Throughout our history, we made landmark achievements through bold, creative, pioneering initiatives that today put us at the forefront of process and management technologies in our industry. This stems from the fact that innovation is one of our three strategic pillars, as applied to process refining (ideation, preparation, development and sale), with focus on consolidating an agile culture, on training for innovation and on launching products and technologies.
This vector, which we call Digital Journey, is intended to develop new markets and lines of business through innovation, digital transformation and more collaborative and efficient work methods. In this context, we are working on four fronts that encompass the Company’s key structures (processes, people, technology, and “sheer” innovation): Brain, Algar Telecom Station, Transformation Programs, and Next.
Starting in 2021, these transformational fronts converged into the Digital Evolution Program, which laid out a framework value proposition and a roadmap for the Digital Journey based on the definition of a common ambition: “to foster simple and fluid interactions with our customers through digitization.” Information and innovation indicators are provided for all these fronts that reflect our movements in terms of development, launches, culture, people, R&D, opportunities and risks, etc.
We also have an Innovation Recognition Policy in place to encourage and give any and all associates, interns, young apprentices and grant holders an opportunity to actively contribute to the fulfillment of our strategy. Innovation is tracked by a specific innovation indicator—revenues from traditional products—that is part of other monitoring metrics.
Our innovation performance results reflect in the awards we received such as the Valor Econômico Innovation Award, the Top-100 IT Innovators award, the Telesíntese yearbook award, and the 100 Open Start award, among others. In 2021, we were named by the 100 Open Startups Awards as the telecommunications company most open to relationships with startups and to the entire innovation ecosystem, and we received the Valor Econômico Innovation award as the third most innovative company in the industry.
Valor Econômico Innovation Award
100 + IT Innovators Award
Telesíntese Yearbook Award
100 Open Startups Award
Another relevant indicator to demonstrate our degree of innovation is our revenues from non-traditional products, which shows, as a percentage, how much of our revenues is not tied to traditional telecom products. For 2021, we reached a strong rate of 18.72%, against 13.51% for 2020
The Brain research and technology organization (RTO) is based on the open innovation model and composed by multidisciplinary team that works on posing challenges to startups and companies in the innovation ecosystem. Its main role is to create unprecedent, disruptive solutions for customers of all Algar group companies, working on four fronts: Internet of Things (IoT), 5G, Cloud Computing, and Digital.
Brain is an autonomous unit that we maintain with other sponsors and has three centers located in Uberlândia, São Paulo, and Recife. Experience has shown us the importance of having an institute geographically located out of our facilities and detached from such a large structure as ours and of everything entailed by this characteristic in terms of corporate culture and internal processes.
Brain holds a creation speed that is part of the efficiency of its business model and has inspired us to implement procedures that expedite our internal innovation efforts. It also works on new business modeling to enable the provision of simplified technological solutions that are integrated with the day-to-day lives of farmers through connectivity at large scale and low latency. Its focus is on boosting the results of the agribusiness through products and services that support more agile decision-making and ensure greater security for the sector.
Brain developed in 2021 five innovative solutions for Algar group customers. It also filed a patent application last year. In addition, it had revenues of approximately R$147 million from solutions developed. The RTO was created in 2017 with the ambition of creating incremental revenues, and, back then, we projected that its revenues could amount to R$50 million by 2021. Therefore, the actual result exceeded our expectations, especially because for 2020, or one year earlier, it had already hit the mark of R$60 million.
One other important development was our work on synergies with Vogel, which we acquired last year. We replicated the entire portfolio developed by Brain and internally used by us. The RTO also started developing product considering the possibilities opened up by 5G, which started offering in December. Among them, the highlights are:
MediQuo
A retail product for the telemedicine segment.
OmniPro
A multichannel platform for the B2B segment that enables us to improve our customers’ experience by providing unique customer service via WhatsApp, social media, telephone and e-mail, as all interactions through these means are recorded in a single place, which makes for continuity and provides an overall view of all contacts.
The RTO works with several partners. The highlights for 2021 were the alliances established in Portugal with Câmara, an entity bringing together RTO businesses, and the Atlantic Hub, a strong innovation space in that country. In Brazil, a partnership was struck with Seidor.
Still in 2021, we rolled out our market access program with Brain Open. One of the milestones was a media promotion intended to check whether the solution was attractive in the international market. We recorded 197 registrations by 157 companies in 17 countries, and we selected four solutions that were under assessment at the end of the year.
We also promoted an Industry 4.0 hub in Uberlândia, Minas Gerais, where we rolled out Open Maker Industrial Challenge, including not only our challenges, but also those of five industries, which attracted 75 startups. We held a Demo Day, when 30 startups introduced their solutions, and five industries selected the work of 17 of them.
Another outstanding event was the Brain Summit, which brought together various partners for two days and set itself apart by including a retail vision, addressing issues like connected homes and games. Altogether, we held 17 events in the year through Brain, among them webinars, panels and live streams.
Academy, Consulting and Lab
The Brain Academy, the RTO’s education arm, targets internal and external publics in partnership with companies that are innovative in their lines of business. In its portfolio are the Summer Job vacation internship program, Agile in Action, a workshop for professionals who want to learn agile methods, Home Office Education, created for companies intending to implement the model, and Timeout, an immersion program designed to change the mindset of leaders, among other offerings. In 2021, the Brain Academy project was expanded, and two more work fronts were added to the Innovation Center: Consulting, and Lab. The three work fronts make up what is known as Growth Levers.
