going digital: for disruption

GOING DIGITAL: FOR DISRUPTION OR COMPETITIVE ADVANTAGE?

EDITOR’S NOTE

With the onset of the New Year, we thank our readers and contributors without whom the publication could not have completed another successful year.

Any publication in print this month cannot NOT talk of Demonetization, a once in a lifetime event of humungous proportions which has impacted every strata and segment of our country. The tailwinds of Demonetization are surely going to accelerate the adoption of digitally enabled services and catalyze the process of digitization in the economy. It was only coincidental that while brainstorming during the last week of October, we decided to focus on digital innovation in the new edition.

Digitization in business is an inevitable reality today. Boardrooms and C-suites world over are as much gung-ho about seizing the opportunity as they are bedeviled by the ensuing dichotomy. Do we disrupt the business with digital innovation and change the rules of the game altogether? Do we build unique competitive advantage and stay ahead of the curve?

Google has been a disruptor and impacted our lives in profound ways. Social media is changing the way businesses reach out to their customers. On the other end of the spectrum is the automobile industry. Ramping up production with robots and sensors and with ERP and analytics to strengthen the supply chain, auto giants have been still been able to cement their leadership over the decades.

Whereas the binary digits, 0 and 1, are driving the digital wave, the conundrum can also be dissected through the binary lenses of disruption or competitive advantage. Through this edition we bring to you the insights of business leaders dealing with the new paradigm as also that of captains of technology industry who play an important role in enabling this transformation.

In this edition, we have interviews and articles from Banmali Agrawala, President & CEO, GE South Asia; T. V. Narendran, Managing Director, Tata Steel India & South East Asia; Krishnakumar Natarajan, Executive Chairman, Mindtree; R. Chandrashekhar, President, NASSCOM; Dr. Ludo Van der Heyden, Professor, INSEAD; Dr. Ashok Jhunjhunwala, Professor, IIT Madras; Bharati Jacob, Co-Founder & Managing Partner, Seedfund and many more.

We have also included features consonant with the edition’s theme. I am sure you would find them interesting to read. Notable among them are on Hyderabad’s potential to become the next startup capital of India, and the profiles of some innovative startups at the forefront of digital disruption in India.

While we were putting this edition together, we were left pondering whether digital innovation does throw up a dichotomy or there is overlap between the two perspectives. I hope you will enjoy reading this edition and would be left with food for thought as we were. As always, I look forward to your comments and suggestions.

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1 | | | CFO Insights Volume 9 January 9, 2017

Volume 9 January 9, 2017 CFO Insights 2| | |

12 | Cleantech: Innovations for a

Sustainable Future

Banmali Agrawala

President & CEO, GE South Asia

TECHNOLOGY IN CONVERSATION WITH

Sanjeev Sharma

CEO & Managing Director, ABB India

40 | Mobile Internet: A Disruptive

TechnologyDr. Anupam Agnihotri

Director, JNARDDC

46 | Going Digital for Travel and

Tourism

Mohit Kabra

Chief Financial Officer, MakeMyTrip

80 | Digital Innovations in the Food

Industry

Tanmay Kumar

Chief Financial Officer, Burger King India

06 | Digitisation: Not just 'Nice To

Do' but a Mission 'Must Do’

08 | Digital Innovation: Bedrock for

Improvement

T. V. Narendran

Managing Director, Tata Steel India & South East Asia

14 | Digitization: Immense Scope

Sutirtha Bhattacharya

Chairman & Managing Director, Coal India Limited

20 | The Need for Correct

Balance Harshavardhan Neotia

Chairman, Ambuja Neotia Group

26 | Leveraging Digital for Quantum

Improvement in Customer

Experience

Krishnakumar Natarajan

Executive Chairman, Mindtree

36 | Gearing for a Dramatic Industry

Shift with Digital

R. S. Goenka

Founder & Whole-time Director, Emami Ltd.

R. S. Agarwal

Founder & Executive Chairman, Emami Ltd.


CONTENTS

50 | Collaborative Design Principle

A. Balasubramanian

CEO, Birla Sun Life Asset Management Company

FINANCIAL SERVICES

Arun Jain,

Chairman & Managing Director, Intellect Design Arena

60 | Digital Disruption: Plan, Plot and

Invest

Ananth Narayanan,

Chief Executive Officer, Myntra Designs Pvt. Ltd.

76 | Open Source Technologies:

An Ideal Approach

Sovik Bromha

Director Finance, Red Hat India

83 | Disruptive Technology:

Accelerating Paradigm Changes

Sidharath Kapur

President - Finance and Business Development

GMR Airports Limited

42 | Building the Discipline for Digital 16 | Mastering the A.R.T. of Digital

Banking

Rana Kapoor

Managing Director & CEO, YES BANK

Chairman, YES Institute

22 | The Digital Micro - Payment

Bugle

Dr. Ashok Jhunjhunwala

Professor, IIT Madras

28 | FinTech and Banks: Creating

Value for CustomersDr. Subho Ray

President, IAMAI

32 | Digitalisation: Taking Advantage

of the Changing Face of Global

Technology

Chris Landis

Division CEO, SIX Swiss Exchange

56 | FinTech and Banks - Towards a

Paradigm Shift Alok Mittal

Co-Founder & CEO, Indifi Technologies

74 | FinTech and Banks: Towards a

Win - Win SolutionAmit Sachdev

Co-Founder & CEO, CoinTribe


CONTENTS

DIGITAL DISRUPTOR

68 | Common Digital Platform for

Healthcare Service ProvidersRahul Aggarwal & Ravi Chandra

Founders, MedMap

70 | Blockchain: Key to Radically

Transform Business

Ravi Jagannathan

Founder & Chairman, KrypC

71 | Local Vendors going Cashless

without Smartphones

Mohammed Maccarim Badrudeen

Founder & CEO, PayTonic

72 | Can Digtial Innovation Disrupt a

Billion Lives?

Kumar Abhishek

Founder & CEO, ToneTag

Anand Babu

Founder and CEO, Jayalaxmi Agro Tech

66 | Digital Innovation in Agriculture -

ICT Solutions

STRATEGY

34 | A Framework for Driving Digital

TransformationDr. David Dubois

Assistant Professor, INSEAD

18 | Making Digital Work for You

Dr. Ludo Van der Heyden

Professor, INSEAD

24 | Is Sustainable Business Growth

possible through Digital Disruption?R. Chandrashekhar

President, NASSCOM

45 | The Second Wave of Startups:

Investing in Disruption Ganapathy Venugopal

Co-Founder and CEO, Axilor Ventures

54 | The Focus of CFO in Today's

Digital Age

Neelesh Talathi

Chief Financial Officer, pepperfry.com

62 | Digital Innovation: Competitive

Advantage or Disruption?

Manishkumar Bhatt

Director - IT, Vadodara Municipal Corporation

78 | DICE: The Key to Creating Competitive Advantage through Digitization

David Wittenberg

Professor, Indian School of Management & Entrepreneurship


Editorial Team

Archit Kannan, Firoz Jobatwala, Kaushik Mukherjee, Neeraj Agarwal, Subhasree Das

CONTENTS

INNOVATION

58 | Intra - City Logistics: Competitive

Advantage of going Digital

Kausalya Nandakumar

Chief Executive Officer, SmartShift

38 | Innovating and Building

for India

Bharati Jacob

Co-Founder & Managing Partner, Seedfund

30 | Inclusive Empowerment

through Digital InnovationB. Sumant

President - FMCG Businesses, ITC Ltd.

77 | TReDs: Treading the Digital

Path Sundeep Mohindru

Founder Director, Mynd Solutions

SPECIAL FEATURES

85 | Electronics Manufacturing

48 | Hyderabad - The Future

Startup Capital of India

BOOK REVIEW

88 | Unravelling the Entrepreneur's

Secret

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Technology

DIGITISATION: Not Just 'Nice To Do' But A Mission 'Must Do'

Banmali Agrawala, President & CEO, GE South Asia writes

about how India needs a change in attitude towards digitisation. It

should not be just 'nice to do' but a mission 'must do.' Digitisation

could lead to effective public governance and improvement in

productivity across industries

Digital Governance:

We have seen that Digitisation in government processes like issuing passports or electronic voting machines or rail ticketing, or issuing driving licenses, or tracking imports etc. provides a better service at no additional or marginal cost. The average citizen is more than willing to embrace digitisation in governance as it is faster, more transparent, a leveler and more cost effective.

The key in achieving efficient digital governance is having good and real time data. Once the administration has access to good quality data the quality of decision making will be faster and a lot better. Further, Indians have shown a tremendous flair for being so comfortable in not just innovating on data through coding etc. but also in using data through smart devices and systems. Even the so called "illiterate" who cannot read or write can easily use smart phones through the use of graphics. In fact, the very definition of literacy might soon have to include the ability to deal with smart devices and data.

Digitisation sounds simple enough but can be time consuming and at times costly. Digitisation also needs some basic infrastructure like reliable power and access to the internet. Currently just about 30% of the Indian population has access to the internet. If we were to truly digitise the country, we would need a strong backbone of connectivity that would cover all the people and would be able to manage the massive volume of data.

Digitisation in governance is also about a culture change. We cannot talk about digitisation of land records, government

procedures etc. and still insist on keeping paper copies. We cannot have e-boarding passes but insist on print-outs so that multiple government agencies can stamp on it. We cannot have the government accepting a digital signature but have the regulatory system to still insist on a “wet signature”. We as citizens cannot talk about digitisation and then look for exceptions to seek special favours outside the system.

Once data has been captured, it has to be stored in a place so that various agencies can access it. This is where the architecture of the platform that collects the data becomes so critical. For example, the government is getting increasingly better at correlating earnings, expenses

and taxes paid in real time and that too at an individual level. Such a system is obviously massive and also has to account for issues such as security, privacy, authenticity, selective access etc. The quantum of data to be stored is also huge and needs space, reliable power and security.

We have so far approached digitisation in governance, more as a way to eliminate corruption and speed up processes. We now need to look at digitisation as a way for Government to make faster and smarter decisions. The bureaucrats need to rely on accurate information and data to make decisions.

ndia is on a roll! In a predominantly slow growth world, India stands out as an economy which has sustained high growth for almost twenty years. Over the last few years there has been a further spurt in growth while the rest of the world

struggles.

But India still has a long way to go in eliminating poverty and providing a decent quality of life to all her citizens. In order to achieve this, India will need to continue to grow at over 8% every year for at least another twenty-five years. India neither has an abundance of cash generating natural resources (particularly Oil & Gas) like the other BRICS countries, nor does she have an autocratic form of governance which can drive economic growth without building social consensus.

Affordability is key to any sustained development in India. While India is still woefully short on infrastructure, the main challenge in building new infrastructure is affordability. Further, new infrastructure needs even more natural resources which is something India is short of. India has 17% of the global population but only 2.4% of the global land mass, 4% of fresh water resource, consumes less than 5% of energy resources most of which are dependent on imports and India's share of global trade is less than 2%.

Therefore, the only path that India has in order to drive sustained economic growth is to be hyper efficient in use of all resources and have the world's best productivity. Presently there is just too much inefficiency all around, which impacts the poor the most and further increases the divide between the rich and poor.

Living with inefficiency is like using a leaking bucket in a desert. It is cruel to waste precious resources in a place like India which has scarce resources and where a swelling number of young population urgently needs at least the basic amenities of life.

The first place to start addressing the scourge of inefficiency is in targeting existing systems and assets. The best way to target the effort is to first get accurate data on the basis of which more focused action can be taken. The fastest way to get data on scale and with the least cost is by digitisation. Once good data is available, there can be a million ways to analyse that data to come out with a vast range of solutions.

Digitisation can perhaps be best divided in three main components- Digitisation of governance, the Consumer Internet and the Industrial Internet.

I

The best way to address inefficiency is to first get

accurate data on the basis of which more

focused action can be taken. The fastest way to

get data on scale and with the least cost is by

digitisation



various hot spots. The pollution hot spots in turn could be seen through satellite images which can tell us where prompt action needs to be taken. All this would only be possible if real time data is available centrally.

In yet another example if all the hospitals were connected with information on the utilisation of their diagnostic equipment, we could easily direct people to the right location to access those services.

Further if all patient records and test reports were digitised and available centrally, treatment would become so much faster and simpler. The insurance companies could offer better

and cheaper services if they had access to such historical data. Today even within the same hospital, the patient has to carry physical reports from one place to another.

In aviation, with better access to data, the glide path of aircrafts landing can be modified to minimise the amount of fuel wasted in circling.

In railways, the fuel efficiency in locomotives can be optimised by determining the optimal speed the locomotive should have for a given load, gradient, condition of track etc.

Even a one percent improvement in efficiency in many areas of basic infrastructure will result in massive net savings.

Digitisation for India is not a “Nice To Do” hobby but it is a “Must Do” initiative without which we will not be able to achieve even our basic development objectives.

India is well placed to make this happen because the younger generation is comfortable with smart devices and Indians have shown their prowess in IT. The quality and number of new jobs that can be created to implement digitisation will be substantial. The government just needs to play facilitator by building the necessary connectivity, skilling people in IT and by being bold to take the full digital step in governance and doing away with “half measures”.

Access to information will get democratised and the people in government would not get their power from having any additional information. Those in government office will necessarily need to demonstrate true leadership and foresight in looking ahead and being proactive than be firefighting and reactive all the time.

The Consumer Internet:

This is perhaps the one area where we have seen tremendous development and progress in recent years. We have also seen social behavioral change. Online shopping instead of visiting shops, e- banking instead of visiting banks, the platforms of social media to express opinion and almost the whole world available in real time on a mobile device. We have consequently seen transaction costs drop dramatically, choices increase exponentially and convenience being the order of the day. The substantial shift of power to the consumer is the new world order that the Consumer Internet has achieved. This trend is only likely to proliferate in India.

The Industrial Internet:

This is one area where we have not even scratched the surface and have substantial opportunity to make an immediate and substantial impact.

For example, many of the older power plants can easily produce anywhere between 5% to 20% more electricity within the existing land footprint, the existing quantum of water consumption and the existing quantity of fuel consumption. The increased electricity generation can easily pay for the capital required to improve performance and that too within three to four years!

As another example if all the power generating assets and all the consumers were connected on one platform, it would be far more effective to supply power where it is needed from the most efficient source of generation at that point in time. One could further optimise operations to control pollution at

We have so far approached Digitisation in Governance, more as

a way to eliminate corruption and speed up processes. We now need to look at Digitisation as a way for Government to make faster and smarter

decisions

Opinions expressed in the article are the author’s own

T. V. Narendran

Managing Director

Tata Steel India & South East Asia

Digital Innovation: Bedrock for Improvement

CFO Insights in conversation with T. V. Narendran, Managing Director, Tata Steel India &

South East Asia, on the digital modernization journey that Tata Steel has embarked on


to the original equipment manufacturers. This is an established capability at our Warwick R&D centre with frequent and valued contact with engineers of our key customers.

In the second type of digitisation, Tata Steel data scientists utilise the data generated by the plethora of sensors located in manufacturing processes. This data is analysed using big data analysis techniques on powerful computers to seek patterns which would be otherwise invisible. These patterns can provide solutions to problems or improvements to current processes and products. The data scientists are also part of the company-wide, cross-functional team working towards a digital steel manufacturing and supply chain.

R&D investments have long gestation period and uncertainty of returns. Being at the helm of affairs, are you looking to acquire technologies or invest long term to build internal capabilities?

We believe technology is a key differentiator in the short run and a disruptor in the long term. Our approach has been guided by adopting and adapting technologies with a focus on product development for focused segment needs in the market, and on process efficiencies in the back-end.

As far as emerging technologies are concerned we are confident that analytics, which allows us to extract value from the data we generate and Internet of Things, which allows us to gather intelligence from equipments and assets, will lead to significant value. These we plan to keep in- house. We would also look out for emerging technologies like Artificial

Intelligence, Blockchain and Smart Dust and look at Pilots to establish proof of concept and proof of value against business use cases. If successful we would scale in-house if that makes sense. The key variables for decision include the maturity of the technology, the estimated impact and life of the same, and whether we would be able to retain talent and scale in house.

We maintain a collaborative approach through engagement with start-ups, solution providers, technology experts, academia, research focused institutions and other players in our industry to ensure we are on top of the technology curve, whilst delivering value to today’s business.

While traditionally we have focused on building our internal capabilities, we are conscious that R&D heavy industries like pharmaceuticals are moving towards acquiring capabilities or products through investments or inorganic growth. We are also watching with interest other emerging options, models and will take a call as appropriate.

Please elaborate on the partnership with CSIR-NML to develop online solutions and improve blast furnace efficiency?

What are some of the digital interventions in iron & steel manufacturing that has enabled Tata Steel to become one of the lowest cost steel producers in the world?

Tata Steel embarked on a digital modernization journey through the 90's with the launch of Online Analytical Processing (OLAP) in the mid-1990s. The creation of Manufacturing Execution Systems (MES) and Human Machine Interfaces (HMI) automated large parts of the plants creating significant advantages of productivity, scale and standardization. The Level 1 automation systems in Tata Steel allow it to capture significant real time data, whilst the Level 2 automation systems have helped Tata Steel to control processes via live feedback. Tata Steel has utilized the data thus generated for optimization which has led to identification and exploitation of significant cost reduction opportunities. Tata Steel has also utilized process simulation and modelling to design low cost interventions and reduce the cost of experiments over the years. These systems have been the bedrock for our improvement programs, that have led to savings in thousands of crores year on year.

The Enterprise Resource Planning system launched in 1998 and subsequently upgraded in 2004 led to visibility across the value chain that has been exploited for both control and improvement. In the last few years Tata Steel has simplified processes utilizing mobiles, analytics and IT interventions that have enhanced productivity. We are taking the same forward by migrating to SAP Hana S4 via the Digital Foundation Program. This would lead to significant gains via making information available to facilitate decision making.

We have identified significant value savings that can be derived via adoption of new technologies and have a Digital Value Acceleration Team, which has been tasked with the responsibility of identifying opportunity and enabling delivery.

Tata Steel’s Centre at Warwick University is working on next-gen technologies for the iron & steel sector. What are some of the digital enablers leveraged by the Centre to develop innovative technologies for the sector?

The R&D centre at Warwick essentially leverages two types of digital technologies.

In the first type, our product application engineers use state of the art modelling software that help digitise product properties and component shapes. Such digitisation helps modelling and evaluation of performance of products in application situations such as in automobiles, heavy vehicles and structures. The results of such digitisation and modelling demonstrate the benefits of newly developed (and existing) Tata Steel products

We maintain a collaborative approach through engagement

with start-ups, solution providers, technology

experts, academia, research focused

institutions and other players in our industry to ensure we are on top of

the technology curve

In Conversation With


and problem solving efforts towards making further gains in efficiency through better understanding.

How is Tata Steel using digital interventions to develop products for the rural and semi-urban markets?

In FY16, our Branded Products business contributed ~INR 13,400 crores to the revenue of Tata Steel. These branded products cater primarily to semi-urban, rural geographies, and small and medium enterprise segment. The brands in this space include Tata Tiscon, Tata Shaktee, Tata Steelium, Tata Astrum, Galvano, Durashine, Tata Structura and

Tata Pipes. Consumers assign a premium to these brands and each of them is a market leader in their category.

New Product and Service introductions, engaging our eco-system and customers, play a significant role in this business. Tata Steel engages with our large family of distributors, dealers and Emerging Corporate Account (ECA) customers on various digital platforms such as Websites, Webinars, WebApps, Crowdsourcing etc. to capture product feedback and generate

insights on customer needs. These numerous insights are then translated into product development ideas. Few digital initiatives for capturing customer feedback which could be mentioned are Customer Relationship Management (CRM) module in SAP for insight management, Web Apps extended to 7500 dealers to capture product feedback for rural markets and 'Ecafez', a web based platform for capturing needs and pain points of ECA customers.

The ‘Ecafez' online engagement platform for small and medium enterprise customer, is aimed to provide a single click answer to all their queries. Webinars are conducted as part of Ecafez to connect with Owners, Managers and Quality Heads for more than 10,000 small and medium enterprises who want to know more about subjects such as GST, Theory of Constraints (TOC) based supply chain, Kaan Baan and Quality. The topics are chosen based on feedback given by customer through the Ecafez portal. The digital platform also has the repository of Knowledge Bank, Case Studies, Industry Best Practices.

Our New Product development process follows a stage-gate approach. In our stage-gate system for New

Product development, Prioritisation for new products is done on an IT platform wherein multiple stakeholders such as Marketing & Sales, Technology Group, Manufacturing and Business Analysts interact for product and service development.

Post launch of the products, customer feedback, and customer satisfaction surveys

conducted on digital platform across the product segments.

Project Innovent is an initiative to promote innovation and business excellence. What are some of the significant technology ideas fostered through this initiative?

Tata Steel is constantly striving towards innovating and creating sustainable differentiation through various initiatives including project 'Innovent'. Our endeavour is to embrace technologies while developing solutions for customers in new opportunity areas which are in the adjacencies of steel business. The technologies embraced include Materials, Coatings, Digital etc.

Over the years there have been several initiatives towards this end.

Late 90s and early 2000s:

There was an ambitious national project to raise Blast Furnace (BF) productivity by 20% from the then existing level of 1.5 t/m3/day. There were three partners - SAIL, TSL and NML. The project was funded jointly by the Steel Development Fund (SDF) grant by the Ministry of Steel and investments by companies involved. While TSL and SAIL did work on installing special purpose probes for measuring phenomena inside the BFs, NML had the role of developing models which would use that information as well as doing laboratory work to establish material characteristics - such as coke and sinter properties - needed for the modelling effort. This was a cross-functional effort and several insights were generated - which allowed the modelling work to be actually carried out by all participating agencies. The project would be considered largely successful - judging by the fact that BF productivity did in fact rise - and knowledge created through this effort certainly contributed to decisions which led to the improvement.

