CI&T; President Bruno Guicardi: ‘We Help Clients Reconfigure Themselves For The Digital World’

‘Most companies out there don’t realize that the way you work, the way you organize yourself, actually is two-thirds of the problem and one-third is technology,’ Bruno Guicardi, the solution provider’s co-founder and president, tells CRN following CI&T;’s successful IPO.

Building Strength Via A Digital Transformation Focus

CI&T this week held a successful IPO. The company priced its initial public offering at $15 per share Wednesday and share prices, after jumping to as high as $21.15 after the opening, are as of late Thursday hovering at around $18.50.

CI&T’s IPO had a few things seldom seen in a technology-focused IPO: The company is a global systems integrator and is already profitable. In addition, it is focused exclusively on digital transformation.

CI&T, founded in Brazil in the 1990s but with global headquarters now shared by its U.S. office, has as its core mission the drive to help customers transform their business digitally to improve how they go to market and quickly react to changes in their customer base. But unlike typical digital transformation where the focus is on the technology, CI&T is focused on first helping its customers reorganize the way they work to lay the foundation for the technology part of the transformation.

CI&T co-founder and President Bruno Guicardi, in an in-depth conversation with CRN, said that digital transformation is more than the “new” or a discrete list of things that need to get done.

“For us, it’s a more profound change, like to really change the pace that you adapt to your new needs and the upcoming needs of your clients and customers and consumers. … With most traditional companies, the time frame from having an idea to launching a digital product in the market is usually two and a half years on the average of clients we interview. And in a fast-paced world, that will take you to irrelevance, right? Over time, that’s very dangerous.”

Guicardi and CI&T represent a big part of the future of digital transformation, particularly for global businesses looking for flexibility and agility. Here is more of what Guicardi had to say.

What is CI&T?

Globally, we’re a technology services company helping clients digitize. We’re in the digital transformation services market. So we help clients reconfigure themselves for the digital world, helping them not only with technology, but also with ways of working, getting to adapt fast to consumer behavior changes that are ever, ever increasing. So we say we give our clients nimble feet. We give giants nimble feet, and help them adjust to the new era.

Where are CI&T’s global headquarters?

The global headquarters are shared between New York, California, and Sao Paolo in Brazil. The biggest operations are in the U.S. and in Brazil because of the origin of the company.

The company was founded in Brazil in 1995 at the dawn of the internet. The commercial internet was starting. We were just three guys out of college, and we just wanted to be part of it, create this company, and try to be ahead, and in the very beginning, try to educate clients on what the internet meant, and trying to create the first digital experiences for them, and websites and commerce sites. These were very early days. And I think that stayed as part of the DNA of the company, to try to screen what’s coming in terms of technology and trailblazing and preparing ourselves to help our clients to get there. That’s what kept us going all those 26 years.

When did CI&T first move into the U.S. market?

I moved here in 2012. We already had an operation here that was already growing. So I came to accelerate the growth here, which has been happening. Last year we grew our historical fastest. Our operation in the U.S. last year grew 52 percent. So we’re a fast-growing company.

How big is your business in the U.S.? What is your revenue and growth here?

The business overall is about 1.6 billion [Brazilian reals], and the exchange rate has been fluctuating, so it depends on when we report it. Roughly $300 million in revenue globally. The U.S. is half of that.

Who do you see as your primary competitors in the U.S.?

The market, not only in the U.S., but globally, is very fragmented. So very, very fragmented. No one has even 1 percent of this market. So we compete with everybody, and it’s very rare that we see repeat competitors in big systems integrators or digital agencies, everybody. It’s a jungle out there. But this category I think is a new breed of technology services companies in which we include ourselves. It’s what people call digital natives or digital first. That category grows faster than everybody else. ... We’re the fastest growing in that category. We‘re very proud of that.

Your primary business is focused on helping companies with their digital transformation. How do you define digital transformation? People still have different concepts.

We try to define it very broadly in terms of it’s not only about the new, it’s not a discrete list of things that you’re going to do. For us, it’s a more profound change, like to really change the pace that you adapt to your new needs and the upcoming needs of your clients and customers and consumers. Let me give you a piece of research that we did in the past. With most traditional companies, the time frame from having an idea to launching a digital product in the market is usually two and a half years on the average of clients we interview. And in a fast-paced world, that will take you to irrelevance, right? Over time, that’s very dangerous.

We help companies change their technology footprint to be faster, to be more agile. There’s cloud, there’s DevOps, and a lot of technologies that allow you to do changes in the services and the software and the systems that your customers and clients have experience with, and do that quickly. And also in the way you work. Our research says actually that has as much influence as the technology. Technology’s a big part. But a big part is actually just the way you are organized and the way you work.

So that’s where I actually started helping clients. It’s not only the technology piece, but also great multidisciplinary teams, agile teams, that actually get ideas to market way faster and help fight the uncertainty and the unpredictability of those new products in a much more effective way. It’s about agility and optionality, creating options and see what actually flies and what actually creates value for consumers and customers.

Old IT is very different from this universe. Old IT, SAP projects or projects are built for your own employees where, quite frankly, if you designed something that wasn’t ideal, where the experience wasn’t that great, well, they’re your employees, right? If they don’t like it, well, you’re my employee, I’m paying you to use this. So just use it, right? I don’t care.

