Ka-ching! In tight times, tech comes to the rescue with software that pays for itself--and then some. (Special Report: Connection).

Used to be, software was all about making things work better, faster, more efficiently. In economic doldrums, however, it takes a little more to loosen corporate purse strings. The newest pitch from sales: Buy our product now, and we'll show you how it can make you money.

"it's the only way these days we're getting dollars out of IT," says Jose Roy, managing director of Latin America for Concord Communications. "Most of these companies have more infrastructure than they need. Even if you do spend, you have to justify like never before."

Some solutions are a matter of saving a few thousand, by paying less for newer, better stuff, like getting phone calls over the same computer server already handling your e-mail and Internet access. Others are more dramatic, such as the case of Sao Paulo state, which uncovered tens of millions of dollars in back taxes using new software.

And sometimes the solution is just like e-mail: Simple and efficient. Mexican printing company Grupo de Integracion Digital found that out when it switched over to free, Internet-based tracking from shipper Federal Express.

Now, just hitting one key on a computer shows all of their shipping material in transit, something impossible before. "It will cut my inventory, and allow me to produce more just in time," says Jose Garcia, owner of Grupo de Integracion. "Instead of waiting 14 days to bill my customer, I can bill in four days, which is another savings."

So here, for your boss's edification, are some real-life cases from Latin American business where spending, yes, spending, even at this bleak hour, can make sense.

For good measure, in the pages that follow, LATIN TRADE took a look at a different kind of sales pitch, from Argentina's booming call center businesses.

A collapsing economy eventually rights itself, if only because labor becomes so cheap. In Argentina's case, two sterling examples of its development in recent years--higher education and top-of-the-line telecommunications systems--are making it the landing pad for a growing number of customer service companies.

Not far behind is Mexico, where a cultural edge and proximity to U.S. companies makes for a home field advantage in getting Spanish-language service contracts from its northern neighbor.

Investment US$500,000 Return $40 million

Carlos Leony, Information Systems Director at Sao Paulo state's tax service, the Coordenadoria da Administracao Tributaria, had a simple aim despite facing a complex problem. He wanted to be able to look at the million-plus taxpaying businesses in the sprawling, industrialized Brazilian state, and pick out a sector, then pick out one taxpayer, if necessary. To do that, he spent $500,000 on software from Business Objects in hopes of being able to pull a needle from a haystack on command.

Business Objects software ties together unrelated systems, such as accounting, sales and shipping, in order to make it easier for managers to make choices, says Tomas Helou, vice president of Latin America for the company. ACNielsen used it in Mexico, for example, to help Coca-Cola understand what happens to a can of soda after it gets to the store. Business Objects has helped MasterCard's managers track misuse of its customer's credit cards and helped find fraud within Mexico's Pemex. "Software is a tool, that, along with policies, makes business more orderly and without a doubt reduces corruption," says Helou.

Using Web-based software called Business Objects Visualizer, Leony is able to track up-to-date taxpayer records against the state's massive data files of past records. By establishing normal tax payment behavior by economic sector, he is able to select businesses that seem to be underreporting taxes. Tax examiners are then deployed to check up on the business in question.

It's hard to figure how much Sao Paulo state might be saving in efficiency costs, in part because the old system was so mind-bogglying inefficient, Leony says. In time, it will become more clear, since taxpayers now know they are being watched and should pay up on time. "Without this software, in addition to being much slower, the process was very inefficient," says Leony. "Since you could be selecting a taxpayer that, truth be told, did not merit being examined, at the cost of others that should be examined. This decision was being made in an unsystematic way."

There's more. After installing the software and checking over previous figures, Leony and his team figure they have already uncovered more than US$40 million in unpaid taxes. Taxpayers may fight with the state of Sao Paulo about the exact amount, but, Leony says, at least businesses now have a sense of the size of their potential problems and feel a new urgency "to begin to meet their obligations, starting now."