Current efforts:

Now that the BF performance level - in terms of productivity and efficiency - is at a much higher level, there is effort to look for pockets of opportunity for further improvement. One such area is managing the more difficult and variable properties of raw material resources available today:

NML and TSL have jointly worked on infra-red thermography for estimating the alumina content of iron ore on an online basis - as against doing less frequent periodic samples. This work, implemented at our iron ore mines in Noamundi, allows alumina to be rapidly estimated - enabling online adjustments in mixing of iron ore streams - to get a more consistent alumina level in the ore fines dispatched to steel works. Less variability in inputs allows processes to squeeze out further efficiency by less frequent adjustments.

Similarly, work is now on to establish the infra-red thermography technique for measurement of coke and coke breeze moisture levels in an online manner - so that the energy input to BF and sinter plants can be better controlled leading to higher efficiency.

Online models need a lot of material properties - such as reducibility, decrepitation, softening-melting of ferrous burden, strength and reactivity of coke, and solid flow behaviour (repose, voidage) of all materials. Given the volume of work involved, both organizations have pooled the data generation to enable faster development.

Higher productivity and lower coke rate also pose challenges to hearth refractory in the BFs. Ascertaining refractory health (remaining thickness in an online manner) based on limited thermocouple data is challenging and often defensive strategies have to be adopted to guard against possible break-out events. In one of the projects with NML, a technique was devised to physically simulate the lining and cooling system - to enable translation of measured thermocouple data to refractory thickness.

Several joint forums exist to debate unanswered questions

Continuous improvement in existing technologies will provide

higher benefit in short run and no business

today can do without a certain level of efficiency

We have identified adoption of new business

models and disruptive technologies as a

significant opportunity


- New planning system (Factory Planner) in use for fulfilment of customer orders using flow management concepts.

In addition to the above, there are some initiatives being planned in the near future:

1) Inspection in conveyor galleries:

- TSK is in the process of developing new methodology for remote inspection of conveyor galleries using digital technology.

- Access control at critical points is also being explored in a similar manner.

2) Inspection of analyzers in stacks at heights:

- Using drones / robots for inspection of chimneys at heights is being explored.

With digital interventions, Indian businesses are seeing improvement in customer experience, productivity and turnaround time. In your opinion, what should be the strategic focus – disrupting with new technology or improving existing technology for competitive advantage?

We don’t see these as alternatives wherein we can only choose one or the other. Continuous improvement in existing technologies will provide higher benefit in short run and no business today can do without a certain level of efficiency. Core steel manufacturing process technology is progressing on a linear scale and we don’t foresee much disruption.

However, digital technologies like Social, Mobile, Analytics, Cloud computing are already disrupting different sectors. We have done a Digital Readiness Assessment survey and have identified adoption of new business models and disruptive technologies as a significant opportunity. Digitally enabling customer decision journeys and creating moments that matter for customers by utilizing both our digital and physical assets, is a key area where we want to move.

Many other technologies are being considered as solution ideas which are currently at various stages of development and would be communicated through our product launches. Our wood finish steel doors 'Pravesh' launched for the individual house builders, uses heat transfer printing for various textures options on doors as per consumers choice. Self-cleaning technology are being considered as enhancements in the toilets launched and unique coating technology has been used for various wardrobe shutter options being provided to home makers.

Tata Steel plans to make the Kalinganagar steel plant a global benchmark in the iron and steel sector. How can digital technologies be blended with manufacturing best practices in this endeavour?

A) Level 2 process control:

- Use of windows tablets and hand held device to update inventory in coil yards and slab yards.

- In house developed control system for coke oven machine co-ordination and positioning in coke plant.

B) Level 3 (Manufacturing Execution System):

- This is one of the most important pioneering initiatives undertaken at Tata Steel Kalinganagar (TSK). A mobile app named ‘TSK Plant Status’ was launched, where the status of various units in plant are updated every 10 seconds. This is the first live app in mobile launched for the first time in Tata Steel Limited (TSL).

- Multiple objective based optimisation tool used to create rolling schedules using PSI Software.

- Introduction of Slab Material Allocator using chemistry based slab re-grading logic in SMS.

C) Level 5 Business MIS :

- First time in TSL, an Integrated Steel Processing Centers (SPC) Information System (SPIS) to have end to end tracking of SPC customer orders in TSK.

Technology

advent of the prosumer(who can generate, consume and sell electricity) in the field of energy is set to play a significant role in the resultant innovation and democratization of the energy market in ways like online trading did to the global oil markets decades ago. As solar and wind farms cannot be located in cities or sunshine and wind velocity is not consistent, efficient transmission and balancing or storage has assumed critical significance.

The following would be instrumental in shaping innovation and bringing growth and green together:-

- Flexibility and the need to address different scope: ABB as a company with decades of manufacturing in the country has energized a 6,000MW project to provide power to 90 million Indians with the world’s first multi terminal UHVDC power transmission corridor. HVDC technology is increasingly being adopted as the technology of choice to transmit renewable energy across long distances. The project also involved the delivery of high voltage power

equipment designed and manufactured in the country. India is a country of diverse requirements, which provide a bigger play to innovators. From a few thousand megawatts to a few kilowatts, supporting the government’s program of green energy in educational institutions, ABB’s solar inverters have brought power to almost 200 schools in the state of West Bengal.

- Addressing local issues: In India land comes at a premium and is a scarce and precious resource. In a bid to

optimize usage of space, ABB has been part of projects like the world’s longest canal top project in the Narmada canal. The project entails usage of the water body surface for the panels which help reduce evaporation from the lakes as well as the water can be used to cool down panels. In Kerala, ABB has set up a first of its kind 500 kW floating solar grid-interactive photovoltaic (PV) project on the Banasurasagar Dam. The project aims to feed power to the grid. In such solar projects, the generation of hydroelectric power can be reduced during the daytime to balance total power output and the water for the purpose can be used during peak hours. ABB’s solar pump drive innovation was a result of wanting to improve the life of Indian farmers with a mechanism that made their solar pumps more

ndia ratified the Paris climate agreement on the th147 birth anniversary of the father of the nation,

Mahatma Gandhi. This presents an unforeseen opportunity to us as a nation at a scale never witnessed before. The agreement has set tangible

targets as India has committed to 40% of the country's expected electricity generation capacity from renewable sources by 2030 with a 35% reduction in carbon intensity by 2030 from 2005 levels. Innovation will be the bridge to make this vision a reality and to convert the multiple challenges into opportunities as emerging economies like India with a different pattern of growth and challenges take centre-stage in the development of renewable energy market in the next ten years. From microgrid technology, solar lanterns, the world’s longest canal top solar project, integrated home solar solutions, wind turbines, apps for distributed generation data, and car batteries to light up homes – India has been home to a host of innovations from start-ups to century old players in the renewable space.

We are at the cusp of the energy and the fourth industrial revolution. The energy revolution is transforming the energy landscape as never witnessed before. In 2015 China overtook Germany to become the biggest producer of solar energy, led by leadership in solar panel manufacturing and conducive policies to replace fossil fuel. India has set a target of 20-fold increase in solar power by 2022 with a total renewable energy generation target of 175 GW in the same timeframe. As per a report by consultancy KPMG, the share of solar in India’s energy mix is expected to rise to 12.5% by 2025, from less than 1% today. There are projections that solar in India will be cheaper than coal by 2020. This has significantly been led by almost 80 percent drop in the price of solar technology since 2010 as per International Renewable Energy Development Agency. This in turn has made it much more viable in emerging economies and reduced the difficult trade-off between clean energy and growth. India is on track to becoming one of the world’s largest producers of green energy and has to take an innovative and cleaner path of development for all.

The advent of renewable energy has transformed our way of using and generating or using and storing electricity. The


Effective and holistic decoupling of growth

from carbon emissions will be possible when sustainability is not

merely compliance but a source of opportunity

CLEANTECH: Innovations for a Sustainable Future

India is on track to becoming to one of the world’s

largest producers of green energy and has to take an

innovative and cleaner path of development for all

Sanjeev Sharma, CEO and Managing Director, ABB India,

I

deployment at the numerous railways stations to locally generate power with or without grid connection.

- Picking the low hanging fruits: Sometimes small changes can have a huge impact. Our internal studies have shown that across multiple sectors India uses 15% to 30% more energy

to produce one unit of anything as compared to global benchmarks. In the EU, for instance, rules requiring a higher efficiency class of motors came into effect in January 2015. In India, where the standards are guided by the EU rules but not mandatory, market-driven demand for high-efficiency motors is growing very rapidly at a compound annual growth rate of 25%. Depending on the rate of adoption, this could result in savings ranging from 30% to 60% with a payback period of less than a year. Considering that more than 10 GW of low voltage motors are

produced in India annually, MEPS (Minimum Energy Performance Standards) on the European lines could save approximately 2000 GWh of energy on a per annum basis.

In conclusion, clean energy in India has redefined innovation with a variety of applications. One such redefinition was ABB’s technology alliance with Solar Impulse, the world’s first aircraft to circumnavigate the world only on solar energy this year. It changed the paradigm of what could be achieved by innovation in renewable energy. However effective and holistic decoupling of growth from carbon emissions will be possible when sustainability is not merely compliance but a source of opportunity to improve the quality of lives of millions across the world.

effective. These solar pumps have also been innovatively deployed by forest officials to pump water in order to create watering holes for animals.

- Increased automation and digitalization: The complexity of renewable energy and the demands of balancing and storage require a greater expertise in digitalization and automation and unlike Germany, India which is led by utility scale projects in solar, this is critical. A recent PwC study also quoted that in the next 5 years, the level of digitalization for Indian industrial companies is expected to rise to 65%. ABB set up the first of its kind state of the art unified automation platform to power the world’s largest single location solar plant of 648 MW in Tamil Nadu to handle more than 600 inverters with varying loads, electrical systems, the solar inverters and state-of-the art software for plant performance monitoring, maximizing operational efficiency and ensuring grid compliance. The advent of the fourth industrial revolution and the internet of things, services and people, it has become necessary to close the loop with data based services for the remote monitoring of such renewable energy plants again necessitating such systems.

- Industry - Academia partnership: Collaboration by industry and academia to develop technology in areas of green and clean energy will pave the way to solve a lot of the emerging market issues in clean energy. ABB has a collaboration with IIT Madras on developing microgrid technology as well as battery engineering. Microgrid technology applied to the rural areas would be key to providing reliable, cost-effective and clean power to offgrid and urban areas through an optimal mix of energy resources. An unconventional application could also be

Collaboration by industry and academia to develop

technology in areas of green and clean energy

will pave the way to solve a lot of the emerging market issues in clean

energy



Digitization: Immense ScopeCFO Insights in conversation with Sutirtha Bhattacharya, Chairman and Managing Director,

Coal India Limited, on how to adopt the digitization processes that are best suited to the company

reverse auction on e-procurement platform has been

implemented in Coal India and its subsidiaries since January,

2016 for tender values of INR 1 Crore and above.

E-procurement and reverse auction has already yielded above

INR 800 Crores saving for the company during last years.

In a step towards consumer friendly approach the company has

launched a web portal ‘Coal Allocation and Monitoring System’

during FY 16 aimed for the benefit of small & medium sector

consumers.

Coal India has also rolled out linkage auction for non-regulated

sector consumers like captive power plants (CPPs), cement

plants, sponge iron units, fertilizer, chemical and many other

industrial units, not having linkages or whose Fuel Supply

Agreements have expired. The benefits include option of

choosing specific grade of coal, preferred source of supply,

mode of transport etc.

What is the overall scope of digitization in the coal

sector? How do you think this will give competitive

advantage to the Indian coal industry as compared to

global peers?

Coal India Limited (CIL) is planning to go totally

digital by end of Dec, 2016. In your opinion, what

would be scope of digitization in your organization and

its impact on CIL’s business?

Yes, we are geared up for e-office, which is Digital Workplace

Solution that replaces the existing manual handling of files and

documents with an efficient electronic system. The upside is, it

will have a positive impact on operational efficiency, greater

transparency and quicker decision making. The process would

also bring in greater employee, vendor and consumer

satisfaction.

What are the key digital initiatives that CIL has

implemented to streamline the value chain -

procurement, tendering, auction, marketing amongst

others?

Coal India had adopted a host of Information and

Communications Technology initiatives to make internal

processes IT driven. E-procurement for goods, works and

services through e-tendering is already operational in the

company in a transparent manner. Procurement of goods of

more than INR 2 Lakhs value is done through e-tendering. The


Harshavardhan Neotia Chairman, Ambuja Group


operational ease and efficiency. We are always open to

adoption of latest technology and innovations.

How will digital enablers like 3D models of mines

and geospatial technology enhance productivity and

lower costs for coal extraction and land reclamation?

Digital enablers like 3D mine modeling tools facilitate a high

level economic evaluation of open pit mining operations, or

new projects by maintaining versions of the design process to

communicate the design details effectively to all stakeholders.

In the process decision making becomes easier, faster and

accurate through better interpretation of data with powerful

visualization tools and graphical displays.

This would help us in lowering our costs.

Mines’ safety is of paramount

importance in the coal sector. How is

CIL leveraging digital or online

solutions in this regard?

Yes, safety of our miners and mines is our

foremost concern. We are focused on

increased use of digitized interface in

perfecting critical processes that have a

strong bearing on basics of mine safety.

Such as, use of software for mine design,

improving accuracy in mine surveying, geo-

fencing, communication as well as monitoring conditions of

mine site through remote sensing technology.

We are also using several online monitoring systems for

analyzing real time conditions of underground mine ambience

through use of Environment Tele Monitoring System (ETMS),

Local Methane Detectors (LMD), tracking the positions of

transport vehicles at different locations inside large opencast

mines through GPS based OITDS. One Miner Tracking and

Communication system is on trial at one UG mine of Coal

India.

With digital interventions, Indian businesses are

seeing improvement in customer

experience, productivity and

turnaround time. In your opinion,

what should be the strategic focus –

disrupting with new technology or

improving existing technology for

competitive advantage?

We all like innovations and improvements,

especially when they add value to our

business processes. We are always on the

lookout of opportunities for improvement,

whether it is in a product or aligning our

operations with latest technologies. Unless

we latch on to the tide of new as well as improvements in

existing technologies, both of which are important in my

opinion, there is a danger of stagnation. From time to time we

experience massive technology changes which are disruptive.

Introduction of ERP in CIL is an attempt to bring about Non

Disruptive innovation with Disruptive Technology.

For the size of a company like Coal India, encompassing

expansive and expanded operations, the scope of digitization is

immense. The point is to adopt the digitization processes that

are best suited to the company, which we are pursuing

attentively.

Besides the e-procurement and e-auction initiatives, Coal India

is leveraging ICT for many other business operations as well.

The major CoalNet modules like payroll, finance, material

management, personnel, production, sales & marketing have

been implemented along with ERP which is rolling ahead on full

steam. To prevent pilferage of coal, GPS (Global Positioning

System) based Vehicle Tracking System in coal transport has

been implemented. Electronic surveillance through CCTVs at

weighbridges and other vulnerable points is on the verge of

completion at different subsidiaries of Coal

India. To restrict unauthorized coal

transport, vehicle weighbridges are being

connected through wide area network to

allow RFID (Radio Frequency

Identification) tagged trucks.

The whole idea is to widen the consumer

base, improve productivity, supply

increased quantity with quality, to make

grade slippage a thing of the past, reduce

the operational cost, decrease the

dependency on imported coal. All these

efforts, as a naturally corollary, would help

gain competitive edge while facing global

peers.

CIL operates in a technology intensive sector. In

your opinion, what are the policy enablers to

accelerate the adoption of digitally enabled global best

practices by Indian Public Sector Enterprises?

Like I mentioned earlier, Coal India has rolled out the

implementation of ERP as a policy enabler which would be in

sync with future needs of the organization to standardize and

modernize the business practices, across all its subsidiaries. At

the cost of repetition, I assert that, what is important is that

we are adopting system enabled best practices suited to geo-

mining conditions of the company.

This will enable improved cycle times,

efficient asset management, expense

control, inventory reduction, better

employee and customer relationship,

improved quality of decision making,

transparency, compliance, standard and

streamlined processes, and business

intelligence.

Coal logistics – handling,

transport, last mile delivery are

rapidly evolving due to process mechanization and

online applications. How is CIL aligning with this new

paradigm in the coal industry?

I would say in a responsive and responsible manner with a

proactive approach. Technology infusion in coal mining

operations is a continuous process. Where ever there is need

for technology enhancement or modernization the company

has always seized the opportunity to implement it for

Unless we latch on to the tide of new as well as

improvements in existing technologies,

both of which are important in my opinion,

there is a danger of stagnation

Technology infusion in coal mining operations is

a continuous process. Where ever there is need for technology

enhancement or modernization the

company has always seized the opportunity


Mastering the A.R.T. of Digital BankingART of Digital Banking and not just the underlying technology

which can help banks navigate through the paradigm shift

The most optimal way out of this conundrum is to collaborate and take the best of both worlds, the mature banking domain and the energetic startups. While Fintechs bring agility, vigor and new ideas to the table, banks can contribute with robustness, resilience and foresight. When an established financier with deep insights about how the economy will play out partners a startup with the passion for novelty, it makes for a winning combination.

It is no surprise that banks are more and more turning to Fintechs to capitalize on their disruptive potential and marry it with their own acumen to create synergy. Some of the hotspots of such symbiotic alliances are payment solutions and SME lending. NASSCOM’s estimates are a testimony to this trend – Indian Fintechs are involved in financial transactions worth USD 33 Indian in 2016 which is expected to grow to USD 73 billion by 2020.

BBVA stands as a classic example globally of how a bank is nurturing and partnering new ideas to the extent of acquiring some of them. One of the key factors for its success has been a dedicated business unit that scouts for and invests in new ventures. Closer home, YES BANK is in the process of launching YES Accelerator, the flagship incubation program for

Fintechs and other startups which will endeavour to create significant value for the customers, business ecosystem and financial services in particular, and in the process, some ventures may become future Unicorns.

One has to admit that these are challenging yet exciting times ahead where both seasoned warhorses and young turks have a lot to contribute as also derive value from each other.

Relationships

Banking services entail fiduciary responsibility. When millions keep their savings, financial or otherwise, they not only park their deposits but also their trust with the banks. Similarly the prime driver for lending is the implicit faith that banks repose on the bona fides of the borrowers.

This mutual trust is the bedrock for continuous and regular engagement between the banks and the customers. As a corollary, there are volumes of data on customers that have accreted with the banks over time. This can be a veritable goldmine of information if meaningfully exploited.

Customers today whether individual or institutional, are well informed, have set exacting standards of service, and yearn for customized services from the banks. Therefore, it has not only become important to satisfy their needs but also to create customer delight. This would facilitate deepening of mindshare and the bank becoming the customer’s preferred choice.

Analytics champions – industry leaders as well as startups, are

ART of Digital Banking

Today, digital is pervasive in every domain of our social existence and economic activities. Banking is no exception to this New Normal. Rather banks have been pioneers in visualizing, strategizing and actualizing digital technologies to create value for their stakeholders. Leveraging on their 360 degree interaction with the economy, banks have traditionally been able to discern what the customer aspires. This has enabled them to adopt emerging technology trends and suitably incorporate them into their growth strategy.

Not any more – business has become more globally integrated, more complex, and predicated on a multitude of factors. Digital interventions are evolving at such a rapid pace that all involved have to continuously reorient themselves to stay ahead of the curve or risk losing out to competition due to obsolescence. Thus when it comes to going digital, banks can no longer rely solely on their vintage and pedigree.

If one were to imagine about things digital, the instinctive and obvious reference would be to technology and its accompanying paraphernalia. And why not – ‘digital’ and technology are interlinked, and it is hard to think of one without the other. One would say it is a ‘Science’ and not an ‘Art’! ‘Art’ is the last thing that one conjures up when thinking about digital aspects. Conventional wisdom implies that it is best left to the connoisseurs of refined tastes and sensibilities.

However fortuitous it may sound, it is the ART of Digital Banking and not just the underlying technology which can help banks navigate through this paradigm shift. If digital promises to be the game changer for banks, then the ART of Digital Banking paves the way to fulfill that promise through:

A – Alliances

R – Relationships

T – Technology

Alliances

If Motown has to compete with Japanese or German automakers for a share of the global automobile market, it also has to keenly follow the disruptive innovations in mobility that Silicon Valley is pursuing. As a result, auto giants are teaming up with next generation niche startups to innovate and build competitive advantage. This is to ensure effective transition into a future business scenario characterized by disruption.

Banking in our contemporary period is also in the midst of a churn. Existing players in the ecosystem not only have to deal with strong competition, but also have to factor in novel ideas that can fundamentally disrupt the industry.


Digital interventions are evolving at such a rapid pace that all involved have to continuously

reorient themselves to stay ahead of the curve

RANA KAPOOR

Chairman,

MD & CEO,

Financial Services


gradually gaining traction as indicated by a CII survey in 2016. 57% of those surveyed in the BFSI space acknowledged having rolled out some sort of cloud based services.

Internet of Things (IoT) is another step towards making digital technology more pervasive. It is projected that information collected through a multitude of touchpoints would provide new insights on business and help in making more informed investment or financing decisions by banks.

Way Forward

Some recent developments also warrant attention. The demonetization drive launched under the aegis of the Hon’ble Prime Minister has been a master stroke in the evolution of the

Indian financial system. This year, the Reserve Bank of India (RBI) launched Vision-2018 – a roadmap to make India a less-cash economy. In parallel, National Payments Corporation of India (NPCI) has been progressively rolling out digitally enabled innovations to enable best in class payment and settlement systems to take root in India.

