We speak to Cesar Augusto Dos Santos, Director of IT and CIO of giant Brazilian Communication Service Provider Claro, regarding its digital transformation at scale, as the company enters an exciting new phase of its evolution.
All major Communication Service Providers (CSPs) are undergoing unprecedented transformation. With a constantly evolving technological scenario and customer expectations for an increasingly connected and disruptive world, Claro Brazil has been working hard to improve the experience and engagement in all its channels in a truly customer-oriented experience.
Currently, there is no longer a notion of Information Technology that is only concerned with reducing cost and efficiency or availability of its systems. It is necessary for modern enterprises to innovate and modernize their platforms as well as implementing more connected and collaborative operational models with the entire ecosystem and its stakeholders. The impact of technology on organizations is currently the driving force for business transformation, contributing to the acceleration or disruption of business, thus creating new revenues and products for a transformational journey.
As a leader in telecommunications in Latin America and one of the largest multiservice operators in Brazil, Claro Brazil is present in over 2,000 Brazilian cities with its networks providing services to over 96% of the population. As the world continues to become increasingly digital first, Claro offers integrated solutions for connectivity, entertainment, productivity and digital services in a truly convergent way, joining fixed and mobile platforms, thus firmly establishing itself as a leader in Pay-TV and broadband while being the fastest growing operator in mobile services, offering 5G connectivity with Dynamic Spectrum Sharing (DSS).
Innovation is key for Claro Brazil and in 2017, the company decided to put Cesar Santos at the forefront of Information Technology. Along with over 25 years of experience in Information Technology and 20 years working in telecom at Claro in Brazil, Cesar was handed the challenge of transforming the technology area.
With so many changes in the technology area in the years that preceded his management, due to the integration of Claro, Net, and Embratel, which today is Claro Brazil, the challenge was duly launched. “What bothered me most was that the technology area could go beyond cost control management and systems availability, to a value-added and customer-centric positioning, and with collaboration between stakeholders throughout the organization,” he told us from his Sao Paulo office. “We wanted to build a new architecture and a sustainable operational model to drive the digital transformation. At the end of the day, digital transformation is not just about technology, it’s about the culture, people and mindset.”
The transformation journey
Transformation at scale, at a large company like Claro, is not easy. According to Cesar, if Claro was a startup, its challenges would be very different. “Although a startup’s mindset is needed to push some digital initiatives, and we are following this path, we also need to consolidate and maintain the availability of our current platforms as we transform Claro’s business.”
Many network-based communications service providers are now several years into their agile journeys, but most have not yet achieved scale. CIOs leading enterprise agile adoption need to address resistance associated with culture, processes, and a lack of transparency. “In fact, these are challenges that we face on a daily basis,” he says, “and at the moment we are looking to scale our transformation journey with a view of product-oriented services. It is a new operational model that crosses the entire organization.”
Claro’s digital transformation journey started in 2018 with an ambitious and transformational Enterprise Architecture, with a cloud platform-oriented, data-driven mindset, API-First approach that challenged a decoupling of its legacy system. “We introduced new digital BSS/OSS platforms that allow us to improve not only revenue and market share, but also new services to our customers,” Cesar explains.
When Claro started this agile transformation five years ago, it was, according to Cesar, not a very well-structured program, prompting the introduction of a scaled process. “We started from the CEO down, a very well-structured program and last year, we started Going Digital, which is a product-oriented process. They’re looking for the value-added services that we can provide to our customers.”
Another big challenge was to change people’s mindsets and to implement an enterprise agile culture by adopting a product mindset, promoting collaboration and trust, while coaching people through the change; an exercise that requires discipline. “We know that Amazon, Spotify and Netflix have been using this methodology for at least for 10 years now, and we believe that we could have, as an enterprise company or enterprise big tech company, this way of working to launch new products.”
One of the outcomes of the transformation was the creation of a multi-year program: a Strategic Plan based on six pillars: Operational Excellence, Cost Efficiency, System Consolidation, IT Modernization, Research and Innovation, and New Agile Operational Model. “To keep the core business running we selected some traditional pillars as Operational Excellence, Cost Efficiency and System Consolidation,” Cesar reveals, adding, “but using a key approach to speed up the transformation with these three new pillars: IT Modernization, Research and Innovation, and New Agile Operational Model. With that approach, we started enabling some new platforms in a cloud-based, API-first approach along with micro-services to speed up new products.”