Investment $0 Return $22 million

Leonard Boord loves to watch them squirm. The CEO of Procura Digital, an online reverse auction provider, sets up suppli ers with a buyer, then turns on the clock.

Put simply, reverse auctions are an invitation for suppliers to bid on a contract, usually things big companies need, like toilet paper or computer keyboards. Instead of bidding up the price of something, as in a traditional auction, the suppliers registered on Procura's Web site are in a race to the bottom, each trying to get the deal before the clock runs out. Procura vets the potential bidders to make sure they can actually supply the items required, then the final pool of companies enter a Web site at a specific hour to bid on the deal. No personal relationships, no favors, no free lunch: Either your price is right, or it's not.

Boord's secret is learning the specifications inside out, so there's no room to fudge. "We try to learn more about the specs than the buyer or the seller," Boord says. "It levels the playing field." But Procura's real pitch is working on contingency. If they save you a dollar, they'll take 30% to 50%. If they don't, you pay nothing. Procura clients in Latin America include Johnson & Johnson, Banco Sudameris and Mexican bread maker Bimbo.

Venezuelan telecom Compania Anonima Nacional de Telefonos de Venezuela (Cantv) saved $1.4 million in one auction online, says Alfredo Garcia, corporate director of purchasing and contracts at Cantv.

The phone company wanted to buy 70 million telephone "smart" cards, prepaid cards with a computer chip inside that remembers client data. Garcia says the smart-card market has many competitors and slim margins--so he can usually negotiate the best price anyway. Through Procura, the final price was nearly 5% cheaper. Six suppliers participated. "This is in a business in which we thought we were already very competitive," says Garcia.

The biggest hit so far for Cantv was an auction of external maintenance contracts under which Cantv hires companies to take care of lines from the telephone switching center to the actual client. Cantv figures it saved 30%, or $24 million, of which 80% to 85% goes directly to Cantv, which signed a long-term contract with Procura. Ten companies bid on the deal. "When it works, it's the best way to do it," says Garcia. If Procura "saves you money, you pay. If they can't, you don't pay."

Investment $1 million Return $18 million

Big companies pay for every minute employees are online. Even with volume discounts it's cash out the door. Sergio Gnocchi, telecommunications network manager for Telefonica Data in Argentina, understands this problem well. He buys broadband wholesale, which his company then re-sells to businesses all over the country. Sometimes he buys it from Telefonica, sometimes from competitors. In any case, he has to turn around and guarantee consumers of Telefonica's data services that their service will not fail, all the while making sure he pays for only for the required amount of broadband-and not a minute extra.

"Broadband is very expensive, so the resource we're using poorly is the company's money:' says Gnocchi. 'Poor use of the network means greater spending." To better plan, Gnocchi spent US$1 million on Concord Communications software, which manages network capacity He calculates that the investment paid itself off within 10 months, then started saving him money.

Put in dollar terms, not planning accurately can mean downtime of, typically, 2 days a year for a given client. A couple of days off might not sound bad to you, but it's $18 million in lost business to Gnocchi. "Aside from possibly losing the clients, the days when our client doesn't have service, those two days, are days when we can't bill," says Gnocchi. "No money is coming in." He figures that the planning software has allowed him to accurately predict needs closer to 99.9% of the time.

Concord normally can demonstrate return on investment in three months, says Jose Roy, managing director for Latin America for the Massachusetts company He points to state-owned bank Caixa Economica Federal in Brazil, where he says a 30% savings on network use added up to tens of millions of dollars.

Investment $0

Return $40,000 per year

John Garcia has one foot in the print world, one in the digital world. A typical job is sent to the Mexico City printer over the Internet, then the heavy manuals--about 20 tons per month--and loads of compact discs are sent out on fork-lift pallets. Once the shipments leave Garcia's warehouse, though, things got fuzzy.