Combustion can only result when fuel and air come in contact with a spark. The ensuing illumination and dissipation of energy proves beneficial for human activity. In the same vein, one can surmise that while India has digital innovations and payments ecosystem, availability of internet and mobility, and changing consumer demographics, the spark that ignites the fire for concomitant benefits to follow suit was delivered by the monumental decision to flush out high-value currency notes.

To conclude, these factors are anticipated to provide strong impetus to digital banking and in conjunction with the ART approach can result in successful digital strategy for banks.

increasingly collaborating with banks to make sense of customer data, anticipate what solutions the customer may want or require, and offer the same in a prescient manner. Advances in machine learning and deep learning in particular would fuel this trend. For banks, digital innovations can thus become effective decision support systems with the insights from relationship induced engagements.

To that effect, NASSCOM projects data analytics in India to be at USD 2 billion in 2016 and grow to USD 16 billion in 2025 to meet the demand from sectors like banking and insurance.

Technology

Digital transformation in financial services is a function of the impact of technology. Electronic payments solutions, internet banking and off late mobile app based banking services have become the norm rather than being privileges. Now banks have to also consider the futuristic technology innovations which can significantly influence their business.

The distributed ledger technology of Blockchain can revolutionize transaction processing. Enhanced security, reduced lead time and improved compliance through comprehensive audit trail are some of its purported benefits. Hence banks are seriously exploring this route for enterprise transactions. A global banking survey by IBM in 2016, shows that 65% of the banks plan to roll out blockchain solutions within the next three years. YES BANK has also executed the first transaction through Blockchain for supply chain finance.

Cloud is fast becoming popular with banks as a technology platform providing greater flexibility and agility. The asset light business model that cloud ensures also helps to rationalize costs. Banks can consider moving critical business operations to secured private clouds while hosting some of the external interfacing modules on public cloud platforms. The trend is

‘Digital’ and technology are interlinked, and it is

hard to think of one without the other


Strategy


Making Digital Work for You

Dr. Ludo Van der Heyden, Chaired Professor of Corporate

Governance and Professor of Technology and Operations

Management, INSEAD and Liri Andersson, INSEAD Guest

Lecturer and Founder, this fluid world, through their study aim

to understand the implications of digital technologies for companies,

how it is being incorporated into organizations and how it is truly

changing the way business is conducted

business. In the majority of cases these initiatives originated at a grass roots level where digital is applied to reach specific business objectives, some not feasible until innovation in digital technologies.

Digital initiatives are generally launched and managed by functional areas inside a firm. While they may at times cut across different functions, digital initiatives are rarely company-wide or mandated from the top. In fact, in many cases senior management or board members did not know the initiatives are taking place.

Digital success is not primarily about technology

While over one third of respondents indicated their main digital initiative has delivered or exceeded expectations, as many as 60 percent stated it was too early to say.

Surprisingly, among those who claimed success, few (just 12 percent) attributed it to the right technology. It seems despite digital often being positioned as a technology, it is by and large

the combination of a right vision, effective leadership, and a supportive culture that make the difference between success and failure. Successful digital initiatives typically start by understanding how digital is changing the business environment, and then proceed by defining how the organisation, its products and services, and

also its business model can leverage the opportunities brought about by digital.

Digital is a journey with no clear destination

For the majority of organisations we surveyed, digital is a journey of discovery with no clear destination. The companies appear to be finding their own digital pathway, navigating through their individual challenges and distinct opportunities. Thus the question to be asked is not “how can I digitally transform my company?” but rather “how can I achieve a competitive advantage in a digital world and how can the technologies emerging in this world help me succeed?”

No one-size-fits-all approach

There is no ‘one-size-fits-all’ or right way to do digital, nor has a corporate digital solution emerged to benchmark against.

or over a decade companies have been urged to “digitalise” or risk getting left behind. While many accept this as a reality, we argue that the precept is at best confusing and at worst unclear for those eager to act.

Too often information about the “digital revolution” and its impact on business comes from analysts, consultancies and the media, but little is heard from the workplace, from business managers grappling with the new realities brought about by digital on a day-to-day basis. It was to uncover their truths that we initiated a study to examine the reality of digital in today’s workplace. It was our aim to understand the implication of digital technologies for companies, how it is being incorporated into organisations, what managers and their boards expect of digital, and how it is truly changing the way business is conducted.

The findings published in the report The Real Impact of Digital - As Seen From the “Virtual Coalface”, were surprising and challenged our own perceptions.

“Digital” has no universal meaning today

Of the 1,160 people surveyed - managers, executives and board members from a broad range of organisations, industries, functions and regions - all were engaged in digital initiatives.

However, the extent to which the meaning of digital differed between organisations astonished us. It was not without a challenge that we grouped their digital initiatives into 20 categories. We concluded that the number of business problems addressed by digital is both vast and varied.

The most quoted reasons for engaging in digital initiatives were to improve customer engagement and increase efficiency; other initiatives touched primarily marketing, sales and business processes. The complexity of engagement was also wide-ranging. While some companies were effectively “defining industry 4.0”, others were still focusing on “trying to get all their staff on to e-mail”.

A grass roots approach

Companies’ engagement in digital is often driven, not by an over-riding digital strategy, but by a multiplicity of business needs and aspirations that are both external and internal to

F

For over a decade companies have been

urged to “digitalise” or risk getting left behind


7. Make people, management and culture the main drivers of digital

8. Measure the impact of digital and the role it plays in achieving your company’s objectives

9. Don’t feel the need to create an over-riding digital strategy – you may not need one

10. Manage the spill over effects of digital initiatives on the wider organisation, as even basic adjustments may necessitate widespread changes

In conclusion

Digital technology is changing fast, constantly pushing the limits of what is possible. It will continue to do so and at an even greater speed. To compete, companies first need to understand what business in the digital age means in general, and subsequently its far-reaching implication on the organisation, the way it is managed, and finally the way it shapes and modifies a company’s value creation.

When considering what investments to make and capabilities to develop, managers, executives and boards need to take into account that digital does offer rich opportunities for innovation and distinctiveness, unavailable until now. Capitalising on this however, will require exploration, understanding and insight.

In sum, be wary of “the promised golden path to digital heaven”, but do not ignore the possibilities brought about by innovation in digital technologies.

This then raises the fundamental question as to whether a single form will indeed emerge around which organisations coalesce, or, at the other extreme, whether digital creates the opportunity for true customisation of a company’s offering, business model and processes, potentially to as many different digital forms as there are organisations.

Ten recommendations to guide management through the digital world

The findings formed the basis for ten recommendations for managers, executives and board members looking to effectively manage digital within their organisation.

1. Clarify what you mean by digital in the context of your company and business objectives, and challenge how the media and experts promote digital

2. Own your digital journey and gain competitive advantage by properly defining how digital technology is to be used to shape your organisation, and customise your products and services

3. Make digital everyone’s business by ensuring understanding of digital throughout the company, from board members down

4. Thoroughly explore the opportunities digital offers before defining and committing to a given digital solution or strategy

5. Be wary of ‘expert advice” in the digital space as it typically comes with expert bias

6. Engage the board in digital, especially in the case of digital and business model transformation, as these initiatives will have an impact on the entire organisation and are inextricably linked to the organisation’s success

Companies need to understand what

business in the digital age means in general, and the way it shapes

and modifies a company’s value

creation

Opinions expressed in the article are the authors’ own

The article is republished courtesy of INSEAD Knowledge (http://knowledge.insead.edu). Copyright 2016.

The Need for Correct BalanceCFO Insights in conversation with Harshavardhan Neotia, Chairman, Ambuja Neotia Group,

on balancing between new technological solutions and improvement of technology at hand

To build a system smooth enough to comfortably absorb disruptive changes is, in itself, a technological challenge. However, research says, some technologies involved with substantial human interface perform better when improved than replaced. For example, according to a study by the Cass Business School of London, the Formula One teams that improved on existing technologies of their racing cars performed much better compared to those who introduced new technological solutions apparently because the latter “...push the (already high) level of complexity beyond the team’s expertise, thus reducing the effectiveness and reliability of technological innovation.”

With digital interventions, Indian businesses are seeing improvement in customer experience, productivity and turnaround time. In your opinion, what should the strategic focus – disrupting with new technology or improving existing technology for competitive advantage?

I think every company or process needs the correct balance of new technological solutions and improvement of technology at hand. There are some technologies that simply become redundant due to a disruptive new model and the system needs to be flexible enough to adapt to the new paradigm.



group create mindshare as well as improve services?

Hospitality is a dynamic sector, where you need to constantly read the customer’s pulse in order to stay ahead of the curve. A slight blip in service or experience is fatal and there is no room for complacency. We have used several devices in the digital media and solutions space that help understand customer sentiments and facilitate effective interventions in case of any detected crisis.

The Neotia University is your unique initiative in higher education with focus on emerging technologies like robotics, animation, biotechnology. How do you see the future prospects of such disciplines? How is the

university training young students to help them capitalize on the digital innovation wave?

Through our University, we have tried to impart highly advanced futuristic courses in various field of technology and other general areas of education to ensure that the students emerge as responsible citizens

with a strong allegiance to collective advancement. The prospect of these specialized courses is forecasted to be very high in days to come as India slowly but steadily advances towards a manufacturing economy with an acquired competitive edge. This is only possible by having in place a systematic skill development mechanism at the higher education level by fostering an ecosystem of multifaceted innovations.

Ambuja Neotia Group operates in several capital intensive sectors. In your opinion, what are the policy enablers for these sectors that can accelerate the adoption of digitally enabled global best practices by Indian organizations?

The Indian Government’s push to build a more robust ecosystem for both developers and users of

technology is encouraging. It has in the recent past supported several interfaces to patronize technology start ups and many digital platforms. We hope ongoing policy frameworks – such as the one for promoting creation of a sustainable software product industry – put adequate emphasis on providing a level playing field

for Indian players.

Investments in innovation and R&D have long gestation period and uncertainty of returns. Being at the helm of affairs, are you looking to acquire technologies or invest long term to build internal capabilities?

I think it has to be mix of both. It is always important to invest long term in a technology, customize it according to the company’s need and see it improve, but for certain other ad hoc requirements, you also need to acquire time-tested efficient technologies for immediate use.

Ambuja Neotia Group has consistently won several awards and accolades as an organization as well as for specific realty projects. What has been the role of technology behind the successful initiatives that led to these achievements?

There are whole lot of developments in the technological area that is aimed at improving the efficiency of operations, minimising costs, maximising revenue and exercising control- whether it is automated systems and process, upgraded equipment, energy efficient devices, mechanised tools and gadgets, products promoting conservation and sustainability etc. We have also tried to put special emphasis on green technologies and energy efficient construction at all levels.

How is the Group employing digital technologies to build energy efficient and green buildings for residential as well as commercial purpose? What are the technology enabled innovations that are gaining traction in the affordable housing segment?

The whole approach of reducing the carbon foot print of a real estate development starts with the concept of design. Different buildings, along with specific landscape features, are oriented to take advantage of the local terrain in terms of wind flow and sun path so as to minimise the use of external energy to provide comfort to the users. The use of locally available material in construction reduces the transport foot print of the raw materials. The use of treated water for purpose of flushing and irrigation has now become mandatory features. The use of most efficient equipment for air-conditioning and energy efficient lighting systems like LED lights, sensor based common area lighting, use of solar cells on roof tops etc are also being adopted to optimise the use of energy.

At Ambuja Neotia, we have tried to adapt to the philosophy of the aesthetic and environmentally sustainable development. We have endeavoured to set standards by opting for third party certification of our development- mostly gold and platinum. We have been using energy efficient LED lights since way back in 2009 in our hotel and offices when use of this technology was still in its early stages in the sector.

Healthcare is also one of your focus areas. How has digital enablers transformed the healthcare services provided by your Group?

We have two hospitals as of now in the state of West Bengal – a multispecialty hospital in Siliguri and a Woman and Childcare hospital in Kolkata and both demand specific focus on technology. This apart, we also operate in a very specialized technology-intensive segment dealing with issues of infertility. Our endeavour in this highly sensitive healthcare sector is to keep updating the technologies to continuously meet international best practices.

Ambuja Neotia Group has a significant footprint in the hospitality sector characterized by rising competition and changing customer preferences. What has been the role of technology to enable your

Invest long term in a technology and

customize it according to the company’s need

Some technologies involved with substantial

human interface perform better when

improved than replaced


The Digital Micro-Payment BugleDr. Ashok JhunjhunwalaProfessor, Department of Electrical Engg., IIT, Madras

phone number (linked to his or her account) in the shop. In the meantime, Aadhaar number and finger-print authentication has scaled in the country. If the merchant has a smart-phone and finger-print sensor, the customer just needs her Aadhaar number and use her thumb to make the payment. Of course, the customer’s Aadhaar number and account need to be linked, but even a PIN is not required, making it less prone to misuse. The only problem is that some customer’s finger-print may not be clear and the transaction may fail. A second try would make it successful in most cases. For a small number of customers, their finger-print may be unclear and they may have no option but to use a PIN.

As yet another option, soon a QR-code based Universal Payment System will be launched, where the merchant will have a QR-code picture on his or her wall. A customer with smart-phone can point and click at the picture, enter the amount and PIN to complete the transaction. Of course the traditional card based payment using POS machine would be another way, though getting the POS machine to every vendor quickly may be tough. In all cases, a confirmatory SMS will be sent to customer’s phone, if it is linked to bank account. Finally, there are enough wallets in the country today and they are doing well. Digital micro-payment is about to explode.

Creating some PULL may help. May be the Government could come up with standard deduction for tax of an amount that a merchant receives using digital transaction, up to a maximum of INR 100,000. Government could certainly remove all charges on customers for such digital payment.

As digital micro-payment explodes in the nation, the economy could benefit immensely. Money will be in banks and not in individual’s pockets. Transactions will be traceable. On top of it, given the situation that we are in today, this micro-payment revolution may occur in the shortest possible time in the country, enabling us to create history. But the rapid movement to digital transaction needs a cautionary note.

The first caution is with respect to frauds and dispute resolution. Frauds can easily destroy confidence in this new system. It will take a long time to overcome the fear after that. It is impossible to completely prevent frauds. Therefore, what would be needed is some customer-centric dispute resolution mechanism, so that customer is not penalised unduly for frauds. This is especially important in the first year or two to build trust. The second caution has to do with tax-authorities using the transaction data to harass small merchants and customers. While legitimate taxes need to be paid, honest small merchants and middle and low-income people do not have the wherewithal and expertise to deal with tax-authorities and answer their queries; nor can they hire legal and chartered accountant’s services easily. Fear will prevent their move to digital.

Unless steps are taken to guard against these possibilities, the micro-payment revolution can again peter out and get postponed.

It is important that government, industry and policy-makers understand that trust and confidence need to be won. It can easily go the other way, more rapidly than one can imagine.

There is little doubt that India is at a threshold of a major revolution. But the champions of micro-payment can become their own enemy and can hurt the movement. Hopefully we will all be careful and see it all the way this time.

here may not have been a better time to pen this article. The

Mobile Payment Forum of India (MPFI) was born some seven years ago, with the objective of

enabling small payments through mobile. Number of mobiles had crossed 900 million and it was apparent that most people would soon have access to a phone. The idea of payment of the smallest to not-so-small an amount, anytime, anywhere, and from anyone to anyone was crystallised. The payment should be instantly possible irrespective of the type of phone that the payer and payee had, the operators they took service from, or the bank or the financial instrument they kept their money with. Banks, telecom operators and technologists got together, were able to rope in RBI, and worked out the details. One would not have to even remember her bank account number, as the person’s phone number will be mapped to it. Since a person may have multiple accounts, an MMID was added to the phone number, which gave a unique mapping between the extended phone number and a bank account. Draft regulations were prepared by MPFI and RBI accepted it. RBI went on to form a National Payment Corporation of India (NPCI) to act as an intermediary and carry out the settlement. One started to imagine that paying the vegetable vendor using a phone and the vision of cashless society was setting in.

Just when everything was falling in place, small and narrow interests of individual businesses started creeping in. Mobile companies wanted to get as much as they could from each payment and compared the prevailing cost of “sending money to a village” as basis for their charges. Further, they wanted their mobile wallets to replace the banks. Banks would not tolerate any new player and would make things difficult for wallets. They would not even allow a third-party player to come up with an application where money would be transferred from one bank account to another and insist on all users using their (bank’s) application alone. So if one has two bank accounts with two different banks, two applications will have to be loaded. No one was thinking of the customer. On top of it, smart-phones were in their infancy and it was difficult to load these applications on a variety of feature phones available. The only easy option was SMS based payment, which was not as secure. It is at that time, MPFI came up with an idea of using spare capacity on USSD ( a channel available on mobile phones and used to send dialled digits). But again, mobile companies would want a huge fee. MPFI then came up with a way to make third party SMS based payment encrypted to communicate with bank’s payment systems. But banks would not accept it. As a result, the mobile payment explosion never took place, but crawled.

The demonetisation drive initiated last month, has suddenly given a new lease of life to micro-payments, and it is more likely to happen today. Customers and merchants would both like to get this working, so that they have to depend less on cash. The Government’s push is helping. At the same time multiple digital payment options are now available.

USSD based payment would probably be simplest, as it would work on any phone (feature or smartphone). A customer has to type in merchant’s extended phone number, amount to be paid and a PIN on her phone and the transaction would be instantaneous. Merchant just needs to display the extended

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Financial Services



Non Editorial

Strategy

Is Sustainable Business Growth possible through Digital Disruption?

The case for Digital is very strong, it really isn’t so much about “if” as it is about “how”

aired by the US President-elect which the world desperately

hopes are election rhetoric); and this could only mean one

thing – there will be a flurry of innovative solutions flooding the

market, which will try and make do with less in an effort to

maintain equilibrium. Finally, the paradigm about

interconnectedness in a world enmeshed with complexities.

Economies can no more remain isolationist, and the impact of

policies in all likelihood, will ensue a Domino effect.

Putting an exact figure may be difficult but a particular study

concluded that in 2013, the accumulated capital investment in

digital technology touched 6 trillion USD which is

approximately 8.5% of Global GDP. The other interesting

development is that such investments are being viewed as

capital asset and not booked under cost. Rapid adoption has

birthed digital innovators like Airbnb, Amazon, Uber etc, which

are not only disrupting incumbents from altogether different

industries, but also enabling partnerships to deliver on scale.

This is most curious. Supremely competitive as they are, and

yet they do not shy away from exploring collaborative models

with competitors even.

The “Prosumer”

Armed with a smartphone, the customer is more demanding

than ever before. Connected 24/7/365, as they are to the

ecosystem players, the best possible offers are at their

fingertips - literally. If high expectations are not met, they can

be unsparing and scathing on social media, and one is never

ets flip the question – is that an option? Can

business sustain without going the digital way, in

future?

In hindsight we are all great strategists, but in the midst of it all

with mounting margin pressure, and caught in the thick of

things, perhaps these decisions are not easy to make.

Global Forces of Disruption

Disruption has become a clichéd word. So, it is worthwhile to

focus on the global shifts and gain a deeper understanding of

what will disrupt business models. Firstly, it will be about

Emerging Markets. Today, about a quarter of the Fortune 500

companies are in these geographies. Less than 10 years from

now, a NASSCOM-McKinsey study has estimated this number

to be as high as 50%. Secondly, and not wanting to make it

sound like a sci-fi apocalypse, but jobs today are at high risk of

getting replaced by machines. Technology, down the ages, have

replaced jobs and created better ones in turn. But, this time

white-collared workers will also not be spared. In addition, the

pace at which this changeover will happen (already happening?)

will be quite unprecedented. It is estimated that by 2025, 260

million jobs may be replaced or augmented by technology.

Thirdly, data generation will increase beyond imagination,

characterized by the three V’s – Volume, Velocity and Variety.

The first two V’s have been around awhile, but it’s the third

one which has compelled entities to think differently. Fourthly,

resource scarcity and global warming is real (despite `the views


L

R. Chandrashekhar

President, NASSCOM


provide support and advisory to the CEO and other functional

heads. The CEO, with support from the CIO and other

functional heads will be responsible for the company’s overall

digital agenda. Finally, the implementation role will rest with

the CIO.

All that has been mentioned till now can only be made possible

if we have the appropriate talent in place. Digital enterprises

require talent which is very different from traditional

organisations. Automation of processes

will lead to much higher levels of

productivity, and demand for some skills

will weaken in comparison, if not die out

altogether. Just to set an example, right

now in the automotive sector there is a

huge demand for mechanical engineers but

in future, it will also be matched if not

exceeded by the demand for data

scientists. We could be facing a situation in

future where there is an imbalance in supply. To address this

issue, we have to make the right decisions now to enable an

ecosystem which is able to nurture the kind of talent pool

which is future ready. It is noteworthy, the first USD 100

billion of IT BPM industry’s revenue was achieved through the

employment of 3.3 million people. The next hundred, it is

estimated, will come through the efforts of 1 – 1.5 million, and

clearly what we see here is a decoupling of revenue with

headcount.

One thing is very clear. Almost no organisation will have

complete control over all the components in the value chain,

which progressively will get to be more

complex and specialized. There’s a

premium on faster time to market, need

for specialized players, standardization and

digital adoption which will only increase

with time. Increasingly collaborative

models and partnerships will come to

operate manifold - significantly higher than

what we are witnessing now. A vertical

disaggregation of the value chain is also

foreseen, dominated by specialized players.

Information overload is upon us –

petabytes, zetabytes and terabytes galore.