But if you create an experience for a consumer based on the fees that they’re going to pay to use this, or like a self-serve thing, or let’s say a chatbot. ‘Hey, we created this chatbot and we reduced cost for me. While we reduced the cost to use it, if people don’t use it, you’re not saving anything. So there’s way more unpredictability and uncertainty around those products because those are people that you don’t control. And I think that‘s the biggest mindset change that we see the clients have to go through still and understand digital.

Digital is about much more unpredictability. And then you have to create options and move really fast. And that influences not only the technology you use, but also how you organized. How much you give empowerment to those teams to come up with ideas and actually go and do it instead of getting 14 or 18 different sign-offs on all functions.

And that’s where we‘re helping our clients. Call it tribes, or some of them become core communities, but this idea that you give not a function to a team, you give a business challenge, let’s say we want to capture X million clients in our e-commerce, you have every function there with that goal, sharing that goal, with the autonomy and authority to actually implement ideas and try new things and move really fast.

What are some new initiatives that you could see maybe CI&T working on for 2022?

I think there are a lot of exciting things in terms of what’s happening that we’re eager to put our hands around. There’s a lot of maturity coming in cloud and service management. It kind of helps to articulate hybrid clouds and making that transition to cloud easier for our clients. I think we’re excited about that.

But we’re also very excited with developments in the ways of working. I think that’s the biggest thing companies didn‘t wake up to yet. They’re thinking that technology will solve it all. Most companies out there don’t realize that the way you work, the way you organize yourself, actually is two-thirds of the problem, and one-third is technology. So the biggest chunk of the problem is actually the way you organize yourself. And we’re excited to see that becoming a trend going forward. We published a book about it with the transformation for some of our clients, but that becomes a reference for other people going forward. And just seeing more of that understanding about the real problem, about what’s preventing companies from moving faster and being more agile in digital.

So what you are saying is that a big part of digital transformation, and maybe the biggest part, comes from transforming how a company works and not the technology side?

Exactly. Remember I told you it takes two and a half years for an idea to hit the market. In our experience, two-thirds of that time depends on your decision-making structure and the way you execute that structure. Since [Frederick Winslow] Taylor invented the standardization of functions, this is how all companies are organized. ... So what we’re proposing and bringing to clients is actually a different structure, which is client-oriented by customers. We orient your teams around the value we’re trying to create for the customer, increase multidisciplinary teams that have authority to actually make decisions and move things fast. So it’s a completely different way to organize the teams, a different way to collaborate across functions and incentivize people as well. So it’s a big, big change. And I think some companies are starting to reap the benefits of organizing like this. And we’re excited to see some other companies understand that that’s the way forward.

Taylor invented what they call scientific management, dividing standardized work, how companies live today. This was invented 130 years ago by Taylor, who looked at what was the most efficient, most cost-effective way, to do products. It was about specialized people and standardized work. Where you do that part of the screw and move on, and the other guy does the other part, right? Another guy plugs in another thing, and this is all he does all day long. But in a role like this, what we see is it takes so long to do anything. To go from idea to implementation takes so long that with a traditional client, someone has an idea today, and they launch two and a half years, three years from now, what are the chances of it actually being a good idea in three years? And that‘s what I see from traditional companies that still operate with that mindset today. If you’re launching a product today, I can guarantee you that that thing was thought of three years ago, so what are the chances it is the right product? Speed becomes an imperative to compete in this digital world. And you have to compromise in that 130-year-old system to do something.

Does CI&T do is own development or do you outsource?

We usually augment our clients’ teams. We did all the legwork on the technology. We coach our clients. Most of our guys have this ambition to accelerate and advance their own capabilities and their own literacy in terms of digital. So we help them with that. We’re not hoarding knowledge and insights, but we collaborate. By the way, the ‘C’ in CI&T stands for ‘collaboration.’ That’s a very collaborative way of doing things with our clients, helping them increase their own digital maturity as well.

I was going to ask what the 'C' and 'I' and 'T' stand for.

Collaborate, innovate and transform.

Has CI&T done much in terms of acquisitions?

We did three acquisitions in the past. The most relevant one is the last one we did. In July, we acquired a company in Brazil called Dextra, which brought us 1,000 people. Before that we acquired smaller operations. One was a digital agency in California, Comrade, with 50 people, in 2017. Another was an analytics firm with 50 people. So most of our growth has been inorganic. And so what we see going forward with this primary component from the IPO is actually to accelerate the inorganic growth going forward. So we plan to continue to grow very fast going forward, but add to that an organic component, an acquisition component.

What kinds of companies would you be looking at in terms of potential acquisitions?

We’re looking to expand to continue to serve our clients. Our clients are global organizations, so we’re looking at acquisitions to support them over the globe. So our first driver is geographic footprint. We’re looking to expand the number of locations around the world that we cover. The second driver is to expand to different verticals, get into verticals where we don’t have a deep presence in today. We see there’s some verticals that have a lot of growth potential in the next 10 years. And we’ll try to get there as well.

How many people does CI&T have?

Around 5,400 or 5,500, primarily in Brazil because the biggest markets we serve are in Brazil itself. In the U.S., we leverage a lot of nearshore technology people. So most of the employees are sitting in Brazil.