personal opinion, I think we’ll land on some admixture of Agile and DevOps methodologies. The situation is so new that we don’t have the answer yet, but we’re trying to figure out what the right balance is as we speak. It’ll be very interesting to see what happens with this in the next few months.
ZS: What other challenges are your teams facing right now due to the pandemic when it comes to delivering technology?
RR: All fifty-five of our locations in Brazil and Argentina were able to go completely remote within three weeks. This was a big achievement for us because we don’t have the infrastructure here that countries like the U.S. enjoy: we faced basic challenges like ensuring everyone has high internet bandwidth. We’re a traditional, family-owned company, and prior to COVID-19, we did not have many options for remote work. So to transition from 100% office work to 100% remote work was a huge challenge. Moving forward, we’re implementing a hybrid model.
We realized that about 80% of the tasks we were doing in person could be done remotely, but we’re still trying to figure out how to accomplish the other 20% remotely. For example, we used to take one week to solve certain issues with everyone in the room, and now that same issue takes four weeks to solve remotely. We probably won’t ever replicate the in-person experience enough to get our timeline back down to one week, but we can hope to at least get it down to two weeks.
ZS: We faced a similar issue at Avenue Code. We went from having four delivery centers around the world to one thousand delivery centers overnight. This was especially challenging given that the systems we deliver are heavily dependent on securities since we deal with a lot of customer and financial data.
Managing that transition while meeting so many location-specific governance protocols around the world, and doing so very quickly, led to what we refer to today as accelerated digital transformation. Companies that transformed successfully were rewarded, while those that didn't lost a lot of their market share.
It’s amazing to reflect that digital transformation used to take 2-5 years. Now we don’t have that luxury–we have to do it in 2-8 weeks. What is your perspective on this?
RR: You touched on a very important point when you mentioned security protocols. We actually solved a security incident, right in the middle of the pandemic, that occurred because we were trying to deliver what our users needed so fast that we left a door open. This incident had a huge impact because then we went to the other extreme: we implemented VPN and all security measures imaginable, but then our productivity was impacted, as were our financials, since security is expensive.
Without the pandemic, all of the things we accomplished–moving to the cloud, security implementations, etc. – would have taken five years for sure. The pandemic made digital transformation a necessity. If you don’t invest in this area, you’re out of the game. Now the importance of technological investment is so apparent that you don’t have to spend time convincing investors–you just present your business case and get approval.
ZS: Yes, and while we did have to invest more heavily in infrastructure for remote teams, this also opened the world as a market for talent, and we know that high caliber tech talent is very rare. The pandemic opened executives’ paradigms to embrace a distributed model and to understand that it would only work within an Agile framework. And of course, we saw cost savings in other areas like travel, entertainment, and office spaces. So for smart companies that adapted well, the cost expenditures and savings counterbalanced each other.
As we move forward in this post-pandemic world with new innovations like immersion technologies and virtual reality, how do you see the future of a company like Grupo SADA that provides so many different services?
RR: During the pandemic, we knew that from a logistics standpoint (which is probably our most important component in terms of revenue), the market wasn’t going to grow for a couple of years. And in fact, it’s still shrinking a little bit. So our focus was on gaining efficiency with the market we do have and increasing profit on our current revenue.
Let me give you an example of how we’ve started to evolve: The quality of our drivers has a big impact on our bottom line. If we reduce the number of accidents our drivers have on the road, we reduce our insurance costs and delivery efficiency.
So we implemented an automated rating system for our drivers: we place cameras in our trucks that measure things like whether or not the driver is falling asleep at the wheel, how long they’ve been driving, and how many tickets they’ve gotten. This generates a score for each driver. Right now we’re trying to use machine learning to understand the massive amount of data we’ve collected by monitoring 3,000 trucks that are moving 150,000 cars per month.
Virtual reality is next on the list for us to explore, because we definitely believe that if you’re not investing in this area, you’re going to be out of the picture.
ZS: I couldn’t agree more. Thank you so much for sharing your amazing journey as an IT leader with us today, Ricardo. We look forward to watching your ideas come to fruition and your journey continue to unfold!
Zeo Solomon is the Founder and Chief Strategy Officer at Avenue Code.