There are sophisticated and powerful tools

which can make sense out of all this to reveal patterns that will

enable humans to make more informed decisions. Predictive or

prescriptive as they may be, but ultimately decisions will have

to be taken by leaders and ensure that implementation is not

compromised.

That bit about running a business hasn’t changed at all.

Knowing what is to be done and having the courage, sincerity

and perseverance to ultimately get it done. That is when it

would have turned a full circle.

quite sure as what can go viral. Unwaveringly, the response is

now expected to be real-time, across multiple channels. What

was earlier seen as a mere transaction between buyer and

seller (pre-digital?) has transcended to a level of experience

sharing.

Also, this is a two-way street. The consumer is a few clicks

away and leaders are able to gather a deeper understanding of

her needs. Physical channels like stores and kiosks are getting

redefined where the customer can see,

touch, feel and experience the product.

Essentially, prosumers are customers who

have a major say in the production as well.

Building a Digital Enterprise

The benefits derived through digital is

varied across industry verticals and

functions. In manufacturing processes,

digitally enabled methods can save cost

across the value chain ranging from 10 to 25%. For instance, in

R&D and Design it can be as high as 20 – 50% whereas in

production, it may be a modest

10 – 25% (in comparison). Whichever part of the value chain

one considers, there’s no gainsaying that the overall impact due

to reduction in cost is quite significant.

The case for Digital is most strong and it really isn’t so much

about “if” as it is about “how.” Crucial as it may be and yet, the

pace of digital adoption will be anything but uniform. Once

again, we refer to the NASSCOM – McKinsey Study which has

put forward a very effective and realistic

framework. If pace of digital adoption be

the parameter then there will be three

distinct types - namely, Digital Attackers,

Smart Followers and Digital Laggards.

Attackers, as the name suggests will be

those companies which will not be

burdened by legacy systems and will be

bold enough to pursue a full digital

transformation. Startups are likely to form

a significant part of this brigade. Internal IT

teams within such organisations will be

quite aggressive in pushing for digital and

maximizing on RoI. Followers will be

somewhere in between. They will continue to run legacy

systems especially in core areas, and leaders will be most

watchful about how the digital strategies pan out for other

players in the market. Their transformative journey is likely to

span over a period of 3 – 5 years. Finally, Laggards will be those

companies which will make limited investments in new-age

technologies, marked by a piecemeal approach and primarily

mimicking popular market trends. Stability and cost will be the

drivers in their investment decisions.

The role of CIO will undergo a major shift, from being the

chief decision-maker in IT investment related decisions, to

The role of CIO will undergo a major shift, from being the chief decision-maker in IT investment related

decisions, to provide support and advisory to

the CEO and other functional heads

What was earlier seen as a mere transaction

between buyer and seller (pre-digital) has

transcended to a level of experience sharing


Leveraging Digital for Quantum Improvement in Customer Experience

CFO Insights in conversation with Krishnakumar Natarajan, Executive Chairman, Mindtree, on how his organization as a strategic partner to clients delivers beyond predictable cost efficiencies

Managed services, IT validation and IT infrastructure

management are the new paradigms to build efficiency

in business processes. How is Mindtree partnering with

clients to create value for their business?

Managed Services, IT validations, IT infrastructure management

have benefitted customers with significant cost efficiencies and

process improvements by which they are able to get services

which are predictable and of higher quality. While these are the

services customers require, at Mindtree we believe in being a

strategic partner beyond delivering predictable cost efficiencies

for our clients. While evolving into this role we focus on

building mutual trust which forms the foundation of any

strategic partnership. Beyond that, we try to have a deeper

understanding of client’s business and deploy relevant

technologies which are required in the context of their

business rather than just deploying technology for the sake of

it. Since we are focussed on deploying the right technology

service for our clients, we are also able to develop the



As per independent research only 22% of the Indian

adult population uses the internet as compared to a

global median of 67%. How can the IT industry

contribute to bridging the ‘digital divide’ so that larger

sections of our society can reap the benefits from

digital innovation?

It is true that only 22% of Indian population use the internet.

This is primarily because the infrastructure for accessing the

internet is still evolving. The Government is rightly putting a lot

of effort in laying down fibre across the length and breadth of

the country. Once the infrastructure is available, IT companies

need to focus on reducing the digital divide by exposing people

to the use of technology. So, education becomes a very key

aspect in helping people adopt internet as part of their

everyday life. We also need to train people on how we, as

individuals and organisations, gain from technology deployment.

One of the activities that has not yet taken off is local

applications. India being a diverse country with different

regions, languages and culture, there is a great need in

developing local applications which will drive adoption of both

technology and internet. Clearly, the Government has started

to understand the importance of this and is driving initiatives to

make local applications a big part of the application portfolio.

It has been reported that 80% of

the total industrial enterprises in

India consisted of MSMEs which

accounts for a major share in the

manufacturing sector, exports and

generating employment. What are

the solutions offered by Mindtree for

small businesses to enable them to

leverage digital transformation and

stay ahead of the curve?

India has a large number of SMEs and 80 percent of the

enterprises are medium and small companies which are

spread across diverse sectors like manufacturing, services,

exports etc. Today, technology is becoming indispensable and

many of the larger enterprises are also ensuring that the

MSMEs they work with adopt technology so that they have

seamless technology stack across their entire value chain. So,

part of the thrust in MSMEs adopting technology is coming

from larger enterprises they deal with. Enterprises also need

to look at some of the evolving technologies and see if they

can make them a part of their technology landscape. For

example, to run any business they would need a strong

financial accounting and reporting system. Rather than trying

to build it in – house or buying a package and implementing

it, MSMEs have the flexibility of procuring this as a SaaS

offering. Similarly, in other areas of business, MSMEs have the

advantage of getting access to the best of the breed solutions

which are being offered on a SaaS model. This means they

only pay for what they consume which makes the whole

process of technology deployment far more cost effective

and affordable. The efficiency which an MSME enterprise can

gain by adopting the right SaaS technology can be

phenomenal and that in turn will give them both the

confidence and capability to compete even in markets

outside the country based on the technology infrastructure

they have.

framework by which we ensure technology investments have

measurable ROI that help them become far more competitive

in their business.

NASSCOM estimates that India will have a 32%

market share in Big Data analytics globally by 2025.

How do you see the prospects of Big Data in Indian

businesses in the next 5-10 years?

Data is core for any enterprise to stay ahead of their

competition. With advances in Big Data, companies are using

data in real time to make key business decisions. I see Indian

enterprises adopting these technologies rapidly and in the next

5- 10 years we will have many Indian companies embracing Big

Data technologies.

With digital interventions, businesses are seeing

improvement in customer experience, productivity

and turnaround time. In your opinion, what should be

the strategic focus – disrupting with new technology or

improving existing technology for competitive

advantage?

Most enterprises are leveraging digital technologies to enhance

consumer experience, achieve dramatic

improvement in productivity as well as

build new business models. Depending on

the maturity of the client and the state of

adoption of digital transformations they

should choose where they want to start at.

In our experience, most organisations want

to increase revenues by significantly

improving consumer experiences. So, this

is an area no organisation can afford to

ignore. There are several good examples

of enterprises which have gained significant

efficiencies by deploying digital technologies and this is also

another area that organisations should focus on. Evolving new

business models that disrupt your current models is not easy

and it should be done once enterprises have a mature

understanding of digital technologies and how it impacts their

business.

Mindtree has been providing customized and

innovative digital solutions – platform to increase in-

store conversions for retailers (Flooresense), a cloud-

based platform for Travel & Tourism to recommend

actions based on passenger’s behavior (PaxPulse), field

inspection services (InspectMind) amongst others.

How are these solutions impacting your customers?

At Mindtree, we believe in building solutions that are relevant

for our client’s business and in that context many of our

solutions like Floorsense or PaxPulse have delivered

noteworthy differentiation to them while enhancing their

consumer experience. We also deploy custom built solutions

like InspectMind- a digital solution we built for a large car

rental agency that has helped them to shorten queue lengths

and consequentially, had a positive impact on their customer

satisfaction. So, many of the solutions we build for our clients

using digital technologies enrich customer experience or bring

in quantum improvement in efficiencies (sometimes improving

by 50- 70%). Hence, clients become far more competitive in

their markets and start winning market share.

We try to have a deeper understanding of client’s

business and deploy relevant technologies

which are required in the context of their business


Financial Services

FinTech and Banks: Creating Value for Customers

Dr. Subho Ray, President, IAMAI, shares his belief on how Banks

and FinTech companies can combine their strengths and bridge their

weaknesses to create lasting value for customers

cooperating and combining their positives to compensate for each other’s negatives. Banks can provide a rapid reach with significant funding and support, and sustain customers’ growing demands. The FinTech sector, on the other hand, can offer the most efficient customer service solutions.

Besides capturing technology disruptions and innovations, FinTech companies can identify various use cases for technology adoption. Thus, they are able to create a value proposition which is both appealing and cost-effective for customers. Banks, on the other hand, are not able to focus on such innovative utilisation of technology and hence stand to lose clientele to upcoming FinTech organisations.

While FinTech companies offer product simplicity and seamless integration, they lack sufficient data security, compliance and

regulatory certainty that banks possess. The industry is seeing a shift where both sides are coming to the realization of a new, mutually beneficial relationship, and ultimately create value for customers.

Banks must continue to enhance customer experience through their journey of digital transformation, but instead of undertaking this journey alone, they should partner with FinTech companies by utilising their innovations in their day-today functioning. Upon analysing their core strengths and weaknesses, banks need to associate and partner with FinTech start-ups which can bridge the gaps and thus create a win-win

situation for both.

Many banks and traditional financial institutions that initially had reservations regarding the FinTech emerging as direct competition to them are now partnering with such innovative startups to offer smart solutions to their customers.

These new business models are focused around product diversification and advancement in financial technology. Recently, the State Bank of India has also allocated a fund of INR 200 crore dedicated solely for enhancement of financial technology space, and has tied-up with Society for Innovation and Entrepreneurship at IIT Bombay to promote innovation by FinTech start-ups.

The demonetisation announcement has fuelled the growth further and the bigger shift we believe will be in the financial behavior of consumers across India.

In India, hackathons, competitions and partnering with incubation platforms is the strategy adopted by a lot of incumbent banks. When you see so many top players taking a common approach, you have reasons to believe that this partnership is here to stay and create value for the end consumers.

nnovation and technology have brought about a radical change in traditional financial services. The prime driving force behind the evolution of FinTech is the desire to make the financial services more efficient.

Today, FinTech companies cater to the entire gamut of financial services ranging from innovative lending and credit facilities, seamless payment solutions, personal finance management to analytics-backed wealth advisory services among others.

There is a large untapped population of the country, which if directed will help the FinTech industry go a long way. The Prime Minister, Mr. Narendra Modi, since 2014, has initiated a lot of new schemes such as Skill India, Digital India, Pradhan Mantri Jan Dhan Yojana, Aadhar enrollment, Krishi Sinchai Yojana and the latest demonetisation drive etc. Rural India can benefit the most from such schemes, and this can be viewed as a potential up-surge for FinTech start-ups in expanding their customer base and provide services such as insurance covers (health insurance, life insurance ); mobile banking (helping them in managing their income and deposits); loans for agriculture, SME business, and other personal purposes.

Emerging FinTech solutions can help grow the market significantly and broad-base the provision of financial services to a wider target market. Driven by digital technologies, analytics and exceptional customer experience, these companies are already building propositions that are competing with the incumbent banks, both globally and in India.

Government initiatives at the central and state levels are including FinTech as a pillar in their planning; the Reserve Bank of India is establishing a blockchain committee; major banks are launching FinTech accelerators; leading towards capturing the opportunity in FinTech.

With the emergence of technology, banks are facing two challenges - managing their technology legacy stack and bringing the cost down for small transactions.

The traditional banks need to adopt the digital transformation route, which can bring in a fresh perspective for targeting customers, ensure agile operations and allow reinvention at every stage, thus enabling these organizations to remain on par with, if not ahead of, the competition.

The rise of FinTech is expected to displace banks. However, banking organizations would benefit from viewing FinTech companies less as rivals and more as innovative businesses that they can collaborate with, learn from, and even partner with.

Banks have a larger customer base and loyalty that has been built over the years. They also have strong financial backing that allows them to invest in upcoming trends and ideas that are beyond the reach of FinTech organizations.

Both Banks and FinTech companies have their own positives and negatives, and instead of working in silos and attempting to target the same customer segments, they will benefit from

I

Banking organizations would benefit from viewing FinTech companies less as

rivals and more as innovative businesses that they can collaborate with,

learn from, and even partner with


Volume 9 January 9, 2017| | | CFO Insights 28

Non Editorial

Innovation

processing, and responding like humans in natural language settings. Using large datasets of context and user behaviour, algorithms are getting good at reading the mood of the moment and even suggesting songs and products with uncanny empathy! Today, the Internet of Things (IoT) is creating an infinite array of smart connected solutions. There are almost as many IoT devices today as humans, about 7 billion of them and by 2020, there will be 26 billion connected devices. (source: Gartner).

There is no doubt that digital innovation has changed and will change the way the world functions, and perhaps for the better. But there are also questions raised today on the social implications of such a transformation, and more so in developing countries with large population and multidimensional challenges. The context of development in low income and emerging economies is very different than advanced countries. The key difference lies in the human element or more specifically, the challenge of providing livelihoods to the teeming millions who are often mired in poverty. In such a context, digital innovations that raise the standard of living of people, create livelihoods and empower the poor are far more valuable than technologies that merely replace human effort and interventions.

While consumers and customers are the backbone of any marketplace, it is important to go beyond markets to examine

how digital technology can create larger societal value. In a country like India, with almost one-third of the world’s poor, digital technology must empower those at the bottom of the pyramid. More so, it must enhance and sustain livelihoods, in a country where only 2-3 million jobs are generated annually against the 12 million who join the workforce. Therefore, digital technology has to be inclusive, even as it enhances competitiveness of the economy.

When digital technology is leveraged to empower the weakest in society, it transforms lives. A defining moment was when ITC pioneered the e-Choupal, bringing the power of the Internet to 4 million poor farmers thereby raising rural incomes. Rural India faces a plethora of challenges that feed on the vicious cycle of poor knowledge and information, poor infrastructure, barriers to market signals, low risk-taking capacity, low investments leading to low productivity and lower incomes. Any solution to address this challenge would need to connect the digital, physical and social world through an orchestrator who would bring in the required synergy.

The ITC e-Choupal initiative, the world’s largest rural digital infrastructure, leveraged information technology with on-ground sustainable agricultural practices, customised extension services as well as the creation of common assets like watershed development, bio-diversity and so on. Its network of village internet kiosks ('e-Choupals') managed by farmers themselves, called ‘sanchalaks’, enable even small and marginal

he convergence of Communication, Computing, Connectivity, Cloud Infrastructure and Communities in the virtual space has redefined life in myriad ways and created a digital universe with far-reaching implications. Digital innovation

permeates every sphere of socio-economic activity today, encompassing consumers, enterprises, governments, and indeed every section of civil society. Perhaps one of the most powerful game changers of this era, the digital world will radically transform the future and irreversibly change the way economic activities are conducted and how social interactions take place.

Technological breakthroughs and innovation in the digital space is already visible today in the growing focus on Big Data, Analytics, Artificial Intelligence (AI) and Internet of Things (IoT) amongst others. The relative simplification of technology is also apparent in the tremendous computing and connectivity power that is resident today in mobile gadgets, available with almost every 2 out of 3 people on this planet. It is therefore not surprising that the first impact of digitisation is more prevalent in the pursuit of economic activity. Today, big data and algorithm-based analytics not only influence product and service designs, but define how products are manufactured, services are delivered, how Just-in-Time needs are met, how products are stored, transported and retailed, as well as how consumers experience the process of search, discovery and purchase, and make consumption choices.

At the enterprise level, product or service designs can take place in one continent, whilst seamlessly enabling manufacturing in another continent and delivery in yet another part of the world – all in real-time and through online interactions. In the marketplace, by increasing the predictability of consumer demand at the aggregate and disaggregate level, digital innovations will reduce uncertainty, enhance efficiency of the supply chain and remove the need for high pipelines and working capital. Physical delivery models from nearest retail to home will create many low skill jobs. Consumers of tomorrow will ‘pull’ what’s relevant for him or her at a point in time, place or mood. ‘Push’ strategies by companies will not only be expensive and ineffective, it would create long term damage to the brand by irritating and alienating its consumers.

Profound changes are taking place with predictive digital applications replacing endless hours of human toil, particularly in repetitive and laborious functions. The bridge was also crossed when digital intelligence entered the realm of creativity, mimicking the creative faculty of the human brain. Today, robots are taking over many jobs, including hazardous ones. Japan has more than quarter million industrial robots employed currently. And now they are becoming increasingly human-like. Since machines don’t get tired, they perform even better in certain situations. They are getting better at listening,


Digital technology has to be inclusive, even as it

enhances competitiveness of the

economy

Inclusive Empowerment through Digital Innovation

B. Sumant, President, FMCG Businesses, ITC Ltd.,

believes that for countries like India, digital innovations will be a

boon if it contributes to addressing its critical challenges of

poverty, sustainable livelihoods and environment replenishment

T


expansion of forms of e-commerce, or in providing e-governance and other services to rural areas, digital technology can shape the destiny of tomorrow’s rural India.

It is heartening that the Government of India has launched significant interventions to use the transformative power of ICT (Information and Communications Technology) in every sphere of society. The journey towards building a ‘Digital India’ has begun with determined steps in the right direction.

The Government of India's ‘JAM’ initiative (Jan Dhan Yojana, Aadhaar and Mobile), envisioned by Hon'ble Prime Minister Shri Narendra Modi, is aimed at achieving maximum value for every rupee spent, maximum empowerment for the poor and maximum technology penetration among the masses. To roll out its ambitious JAM trinity plan to directly transfer subsidies to intended beneficiaries and eliminate intermediaries and leakages, the government has started linking the Jan Dhan

scheme, Aadhaar numbers and mobile numbers of individuals. The government has also brought about several reform measures for the promotion of payments through cards and digital platforms. All this will no doubt bring the benefits of digital technology to the masses.

For countries like India, digital innovations will be a boon if it contributes to addressing its critical challenges of poverty, sustainable livelihoods and environment replenishment. While there is no debate

on the levels of efficiency and competitiveness that can be achieved through digital interventions in a connected world, such innovations must be designed not just to replace human effort, but to enable larger value addition and productive usage of human talent. It is essential that the power of digital technology is leveraged to create larger societal value. Otherwise, as history has shown, in spite of an era of industrialisation, globalisation and modernisation, social inequity and unsustainable growth can completely derail societies despite radical technological breakthroughs. It is only when there is a harmonious amalgamation of digital, physical and social innovation, that true transformation will take place to build a better, secure and happier future.

farmers who are otherwise de-linked from the formal market to access ready information in their local language on weather forecasts, best practices, and on prices. The knowledge enables them to make informed decisions, improve risk management and implement best practices in agriculture, thereby improving productivity. This enables them to command higher prices at the marketplace and improve their competitiveness.

The globally awarded e-Choupal model, also taught in business schools across the world, is a unique example of the synergy of digital technology, on-ground physical and social infrastructure as well as private-public-people partnerships. The key objective of the e-Choupal model was to create and enhance rural livelihoods, thereby creating fortune for the bottom of the pyramid rather than trying to only exploit the fortune at the bottom of the pyramid. Therefore, instead of fighting for a larger share of a smaller wallet, the objective was to increase the size of the wallet through digital, physical and social innovation. Innovations like the e-Choupal become the digital highway connecting, enhancing and contributing to rural income growth, thereby improving the quality of life of the rural and marginalised communities substantially.

When digital technology is used to provide much needed healthcare and education to those deprived, it creates secure generations for the future, critical for growing markets and economic stability. The future will see a larger proliferation of web-based telemedicine, skill building modules and provision of services. The mobile phone revolution will make such gadgets and apps the centrepiece of inclusive development. How can artificial intelligence, big data, analytics and the scale and speed of computing help empower the weakest in the value chain, and ensure sustained livelihood creation is the challenge. In that also lies infinite opportunities for innovative and future-ready enterprises. Whether it is opportunities in education through virtual classrooms or primary healthcare through a combination of digital and paramedical infrastructure, or the use of data to improve agricultural productivity and produce according to market signals, or in logistic solutions that increase access to rural areas and reduce costs, or in the


Innovations like the e-Choupal become the

digital highway connecting, enhancing

and contributing to rural income growth

D

Digitalisation: Taking advantage of the changing face of Global Technology

The world is experiencing major digital advances which will create new opportunities for global markets

Financial Services

challenge the business models of established providers. Yet the main challenge today for financial services providers and regulatory bodies alike is to acknowledge this rapid change and the emerging business models these changes imply.

One the one hand, this is going to be ever more important for the financial services providers themselves in order to best

navigate their client channels. On the other hand, the regulators need to adapt at the same time in order to insure integrity at all times and protect at the same constant level that financial services and clients need.

Fintech innovation lab

SIX, as the backbone of Switzerland’s financial infrastructure, demonstrates innovation and agility when devising its business models so it can react flexibly and confidently to the new realities of digitalisation. We have made innovation

one of our strategic priorities, having operationally integrated it into our organisation with the creation of our F10 Incubator – the driving force behind our technological developments which provides scouting, quick prototyping and faster “idea-to-market” time services.

Our intention is to grow F10, together with other Swiss companies from the banking, insurance and consulting sectors, to make it Switzerland’s largest fintech innovation lab. This initiative can already count on two well-known backers in the form of Julius Bär, Switzerland's leading private banking group, and PwC Switzerland, Switzerland's leading professional services firm. Through their respective expertise, together with SIX, they strengthen the innovative capacity of the Swiss financial centre and thus invest in the future.

