CASES

Beyond exporting IT services: The evolution of a business model under an entrepreneur’s global vision

“CINQ has managed to differentiate itself even from its Indian competitors.” Carlos Alberto Jayme, CINQ

CINQ Technologies, founded in 1992, only made its first export after 11 years of existence. In that period, the company strove to encourage its global vision and gain internal strength in order to “go beyond Atuba River”. Today, with over a decade of international experience, approximately 40% of CINQ’s revenue comes from overseas, and the company relies on lessons internalized in its business model.

 

Motivation to internationalize: the company’s DNA

Focused on exporting IT services, CINQ has had many reasons to enter the international market, such as market diversification, development of capacities based on global market demands, valuing the company’s image, and a better way to face the international competition present in Brazil. However, the seed of all those reasons germinated even before CINQ itself. Businessman Carlos Alberto Jayme, one of the company’s founding partners, grew up listening to his mother say that he was “a citizen of the world.” Even as a young man, he made his first export as a freelancer, and later chose to work on international projects for a multinational company. When he finally decided to found CINQ, initially called Qualipro, Jayme looked for partners with international experience, meeting Edson Althoff and Aldir Brandão.

“The world offers many opportunities and challenges. Courageous entrepreneurs only need will and passion to face it.”

Carlos Alberto Jayme, CINQ

 

Previous experience: fostering an internal global culture

Although CINQ has originally been created to operate in the Brazilian market, its entrepreneurs never let go of their international dreams. The initial concern with generating revenue in Brazil did not stop its managers from fostering an internal global culture. In 1994, with only two years of existence, CINQ was already bringing foreign trainees to work at the company, and was concerned with obtaining internationally acknowledged quality certifications. When the company started to operate in partnership with multinational Diebold, it took the opportunity to send its employees on project missions abroad. Whenever there was an opportunity, they let their global partners and clients present in Brazil know their ambition to operate in the foreign market.

 

Opportunity and Challenge: credibility with global clients

In 2003, thanks to a referral from a friend and sector businessman, Rui Tadashi Suzuki, CINQ established a commercial partnership with a company based in Atlanta, USA. According to Jayme, that partnership brought the first consistent export opportunity. One differential to win that opportunity was the credibility that CINQ had with its global clients present in Brazil. As at that time the company did not meet 100% of the requirements, we had to organize a task force on the weekend to provide the team assigned to the project with the knowledge required. All that took place more due to determination and a sense of purpose, than due to a formal internationalization plan. Finally, that first export agreement provided CINQ with a seven-year-long project and significant revenue from the foreign market. The partnership with the company from Atlanta continues to this day.

“Today, it’s easier for CINQ to sell abroad than in São Paulo, given the intense competition”

Carlos Alberto Jayme, CINQ

 

Challenges to Overcome and Achievements: internal and external consolidation

After solving the first problem of how to enter the foreign market via commercial partnerships and referrals from global clients present in Brazil, CINQ still had to gather much knowledge and further develop its internal structure to consolidate its operations abroad. Without relying on previous experience in export procedures, the company had to learn how to deal with bureaucratic barriers and contract international insurance required by foreign clients.

In 2006, CINQ began to participate in international commercial missions promoted by Apex/Softex, giving the company more confidence to operate in the foreign market. In what concerns its internal structure, CINQ work intensively to achieve CMMI certification level 3 in 2009. Later that year, the company expanded and redesigned its commercial area, hiring a specific account manager for foreign markets. In addition to processes, quality, and certifications, the company strove to maintain and increase its capacity for innovation. The Business Solutions Design Lab (BSDL) area was then created, whose purpose would be to identify unmet business needs and apply appropriate technologies to create innovative solutions for its clients’ value chain. Finally, CINQ took over the creative front of Curitiba Offshore, favoring the image of the city of Curitiba, which relied on several global companies providing services abroad (captive centers).

Today, it is easier for CINQ to sell abroad than in São Paulo, given the intense competition. Operating in Canada, United States, and Europe, the company’s founding partners have confidence in the competitive potential of their services in the foreign market. For them, CINQ has managed to differentiate itself even from its Indian competitors. According to Jayme, Brazil would be much closer and culturally comfortable to European and North American clients, not to mention that the country’s time zone is more favorable, in several situations, than India’s. In addition, unlike the companies from that Asian country, CINQ does not work with large volumes and avoids price wars whenever possible. Its proposal is focused on certain business and technology domain niches. Thanks to that strategy, the company has participated in foreign projects using the most modern technologies in mobile, cloud, big data, and BI services.

 

Lessons and Future Challenges: expanding frontiers, incorporating innovation

With the export knowledge gathered for more than ten years, CINQ was able to internalize lessons learned abroad. First, being sensitive to cultural differences, the company has become more assertive and objective in its daily operations, and began to value punctuality in its meetings.

From Canada, the company has brought lessons for its business model, starting to provide services in a productivity model. There are usually two basic models, which are team and material (body shop), and closed scope projects. With the productivity model, supplier and client share the inherent risks of projects. This model is based on a metric of small work units, and according to the complexity of the delivery (cosmetic, simple, average, and complex changes). Each level of complexity has a certain price. The value of a work unit is paid only once; in case of errors, CINQ corrects them in the warranty period. That way, both client and CINQ have flexibility to increase or decrease the size of the team of professionals involved, based on the demand of each work unit. All of this follows the Agile Scrum methodology, which provides speed, flexibility, and measurable results for the client, CINQ, and the professionals participating in the project. Therefore, in what concerns innovation, CINQ has incorporated the agile methodology before its domestic competitors.

The lessons learned and the results achieved by CINQ abroad have motivated its entrepreneurs to continue dreaming beyond borders. In the future, the company expects to open subsidiaries in England and the USA, solving the issue of the high cost of international financial transfers for partners abroad. Establishing partnerships in India or even entering the country would also be a possibility, because the company has been concerned with the issue of the shortage of workers in Brazil.

According to Jayme, paraphrasing Eloy Zanetti, “we need to go beyond Atuba River,” since in addition to domestic market’s inherent risks, the world offers many opportunities and challenges, and the entrepreneurs who wish to enjoy it only need will and passion.

 

 

By Sabrina Mendes, Master in International Studies from Sorbonne University and Intelligence Analyst at Softex.

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