Alexandre Moco Barros only joined YDUQS in October 2017, but has immediately put his mark on a company that has enjoyed more than 50 years of success to become Brazil’s biggest higher education organisation. But how do you further transform a company that is already entrenched and so successful in the region? Alexandre highlights how there is always room for improvement, and has already maintained progress through a digital transformation of procurement operations.
Hi Alexandre. YDUQS has made a name for itself in Brazil over the past five decades as a source for learning? A great place to start, then, would be for you to teach us about the company’s evolution and success story…
YDUQS is the largest higher education company in Brazil in terms of the number of students, which has now surpassed 1.3 million. It is also the largest in terms of market value, having grown and grown since the inception of its Estacio brand in Rio de Janeiro more than 50 years ago.
Now, in addition to Estacio, YDUQS brands also include IBMEC, Wyden, Idomed, Damasio, Q Concursos and many more. In this present day, we exist as an educational technology and services group, but with the same mission as when we started – to raise the quality of higher education in Brazil.
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This is now achieved through three large business units – on-campus learning, digital learning and premium operations. It has been important to diversify over the years and to take advantage of the digital culture we now live in. That being said, it is just as important to ensure that people from all social levels and all over Brazil, have access to our services.
Since 2007, YDUQS has been a publicly-held company, but we still rely on the tradition and reputation that was formed more than 50 years ago. Our purpose remains to drive development through education, generating a positive and lasting social impact on people’s lives, business, and indeed the world.
We must continue to try and transform Brazilian education through the extensive use of technology, to support the development of young people and adults from all income levels, from north to south, with sustainable practices across all stakeholders.
Education is naturally important in every country. Why do you think your approach has been so well received in Brazil especially, though?
In a culturally diverse country with social contrasts, we understand that access to quality education is the basis for social mobility for millions of people. Our mission, therefore, goes beyond expanding and democratizing access to education. We want our students to be agents of transformation of their own histories and of society.
For us, managing our social and environmental impacts and the humanistic training of our students is done with the same strictness and discipline that we apply to our economic and financial management. It is precisely in this exact scenario that our governance is united into one – a management practice expanded by ESG practices.
Technological advances, environmental challenges and the need to prepare millions of people for the job market are the foremost topics in today’s world; and we know that education is at the heart of it all, as a path and tool for the change we want to see.
To that end, what challenges or industry shifts have you noticed in recent years, that you’ve had to respond to, in order to stay true to these missions?
Indeed, higher education in Brazil is facing a lot of challenges.
From a macroeconomic standpoint, there are higher inflation rates and limited incomes, therefore lowering purchasing power within society. In addition, we also see a large number of students migrating from campus learning to digital learning. Both of these elements connect with the need to implement a successful digital transformation.
For example, if we are being as efficient as we possibly can, and being smarter with savings, then we can keep average ticket prices at a level that all students can afford.
With that in mind, we have had to implement cost reduction projects by negotiating all contracts related to more representative categories in terms of spend, such as marketing, real estate, IT and facilities.
More broadly, we have engaged with several new partners to build on that philosophy and to implement a digital transformation project across the whole company.
I know that this digital transformation effort has been extensive, so please do build on your point above to introduce this process…
Well, from a procurement perspective, which is my area of expertise, we looked to address initial pain points such as: being unable to implement an electronic purchase catalogue in the marketplace we had at the time; an inability to conduct reverse electronic auctions; our material registration process creating duplicates and contracting errors; invoice delays due to our legacy system; similar delays with contract signings; payment tracking shortfalls; a lack of mobility in approval processes; and a series of other pitfalls in areas such as budget monitoring, stock replenishment and general administration.
In light of this scenario, we hired a consultancy that designed a future REQ-to-Pay roadmap. Based on this work, we went to the market through a comprehensive RFP, and contracted various solutions.
These included:
- New marketplace – Ariba
- SAP mobile tool – SAP Fiori
- Material database solution – Astrein
- Electronic catalogue solution – Vaees
- Supplier qualification tool – Uqualify
- In-voice portal tool – Tech Consulting
- Contract platform – DocuSign
- Material Requirements Planning solution – SAP Module
- Chatbot – OMAR
- Purchase robot (‘Rosie’)
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That is an extensive list – can we perhaps focus on one or two of these as significant examples of successful integration, and their immediate impact?
I think it makes sense to start with Astrein as the role they played in our digital transformation was very important to us. We previously had a lot of problems with materials, where SKU numbers were duplicated or even wrong, and the tool we deployed from Astrein rectified this.
The reason this was so important, is due to data. Data would be the key to how well the following tools and integrations would work. Simply, they wouldn’t work if they were dealing with duplicated or incorrect data. We had to get this part right before moving on to the next stages. It made all the difference to get this done early. To no longer be working with a ‘garbage in, garbage out’ process, was vital.