"Before, we were working with two different transportation companies. We faced two potential problems. Getting door-to-door service was difficult, if not impossible. And, because we were running late, there was a high cost," says Garcia, whose US$6 million revenue company, Grupo de Integracion Digital, ships worldwide.

Enter Federal Express. Besides making Garcia a deal on his freight rate--an 18% discount--the global shipper offered Internet tracking. The printer was tracking shipments before, Garcia says, but not in a real sense. Transit time was 14 days, and by the time he got news that some item was in customs, it had probably already moved on. Through the FedEx Web site, Garcia and his employees can check any item anywhere at any time. Shipping time dropped to between four and six days, down by about a third.

Integracion Digital expects soon to install FedEx's Insight software, connecting its computer system directly to FedEx's to allow for tracking by the company's account number, says Frank DeValdivielso, managing director of logistics for Latin America & Caribbean division of FedEx. "The customer can see where the product is at all times throughout the supply chain," DeValdivielso says.

Being able to keep track--and to bill his customers faster--means doing more just-in-time production. The new way saves US$40,000 a year, Garcia says, over his old system, including FedEx's discount.

Investment $4 million

Return $1 million per year

Selling dusty, heavy construction materials like concrete and plumbing might seem far removed from the clean, quiet world of digital business, but for Chile's Construmart, tech turns out to be the handiest tool in the bag.

Construmart is growing in part because of Chile's strong economy, which feeds disposable income to young people buying or renovating their first homes. That's what drew U.S. do-it-yourself giant Home Depot to Chile in the late 1990s (it later left the country), and continues to bring business to companies like Construmart and its major competitor, Sodimac.

Construmart was created from the 1997 merger of three smaller construction suppliers, and it now has wholesale shops and retail outlets the length of Chile. The new company had to deal with each of the old companies' enterprise management software systems, plus far-flung purchasing systems, billing software that didn't match, and price changes that had to roll out across all of the stores at the same time, says Construmart General Manager Cristian Montes.

The company spent US$4 million on an enterprise package from SAP, the German industry leader in corporate management software. The savings combined with a headcount reduction to 1,400 from 1,600 add up to $1 million a year, 70% from reduced personnel, 30% improvements in margins, Montes calculates.

"The processes which save the most are all the areas having to do with control:' says Montes, indicating that the cost base of the accounting and invoicing operations of the wholesale business has been reduced by 20% to 25%.

Other areas touched on by software include price changes and purchasing. Before, each store had a person in charge of buying things the store needed to do business. "We had 24 people, each with their own miniature purchasing process," says Montes. "Now we have three."

Investment $15,000

Return $31,600

Most people come to work in an office and think nothing of a phone line, a desktop computer and a Internet connection. It's just there, right?

Not for the info-tech laborers who struggle to put it all together. When a 3,500-employee direct marketing company E&V Promocion Empresarial wanted to add 22 work stations to its Mexico City offices, the costs of going the old-fashioned route--regular telephone lines, then data links for the computers--seemed a waste. So it turned to 3Com, which offered a way to combine voice telephone calls and a computer network into one.

3com was willing to take payments in installments, but the product is just cheaper to buy and use, too, says E&V Corporate Director Eduardo Velez. In the simplest sense, it's a hardware problem. "You have to invest in cable," he says. "It cost $7,000 to do it with the old system, and $4,000 with the new system, just in cable."

Part of the problem was an increasing number of calls. The company has sales people on the street all day, pitching credit cards and consumer products. Add to that 42 offices making long-distance connections, and you can quickly get a bottleneck if the cabling isn't right, says Velez. Plus the company wanted to update from old-fashioned analog phones to more powerful digital phones with features like voice mail.

E&V was able to skip installing an extra computer server as well, which saved in personnel costs and maintenance. The office no longer needed a receptionist, since voicemail was included. "It's cheap if we have to move. It fits into a rack," says Velez "We saved on installation and it can be moved more quickly."