The initiative brings together financial services providers,

igitalisation is changing the world. It permeates almost all segments of society and sectors of the economy and will be a key driver for future growth of economies and companies. As people, machines and objects become more

interconnected, existing value chains are breaking up. Established business models are being challenged and new models are appearing. This presents both opportunities and risks. Although there is a clear trend towards an increasingly digital economy and society, the pace of change depends on various factors and is not consistent around the globe. It also raises a series of questions. What do companies need to do to keep up with the fast pace of evolving digitalisation? Who are the winners and losers?

Disruption of business models

At SIX, we view digitalisation as a major opportunity for the financial sector as it brings a range of advantages, not only for financial providers, but also for clients: focussing on mobility, simple comparability, accessibility, the continual availability of services and the automation of processes.

In our view, the increasingly dominant role of the internet is paving the way for the biggest changes. A changing environment within the financial sector is, of course, not new we have seen many shifts in the past 200 years. What is new, however, is the speed of these changes and their global impact.

Technology means small providers are now able to create services and solutions that extend the existing offerings or to combine the services of multiple providers in a streamlined package, all for a comparatively small development cost. New providers, most of which are from outside the sector and operate on a global basis, are also entering the market and


Chris Landis

Division CEO, SIX Swiss Exchange

Digitalisation is changing the world. It permeates almost all segments of society and sectors of

the economy and will be a key driver for future growth of economies

and companies


banks and its largest retailers combined their efforts to develop a Swiss standard solution in the area of mobile payments.

Furthermore, our exploration of new technologies includes examining the potential of distributed ledgers

(blockchain). This new technology, into which little research has thus far been carried out, establishes a completely new method of handling encryption, digital signatures, open systems and transaction functions.

In order to better understand the potential of this new technology, our SIX Securities Services division, the post-trade infrastructure operator for the Swiss financial sector, and Digital Asset Holdings, a developer of distributed ledger

technology for the financial services industry, are developing a proof of concept that demonstrates the commercial viability of distributed ledger technology across the Swiss financial market, with an initial prototype for securities lifecycle processing.

Future-oriented solutions

The world is currently experiencing major digital advances which will create many new opportunities for global markets. At SIX, we are in the best position to anticipate our clients’ needs at an early stage. We have an innovation system that allows us to mobilise our employees and networks to quickly identify changing needs and explore solutions that can be implemented together with our stakeholders.

SIX is confident that across all divisions, we can offer ideal future-oriented solutions and play a leading role in the digitalisation of finance and be at the heart of this exciting industry change.

academia, fintechs and start-ups, and networks them with relevant opinion formers and subject leaders in the financial sector. Being an integral part of the community guarantees cultural spill-over and acceleration of innovation initiatives and we are creating an innovation pipeline, strengthened by deep and long-lasting community ties that go beyond the terms of any given project. We believe that new technologies will not only create new business models, but will also have the potential to break-up existing value chains, not least in financial market infrastructure, and place new demands on systems.

Digital technologies will lead to the increased automation of procedures and processes, with the aim of having less manual interaction in the client-bank relationship while at the same time massively increasing efficiency and profitability. We are seeing that clients require, and expect, full end-to-end automation with their interactions all of the time, the best quality data possible, guaranteed safety from cyber security and data leaks, and faster processing times. It is probably only a matter of time before value chains are fragmented and activities begin to be outsourced. This will bring with it an increased standardisation of products.

Exploring new digital business models

SIX is continually reviewing the possibilities of using digital technological developments for new business ideas. This includes mobile payments, where the world has experienced technology firms quickly encroaching on the traditional banking industry with their mobile, cashless systems. The convergence of online and offline channels in a mobile environment has led us to explore new payment related services for banks, merchants and consumers. Recently we, Switzerland’s biggest

There is a clear trend towards an increasingly

digital economy and society, the pace of change depends on

various factors and is not consistent around the

globe


Strategy

A Framework for Driving Digital Transformation

Dr. David Dubois, Assistant Professor of Marketing,

INSEAD, explains that leading an organisation’s digital

transformation requires simultaneously tackling three questions

behind and where they are on par or ahead, and establish a roadmap for moving the digital transformation forward.

Intelligence

With search engines such as Google processing a staggering 3.5 billion requests a day and massive quantities of content available through social media, digital data represents the richest reservoir of insights that has ever existed. Building intelligence capabilities based on this data starts with social

listening. This initiation stage thus typically involves acquiring basic social media analytical skills giving instant access to online conversations and activities about brands and topics. For instance, when the power went out during the Super Bowl 2013, it only took a few minutes for creative teams at Oreo to post a tweet featuring an Oreo cookie and the caption “You can still dunk in the Dark”. The quick response successfully grasped the attention of spectators, many of whom were already on social media to pass the time during the power outage.

The ritualisation stage focuses on using digital data from social media and online searches to generate short-term insights and optimise operational decision-making. A good example of this is L’Oréal which, after assessing the size and scope on social media of a new hair-colouring trend blending light to dark shades, integrated these insights into its key operational decisions and launched a brand of products to help customers achieve the effect, even naming the brand after the term consumers used for the style, “Ombre”.

The internalisation stage entails using multiple sources – social media, search sites, geolocalised data, etc. – and integrating findings at a strategic level. The combined sum of insights from consumers, competitors and the media often reveals fresh new

insights about a brand – the “unknowns-unknowns”. To this end, Tsquared, a pioneer in search analytics, works with large fast-moving consumer goods firms to help them understand their digital footprint and better leverage their brand. Tsquared identifies potential threats, determines opportunities to extend into new categories and helps companies develop a better understanding of their digital ROI.

ith digital disruption no longer a question of “if” but “when”, CEOs are increasingly focused on transforming their organisations to reap the benefits, and meet the challenges brought by the successive waves of

technological innovations.

Over the last two decades, disruptions have taken various forms: from social media platforms empowering customers, to the internet of things equipping objects with the ability to create, send and receive data. New ecosystems and business models have evolved, redesigning the competitive landscapes across industries.

At its core, the disruptive nature of digital technologies stems from their ability to significantly reduce information asymmetry between different actors within an ecosystem (such as a driver and a potential passenger, or a lender and a borrower) by making information instantaneously and easily accessible.

Digitally transforming an organisation and capturing these opportunities is often challenging as it requires C-suite executives and entrepreneurs to identify possibilities and drive change concurrently in three areas where digital technologies can make significant differences and change the face of organisations.

Intelligence – Seeing digital data as a source of insight and using this data in knowledge-creation processes to create competitive advantages.

Integration – Leveraging digital channels to transform organisational processes and create agility.

Impact – Rethinking how digital dynamics can improve a company’s value proposition.

To successfully lead the digital transformation across these three building blocks, leaders need to measure their progress and the extent through which their organisation has embraced change, from an initiation phase (focusing on the discovery of new opportunities) to a ritualisation phase (looking at ways to interact with the digital ecosystem) and to a final internalisation phase (prioritising digital solutions; see table below). Only then can they assess where they lag

The disruptive nature of digital technologies

stems from their ability to significantly reduce

information asymmetry between different actors

within an ecosystem


Roadmap for Assessing an Organisation’s Digital Transformation

W


Impact

During the initiation stage of Impact transformation, digital

technologies create a tremendous opportunity to connect

firms with their audience – customers, collaborators and the

media –helping to increase awareness about their brands and

services through channels such as Facebook and Twitter.

The ritualisation phase increases brand engagement using digital

and non-digital interactions and

involvement from customers to increase

value. For instance, a widely used strategy

entails ‘seeding’ products to key

influencers in order to facilitate and speed

up product adoption.

In the internalisation stage, companies will

take the lead in the disruption, using digital

technologies and a customer-centric focus

to drive changes through a stream of self-

generated innovations. Reaching this stage

often means that companies have

developed a complex data-collection system providing unique

information that the company can leverage in another market

or context.

Pacing change

In a world where the digital revolution transforms markets and

rapidly changes the competitive landscape, embracing the digital

transformation can mean the difference between retaining

leadership, losing ground and eventually being pushed out of

the game. To win this challenge, company leaders need to be

able to identify where their organisation stands as they

progress through the transformation process, assess

performance and anticipate change as they go.

Integration

While the majority of executives identify digital as a key priority, when it comes to integration many outsource the design and implementation of digital initiatives to agencies or consultancies. This is an easy, albeit risky, option. By outsourcing this crucial step, companies become less familiar with digital technologies and the continual advancements in communication and risk losing control of their digital data. By keeping the task in-house, firms advance organisational learning and ultimately increase company performance.

The initiation stage for Integration involves creating a digital memory, a transparent repository or sharing mechanism accessible across the company’s different divisions to keep track of online and offline initiatives. The form these ‘memories’ take is often unique to each company and could be as simple as a spreadsheet or a collection of videos. This toolkit helps companies learn much faster from their mistakes, build best practices and leverage their successes in the digital race with their competitors.

The move into the ritualisation phase involves gaining the ability to extract and share digital information within the organisation, integrating digital sensory capabilities, such as social media analytics. To illustrate, a number of hotel chains have listening capabilities to track e-reputation locally and integrate these new metrics into the staff incentive structure.

In the internalisation stage of Integration, a company acquires the ability to track data about processes and customers. With this ability, companies become truly responsive and can rapidly improve quality and learning across the organisation. For instance, Rolls-Royce inserted a tracker within each aircraft engine it produced to monitor potential defects as well as the engine’s resistance and performance in different weather conditions. By increasing its knowledge, the company was able to extend its services to become a data provider for airline companies and pilots to help them better programme flight efficiency.

Embracing the digital transformation can mean the difference between retaining

leadership, losing ground and eventually being

pushed out of the game


The article is republished courtesy of INSEAD Knowledge (http://knowledge.insead.edu). Copyright 2016.

R. S. Agarwal

Founder & Executive Chairman

Emami Ltd.

R. S. Goenka,

Founder & Whole-time Director

Emami Ltd.

Gearing for a Dramatic Industry Shift with Digital

Due to digitalization, every business has to change how to operate and interact with their customers


RSA & RSG: Evolution of digital marketing has changed the

marketing mix for FMCG sector - changing the way marketers

communicate. Emami focuses on digital marketing strategies

that adhere to consumer insights in developing the right

content, integrates with the most efficient channels and

endorsements to conform to the continuously changing media

landscape.

Emami operates in a sector with

high degree of technology

interventions. In your opinion what

are the policy enablers to accelerate

the adoption of digitally enabled

global best practices among Indian

FMCG companies?

RSA & RSG: The true value of

transformation often comes from seeing

value across silos and then helping everyone else realize the

same. FMCG companies have to address the digital marketing

transition not by radically replacing the old with the new, but

rather by transforming some of the existing resources and

competencies for the new environment. It also requires

understanding when traditional assets and sources of advantage

start with diminishing returns. The sector will thrive in digital

transformation not by doing something completely new, but by

taking advantage of one’s capabilities to gain advantage through

digitization.

With digital interventions, Indian

businesses are seeing improvement

in customer experience, productivity

and turnaround time. In your

opinion, what should be the strategic

focus – disrupting with new

technology or improving existing

technology for competitive

advantage?

RSA & RSG: Today due to digital, every

business has to change how to operate and interact with their

customers every day. Long term digital strategies are no longer

valid or sustainable as change is a constant feature. Emami is

adopting digital technologies like IOT, Big Data Analytics,

Mobility. We incorporate the future trends onto the digital

platforms and address them before the transformation process

could begin.

According to independent research, Indian

e-commerce sector will grow at a CAGR of 36% from

2015 to 2020. What is Emami’s digital strategy to

leverage this growth potential?

R. S. Agarwal & R. S. Goenka: E-commerce and retail are

up for a dramatic industry shift and commerce is switching to

digital. For Emami, e-commerce and e-retailing is a critical part

of the sales and marketing process. It helps in new customer

acquisition, sales growth, and generating existing customer

loyalty. Emami has realized the need to

expand the efforts on this front and have

forayed in the domain by adapting best of

market practices and inducing online as

one of the pillars for marketing.

Digital revolution has empowered

your customers with more

information and more options to choose from. What

has been Emami’s plan to align with this evolving

business paradigm?

RSA & RSG: Modern Marketing naturally focuses on the

customer and at Emami we’ve focused on the use of customer

personas as part of Customer Digital Experience Management.

The communication and digital marketing activations are

customized as per the understanding of the specific category

consumer and his intent for information and choice. This

practice ensures the deliverance of best user experience via

Emami’s digital initiatives.

How is Emami using digitally

enabled best practices to make its

supply chain more efficient and cost

effective?

RSA & RSG: Emami has realized that

digitization as a critical element that has

evolved over the traditional supply chains

toward an efficiently connected, smart and

highly effective digital supply chain

ecosystem. Emami is incorporating the

"guided buying experience" used by online retailers for

procurement processes through various e-commerce channels

like Amazon & Flipkart .

FMCG sector has seen a lot of developments in the

digital marketing space. How is Emami capitalizing on

this new avenue to create mindshare among

customers?

Long term digital strategies are no longer valid or sustainable as change is a constant

feature

The sector will thrive in digital transformation

not by doing something completely new, but by

taking advantage of one’s capabilities to gain advantage through

digitization


Innovation

Innovating and Building for IndiaEvaluate businesses based on the problems and opportunities presented by India, and not copy and

paste models that have worked elsewhere

Therefore while investing and building businesses in India, we need to be able to consider the unique characteristics of the Indian market, evaluate businesses based on the problems and opportunities presented by India, and not copy and paste models that have worked elsewhere.

“What to make” for India and “how to make” in India are two important aspects that need nuanced understanding of local markets and not follow the “pattern matching” that many investors and entrepreneurs followed.

Make for India

India lacks public spaces, including spaces in many schools, where children can play sports or outdoor games. The Indian

parent however is increasingly aware of the benefits of sports and fitness for children. The challenge is how to marry the constraints of space and trained sports coaches with the parental desire for sports for their children. Enter Edusports, a Bangalore based company that offers comprehensive fitness and sports outsourcing programs at schools, that bridges the gap in a unique way. Edusports provides physical education curriculum, trained coaches and a comprehensive evaluation of the progress made by the

children in school.

Today, Edusports is available in over 1000 schools across several cities in India. It has been successful as it uniquely matches the constraints of schools – space, inability to provide a comprehensive physical education and sports coaching – with parents’ desire to see their children play sports and be physically active. Edusports fails the “pattern match” test as it is

he years 2014 and 2015 are often called the golden years for the Indian startups. Over the two years VC funds, hedge funds, mutual funds, corporate investors, investors of all hues scrambled to get into every deal and invested

over $14 billion in Indian startups. This flood of capital was based on the popularly held belief that India was “China + 5years” or, the US + 10 years”: many investors and entrepreneurs believed that innovations and startup business models that worked in China 5 years ago (and in the US 10 years ago) would now work in India (based on various macro data sets ranging from the number of mobile phones, broadband penetration, GDP per capita and the like) and that Indian businesses would get to the current scale of Chinese businesses over the next 5 years. This resulted in Indian companies that copied the innovation, being funded to the same level and degree as their Chinese counterparts.

Companies however belied this expectation and didn’t scale as expected. For example, over a 12-15 month time period, while the total number of food deliveries made by an Indian company across all of India grew to about 10000 a day, one Chinese company reached over 2 million of daily deliveries over a similar time period. The lack of scale of innovations in India for the ones that worked in other markets, resulted in a lacklustre funding in 2016. Were investors right in 2014-15 or in 2016?

My submission is that India is a very different market than any other at many levels: from an Indian consumer’s ability and willingness to pay for the challenges of executing on the ground to the attitudes of “chalta hai” and “jugaad” to the infrastructure challenges to the regulatory environment.


T

Bharati Jacob

Co-Founder & Managing Partner, Seedfund

“What to make” for India and “how to make”

in India are two important aspects that

need nuanced understanding of local

markets


have a very tight grasp of the unit economics of the business before scaling rapidly.

Team India way

The Indian education system is designed to produce employees rather than employers– a system of rote learning, a system where enquiry based learning isn’t inculcated nor is risk taking. Therefore, while the young entrepreneurs that want to build businesses have the passion, raw energy they often lack a sense

of commerce or tools to convert an idea into a sustainable company. This means that the early stage capital must come with real value addition – of helping the entrepreneurial team convert their idea into real businesses. The implications for early stage investors is to build a team that has strong entrepreneurial empathy, a team that understands local executional challenges – a team that is “coaching” and

mentoring the young start up teams. And a startup needs to work with investors who understand local challenges and aren’t driving from back seat, helping find talent, helping find product – market fit.

Way forward

Antoine de Saint-Exepury, French aviator and author said “if you want to build a ship, don’t drum up the men to gather wood, divide the work and give orders. Instead teach them to yearn for the vast and endless sea”. Similarly, to innovate for India, identify the big problem, find the team that can yearn for the vast and endless sea and provide the tools to solve it. It is the only way to create sustainable enterprises that cater to India’s unique problems.

hard to find a similar program in the developed markets given the abundance of public spaces for children to be physically active.

Making the Indian way

redBus launched in 2006, is a bus ticketing company that helps consumers buy tickets for inter-city buses on-line, just the way a consumer buys and reserves a seat in an airline. In 2007, when we invested in redBus, the average ticket price of a long distance bus was about INR 500 and redBus made 10% commission income i.e. INR 50 on this amount. redBus had to run its entire business on this commission amount and generate profits. The number of tickets, however, sold annually was estimated to be over 40 million and expected to grow at 15% a year. Today, ten years later, from selling 35 tickets a day at the time of our investment, redBus is selling over 35000 a day and is one of the few internet properties that is profitable. The only way this could occur was by selling a large volume of tickets in a very frugal, efficient and innovative manner. redBus was acquired by Naspers of South Africa, it had only spent INR 140 million (or $2.4 m at the then exchange rate) and provided one of the top exits in India over the past decade.

In India, many markets mirror the economics of the bus industry viz. high volume and low value markets. It can even be argued that the majority of consumers segments in India, (barring the top 100 million people) characterise the “high volume-low value” markets. The implications for start ups targeting India markets is that such ventures need to be capitally frugal and understand how to make money from small value transactions. Customer profiles, habits and behaviours have to be rapidly discovered in a very capital efficient way and Opinions expressed in the article are the author’s own

Ventures need to be capitally frugal and

understand how to make money from small value

transactions

Technology

Mobile Internet : A Disruptive Technology

Mobile internet technology has tremendous future ahead in terms of exemplary economic gains and

increased productivity

like electricity in human life, less visible yet more deeply

embedded in people’s lives for good and evil. The positive side

of it will be enhanced convenience, productivity and safety,

more useful information available on free domain, and self

awareness. There will be global immersive, computing

environment through smart sensors, cameras, software,

databases and artificial intelligence. People will perceive

through wearable, portable and implantable technologies. The

social and business encounters will be met using virtual reality.

The negative aspects will be privacy challenges, technological

complexity and over hyped expectations. The robots and

artificial intelligence will play major role in

job function with less human interface.

Humans and organisations may not be able

to respond to challenges from complex

networks.

In many developing countries people don’t

have access to desktop or laptop

computers, and use mobile phone for connecting to the

internet. They are using various services through mobile

internet such as – daily banking, paying bills, connecting with

people.The price of the fastest super computer in 1975 was $5

million and at current date the price of an iPhone is just $400

but they both provide same performance (The McKinsey

Global Institute, 2013). Nowadays, mobile devices are

preferred over personal computer for people’s daily job

completion.

disruptive innovation helps create a new market

and value network, and eventually disrupts an

existing market and value network (over a few

years or decades) while displacing an earlier

technology.

Of the twelve emerging disruptive technologies—mobile

internet, automation of knowledge work, internet of things,

advanced robotics, cloud, autonomous or near autonomous

vehicles, next generation genomics, next generation storage,

3D printing, advance materials, advanced oil & gas recovery and

renewable energy - mobile internet,

renewable energy, autonomous vehicles,

and advanced genomics have the potential

to truly reshape the world in which we live

and work. Leaders in both government and

business must not only know what’s on the

horizon but also start preparing for its

impact.

Technology is one such thing which keeps evolving and

changing every second, and every minute. The year 2015 saw

many breakthroughs in high-tech, space-tech, clean-tech,

wearable tech, cyber tech, biotech etc. 2016 seems to be even

more promising on the technology front.

The free flow of information online is one of the greatest

things to ever happen to humanity. The internet will become


A

The free flow of information online is one of the greatest things to ever happen to humanity

Dr. Anupam Agnihotri

Director, Jawaharlal Nehru Aluminium Research Development and Design Centre (JNARDDC)


cash handling will be reduced. It is estimated that more and

more online transactions will be done through mobile devices

using mobile internet in the near future.

The rapid development of mobile internet and other disruptive

technologies is leaving organizations in a dilemma where threat

and opportunities lies in customer behavior, values and

expectation. Technology is developing at a faster rate than an

organization can adapt to the change. This is very critical for

business as the business models have to be constantly changed

and leadership needs to reinvent itself very quickly to stay in

the completion.

There are some significant social disadvantages of mobile

devices and internet use. Mobile internet

technology tears people away from the

society because of the constant human

interaction with the devices. It might lead

to some serious accident considering how

people are using it these days. Poor

security or loss of mobile device may cause

breach of data privacy.

More people experienced internet first

time on mobiles than on PCs. The mobile

internet users, which are estimated to be around 200 million,

are slated to touch the 1 billion mark by 2025. The market

which grew on feature phones, has suddenly found an affinity

towards smart phones. The emergence of cost effective smart

phones has disrupted the entire internet user landscape. There

are more mobile internet users than laptop or desktops

internet users. If this is coupled with good internet connectivity

and speed (which is still a challenge), the impact can be far

reaching.

