Where Totvs is looking to grow this year

Brazilian software giant Totvs is committed to accelerating its growth in Latin America, focusing on medium-sized companies in the process of digitally transforming.

“In Latin America, we're just starting on the path of digital transformation,” Javier Marbec, director of international business at Totvs, told BNamericas during a company event in Buenos Aires. “Companies are just looking for their first ERP or are in the second or third replacement of a previous experience.”

Although the executive said there are companies in more advanced phases, which are seeking to transform their business with data analysis, process automation or artificial intelligence, the majority are in the early stages of choosing the first or second management system.

In 1Q24, Totvs reported revenues of 1.27bn reais (US$248mn), 17.2% more than in the same period last year. 

In this interview, Marbec talks about the company's expectations for this year.

BNamericas: What are the expectations for this year?

Marbec: I can’t tell you about numbers, but I can tell you that we have a very strong focus on the entire Latin American market. There's enormous potential because the middle segment has a very great need for solutions like ours.

We’ve been experiencing very strong growth year after year, and we want to enhance and accelerate it.

BNamericas: Are you making investments or adding personnel?

Marbec: We’re incorporating personnel permanently. At this moment we have almost 20 places open in Argentina for the implementation area. We’re in a process of important growth.

BNamericas: What's happening with companies’ investments in Argentina in this unfavorable macroeconomic context?

Marbec: We’re going through a time when for some industries it can be a bit complicated. However, it’s clear that implementing management technology solutions is as important as purchasing a machine. So, what we’re seeing is that, although the pace of projects seems to be slowing down a bit, movement and demand are still very intense.

Now, if we look beyond the situation of the last five months and look back and forward, the truth is that we’re already in a process of increasing demand to help companies implement technologies to transform and streamline their businesses.

BNamericas: Where do you see the greatest opportunities for growth?

Marbec: There are lots of sectors that are growing very strongly. We focus on five: agribusiness, industry, construction, services, and distribution and logistics. I would say those are the ones that are growing the most.

In logistics we’re launching a new suite [of solutions]... and in agriculture, for example, until recently, about three years ago, it seemed reluctant or, rather, it didn’t see these investments as an opportunity to improve productivity. That has changed completely and we see more and more agricultural companies wanting to incorporate technology.

BNamericas: For example?

Marbec: We have several sugar mills as clients. We’re leaders in sugarcane production in Brazil and we have some very important companies here. We have the entire field solution: from agricultural planning, phytosanitary control, crop monitoring to harvest. And we connect our solutions with a lot of possibilities that IoT offers.

BNamericas: How are Totvs' systems being implemented and what role does the cloud play?

Marbec: I think the cloud is already an indisputable thing, it’s something natural. We offer all our products in SaaS or cloud.

Perhaps what’s different about us, and which is very important, is that we see the ecosystem in a very holistic and open way. Instead of closing ourselves and monopolizing the ability to connect with the systems, we’re opening up more and more because we understand that today there are specific solutions in many companies that we cannot solve monolithically with just the management system or ERP.

We acquired RD Station, which is a company specializing in digital marketing and sales, to provide a specific solution to that entire part of electronic commerce. We also have a plant floor automation tool to provide a solution to industry 4.0... we have the possibility of filling [the Totvs system] with very specialized solutions.

BNamericas: Do you plan to make more acquisitions?

Marbec: I can’t give you that answer, but we’re an M&A company, so it’s very likely, if necessary, that the company will decide to continue making acquisitions.

BNamericas: Could you expand on the collaboration with the ecosystem for innovation?

Marbec: At some points we acquire [companies] or make alliances like the one we announced with Shopify. We have a research and development center in the United States close to artificial intelligence developments and we’re developing our own AI with insights within the ERP.

So it’s a mix between our own developments, acquisitions and associations.

BNamericas: Are you working with generative AI?

Marbec: We’re actually starting to use predictive artificial intelligence. [Generative] artificial intelligence is going to play a fundamental role in the entire line of processes of companies and businesses. We’ve done some experiences in different segments, such as health, to evaluate diagnoses. And the truth is that the potential it has is enormous, but it’s very incipient.

BNamericas: How do you handle the issue of data protection and algorithmic biases?

Marbec: The issue of security is embedded within the ERP; we have international clients with a very high security standard.

On the other hand, in predictive intelligence there may be errors, but it’s not as striking as in generative intelligence. It's difficult because I think it’s a question that cannot yet be answered. I think it’s the great challenge and the great risk that we have worldwide.

Today contextualizing the results of artificial intelligence is very important.