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June 10, 2013

Clipping: NCR'S Careful Turnaround Strategy in Brazil a Winner

Phil Bolton 

Bob Tramontano

With revenues of $5.7 billion in 2012, Duluth-based global technology company NCR Corp. might take it easy. But the message from Bob Tramontano at a breakfast meeting of the Brazilian-American Chamber of Commerce suggested the opposite.
Mr. Tramontano, NCR vice president of industry and product marketing, was on a panel May 21 at the Brazilian consulate general in Atlanta with a senior economic development official from the Brazilian state of Amazonas and several partners of the law firm Andrade & Camara.
Before describing how NCR turned around a lackluster 70-year presence in Brazil, Mr. Tramontano spoke about the company’s “key challenges and secrets of success.”
“We have to have the ability to localize, to understand our customers and how to make them successful; what makes them money,” he said of the company’s operations in the more than 160 countries in which it is active.
Given the prevalence of NCR technologies in a large number of sectors including finance, retail, hospitality and telecommunications, he roused the attendees at the early morning event with the extent of the company’s knowledge about them.
“We know where you shop, work, travel and bank,” he said pointing to the extensive network of NCR point-of-sale and automatic teller machines. “If you self-check-in at the airport or use your phone for boarding we are going to be processing that information,” he added.
Despite its 70-year presence, however, NCR never got traction in Brazil until it began to follow its own precepts for success.
“We were ineffective in Brazil,” he said. “We didn’t understand how to do business properly, how to commit and how to stay current.”
Company officials knew that given the size of the country and the importance of the banking industry there, it should be a profitable market.
But its size in itself provided a problem due to the different tax exemptions, incentives and benefits of its 26 different states, which, he added, often act as if they are  different countries battling each other to attract investment.
Despite its status as an emerging economy, Brazil’s financial sector has been at the forefront of technological innovations for decades.
Since ATMs are at the heart of NCR’s product lines, the demand from Banco do Brazil SA, which has 40,000 ATMs across the country, and Banco Bradesco SA, which has 35,000 ATMs, prompted the company to analyze the benefits of establishing a new plant to manufacture state-of-the art teller machines.
Shaking off the company’s inertia, NCR’s officials including Mr. Tramontano, launched a comprehensive evaluation of all the locations in the country to determine where best to set up operations.
They finally chose Manaus, the largest city, in Amazonas, Brazil’s largest state. At first glance, it may seem an unlikely commercial center since it is located in the middle of the jungle and is 932 miles away from a major port.
“We looked at a lot of places,” Mr. Tramontano said using the phrase “risk analysis” more than once, adding that they finally chose Manaus even though the plant would entail higher operational costs.
Those expenses, they figured, would be balanced off by the benefits from tax exemptions as well as the state’s stability as a business center.
“We didn’t go in with a grand vision,” he added. “Instead we started small and built trust.”
The presence of 600 other foreign companies in the city also provided a comfort factor and officials from a local Honda motorcycle plant were especially helpful as they were getting established.
The plant began manufacturing self-service ATMs in 2009 not only for Brazil, but the Caribbean and throughout Latin America with such success that it received a local export award.
While the management at the plant must remain vigilant, Mr. Tramontano said an ideal partnership with Bradesco, which has acquired 49 percent of their operations in Manaus, assures their continued presence in the region’s rapidly growing economy.

(source: http://www.globalatlanta.com/article/26305/ncrs-careful-turnaround-strategy-in-brazil-a-winner)




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