The mobile internet technology has tremendous future ahead

in terms of exemplary economic gains and increased

productivity. The service delivery for businesses would be very

effective and efficient due to the growth of mobile internet and

its usage around the world. The developing countries will

benefit mostly due to the means of internet availability to them.

The online presence will increase in these countries,

entrepreneurship will flourish and the approach to doing

business will change. Mobile computing devices are increasingly

getting cheaper and cheaper while internet connectivity is

easily accessible which is delivering services more efficiently

and effectively. Seamless communication and internet access

even on the go, and all in one devices makes mobile internet

more attractive which drives more disruption in our society.

In the education sector, online delivery is

becoming popular day by day. Hybrid or

online classes can save cost and time for

both teachers and students. Students can

participate in online class from anywhere in

the world by using mobile and handheld

devices. In public sector, government

services would be easily accessible for the

people. Government’s citizen-centric

strategic goals can be driven by mobile internet based service

delivery approach. The public will be one step closer to the

government due to the availability of smart phones and other

mobile devices. Governments also need to identify new

framework for the citizens so that they can prosper even with

the effect of disrupting technology.

Businesses will gain enormously through mobile internet

adoption while traditional brick and mortar businesses move

online. They will save operation and inventory cost, and profit

margin will increase. The transactions can be done online and

Leaders in both government and

business must not only know what’s on the

horizon but also start preparing for its impact


Building the Discipline for DigitalCFO Insights in conversation with A. Balasubramanian, CEO, Birla Sun Life Asset

Management Company to understand the indispensable role of technology in creating opportunities,

building trust, and mitigating risks

Risk adjusted returns is one of the primary considerations in asset management. How is Birla Sun Life Mutual Fund utilizing technology to better detect and mitigate risks? What are the technology interventions that contribute to delivering superior ‘alpha’ consistently?

First and foremost, we have in place a strong governance mechanism and have over the years, strengthened our investment processes. While fund management does their job of managing money efficiently, they are also supported by technology driven analytics for both trend-spotting, as well as identifying areas of risk. Risk is largely to begin with, a deviation, which is then closely examined for other risk parameters. We use MSCI Barra to help the portfolio to do attribution analysis at regular intervals. The team is also enabled through high-speed servers to analyse various data points and finally shortlist potential winners in order to help them create alpha in the portfolio.

How is technology helping asset management companies align with the new paradigm of proactive regulation and compliance?

Frankly, compliance requirements have gone up manifold as it is happening for the banking industry as well. Therefore, it is becoming more important to create a strong vigilance system in order to stay compliant both from the regulatory perspective as well as internal risk perspective. This also

With digital interventions, businesses are seeing improvement in customer experience, productivity and turnaround time. Being in the business of asset management, what is your strategic focus – disrupting with new technology or improving existing technology for competitive advantage?

In this age of Digital Disruption, it is important to keep pace with the changing expectations of our customers, while providing a sense of trust and stability.

We are using technology to increase transparency in our dealings with our customers, which further strengthens their trust in our brand. The onus of this lies not with one team alone. We have in place a cross-functional Digital Evangelist Team that functions as a business partner in driving growth using digital and technology mediums.

The path we have chosen is to upgrade our core technologies and processes to provide a stable back-end, and use innovative digital ideas to transform the way our customers experience mutual funds with us. This ensures that as innovations are introduced at various touch points with customers, the infrastructure which forms the backbone of the operation remains robust and stable.

We introduce new features across our digital platforms on a regular basis to keep enhancing the customer experience and recall. This discipline in process and experience enhancement ensures that innovation is now in the DNA of the organization.



new-to-category customers and providing a platform for seamless purchase and transaction.

Our dedicated investor education website, Jaanoge Tabhi Toh Maanoge helps users learn about the various facets of mutual funds and how it can make a difference to wealth building, and financial planning. On the purchase side, we were the first to introduce eKYC which was a totally online Aadhaar based KYC. With this, one can start investing within 2 minutes for any mutual fund.

Our SIPNOW microsite, which is highly user friendly, makes the buying journey so lucid that assessing risk appetite, investment horizon, and choosing funds takes under 5 minutes. The entire buying journey here has been made so easy using robot-advisory technology. This site is mobile friendly and has generated good traction for us. Several of our distribution partners have asked us for a white labelled solution of the same, and we will be developing this for them within the next few months.

All this has had a positive impact on our offline buzz as well. We have seen a direct correlation between our online activations and education to our overall business growth.

There are plans to allow investing in mutual funds by using digital wallets. How do you expect this to impact the asset management business?

Digital Wallet is definitely opening up a new channel for the mutual fund industry

for acquiring both customers as well as assets. In order to grow this channel among other channels, there is a need for regulatory changes which I assume is under way. While regulatory changes are awaited, we have prepared ourselves for the back-end connectivity for money transfers from eWallet accounts to our funds and vice-versa. It is no doubt a new opportunity, given the under-penetration that exists in the mutual fund industry. This opportunity however, will still remain small in relation to the overall growth.

Digital revolution has empowered your customers with more information and more options to choose from. What has been Birla Sun Life Mutual Fund’s plan to align with this evolving business paradigm to drive customer value?

As an asset manager in the digital space, we benchmark our efforts to standards set by leading players in the e-commerce segment such as Amazon, Flipkart, and Uber among others. We endeavour to be able to provide to our customers an experience which is at par with these players, or something even better. For example, our Active Account mobile app which was recently launched is a revolutionary mobile app which has shifted the paradigm with respect to customer

experience from a financial mobile application.

Since the financial literacy in our country especially with regard to mutual funds is yet to gain momentum, it is our constant pursuit to be able to provide solutions for our customers’ financial goals in the most simplistic manner. Through SIPNOW, we have also introduced robot-advisory service to help customers visualize their goals and plan their investments accordingly. Furthermore, our dedicated Digital Evangelist Team is constantly striving to uncover the next BIG disruption to bring to the market. I am also extremely bullish on the AMFI led investor education campaign which would create a big pull for mutual fund industry as a category over the next few years.

includes our internal governance mechanism as defined by the Board of Trustees. To cater to the new paradigm in compliance, it is critical to have technologies which are flexible and nimble enough to align with the changing regulatory landscape. It helps to have Indian technology partners who understand the local specificities and are able to quickly incorporate these changes into their product or solutions architecture. It is also essential to have an overall system architecture which is open and adaptable enough to be able to integrate regulatory driven changes quickly without impacting the overall stability of the systems.

Asset management has become increasingly competitive. How is your organization leveraging Social Media, Analytics, Cloud & Mobility (SMAC) and other digital enablers to create mindshare and acquire customers?

For us SMAC is a big opportunity for enhancing engagement, promoting DIY and increasing sales. Some of our initiatives under each are as follows:

We use social to educate, engage and service. We have developed a robust platform for investor education through Jaanoge Tabhi Toh Maanoge, which drives interactivity and sharing through a diverse mix of thoughtfully developed content.

We especially use engagement during key festivals and social occasions as opportunities to popularize mutual funds as a category. The engagement targets participants back with a customized mutual fund solution. For example, our #FukatKeKharche campaign on New Year’s Eve 2015 aimed to make people realize how they could benefit when wasteful expenditure is channelled into mutual funds.

Twitter and Facebook are popular platforms which provide us with an opportunity to service 24x7. In our experience, good online service recovery results in better brand salience and generates opportunity for more sales. Our digital team has strong proficiency across a suite of analytics tools like Google Analytics, Wingify etc. Analytics not only helps us track behaviour and customer experience on our digital assets, but has also has helped us enhance our goal funnels on assets by upto 200% this financial year.

We are constantly exploring mobility in terms of platforms, applications and technology to further our reach, as well as enhance service and transactions for both internal and external customers. Towards this our endeavour is to build an API supported tech ecosystem that can consume services from digital leaders like Google, Facebook etc. to enhance our customer experience. Currently we use the same as branch locator on our website and Facebook login for our customers.

Speaking of apps, we have recently launched 3 user-friendly mobile apps – BSLMF FinGo, BSLMF FinGo Partner, and BSLMF Active Account. Our latest App, BSLMF Active Account is a liquid fund based mobile application which helps investors earn from their surplus savings by activating money with a single swipe. With over 2.5 lakh downloads and transactions by around 1,00,000 customers, it has been very well received by the industry and investors alike.

How are you tapping into digital channels to make investing easier as well as knowledge about investments easily available for your customers?

Digital is now a 24x7 channel towards educating, informing

Digital Wallet is definitely opening up a

new channel for the mutual fund industry for acquiring both customers

as well as assets

Digital is now a 24x7 channel towards

educating, informing new-to-category

customers and providing a platform for seamless

purchase and transaction


Non Editorial


The Second Wave of Startups : Investing In Disruption

Ganapathy Venugopal, Co-founder and CEO, Axilor Ventures, shares his perspective on

what do investors look for while investing in startups

driven by Aadhaar and inclusion of large number of SMEs in the cashless economy. These are creating huge opportunities and new addressable markets which till now were either not accessible or profitable.

But this change cannot be taken for granted. To accelerate this, we need two things. One, more disruptive ideas. Second, we need a deeper investment ecosystem that can nurture and support startups, both in numbers and diversity, in their early stages.

On having more disruptive ideas, we can follow the advice of the great inventor Thomas Edison - to have one great idea, start with a lot of them. And disruptive ideas

rarely look disruptive at the beginning. Try looking at the early pitch decks of many successful startups or listening to the founders’ vision for their startup in their early days. The most disruptive ideas start as deceptively simple ideas. They start with a kernel of an idea. They build proprietary insights around the problem, test needs and adoption. Based on this, they end up building something users love (and willing to pay for) and rapidly expand their user base and addressable market. Many of them acquire the patina of disruption because of their impact - execution, scale and delivering on the promise of their idea. Seemingly simple ideas executed flawlessly can build large, scalable businesses. The list of disruptive ideas that have seen an early end due to poor execution is much longer. So a good way to have more disruptive ideas is to begin with a lot of

good ones and ensure that they get on to the trajectory of becoming scalable businesses.

To do this well, we need a deeper investment ecosystem to support startups in their early stages. In the last 12 months VCs have announced raising more than US$ 2 billion India focused funds. So there is ample capital available for funding late stage deals. But the capacity at the seed level is still lagging. The angel funding investment capacity in India is one-

hundredth of the capacity in the US. Early stage funding needs to be complemented by institutional programs that allow early discovery of disruptive ideas and create a capital efficient model for funding them at the right stage. In the US for instance, while only one out of 10 startups go through an accelerator program, one out of three getting funded is from an accelerator program. These programs allow early discovery and systemically improve the signals available for VCs to pick the best teams. We are quite far from that.

We have all the right conditions - a growing pool of entrepreneurs, triggers for disruption and adequate risk capital to support these. With a few enablers, I am confident that the second wave will see startup activity in more diverse sectors, with more disruptive ideas and larger ambition. It will also signify our startup ecosystem’s march to maturity.

here is a famous adage in advertising. Only 50% of what you spend really works but the trouble is you do not know which half. It is an adage equally

apt to describe investing in startups. The share of successful investments is far less, often in single digits. And rarely can one predict with accuracy which ones will succeed. So, the question of what do investors look for while investing in startups is an interesting place to start. The short answer is that it depends. The longer one is what I have attempted below.

In my view, what we have seen in the startup scene in India in the last five years are largely the first order effects. We have seen an explosion in the number of startups, many of them restricted to a few sectors, a few winners and a lot of failures.

From an investing perspective, late stage investors follow large market opportunities and good teams that can address them. In the last few years, the investment bets focused on sectors with large markets (read e-commerce, consumer internet or mobile). In 2016, more than 80% of the investments have been into these and related sectors. In these sectors the preferred business models were those proven in other markets like the US and China with the predominant theme of ‘organising the unorganised’. In these areas, the number of bets they could make was limited by the quality of the founding teams. The final investment decisions have been focused on finding the best teams who could execute on the opportunity to emerge as the category leaders. Given the nascent stage, the search for these category leaders have also meant that the business models have been highly capital intensive, discount driven and consumer acquisition led. This is in marked contrast to the models that have evolved in more mature entrepreneurial ecosystems. They are a lot more diverse in terms of the ideas being pursued, startups being invested in. They also have much more institutional capacity available to support startups in very early stages.

I believe that the next five years will be different. We will begin to see the second order effects of this entrepreneurial revolution. And this will be disruptive. There are three clear triggers. One, we have a sizeable number of startups who have been through their first entire cycle of their business models and funding - many winners, lots of losers but most of them wiser. The investors now have indigenous portfolio data and performance benchmarks on business models and sectors - what works, where and with whom. Second, the first wave of startups has created a large talent pool of folks with entrepreneurial aspirations - with experience of building something useful and a good understanding of the problems they want to work on. This number will only grow. Third, there are several external shifts like ubiquitous data connectivity, improving access to electricity, financial inclusion Opinions expressed in the article are the author’s own

From an investing perspective, late stage investors follow large market opportunities

and good teams that can address them

T

Strategy

Going Digital for Travel and Tourism

Mohit Kabra, Chief Financial Officer, MakeMyTrip, believes that leaders in the travel industry

will do well if they have the ability to recognize digital trends

and Tier-3 cities which are now skipping a generation of

landlines and personal computers, backed by growing

disposable income in these towns. With newer technologies

and platforms being introduced rapidly, the competition is

going to be strong but it will only push us to innovate and

better ourselves.

Emerging Trends

The new-age traveler has become smarter and wants more out

of their travel and the onus is on the companies in the market

to design their brand-proposition in a manner that will

continue to add value to the traveler’s experience. The

travelers are more aware of international destinations and India

has emerged as one of the world's fastest-growing outbound

market and the number of Indians travelling overseas is set to

rise.

Online travel is among the first e-commerce categories to scale

up in any market as travel tends to lead in driving online

behavior or ecommerce. MakeMyTrip has been a pioneer in

enabling e-commerce to take off in India since 2000; at a time

when there were only a handful of portals, among which

barring a few rest have shut their business. The travel and

tourism industry therefore has also been at the forefront of

driving the digital development. Be it in the form of digital

marketing techniques, digitization of paper tickets, digitization

in payments or hitherto offline post sales services.

The long-term players in the industry will constantly have to be

Online Travel Industry

The growth outlook for the online travel industry in India has

always been robust. The key drivers for this consistent growth

have been increasing online penetration through smartphones,

significant rebound in the domestic aviation industry basis

opening up of FDI and low crude oil prices and focus on

infrastructure. These factors have helped drive travel and

significant investment by the online travel industry in changing

customer habits towards online buying.

The mobile apps have changed the way in which customers

interact with brands and vice versa. With over 27.5 million

downloads till date, our app is the most widely used travel app

in India and we are strongly focused on strengthening our

mobile technology with this carnival. We hope this offering will

enhance and strengthen the travel buying experience on

mobile, aided with the vibrant mobile ecosystem. With

smartphone adoption growing at a phenomenal rate, the

number of travel-related searches and bookings via mobiles has

sky-rocketed in the past year. According to a recent report by

Ministry of Tourism, the travel and tourism contributed nearly

US$ 295.7 billion or 19.2 per cent to the GDP in 2015-16,

while growing at 8.9 per cent year-on-year. Also, the industry

is expected to generate 13.45 million jobs across sub-segments

such as hotels, travel agents, tour operators and restaurants.

At MakeMyTrip, we believe that there’s still enough headway

for growth in the future owing to the internet and smartphone

penetration. Also, with airlines giving great deals and discounts,

the travel industry is set to grow at a faster pace. Another

contribution towards the present state of health is by Tier-2

Technology



• The accommodation market in India has opened up to

beyond branded hotels thanks to digital tools being

leveraged to aggregate unbranded hotels or alternative

accommodations.

What matters for Foreign Tourists

The government’s e-tourist visa programme continues to gain

traction, with a sharp rise in applications in

October 2016. Digital Solutions

enhancements are the need of the hour as

it really does help the flow of travel.

Globally, consumers are looking for extra

value from their travel spends and in India,

travelling is part of people’s ambition. The

industry needs to address the evolving

travel perceptions and behaviours by offering specialized

services for each need. Most OTAs offer packages with custom

destination, itinerary, flight and hotel bookings and discounts.

We have also enhanced our portfolio, in line with our mobile-

first approach, like fare alerts service for flights, progressive

web app for hotels, Trip Assistant, hotel check in experience

or assist, personalized hotel search, easy location search for

hotels , instant refunds on domestic flights & hotels.

Way Forward

The rapid digitization offers a rare opportunity to disrupt

rather than go for incremental changes. For instance, mobile

based cab services like Uber and Ola have

disrupted the cab hire market, meta-

technology will soon be disrupting

established agency market, marketplaces

could disrupt agencies as well as search

platforms. Wallets have disrupted

traditional methods of payments and

Adhaar or UPI could perhaps disrupt

wallets in the near future, hence there

cannot be a better time for path breaking

disruption and the Indian travel industry is well poised to do so.

We feel that the onus on disrupting existing technology

ecosystem is on the existing players. The companies in travel

industry must be able to spot the emerging trends and be able

to pivot the organisation to become future-ready. Today,

everything has moved to the cloud. It's a much smarter way of

working since operations are no longer restricted by

physicality. The possibilities and scalability of business are faster

with cloud. Leaders in the travel industry will do well if they

have the ability to recognize trends such as fall in smartphone

prices.

on their toes to design unique ways to offer varied services to

their target audience. Data science is an area, where a decade

or more of history with customers should lead to better

suggestions and customisation. Another key enabler that has

given boost to the online travel industry is the ‘Big Data’, as it

enables the travel companies to engage better with customers

and deliver service efficiently and intelligently. It provides us a

great opportunity to positively impact both the business-end

and the experience at the customer-end through better

decision-making, greater product and

service innovation and stronger customer

relationships that will be delivered by new

approaches to customer management,

revenue management and internal

operations.

Indian online travel booking space is in the

midst of a critical churning. Mobile has become the most

secular driver of online travel business. It has helped in geo

tagging and providing relevant content to customers who for

the longest time have been used to offline buying of travel

services in destination. This has also led to significant growth in

last minute bookings on the mobile. The mobile platform is

only getting better and bigger. From e-commerce, we are

heading to m-commerce era at a fast pace thanks to mobile

which is now an indispensable companion available on a 24×7

basis. More importantly, the bandwidth has significantly

improved. The entire eco-system which we are noticing today

has fundamentally evolved because of mobile.

There are three possible disruptors in the space:

• The mobile internet and app revolution

is one of the biggest growth drivers for

the industry at large. It has connected

many more people in India and

expanded the addressable market for

companies like ours. The emergence of

mobile wallets such as Paytm, PayU and

others supplemented this trend by

making the payments side of things

more democratic. Gone are the days when debit cards

were not used for online transactions. Having said that,

much more needs to be on the payments side.

• Intelligent use of Big Data and Business Analytics in all

decision making – keyword buying, listing, personalization

etc. will be the real differentiator and disruptor in the long

term. Data science is an area, where a decade or more of

history with customers should lead to better suggestions,

personalization and customisation. We at MakeMyTrip are

also trying to work out if we can predict flight prices, if we

can tell the customer in advance. We are still figuring it out

to do it in a way where everybody wins, the airlines, the

consumers, and us too. We want to create an ecosystem

where no-one is losing out. Opinions expressed in the article are the author’s own

We feel that the onus on disrupting existing

technology ecosystem is on the existing players

The companies in the market have to design

their brand-proposition in a manner that will

continue to add value to the traveler’s experience

Special Feature

Hyderabad – The Future Startup Capital of India

Rama Iyer, Senior Vice President, Strategic Alliances and Innovation, T-Hub, on why

Hyderabad can become the future startup capital of India

Infrastructure is Key

Let’s look at the bigger picture of the state and why it is different and nimble compared to other states in the country. Hyderabad has one of the best infrastructure compared to other cities like Bangalore. It also has a huge talent pool of IT, BT and R&D resources, which are essential inputs for growth of any knowledge hub. It also has one of the cheapest commercial real estate prices, making it an extremely attractive business destination and offshore centre. It also has a very progressive bureaucracy and has industry and IT policies that are among the best in the country.

Human Capital driving the Ecosystem

Let’s now look at what’s unique about Hyderabad and what

startup’s today thrive in the city of pearls.

Hyderabad is home to numerous research institutes like CCMB, NIN, NARM, ICRISAT; defense institutes like DERL, DMRL, BEL,ECIL; other institutes like IIT, IIIT, ISB, NALSAR etc, among many others which provide for a very simulating and young talent pool and extremely analytical and smart professionals.

This allows for enough home grown talent that can be harnessed by newer knowledge intensive industries like IT, Telecom and now the startup ecosystem. Hyderabad is home to somewhere around 3000 startups out of the 20,000 startups in the country. It is among the top-3 buzzing startup ecosystem in the nation and houses quite a number of incubators, accelerators, and co-working space which are beehives of activity. These places form the platform for startups to connect with fellow startup’s, find talent for their team, find mentor or advisor, find angel investor, find venture funds and many more things, which will provide a better chance for the startup to be successful.

Now that we have covered the macro picture, let’s dive deeper into the most happening, attractive and the best innovation centre in the state and the country – T-Hub.

