Widesoft Creates Mother and Child
When Brasilia, Brazil's capital, was built, one of the city architects suggested planting grass everywhere instead of paving sidewalks. People could walk wherever they wanted. Where natural paths emerged, the concrete would follow.
The city fathers chose not to adopt this plan. But Mario Persona took notice. The lesson for him was "the idea that every company must pay attention to where customers create the path before building in that direction."
Persona is one of the executives at Widesoft, an ASP located in Limeira, Brazil. Widesoft's founders watched the grass and created Brazil's first business-to-business (B2B) Web-based exchange long before eCommerce was cool.
The founders created Widesoft in 1993 to develop enterprise resource planning (ERP) and advanced planning and scheduling (APS) software for two companies in the automotive sector, Varga Brakes Company and AMC. (TRW Automotive has since purchased Varga Brakes.)
Two years later Widesoft executives, mesmerized by the Net, become an Internet company. The resulting software system worked so well for Varga Brakes the executives bet it would seamlessly translate to the Web. "We decided to convert the experience we had in the automotive industry into Web-based solutions for doing business between companies," says Persona. Two years after that, in 1997, Widesoft launched its online B2B supply chain management (SCM) system linking Varga with its suppliers.
Launching the First B2B Exchange in Brazil
Launching a business solution in the prehistoric days of eCommerce was a brave undertaking. Back then Brazilians thought the Internet was solely a medium for entertainment. The company was able to proceed with its vision because of the support of its main investor, Estevam Varga.
The brave move paid off. Today Widesoft has 400 companies using its system.
The system emanated with Varga Brakes, which the programmers dubbed "the mother company" to distinguish it from its clients and suppliers who became "the children." Persona said the names stuck because the monikers made it clear who someone was talking about.
However, the children companies realized how valuable this online SCM system was. So they wanted to become a mother company with children of their own. "Children companies have to use our system if they want to do business with the mother. They naturally see the benefits and call us to become a mother," explains Persona. He attributes the company's success to "viral marketing" as its usage expanded in concentric circles.
Caterpillar was another mother company. Other companies are using part of the solution. A Shell plant in Brazil is monitoring its oil transportation. Kodak is using the request for proposal and purchase order segment. Hewlett Packard has adopted the quotation package for national and international procurement.
The Widesoft system currently operates in three languages: Portuguese, English and Spanish. It has become a global vendor. Persona says customers from Hong Kong to Europe are testing its software.
All its solutions are Web-based; it installs software nowhere. "All the upgrades happen here at our servers," says Persona. He says the ASP model reduces cost to the buyers because the vendor doesn't have to send staffers to the plants to install the software. Buyers don't have to purchase upgrades, another savings.
The ASP model also solves the online security issue. Many of the suppliers in the automotive industry are small companies whose internal computer networks are not secure. "Manufacturers are not interested in network security. If they open their networks to the Web, it can be dangerous," points out Persona.
He says Widesoft views its system as a bank with all the necessary security. "If you worry about your money, you don't hide it under the bed. When a customer sends a purchase order to our database, it's safe," he says.
The Brazilian SCM system works with the major ERP systems currently available. The programmers wrote the application so it can translate orders from one system to another. If a bicycle brake is part 123 in the manufacture's system but part abc in the supplier's system, the Widesoft program will automatically convert the parts numbers.
Persona labels his company one of the "new pioneers." Fortunately, the company was in the right place at the right time, when the large electronic data transfer (EDI) companies "would not kill their business to offer the cheaper Web-based SCM solutions." This was important for "a small company from Brazil that could not face the big players using the same weapons they use."
But the big players weren't paying attention to the grass.
Lessons from the Outsourcing Primer:
- Viral marketing helps an ASP with a program that ties manufacturers with their suppliers.
- The ASP model saves money because no customer has to maintain or upgrade software. It is all done by the ASP on its own servers.
- The ASP solution solves the network security problems when dealing with small suppliers who do not have the resources for a secure network.