Another important transition at this point was to then change our marketplace, where we would carry out transactions with suppliers. We did this with the help of SAP and their Ariba solution. It wasn’t easy to prepare for such a change, but the result is that we can now conduct reverse public auctions which we weren’t able to do through our previous marketplace.
These initial steps were hugely significant and kickstarted in late 2019. Of course, I don’t have to explain how significant that timing ended up being, as we essentially embarked on a transformation before everyone else started doing so a few months later.
After such a substantial effort to accumulate and organise large swathes of data, which of your other aforementioned solutions have looked to leverage that data and take you to the next level since then?
Well, at the other side of the main pandemic storm came our new SAP mobile tool using SAP Fiori, as well as a new contract platform via DocuSign. Pivotally, we also introduced a specific marketplace, not only for dealing with suppliers, but to also capture the invoices issued by suppliers, which was a stated problem before.
We have almost 100 units spread out across all areas of Brazil, so you can imagine the confusion across these units if it’s not clear and seamless when contracts, invoices or information is shared. For example, if it’s not clear whether a material has reached a unit yet, then we don’t know whether it’s time to pay the supplier or not. We needed that smooth translation of information and of communication. This naturally has big benefits in terms of partner relationships as well, as there are never any delays or confusion between the organisations.
Internally, it has also been very helpful for each individual employee, who takes pride in being able to see the whole picture in real-time, and confidently relay information to customers or suppliers.
Further feeding into this, and another important addition, has been our MRP solution by SAP. This gives those workers a specific system to access, to see which materials are needed and which have been automatically requested. Before, they would have had to go through a lot of manual effort to work out these metrics themselves and set quantities from their calculations. Now, this MRP is a flexible solution that we can alter according to need, but that responds primarily to centrally-set stock levels that the company states we need. Time, effort and errors are all saved as a result.
As a final question regarding your recent digital transformation, we must of course ask about Rosie?
Ah yes, this was a more recent addition in the past year or so, that builds upon our efforts to be more automated; especially now that our processes are so much smoother and our data is clear and accurate.
Rosie is a purchasing robot, who we named after the Jetsons family character on television. This new way of working involves thousands of pieces of materials, that took up valuable time of our buyers’ historically. Rosie is now taking that strain away from them, where they can instead dedicate their time to other activities.
Just like our MRP, we can configure Rosie to a certain amount – in this case, setting the metric to money-spent (reais).
After such a remarkable journey in recent years, is it possible to compare the company from 2019, to the company of today?
We have certainly changed a lot. Back in 2018, our total spend was around 1.2 billion reais. Now, that spend sits at 1.9 billion reais. This is because of how we’ve been able to expand, to acquire and to grow as a result of the efficiencies we’ve introduced and the savings we’ve made.
The digital transformation of our supply chain has been critical to these group efforts. And it certainly hasn’t been a case of replacing people with machines to get there. In fact, our headcount in the procurement department has almost doubled in that time, to help us keep up with our own ambitious scaling plans.
As you can see, it was so important for us to start this transformation – to get our data right, to introduce automation and AI, to be better in our correspondence with partners through innovations like Rosie, and to enrol the help of partners like SAP and Astrein. We haven’t even touched upon additional innovations like our new chatbot, which further showcases how comprehensive this transformation has been.
However, one thing that is also important to mention, is that this isn’t solely a journey based around technology…
What would you say the transformation is ultimately based around, then?
As always, our sustainability, and our ESG-based mission.
We’re not just transforming our company to be the best. We are doing so to be sustainable, because the service we provide is so valuable to so many people in the country. There is a responsibility for us to be the best we can be, and to set an example for our suppliers and partners also working in the industry. With that in mind, we continue to dedicate a lot of time to understanding the level of ESG we need to embed into our supplier relationships. This will be something to watch out for in the future, for sure.
As a market leader, you are clearly setting positive examples. To that end, how do you feel that other organisations could learn from your philosophy and your recent transformation efforts?
I really want the message to be put out there, that you can always do better. And right now, the way to do better is by taking advantage of new technologies, while keeping hold of your values and vision. It can’t just be innovation for the sake of innovation.
However, when done for the right reasons, we have shown what can be achieved if you really go for it. We have digitised almost our entire supply chain in quite a short amount of time. There is always a reason to be quite cautious, or to delay, or to think about the risks. But my message is to think about the positive outcomes, and to target the supply chain specifically.
The supply chain transcends all aspects of the business. You reduce costs, you better communicate with suppliers and partners, you determine availability to customers, you free up revenue, you reduce errors, engage with staff, become more sustainable and green, and achieve so many other benefits. It can all be realised by targeting your digital transformation towards your supply chain.
Hopefully the global challenges of the past few years will have motivated people to take those first steps towards a more digitised, efficient and valuable supply chain.