T-Hub: India’s Largest Startup Incubator

T-Hub is today the crown jewel of Hyderabad when it comes to Innovation, Startups and Entrepreneurship. It is India’s largest startup incubator, housing 200+ startups on a spectacular 70k+ sq. ft. with 700+ seating capacity , many huddle rooms, board room, cafeteria, fun zone, mentor garage and a spacious event

yderabad, the city of Nawabs, has been known for its sumptuous and authentic biryani, pearls and of course Charminar to a lay Indian and probably true by most yardstick. It doesn’t occupy the same mindshare as Bangalore when it

comes to IT and startups. The reasons are mostly common-sense – Bangalore sports a much larger pool of IT companies, IT talent pool, R&D houses and has had a big lead compared to other cities in India. Today, Bangalore also sports the most number of startups in the country, most number of venture capitalist and is the most happening city for deal closures and startup events. There is not much debate on what is the current startup capital of the country – Bangalore by a good wide margin with few others playing catch-up or playing second fiddle.

Advantage Hyderabad

This opinion piece will try to make a case for why Hyderabad can become a future startup capital of India and the umpteen reasons supporting that hypothesis.

Vision and Foresight in Governance

Hyderabad has seen many changes over the last 1-1.5 years. The biggest of them being a stability on the political front that has given rise to a new state Telangana which houses Hyderabad as its state capital. The uncertainty had cost the city by way of deferred investments and some moving to other

cities. All of this is behind us now. Telangana now has a very stable and forward looking government. It has an extremely savvy and charismatic IT Minister, Shri K.T. Rama Rao, who has changed the perception of the state from people’s perspective as well as from an external investor’s stand-point. He provides the comfort of a statesman and the brilliance of a strategist. There is no wonder that he put his vision of making Hyderabad the startup capital into action, no sooner he took charge. It was a very forward looking vision crafter by the minister and put into reality by Srinivas Kollipara, the founder of what is now T-Hub.

H


Hyderabad is home to around 3000 startups out of the 20,000 startups in the country

It is among the top-3 buzzing startup ecosystem in the nation

Hyderabad has better infrastructure compared to other technology hubs like Bangalore

Hyderabad is home to numerous research institutes allowing home grown talent to be harnessed by newer knowledge intensive industries

The state has Industry and IT policies that are among the best in the country

room. T-Hub is a unique PPP model, where the Government has contributed on the capex side and has allowed an independent management team to run the day-to-day affair, governed by a board of very high pedigree. It is today a very busy and bustling building full of energy and exuberance.

It is witness to many marquee and VIP visitors both from the country and outside. Some of the big names who have visited T-Hub to-date are - Ratan Tata (who inaugurated the building), Satya Nadella, Ravi Shankar Prasad (Union IT Minister), Manohar Parrikar (Union Defense Minister), Amitabh Kant (Niti Aayog) and many other dignitaries.

T-Hub is much more than a flamboyant building. It is a thriving ecosystem of startups, mentors, co-founders, and support services, and an un-paralleled number of events that dots the campus. It is a living and breathing community where startups get bevy of varied services at a steeply discount price whether

it is incorporating the company or HR services or financial book-keeping or legal services. All of this is available to the startups at the campus rather than they going hunting for it which is a big hit on time and resource and is something the startup can’t afford to waste. Startups at T-Hub also enjoy an enviable list of mentors to choose from – both from within the city and from outside.

Let’s take a closer peep into T-Hub and why it is pitted to be a game-changer for startups in Hyderabad.

Industry Connect

Today at T-Hub there are events with all quarters of the industry, which includes the likes of - Microsoft, IBM, Intel, Amazon, Google, Samsung, Yes Bank, ICRISAT, SalesForce, Cisco, HPE, Nasscom, TiE and many more. All of them bring a lot of product and technology know-how, amazing amount of credits to help startup use many of this at less or no cost at all. This is huge from a startup’s stand-point and we at T-Hub understand this well and make every effort to line up all of this and many more right at their door-step.

Capital Raising

There are atleast two dozen startup’s who have been successful in raising their next round of funding (of atleast $100K or more) or have stuck big partnership with marquee corporates in a short span of an year in the incubator. Majority of the startup raise in the city has been around the $100K -

$150K (angel round) and fewer in the $ 0.5-1M VC round. This will change soon and we should hear more big ticket raises as many of these companies hone their product and go-to-market strategy and start getting into bigger revenue play.

Partnerships

There have also been partnerships between startups operating from the campus, which is a key advantage of a massive incubator having hundreds of startups. Beyond the incubator, T-Hub also has many corproate partnerships for those who wish to engage with the startup community via one of the many structured programs. A popular one is the accelerator program that few of the corporates have already kick-started.

The Rising Stars at T-Hub

Let me also touch upon a few amazing startups that are trying to break upon the door to success. There is – Gayam Motor Works (maker of electric cycle and auto), Hug Innovation (maker of multi-utility smart wearable watch), Loop Reality (maker of mixed reality cycling +VR), ATL (one of the top P2P lending startup) and many more exciting one’s who are the torch bearers for Hyderbad’ startup success. The success of one or more of this will be the moot point in the history of the city, which will open the seam for many more success and create a much larger ecosystem that what exist today.

T-Hub in Future

There is also plan of a much larger and more ambitious T-Hub Phase-2, which will be 5 times the size of the current one and when operational in 2018, will be the world’s largest startup incubator. It will have most number of startups under one campus anywhere and a perfect melting pot for all things innovation and entreprenuship. By that time there will certainly be few big success stories from the current bunch of startups that already exist and which will start to have a mushrooming effect around the time when the larger playground will be ready to unleash. Given all of this – it’s only fair to say, that Hyderabad will breed most number of startup’s and thrive as the best startup ecosystem in the country. Hence it has a good chance to be crowned as the “startup capital” of the country and an example for other cities to emulate, making india the “startup capital” of the world.

Hyderabad: Way forward

I am extremely positive and confident that Hyderabad, the city of pearls is sitting on a pent-up gold mine, which is slowly being scrapped at the surface and the shine starting to glitter. So I guess the question is not – “If Hyderabad will become a startup capital or not” but it should more appropriately read – “When Hyderabad will become the startup capital of India”. In my view it may only be 5 or 6 years away.

Opinions expressed in the special feature are the author’s own

Located in Hyderabad, T-Hub is India’s largest startup incubator

T-Hub houses 200+ startups in a 70k+ sq. ft. facility with 700+ seating capacity


Arun Jain

Chairman and Managing Director

Intellect Design Arena Limited

Collaborative Design Principle

Arun Jain, Chairman and Managing Director, Intellect Design Arena Limited, is of the opinion

that design and technological differentiation is the way to stay ahead of the curve


D8 Higher Throughput: Create and nurture a collaborative culture around design thinking, leveraging engineering centres and 6 people-teams working as unit cell structures

With digital interventions, businesses are seeing improvement in customer experience, productivity and turnaround time. In your opinion, what should be the strategic focus – disrupting with new technology or improving existing technology for competitive advantage?

Intellect has always considered design and technological differentiation as the way to stay ahead of the curve. It spotted the green shoots of this trend 7 years ago and started investing

diligently to build two radical technologies.

Canvas Technology, a transformative distribution technology for channel solution design, development and deployment, is an 'ahead of trends' product that enables the financial institutions to offer a unique omni-channel platform for end customers as well as internal users, thereby creating an integrated and

continuous experience. Banks are beginning to refer to this as "Digital Outside".

Corporate Business eXchange is an example of this technology in action. CBX is a next generation, comprehensive unified portal offering self services across domain catering to all corporate segments, enabling them to make informed decisions. CBX provides bank’s customers the view across multiple entities, banks, geographies, and currencies, to accurately determine their cash positions and borrowing needs, or to facilitate intelligent investment decisions. The drill-down feature provides contextual relevance on the cash flow events along with ability to act on the information.

Drawing inspiration from the Airline hub, Intellect’s Hub Technology addresses the needs of a dynamic business environment facilitating seamless interactions among the various stakeholders along with end to end process orchestration and centralized risk management. This is grabbing the attention in banking circles as an enabler for their agile operations, also known as "Digital Inside" strategy.

Both Canvas technology and Hub technology are serious external validations of not just the strength of Intellect’s R&D capabilities, but also its ability to spot futuristic trends well ahead of time.

Another example of Intellect's focus on technological differentiation as the way to stay ahead is 'Risk Analyst'. This product is the most advanced risk discovery tool in the insurance industry that leverages big data and known sources to uncover hidden risk in minutes. The solution analyzes data from 1800+ sources using big data, artificial intelligence, underwriting rules and risk predictors.

As a leading BFSI products company looking to achieve a long term growth target of 22-26%, how is Intellect Design Arena collaborating with clients to create value for their business?

Collaboration is at the core of Intellect’s relationship with all its clients. The organization’s DNA is based on a collaborative ‘Design Principle’ which is centered on a four-stage process that begins with de ning the problem by asking the right questions. The purpose here is to understand stated and unstated needs, and overcome the problems faced by the customers. Stage 2 involves observing patterns with an emphasis on accidents and exceptions. Stage 3 is all about the rigour of knowing and connecting the dots between customer experience and operations design. Stage 4 focuses on diagnostics to unearth blind spots.

Intellect provides the complete suite of technologies that enable holistic Digital 360 adoption. At 8012 FinTech Digital Design Centers, customers can experience their digital vision in real time and work with specialists on the customer experience and operational excellence drivers, sharing pain points, getting under the hood to better appreciate gaps in current systems, identify change opportunities and establish priorities for progressive modernisation.

Intellect also believes that value is provided when products are delivered on time and in full. Intellect ensures this through its delivery excellence programme called D-3 OTIF, which is built on the pillars of Design and Diagnostics, and contains distilled progressive thinking on Agile Engineering, Theory of Constraints, and Six Sigma. Consistent performance requires a high performance engine around domain efficiency, technology efficiency, process efficiency, customer knowledge, re-usability, IP innovation, and people energy. Deep diagnostics unearth blind spots. Design principles engineer for predictability.

The elements of this framework are:

D1 Customer Requirements: Understand requirements to deliver beyond expectations

D2 Technology Solutions: Provide superior solutions through optimum technology.

D3 Engineering: Lean operations design; first-time right development; zero-defect products; easy adoption

D4 Product Support & Service Delivery: Full technology lifecycle support.

D5 Planning: Optimisation of work scope, resources and activities for best results

D6 Monitoring & Control: Relentless focus on accident prevention and management to enable higher speeds and greater safety on the interaction highways

D7 Stakeholder Management: Map all experience touchpoints to ensure meaningful dialogue through the engagement process

Technology companies must necessarily

reinvent themselves every ten years


Other success factors include:

• Intellect Treasury powers RBI - 90% automatic reconciliation of entries with Exception Manager

• Intellect Core accelerates NBAD’s business growth to 33%

• The regional bank achieves 140% increase in transaction volume using Intellect Liquidity

R&D investments have long gestation period and uncertainty of returns. Being at the helm of affairs, are you looking to acquire technologies or invest long term to build internal capabilities?

Technology companies must necessarily reinvent themselves every ten years, and this was Intellect’s first reinvention that propelled it to leadership position in the specialist financial technology industry.

Intellect has a pole position in the FinTech product segment in the IT industry ensuring its technology advantage. Since 2004, a team of over 600 passionate and creative R&D engineers were deployed in building and extending the Intellect product suite which now drives total Digital 360.

Intellect has invested nearly US$ 150mn in R&D in the past 10 years to build pure digital products on a three-tier service-oriented architecture (SOA), which has won accolades from industry analysts. Other products are generally old legacy system overplayed with some digital flavours.

Our R&D team continuously works on latest technologies like Digital 360, Natural Language Processing, Artificial Intelligence, Big Data and smart search technologies to integrate and build solutions leveraging the strength around these with our Products.

As per NASSCOM estimates, India - the fastest growing base for technology startups globally, will expand at the rate of 75% every year until 2020. Presently, Indian startup ecosystem is going through a transition phase. In your opinion, as an active angel investor, how can the startups build competitive advantage to better cope with this phase?

I became an angel investor to help develop good ideas that will have an impact on society. I tell young entrepreneurs never to say they don’t have the money to explore a great idea. Money should not be the first priority of a start up; it should be problem-solving. Unless you solve somebody else’s problem, you will not make money. They should have the solution to a unique problem. Then I will help them scale up their business. Being an angel investor, I believe, is not an investment business, but a problem-solving business.

I have often said that the next $100 BN will come from product companies in India, that this country would see the next Silicon Valley-like phenomenon. Product firms will form the fulcrum of a fresh momentum in India’s growth story in the IT (information technology) space. A variety of political, economic and cultural factors prompted me to make this observation. I believe that it is the responsibility of established entrepreneurs to do more to create an environment that nurtures upcoming entrepreneurs.

Intellect Design Arena has been providing customized and innovative digital solutions across its business segments. How are these solutions impacting your customers?

Financial institutions are grappling with the challenges of increasing revenue on one hand, and cost reduction on the other, and 'digital' provides new and previously unimaginable solutions through technology. For this, Intellect is positioned at the forefront of the digital transformation banks and insurances companies seek, as they moved from disjointed digital activities to holistic digital outcomes. Intellect believes digital is about delivering the same experience at all touch points. Its solutions ensure superior customer experience, higher order operational efficiency and better governance in accordance with evolving regulatory frameworks.

Consider the case of the Reserve Bank of India, one of the largest central banks. Our solution manages public debt, collections and payments of the Central Government, 29 State Governments and Union Territories, and 7 very large customers including the Ministries of Finance, Railways, Post & Telegraph, Telecom, Defence, CBTT, and other Ministries. From the infallible perception of balance sheets, Intellect has provided the Central Bank real-time enterprise GL, allowing it to drill down to the last transaction. This ensures nil recon between multiple systems.

Even for overseas corporate banks, Intellect enables banks to meet their aspirations. Hong Leong Bank, Berhad, a leading financial services organization in Malaysia is powered by Intellect to transform and digitalize its wholesale banking offerings with the Intellect Global Transaction banking (iGTB) suite. This consists of a digital omni-channel delivery platform and rich applications across Digital Cash Management, Liquidity Management, Domestic and Foreign Payments, Trade Finance and Supply Chain Finance which will enable the bank to facilitate mass adoption of real-time digital payments amongst its corporate clients.

Six years ago a regional bank embarked on a mission to become a leader in Asia-Pacific with the aim of strengthening its presence as a cash and liquidity management provider across the region. As an ‘AA’ rated bank, it had the strength and capability to support potential clients in the region. Nevertheless, building a presence in Asia-Pacific was not easy – especially given the number of competitors already established in the region, combined with customer expectations for sophisticated technology solutions. The bank’s business objectives for the overall strategy to be implemented included increasing the regional customer base, increasing transaction volumes while reducing costs, improving visibility and control of funds, automating cross-border liquidity structures and minimizing operational risk of the bank’s customers. Accomplishing these goals required not only an aggressive growth strategy, but also a significant commitment to technology upgrades.

The bank now achieves 140% increase in transaction volumes and 85% uplift in intra-day transfers. With Intellect’s solution, the bank offers sophisticated automated solutions for cross-border sweeps or notional pooling to their customers. With a front-end portal and client visualization capabilities, clients now have complete visibility across their accounts and overall balances. Currently, the bank has around 320 liquidity structures live, from Australia through Asia, that are supporting customers with regional treasury centres in Singapore and Hong Kong.

Money should not be the first priority of a start

up; it should be problem-solving


Non Editorial

Strategy

The Focus of CFO in Today’s Digital Age

Neelesh Talathi, Chief Financial Officer, pepperfry.com

What makes Digital Disruption a force to reckon with is the pace

of change and its all-pervasive nature

Business Models:

‘Every moment in business happens only once. The next Bill

Gates will not build an operating system. The next Larry Page

or Sergey Brin won’t make a search engine. And the next Mark

Zuckerberg won’t create a social network’ – Peter Thiel.

Competition is no longer that person selling products or

services like those sold by you. Who would have thought that

a wannabe new comer like Pepperfry.com would in under 5-

years rise up to be the largest furniture retailer in India. Or,

how strange it is that the traditional global No. 2 FMCG player,

Unilever, with a turnover more than INR 50 BN, would pay 5X

to acquire a subscription based start-up, Dollar Shave Club

having a turnover of less than $200mn. Or, for that matter

Detroit is rushing to relocate to Silicon Valley with General

Motors investing $ 500 MN for an undisclosed share in Lyft, a

start-up in the self-driving cars space. Clearly business models

are being redefined every day. The CFO needs to play a crucial

role in provoking challenging questions – on the business

models, on value drivers, on ROIs of different type of

marketing investments etc.

Yet another aspect where businesses are being profoundly

impacted by technological advancement is

the cost structures. We know that all

CFOs simply hate cost. Digital age is now

providing us unconventional solutions to

address the entire cost challenge. For

instance, let’s look at customer service

centres (also called call centres). The cost

per phone call tends to hover in the range

of INR 6–7 per call. Training of staff,

education of customers, supply chain

efficiencies can bring this cost down by

let’s say 20%. Not bad. However, if we can

deploy ‘chatbots’ – well then, we could eliminate this cost!

That’s the sort of competitive cost advantage that technology

can create for you. What the digital age is offering is a

completely different paradigm when it comes to operating

efficiencies.

Information:

Our mobile phones today have more computing power than

the computers used while sending man to the moon. To quote

Bill Gates – “Information technology and business are

becoming inextricably interwoven. I don’t think anybody can

anagement thinker and Professor, Clayton

Christensen describes ‘Disruptive Innovation’ as

a process by which a product or service takes

root initially in simple applications at the

bottom of a market and then relentlessly moves up market,

eventually displacing established competitors. Disruptive

innovations have been underway for a long time, for example,

Mini Mills disrupting Integrated Steel Mills, or Personal

Computers dethroning Mainframes.

James McQuivey, in his book Digital Disruption characterises

the current state of disruptions as a preference to innovate

through rapid, focused pursuit of adjacent consumer benefits

and a habit of partnering to deliver these benefits quickly and at

low cost.

In my view, what makes Digital Disruption a force to reckon

with is the pace of change and its all-pervasive nature. It is

indeed right to think that different businesses are varyingly

impacted. For instance, a mining business would be lesser

impacted than say a consumer facing business. Having said that,

every organisation today needs a digital strategy. And every

CFO has a role in shaping and delivering their organisation’s

digital strategy. I don’t intend to dwell on

the specifics of individual strategies, but

rather on 4 key areas that I, as a CFO, am

focused around:

Resource Allocation:

To quote Randy Komisar, Partner, Kleiner

Perkins Caufield & Byers – ‘If Corporates

don’t approach rebalancing as fiduciaries

for long term corporate value, their life

span will decline as creative destruction

gets the better of them.’

Never has resource allocation been as important as in the

digital age. Yet, studies have shown that roughly a third of

businesses fail to differentially allocate capital. As a CFO, one

needs to be cognisant of the inertia in the allocation decisions

and counter it by deploying suitable tools and processes. It is

critical here for the CFO to get over their personal bias

towards anchoring or loss aversion. Incremental allocation is

not the answer. Driving objective decision making in an

otherwise subjective VUCA world is the challenge. CFO needs

to provide the objectivity, ensuring that organisation politics

does not rule over business economics.

As a CFO, one needs to be cognisant of the

inertia in capital allocation decisions and counter it by deploying

suitable tools and processes


M


has said – ‘You must be the change you want to see in the

world’. Our approach to succeeding in Digital Age is not about

doing things differently but to do different things. Here a CFO

needs to follow a two-fold approach. One aspect is around

development of the Finance Team, and the other where the

CFO is effectively the spokesperson on behalf of the CXOs or

the leadership team.

In our business, we have substantially

invested in training and development of

our teams. It is as much an unlearning

process as it is a learning one. The

approach encompasses heightening

awareness around the digital world, (for

instance, bringing in Facebook team to

speak to our leaders), redesigned

information capabilities (e.g. data

warehouse), and adopting newer processes and tools (for

instance, Tableau). As a CFO one ought to be evangelical about

the company’s digital strategy and its roll-out. This process

starts with changing yourself and converting those around you.

It calls for a level of belief that the future, as uncertain as it

maybe, will only be brighter and that we (organisation,

individuals) will succeed in that future.

My concluding thoughts – if you are not a disrupter then it’s

very likely that in the digital age you are getting disrupted.

Finance function and the CFO are the vanguards of

organisational value creation. Let’s seize the opportunity to

creating competitive advantage for our organisations.

talk meaningfully about one without talking about another”.

This is truly advantage CFO!

Digital age has ushered in the unprecedented ability to collate,

store, process and compute vast amounts of data at high speed

and low cost. There isn’t any aspect of business where the

power of information can’t be unleashed. Let me again call out

an example from my business where we harnessed the power

of information to create competitive

advantage. In the global FMCG industry,

10bps of market share can swing fortunes.

Pricing decisions have significant impact on

margin and growth. There are very many

considerations that go into making these

decisions and finally it does come down to

the exercise of judgement (a better way of

saying a gut call). In our business, we

successfully pioneered predictive pricing models which brought

together diverse information such as brand voltage scores,

consumer behaviour metrics, economic indicators etc. With

the advent of artificial intelligence and significant improvements

in capabilities to mix and crunch diverse sets of data,

programmers can associate or disaggregate trends or

exceptions and help visualise information, enhancing human

abilities to discern and make better informed decisions. It’s a

true CFO dream come true - to see the organisation

embracing information based decision making.

People People People:

As I spoke earlier, the digital age is not just about the change

but more so about the pace of change. As Mahatma Gandhiji

As a CFO one ought to be evangelical about the

company’s digital strategy and its roll-out


Financial Services

Fintech and Banks: Towards a Paradigm Shift

Alok Mittal, Co-Founder & CEO, Indifi Technologies, believes that evolution of Fintech is at

an inflection point and now has a bearing on customer interface and strategy of financial institutions

anywhere interactive access to services.