Another important aspect to developing a digital transformation, especially in an enterprise as large as Claro Brazil, is the successful selection of reliable partners who bring the experience of dozens of similar sizable projects to enable speed and assertiveness to the journey. For instance, Claro developed a Strategic Sourcing program with procurement in order to select real trusted vendors to keep an eye on relationships and cost efficiency. “We’ve developed our roadmap management in terms of how we strategically make changes in a flexible and agile way, based on market conditions and business needs,” Cesar explains.
In a year when the COVID-19 pandemic caused an unprecedented crisis, 2020 was a challenge that Claro Brazil successfully overcame as it released brand new services enabling a new e-commerce platform for the B2C segment, an API Management that enabled them to decouple the Core and launch new services on digital channels, a complete ecosystem for sales and customer service, new services for the B2B segment exploring its monetization data with Microsoft Azure Analytics components, and broad implementation of collaborative components based on Azure. These are just some of the goals Cesar and his team achieved in 2019 and 2020. “Another important aspect of the transformation is a Data and Analytics Strategy, and we have a dozen Tier 1 and Tier 2 partners and vendors helping us during this digital transformation. Another trusted partner is helping us in that journey is SAS with its Analytics platforms across the multiple use cases we have implemented.”
Right people on the bus
Cesar and his team performed an important part of this transformation through the building of the strategic plan and the pillars of the transformation that closely aligned to the corporate strategic plan. “They understand that we must pivot IT from an operational department to a business partner, with a value-added and customer-centric mindset,” he reveals. With that in mind and the right talent and leaders in position, Cesar shifted his focus to look closely at the vendors and business partners to ensure Claro was partnering with the right strategy, program roadmap and truly best-in-class organizations.
“As a leader we must encourage the teams to perform the best results they can, but I never said: ‘I am the Boss!’ The most important thing to keep in mind is that you need to be side by side with your team and do it together. Leaving barking orders and guidelines will only take you away from your team and help everyone lose. The way is always to listen to your employees’ dialogue and build together the best solutions. As a leader, you must act so that your team gets into synergy, so the skills and abilities of each member are enhanced. Do not restrict creative freedom. Perhaps this is one of the most important lessons. Be very careful not to strangle your employees’ creative capacity with too many rules and plastered processes. Yes, processes are important if you want to have quality management, but they are not everything. Your company needs to have agility to, whenever necessary, adapt processes so that its employees can always create new solutions for the situations that will arise along its trajectory. When we redesigned our IT headquarters I encouraged the team to design, develop and implement a new work environment where we could adopt the new mindset. The result was phenomenal. They created a truly collaborative environment on their own.”
Talk about partnership with business
To deliver best-in-class services for the company, a partnership with main stakeholders was fundamental to develop new products. With that approach, Cesar and his team started to develop new collaborative ways of working with them. So, at the beginning of 2019, the pillar of Research and Innovation raised the idea to build a Digital Wallet for Claro. Maurício Santos, Claro’s Financial Services Director explains: “IT, therefore, started to gain a new face, with an eye on the business, looking for innovation and new values to meet the expectations of the digital driven market and to be in line with a new customer profile, eager for convenience. In this renewed journey, IT had an important business partner.”
Claro Pay is an app with a digital account and mobile payments, created with the objective of democratizing the use of payment services, eliminating unnecessary bureaucracies and making financial services available in a safe and simple way. It aims to reduce costs of collection and commissions, in addition to attracting and retaining customers for Claro, with intelligent use of data, customer experience, and digital engagement, connecting customers to the best solutions. In a marketplace concept with banks and FinTech to create value for Claro’s digital ecosystem, Claro Pay was launched in March 2021 after a business simulation process between Nov-20 to Jan-21.
Mauricio explains: “To my positive surprise, the technology team was already working on finding new business opportunities with a lot of technology, with Design Thinking and agile methodology. So, we designed Claro Pay together. IT’s vision, from the beginning was profoundly important to the project. In all phases of the project, IT work with a business mindset, partnership, and not only as an executor.”
Continuing this transformation, in 2018 Claro started a customer-journey focused strategy launching a program initially called Customer Experience Center (CEC) followed by SOLAR, “that means the sunshine of Claro and a broader meaning for the real Customer-oriented approach”.
Claro offers its cable and satellite Pay-TV services, fixed and mobile broadband, fixed and mobile lines, in addition to value-added and financial services. “With all these services, and a fragmented architecture coming from companies like Claro, Net, and Embratel, we needed to create something innovative and disruptive that could bring speed and at the same time would bring total adherence to the organization’s objectives, while focused closely on the customer.”