With four years gone by since its creation and more than 2,000 people trained in agile methodologies, the idea now is to use Brain’s practical experience to support businesses and professionals that want to transform themselves through innovation, agility, leadership for the future and new technologies. To that end, Brain is banking on three work fronts as growth levers for the market: job education, consulting for medium-sized and large enterprises on innovation and new business development programs, and a lab for co-creation, using such innovation methodologies as Design Thinking and prototyping for strategic customers requiring experimentation environments.
Brain’s work flow comprises three stages: ideation, preparation and development. At stage one, ideas for disruptive solutions and startups are analyzed to determine the key discussions concerning innovations and potential projects to carry out. At stage two, the ideas are submitted to the Advisory Committee, which is responsible for assessing opportunities. Finally, for stage three, squads consisting of multidisciplinary teams are tasked with the development, which expedites deliveries and allows the minimum viable product (MVP) to be rapidly available on the market and easily improved until the desired product is achieved. The process takes about six months. The products developed by Brain move on to the Station and can be absorbed by our portfolio in 15 to 30 days’ time.
We interact with a series of entities engaged in our segment, as members of their boards, theme-based technical groups and other governance bodies, in order to contribute to building positions and advocating topics of common interest. They include:
It is incumbent upon the Station to operationalize and scale up the solutions coming from Brain, while working on the development RTO services to improve our portfolio. It operates through teams (tribes) and squads (multidisciplinary teams) focused on RTOs, digital services that provide the best customer experience, and developing project-boosting technologies. In 2020, after many lessons learned and developments made, all Marketing and IT areas migrated to the Station’s agile model, with more than 400 associates brought into the team. The squads follow the Station’s innovation work in real time, reviewing it and making decisions based on daily monitored data.
The Station also features Management On Demand, an online dashboard accessible to everybody that provides financial and marketing information, customer data (satisfaction rate, deliveries, returns) and a clearly and objectively presented delivery backlog. This resource allows the squads to detect incidents, take correction actions swiftly, create opportunities and improve innovation in general.
Rolled out in 2019 in order to make the business transformation internal model more organized and efficient, it is also tasked with managing efficiency projects and processes that oftentimes involve implementations and automating tasks.
The program made a decisive contribution to making us a benchmark for many companies and organizations due to how it accelerated the dissemination of an agile mindset and devised alternative ways of achieving economic growth in the industry.
Next was created to enable us to get the support we needed for our transformation into a digital company, adding more and more levity and simplicity to our customer service. The program comprises projects that transform the basis of our business—technology—fostering upgrades in networks, systems, processes, equipment and energy matrix, among other factors.
An important feature of Next it that it gives us an overview of the technology scenario for the years to come, encouraging us to find solutions that maximize competitiveness, such as the ability to get all solutions in clouds going forward. The program comprises five journeys:
The digital evolution process has been taking place rapidly and at a global scale, interfering in the habits and behaviors of the whole society. We are watching that and have made changes that put us in sync with the demands of the new times.
Currently, we are working on the Digital Evolution Program, standing on three synergistic pillars dedicated to today’s challenges. One of them, supported by the Station, is digitizing everything related to the transactions and interactions of our customers.
In the retail segment, this process is made easy by the fact that selling online already is a reality. In the B2B segment, on the other hand, advisory sales prevail, which motivates us to train our teams more and more to work in the digital environments through initiatives like the Sales Navigator acquisition from LinkedIn and the creation of a prospection page by consultant. Due to the restrictions caused by the pandemic, we were able to develop a more digital B2B sales model, without compromise on the advisory part. We developed and physical and digital approach to sales. At the height of the crisis, with our salespeople precluded from staying in touch with customers, we started scheduling virtual visits and succeeded in keeping closing sales.
The second pillar has to do with the internal digitization process. Supported by the Next and Transformation programs, it consists of taking a “look inside” to propel the evolution of our operations, processes and technologies, modernize our services and improve the way we work and deliver value.
For this challenge, we kicked off a program in 2021, in partnership with Accenture, that will result in the digitization of processes of the field operations, financial and sales teams for the corporate segment.
At the same time, Next works on the entire network and systems development to make us increasingly digital. Standing out in this context are the ERP Journey, which is replacing the Algar group’s back office systems with a new SaaS (Software as a Service) solution, with information integrated and standardized to support decision-making, the Journey Tracking project, an implementation solution that will enable customers to track all interactions with us, from the start to the end of the journey, which will reduce their efforts on customer service channels, and the BE Digital Automations project, which is implementing automation at different steps in the customer journey (offering, service, delivery, use), benefiting both B2B and B2C, improving our NPS and bring about cost savings.
The third pillar is supported by Brain and focused on “looking at the future,” creating new business, products, and services, all digital in essence, by exploiting solutions, opportunities, markets and business models, with the ability of coupling or decoupling partners rather effectively and thus expand the range of digital solutions offered to the market.
To take on this challenge, Brain is modeling a hub based on the open innovation model and designed for MSEs: the New Age Hub, which positions us as a provider of digital solutions that enable MSEs to boost their sales and perform more efficiently through digital transformation. Brain is also at work developing a development lever for B2C: Future of Living, which indents to offer customers, in an affordable manner, products and services that promote their well-being and give them technological conditions to go on a complete use journey and improve their home routine experience.Over the course of 2021, we also held two internal events focused on digital evolution: Digital Evolution in Action, put together by Digital Evolution in partnership with Next and Brain (two editions, with Magazine Luiza and Wayra in attendance), and Tech4all, organized by Next (five editions attended by Salesforce, Huawei, Software SAP, and Tibco, among others).
