PYMTS: GLOBAL SPOTLIGHT - CHILE

June 29, 2015 Invoiceware by Sovos

This article originally appeared in PYMTS on June 15th, 2015Follow this link to read the original article.

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By PYMTS: Whats Next in Payments. 

PYMTSIn the world of B2B innovation, Chile is most often mentioned in the context of e-invoicing. While it’s true that the nation is among the world’s leaders for successful digital procurement adoption, Chile has become an underdog success story for its embrace of Big Data and its flourishing B2B startup community. PYMNTS takes a look at this South American nation for its latest Global Spotlight and finds encouraging evidence that a growing community of B2B innovators is now making its mark in Chile.

A Global Leader In E-Procurement

Latin America is a world leader in digital procurement adoption, and experts consider Chile among the best of the best when it comes to implementing successful e-invoicing practices. Chile launched its e-invoicing mandate program in late 2014, so the nation is a more recent addition to the federal e-invoicing community. Nonetheless, Chile has already shown success worthy of emulation by other jurisdictions.

So far, federal mandates require large corporations to comply with e-invoicing guidelines. Mandates for SMEs are in the works, too, and will be implemented through 2017, according to reports. These mandates include the requirement that companies upload monthly reports to a government e-portal.

In preparation for these rules, some of the world’s largest corporations enlisted the help of e-invoicing service provider Invoiceware International, including the Chilean operations of Coca-Cola and chocolate company Barry Callebaut.

Reaching A Hand Out To SMEs

By now, it’s well-known that the benefits of digital invoicing can have massive benefits for businesses both buying and selling, especially SMEs. Chile’s small business community is sure to embrace the funds and time saved by digital procurement practices, and the government is making a move of support to its SMEs by allowing them more time to prepare for federal mandates.

But there has been some controversy over the government’s position on supporting small businesses by favoring them over larger conglomerates for B2G procurement purposes. Officials have reportedly shied away from allocating a certain portion of funds for SMEs on the grounds that it is unconstitutional.

Still, Chile has not shied away from supporting its small businesses in government procurement initiatives. A 2014 report published by the federal e-procurement portal Chile Compra revealed that SMEs secured 44 percent of government procurement contracts in the first half of 2013, compared with the 24 percent they secured when the portal first launched in 2003, according to reports. Today, reports said that 91 percent of the suppliers working through the portal are SMEs.

Chile Compra has also extended support to small businesses through regional support centers that provide education and mentoring on the tendering and e-procurement process.

Keeping The B2B Startups At Home

Perhaps the largest show of support for its SMEs is Start-Up Chile, launched four years ago to support startups and link entrepreneurs and innovators to the funding they need to succeed. According to the group, Start-Up Chile is the world’s largest startup community. In partnership with some of the largest names in business, including Google, Amazon, American Airlines, Microsoft’s BizSpark and PayPal, Start-Up Chile provides financial security to startups in exchange for the promise they will remain in the nation for a certain amount of time.

Last month Start-Up Chile chose its first nine companies to receive $100,000 each in equity-free backing, reports said, while the startups agreed to remain in Chile for at least three years.

Among those startups is B2B analytics service TeliportMe, which focuses its marketing services on the travel industry, and RetiDiag, which developed a low-cost screening method for blindness through innovative software provided to primary health care physicians.

Other businesses are ZenHub, which offers project management solution services for GitHub; Uanbai, which facilitates e-payments between individuals through social media platforms; and Themidgame, which provides marketing services for companies that want to reach out to consumers through social media.

According to Start-Up Chile director Sebastian Vidal, the initiative hopes to strengthen Chile’s startup community, which often finds itself in a position of being forced to relocate to the U.S. for survival.

“We want to make sure that the business model is already validated, because in Latin America, a company with traction but no revenue in the first year is not considered successful,” he said in a recent interview with TechCrunch. “Here, those companies will not get funding, and they will die unless they go to the States.”

A Hot Bed For Big Data

Chile has become a focal point for Big Data aggregation and analysis for many of the world’s largest leaders in the space. One characteristic of Chile is its robust mobile application development. According to reports published last month, the nation has developed more than 3,000 apps, while research indicates a new boost of smartphone adoption thanks to the arrival of 4G and greater signal coverage.

The telecommunications industry has been crucial to Chile’s development of Big Data tools. Spain-based Telefonica announced only weeks ago that it would be launching a new Big Data project in both Chile and Peru through a partnership with Amdocs.

The collaboration includes the launch of the Business Support System project, a service that helps businesses aggregate and analyze their data for the purpose of gaining previously unreachable insight into their business. Reports said Amdocs will install a so-called operational data store and use the Amdocs Logical Data Model to provide data analytics services to Telefonica across Chile.

Aside from telecommunications, Chile is a hot bed for Big Data services in other areas. Cisco, for example, is boosting its data storage offerings and has chosen Chile to host one of several hubs to explore the Internet of Things and smart city phenomenon.

But domestic companies are beginning to recognize the potential of Big Data, too. Local startup Review Trackers, for example, secured $2 million in backing last year after graduating from Start-Up Chile to help businesses aggregate and analyze the data of online reviews through its Software-as-a-Service offering.

Review Tracker’s efforts bring the story on Chile full circle: startups in the nation are at the epicenter of Chile’s B2B efforts, from innovative mobile services to shaping the direction of federal e-procurement efforts. With Start-Up Chile’s plans to encourage startups to stay in Chile, it isn’t a stretch that the country will soon make a name for itself on the B2B front.

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