The project brought disruptive architecture and decoupled Claro from its legacy systems (CORE Systems), using technologies based on cloud, analytical engines based on machine learning, and the use of robotization. The micro-services-based architecture allows Claro to launch new features faster than ever, bringing the greatest result for the business.
The project is based on a Digital BSS architecture using the SalesForce platform, SAS Cognitive features and
“The product objectives are reviewed quarterly, and we assess whether the best journey with the greatest value for the customer and the return for the organization is in line with the main objectives of the program.”
According to Gartner, a global consultancy firm, by 2024, 25% of large traditional enterprise CIOs will be held accountable for digital business operational results, and by 2023, over 50% of employees in lines of business will be technology producers. This means that IT is becoming more strategic and a large and crucial part of the business growth. “At Claro Brazil we have IT leaders joining business strategy teams as Product Managers (PM) to develop and deliver more value to the business and customers. This is something that is changing in a real-world of transformation, as technology becomes the business. Enterprises are optimizing their approaches to strategy, governance, and operating models to reflect the long-term prospect of ongoing turbulence, uncertainty and transformation.”
One of the key characteristics of organizations that have adapted well to this turbulent environment is that they accelerate efforts to break down operating models and the organizational boundaries as well as those related to role.
In order to reach the market’s expectation for high quality services and customer convenience, such as new payment methods, cloud computing and IOT, Claro started its Data Strategy in 2017 by investing in a specialized Big Data & Analytics Centre (or CBDA in Portuguese) focused on accelerating the adoption of big data, machine learning and AI. Additionally, CBDA is responsible for data security and data governance; important disciplines that consolidate and disseminate best practices, while setting the rules of access for each type of data such as sensitive and non-sensitive customer data.
The CBDA is a multidisciplinary team composed of data scientists, data engineering, statistics, big data tech experts, cloud experts and telecom experts. The team is organized into Analytics Squads, acting in prioritized use cases or complementary transformational project team that require data and intelligence to improve their results. To succeed, the CBDA only prioritizes use cases that can be measured financially. Successful use cases include credit score algorithms, the location of best offers that match with the customer’s profile and consumption habits, and evaluations of the best places to expand the net, evaluate the best places to open new stores and identify why some places or devices (smart phones or modems) have poor network signal quality – in order to take appropriate action. The actions can automatically reconfigure the device or open a work order to a technician who can fix the problem at the customer’s home or on the antenna. In these cases, algorithms are transformed into APIs to easily integrate with legacy systems, BOTs and RPAs, thus closing the cycle of automation and auto-learning.
The CBDA also generates business value to B2B clients, as the intelligence created to solve internal problems is transformed into APIs which are exposed in the Claro Insights Portal. Using the CBDA, Claro utilizes its Datalake, which has a big volume of data (+20 Petaytes), to create the portal of intelligent solutions that optimizes decision-making while contributing to better results for the company’s business. With an intuitive interface that facilitates the onboarding of new customers and the hiring of new services, the portal provides, through its showcase, the documentation and internal processes of how to contract, use and manage the consumption of services. “The customer can monitor the consumption and performance of the contracted products through analytical dashboards,” says Cesar. “For Claro, it is easy to manage its customers and make new releases of services available. As a cloud-based product, the portal is available 24×7, and can be accessed from anywhere and at any time through any device.”
“They can then manage this consumption with payment methods available directly at the portal. Until now, we had long cycles in the development of new intelligent data services and, little innovation, directly affecting time-to-market for a solution to create, publish and manage the services. To build this journey we always had a great support from SAS and Microsoft as Trusted Partners. Doing things in a collaborative way of working was fundamental for the success.”
About the future and the solid foundation of it
The digital transformation, well underway at Claro Brazil, lights the way to an exciting future for the Brazilian telco. “The future is here and now, and we believe we have delivered a solid foundation to continue delivering value to the business and transforming Claro Brazil to continue building upon and unlocking the door to greater innovation through a best-in-class Information Technology function,” Cesar enthuses. “We have accomplished great successes so far and have more to achieve. We have a 3-year strategy plan (TRANSFORMA_TI) that establishes where we want to be in this period of time, and this gives us the right way to capture the benefits of the transformation as soon as possible.”
“We have completed our mission planned for 2019 and 2020 with great success, but we know this is not enough. The journey is only starting as our environment is very dynamic, technologically fast and perhaps will never end as we are also constantly evolving and always seeking excellence within our sector.”