What is more is that the underlying user experience paradigm on the mobile device breaks through the barriers of monolithic service providers. It is creating a host of opportunities to rethink banking and make it pervasive to a point where customers will not think about their banks the way they do today. There is a cycle of unbundling of banking services, and re-bundling them with other non-banking services, which leads to a completely different user experience – that, in my mind, is the real disruption that current

generation of Fintech companies will cause. Let us consider a few examples:

1. WB21 is an online-only bank that unbundles the foreign exchange remittance service that is conventionally provided by large banks. However, WB21 creates a seamless customer experience, and a pricing value proposition, which allows a customer to get the best forex service without ever leaving their desk or talking to a customer service representative. Sure, it rides on decades of investments in financial infrastructure – but it teases out perhaps the most profitable franchise on basis of a disruptively superior customer experience. Similar examples are beginning to appear in other banking services such as wealth management.

2. Go and ask a hundred people what Paytm is – and none of them is likely to say that it’s their bank! Paytm

unbundles a select set of banking services (the consumer liabilities side of business), and bundles it with non-banking services from mobile top-ups to ecommerce, to create a completely new customer proposition. Similarly, services like MoneyView take the investment side of business, and seamlessly combine it with a spend management utility to create a new savings and investment product. Such unbundling and re-bundling of services lies at the heart of Fintech companies, and are likely to change how consumer perceive

banking.

3. Alternate lenders such as Indifi enable credit in the customers’ business context. In many cases, the customer may not even think about taking a loan, but the offering is available in an integrated manner with their sales and purchases during usual course of business. Rich data analytics help address current limitations of credit algorithms. Such integration between business processes and financial services will address both access and usage gaps.

intech (Financial Technology) is the buzzword which connotes an enabler and a disruptor in the same breath. The space of financial technology companies is

so wide that it promises to change the current paradigm in almost all areas of banking – be it deposits, lending, wealth management, forex or treasury management. Many of the enabling technologies around Fintech are relevant for incumbent banks as well as for new companies alike. These would include classical enterprise technology stack in context of banks – right from core banking systems to new models of CRM, and to innovations aligned to what is now referred to as India Stack (Aadhar, e-Sign, e-KYC, UPI).

Banks and Financial Institutions have been a lead adopter of technology through decades. Why is this surge of technology then different from the previous waves? Does the new set of technologies enable fundamentally different capabilities than the gradual evolution of technology we have seen in the past? Above all, what does this mean for incumbent banks, as they see a slew of specialist Fintech companies spring by – is this a threat or an opportunity to cooperate?

The Impending Paradigm Shift

The set of technologies appearing on the horizon signify a departure from the nature of technologies that have been experienced in the past. Historically, technology deployment by banks has mostly been in the back office and middle office – be it mainframes or CRM – with possible exception of ATMs and Internet Banking. Needless to say, these technologies led to improvement in customer experience as well. However, the primary rationale for adoption was to introduce more efficiency and scale in the banking system. Most of these technology innovations did not change the worldview of customers in how they related to their banks. Banks continued to be places where consumers go to deposit money, take loans, transfer funds and the like. That is about to change.

The recent wave of financial technologies enable a fundamental shift in how customers will think about banking – or better still, stop thinking about banking. This shift is primarily being enabled by a decade of accumulated gains in making the banking infrastructure streamlined. However, it will be driven through the biggest customer-interface innovation of our times – the mobile phone. For the first time, customers have anytime


F

The unbundling and re-bundling of banking

services at the customer front-end will be

mirrored by creation of new partnerships between Fintech

companies and banks


The Indifi Experience – So far

Indifi is innovating in the space of supply chain financing, basis shared credit intelligence. Indifi integrates its financing product deeply with the processes and cash flows in the supply chain – not just in terms of provisioning a loan, but in creating other technology-enabled market linkages through payment systems

and analytics. As an example, Indifi has created a product for financing distributors for a large travel consolidator, using supply chain data and other segment-specific signals. Lenders use this analysis to extend working capital loans to the agents, thereby enhancing their business capacity.

Indifi works in partnerships with banks to bring these products to the market. Banks gain by getting access to new segments and tighter linkages into the business flows. Customers gain by seamless access to

financing products that fit their use case and process flows. We expect to see more such models that focus on co-creating value for customers.

Conclusion

Evolution of Fintech is at an inflection point, where it is no longer confined to technology and operations functions. It now has a bearing on customer interfaces and strategy of financial institutions. This allows for co-creation of new business models by Fintech companies and banks, which will define the basis for the new terms of engagement of a customer with their financial service providers.

Competition or Cooperation

Fintech companies are adopting a wide variety of business models in going to market. Some, like new-age NBFCs and Payment Banks, look to control the entire value chain right from customer experience to the balance sheet. Others, such as marketplace platforms, attempt to combine the best capabilities through a partnership model.

In this equation, the key capabilities that Fintech companies bring to the table center around their ability to reimagine the customer experience (which is essentially driven through diversity of ideas and approaches), and deliver it through compelling usage experiences. These companies also bring an unwavering focus on customer experience as the organizational DNA – something that, generally speaking, is not associated with banking.

However, most of these startups lack the capabilities that have been built in the banking system over decades. These include the infrastructure (technology as well as operating), the understanding of risk, regulatory compliance processes, and sheer scale which leads to more efficient and reliable services. This is where the partnership opportunities for Fintech companies and banks will reside.

In effect, the unbundling and re-bundling of banking services at the customer front-end will be mirrored by creation of new partnerships between Fintech companies and banks, which leverage their respective strengths to co-create customer value.


The recent wave of financial technologies enable a fundamental shift in how customers

will think about banking – or better still, stop

thinking about banking

Innovation

Intra-city Logistics: Competitive Advantage of going Digital

Kausalya Nandakumar, CEO, SmartShift, describes how digital innovations address the

significant need for efficiencies in a largely scattered and disorganised intra-city logistics space

space, wherein the dominant incumbent players are the unorganized truck stands (or nakas). Close to 100% of the on-demand transport still happens mainly through these truck stands. Thus, the entire focus of the team has been to leverage the existing know-how of these transporters and make the naka process “Digital” and “Efficient”.

The SME (small and medium enterprises) base that SmartShift caters to spends nearly 30% of their daily working time arranging for their logistics requirements. Most of their time is spent in haggling over the price with multiple transporters. That for us was a key insight. If we could digitize the concept of ‘Bargaining’, it’ll reduce their effort and make adoption seamless. That’s how ‘reverse bidding’ was born. As a system, we do not dictate or force prices. We give the choice to the

customer to choose the transporter at the right price. What this also did was it made the price of the trip known in advance (unlike distance and traffic variability of others’ models), which also helped us differentiate in the market.

Reverse Bidding has helped SmartShift create an attractive model on the transporter side as well. Over the last one year, we have realized that the lynchpin to our success has been an unparalleled understanding of the transporter’s mindset. We designed SmartShift to celebrate the “Entrepreneurial” spirit of the transporters

and give them the autonomy that they desire in a smarter fashion. On our platform, transporters decide their working hours, the right price for the cargo movement and may also decline the job if it does not suit their current conditions.

There are many players in the market working on various pricing models, however SmartShift chose to work on a

ogistics demands high economic and time investment for all companies; often becoming one of the biggest bottlenecks in their everyday operations. Triggered by this realisation and with a deep belief that efficient solutions could be made

available, the SmartShift team decided to better understand customer needs in the space of intra-city logistics movement. The team conducted 2000+ hours of customer interactions; mapping several industries’ complete supply chain, meeting transporters and businessmen alike.

The team recognised the significant need for efficiencies in a largely scattered and disorganised intra-city logistics space. The intra-city logistics market is estimated to contribute 30-35% of the USD 135 BN logistics industry and is poised to grow driven by key enablers of burgeoning urbanization and improving purchasing power. This space is largely catered to by SCV (Small Commercial Vehicles with carrying capacity of 1.5 Tonnes and less) transporters. The largesse of information asymmetry coupled with the understanding of the strong entrepreneurial bent of mind of transporters triggered the birth of SmartShift and its unique business model wherein the solution goes beyond cost efficiencies.

SmartShift entered the market in October 2015 as a multi-medium digital marketplace platform for intra-city logistics. SmartShift enables cargo owners (businessmen) to find the right transporter based on various criteria like distance, shipment type, size, weight, etc. The platform enables access to its services through an Android mobile application, website and a dedicated call centre.

SmartShift operates in the highly competitive intra-city logistics


L

The largesse of information asymmetry

coupled with the understanding of the

strong entrepreneurial bent of mind of

transporters triggered the birth of SmartShift


they like to run their business. In a company whose fundamentals run on mass customization and servicing, these records help the SmartShift team to garner important insights that they then use to design the CRM offerings to deliver on the “Business Ko Lift Karo” mantra.

One of the outputs of these analytics has been the ‘platform thinking’ incorporated by the company. SmartShift has tied up with companies like LendingKart, a company which provides financial assistance to Small and Medium Businesses to help their business grow and expand, to deliver financial products to the SME customers. The trigger for garnering such partnerships was based on analytics run on the data that SmartShift has collected which indicated that access to economical and multifaceted capital was a critical need of SME customers.

Similar insights with SmartShift’s transporter database convinced the team that if they wanted to resonate with the transporters and increase their stickiness to the platform then they must develop solutions that go beyond just providing the transporters jobs. A dedicated team at SmartShift works to create a holistic package for transporter partners who are associated with the company including a recent alliance with IOCL to help leverage aggregated economies of scale and deliver lower cost of vehicle running through fuel points.

The team believes that ‘the beauty lies in anticipating a customers’ need even before the customer realises that such a need exists.’

SmartShift’s digitization driven approach to customer experience is a three pronged strategy of customer engagement – it works as the core interface between the company and the customer, also a comprehensive manager of records for all its customers and partners and most critically a solution-enabler driving innovation that enables competitive advantage.

reverse bidding model. While the digital platform intelligently simulates the current marketplace behaviour that both the customer and transporter have been practising for years, it successfully taps into the innate satisfaction that one gets on cracking a good bargain. SmartShift’s app enables customers and transporters to interact real-time and close deals in a matter of 3 minutes. Customers are engaged as they discover prices real-time and save as much as 30-50% cost on daily transactions.

Beyond bringing convenience of booking a vehicle quickly, being digitally enabled allows SmartShift to offer its customers, services and value added features which create unmatched value. In SmartShift, all innovations are driven by a relentless pursuit of unlocking customer value and creating unmatched solutions.

For example, the team realized early on that the smartphone penetration in the transporter community is extremely low. So the team chose to build a strong technology architecture to create a ubiquitous platform that caters to plain voice enabled feature phones as well. By leveraging a global-first technology platform that utilizes tower triangulation (telecom towers’ location tracking) SmartShift is the first and only player in the digital logistics aggregation industry to have created a universal platform that all transporters can have equal access to. This single strategy improved the universality and most importantly created zero entry barriers to SmartShift, helping the company make significant inroads in acquiring and retaining transporter partners on board.

The team believes that success is driven by understanding customer needs. The analytics on the platform likens every customer to a series of patterns. The multi-digital customer touch points have enabled SmartShift to track the customer’s likes, dislikes, preferences, decision-making criteria and many more elements which in turn has improved customer experience through superior delivery of service . In SmartShift, customer data is treated as ‘oil’, as it is a treasure trove of the customer’s needs, giving valuable insights especially about how

SmartShift is the first and only player in the

digital logistics aggregation industry to have created a universal

platform that all transporters can have

equal access to


Digital Disruption : Plan, Plot and Invest

Disrupting the business with new technology is a systematic process involving multiple phases of

development and testing before implementation

Technology is at the heart of our system and has shaped our growth since inception. Improvising upon existing technology to provide our customers and partners with an exceptional experience is a continuous process at Myntra with teams working round-the-clock to ensure the same. It certainly gives us a competitive advantage in terms of customer experience and turnaround time. Disrupting the business with new technology is a systematic process involving multiple phases of development and testing before implementation.

We are open to exploring new technologies that can bring change to the way fashion is accessed and consumed and also in line with our mission, which is ‘to use technology to democratize fashion & lifestyle to make people look good.’

Digitization has improved customer experience, productivity and turnaround time for businesses. In your opinion, what should be the strategic focus – disrupting the business with new technology or improving existing technology for competitive advantage?

Disruption is integral to the domain and it is cutting edge. Even as the focus of the operating business has to be continuous, with improvements in existing technology to adapt to a fast evolving digital ecosystem, future business demands that we plan, plot and invest in disruption, as well as manage disruptions that may occur. No technology based business can exist with only one of the two legs.


Ananth NarayananChief Executive Officer

Myntra Designs Pvt. Ltd.


generate customer engagement and ensure efficient inventory management?

Data analytics tells us a lot about customer preferences, tastes, brands and trends with respect to geographies. Our systems generate detailed logs of each and every customer who has shopped on our platform, monitors their browsing patterns and social chats to predict preferences and suggest products. It goes on to the extent of advising matching tops or skirts for an occasion based on what is already available in the customer’s wardrobe. We are also able use this data to provide insights to our brand partners on designs and styles that would be in demand for the upcoming season or sale event using predictive analytics, ensuring effective inventory management.

One of the important ways to ensure the quality of customer experience is logistics. How is Myntra using digitally enabled best practices to make its supply chain more efficient and cost effective?

In order to strengthen and make our logistics and supply chain more efficient, we have a system for real-time tracking of shipments and also use location mapping for improved intra-city logistics. This also helps us predict estimated time of delivery irrespective of it being handled by us or our partners. We have improved our ability to track movement across multiple

service providers and are also ensuring optimum utilization of our delivery force which is in the range of 90%. We are also continually focusing on last-mile customer experience with the use of technology. We currently ship over one hundred thousand orders per day on an average and are also focused on providing value added solutions such as try and buy, returns (quality checks), exchanges, alterations and reverse logistics, all of which are achieved to the highest standards of service through technology.

In the recent light of demonetization, what digital solutions can the e-commerce industry capitalize on to

reduce their operational bottlenecks?

From an operational perspective, existing digital solutions provided by companies in association with banks and other payment solutions are adequate for e-commerce companies to capitalize upon. Companies are already witnessing a surge in online transactions owing to demonetization. At Myntra we have witnessed a 30% increase in prepaid transactions since November 9, 2016.

As per NASSCOM estimates, India - the fastest growing base for technology startups globally, will expand at the rate of 75% every year until 2020. Presently, Indian startup ecosystem is going through a transition phase. In your opinion, how can the startups build competitive advantage to better cope with this phase?

Startups can build competitive advantage by not shifting focus from customers and concentrating efforts towards achieving its mission while keeping in mind the long term vision. Business environments and market conditions change quite often. Startups should focus on building strong and resilient businesses that are not impacted by economic or other changes in the business environment.

Acquisition of Jabong has strengthened Flipkart Group’s position in the Fashion and Lifestyle segment. In your opinion, how will this impact the customers’ mindshare and what are your plans to prevent market cannibalization?

The Group today occupies 70 % of the market. The acquisition of Jabong has strengthened our position and we plan to continue operating it as a separate entity so that customers can continue to enjoy the brand experience. At the same time, we expect some synergies on the technology side and will collaborate in the back end so that customers of both Myntra and Jabong can benefit by having an enhanced customer experience, access to more brands and a faster turnaround time. While there is some overlap in our customers, both entities have a clear and strong positioning in the minds of the customers and hence there is limited potential for cannibalization.

When every industry is trying to go online, Myntra is introducing its physical store. Technology being the company’s forte, how do you plan to use it to make this store stand out?

In fashion, customer behavior is guided by their sense of comfort with the brand, and the touch-feel factor; hence we decided to adopt an omni-channel strategy. Our physical store will transform brand experiences using technology. It is being designed as an experience zone and an extension to the way in which customers currently experience fashion before undertaking a purchase.

In the past you have mentioned that your motivation is to disrupt fashion which you believe can be done across the value chain. How do you think technology can improve services across the value chain?

At the services end, technology will deliver on two big scores: greater efficiency and customer intimacy that delivers a very high degree of personalized experience.

Technology is at the centre of all our operations and functions. Automation has helped us to streamline processes in a manner that allows us to deliver products to our customers with the least turnaround time.

Automation throughout the entire value chain, from inbound to outbound logistics and the sales platform is monitored real time by our expert tech team that is constantly working to improve efficiency and eliminate slip-ups through the entire system. Increasing levels of automation therefore has a correlation to customer satisfaction and this is possible only with class leading technology.

The other elements that are fundamentally changing consumer experience are the intuitive aspects which help customers navigate the vast array of options with ease along with enlarging social aspects of online shopping. Personalization of the onsite experience is today an expected benchmark as customers don’t want to simply browse and waste time, but be led to choices that are within their spectrum of preferences.

Digital revolution has empowered your customers with more information and more options to choose from. How is Myntra leveraging predictive analytics to

At the services end, technology will deliver

on two big scores: greater efficiency and

customer intimacy that delivers a very high

degree of personalized experience

Startups should focus on building strong and

resilient businesses that are not impacted by economic or other

changes in the business environment


Strategy

Digital Innovation: Competitive Advantage or Disruption?Manishkumar Bhatt, Director - IT, Vadodara

Municipal Corporation, thinks that digital innovation tends

to be a massive competitive advantage if done at the right time

with the right set of resources

• What does a digital strategy look like?

• How do you integrate digital world into your business?

• Where do you start?

• Where will the new skills required by going digital come from?

The use of Digital Innovation can be analyzed in terms of 3 aspects

1) Product - digitally-enabled products, digital components and control systems

2) Business model - open innovation, co-creation, platform ecosystems

3) Data - analytics, big data, customers, personalization

Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services. The difference between

disruption and innovation isn’t black and white, but there are clear distinctions. “Disruptors are innovators, but not all innovators are disruptors - in the same way that a square is a rectangle but not all rectangles are squares,”

Disruptive businesses always operate with a degree of innovation; however, innovation alone doesn’t always displace an existing market, industry or technology. Digital disruptors are better, stronger, and faster. They build better product experiences that create stronger customer

relationships and bring it all to the market faster.

In such a scenario, the questions for aspiring digital disruptors would be:

• How will you create an ongoing digital customer relationship?

• How will you generate more ideas more quickly?

• What does your total product experience look like?

• What is the role of technology & operations?

• What partners will get you there quickly?

igital technologies… are combinations of information, computing, communication, and connectivity technologies (Bharadwaj, El Sawy, Pavlou, & Venkatraman, 2013)

Innovation … is an idea, practice or object perceived as new (Rogers, 1995)

Digital innovation is about going beyond the conventional IT business model of delivering and maintaining products and projects. If done at the right time with the right set of resources, digital innovation tends to be a massive competitive advantage.

Some major influences of digital innovation are:

• IT is no longer just a service or support department for organizations outside the software industry.

• Innovation is no longer considered a value-addition.

• More and more companies are pushing towards mobile-first strategy.

• A growing trend of long running businesses facing new threats from newbies or outsiders. If we summarize, some recent trends:

- YouTube and Netflix have forced channels like Star and HBO to explore the online market for expanding viewership.

- Online marketplaces like Amazon and Flipkart have challenged the retail market enormously.

- Online taxi booking portals such as Ola and Uber have taken away a huge market share from the traditional taxi companies.

• Customers’ impression of a business is established through digital engagement, forcing businesses to recognize that software is the brand.

As a result of digital innovation, decision-makers are asking some fundamental questions, such as:

Digital disruption is the change that occurs when new digital technologies

and business models affect the value

proposition of existing goods and services


D


Sometimes this works and sometimes it doesn’t.

In certain cases, a failed response to a disruptive threat cannot be attributed to a lack of understanding, insufficient executive attention, or inadequate financial investment. The challenges that arise from being an incumbent and an entrant simultaneously have yet to be fully specified. How best to meet

these challenges is still to be discovered.

Disruption theory does not, and never will, explain everything about innovation specifically or business success generally. Far too many other forces are in play, each of which will require further study. Integrating them all into a comprehensive theory of business success is an ambitious goal, one we are unlikely to attain anytime soon.

But there is cause for hope. Empirical tests show that using disruptive theory makes us measurably and significantly more accurate in our predictions of which fledgling businesses will succeed. As an ever-growing community of researchers and practitioners continues to build on disruption theory and integrate it with other perspectives, we will come to an even better understanding of what helps firms innovate successfully.

And the path to disruption would entail

• Senior-level commitment to putting the customer first

• Disrupt the process in order to disrupt the product

• Give authority to small teams to generate focused innovations

• Test and measure; expect and accept failure

• Partner to get there quickly

The conclusion is disruptive innovation breaks apart previous arrangement on who’s getting what share of industry value. Low-end disruptive innovation offers lower prices on an existing market. Low-end disruptive innovation disrupts pricing. New-market disruptive innovation identifies a new customer segment, new market and creates new products, which results in new revenue streams. New-market disruptive innovation disrupts markets segmentation.

We still have a lot to learn

We are eager to keep expanding and refining the theory of disruptive innovation, and much work lies ahead. For example, universally effective responses to disruptive threats remain elusive. Our current belief is that companies should create a separate division that operates under the supervision of senior leadership to explore and exploit a new disruptive model.

Disruptive innovation breaks apart previous arrangement on who’s getting what share of

industry value


Non Editorial

DIGITAL DISRUPTORS

Ahead of the Digital Curve

In this section, we have profiled 5 innovative companies that have the potential to be game - changers in their business domain with their unique digitally enabled innovations.

Digital Disruption: Agriculture

Digital Innovation in Agriculture - ICT SolutionsAnand Babu, Founder and CEO, Jayalaxmi Agrotech Pvt.

Ltd., believes challenges in agriculture can be solved in a way that

creates economic and social benefits

Why digital approach (ICT) solutions are inevitable?

Although government has dedicated agri-extension department to disseminate the information, illiteracy and diversity are major bottlenecks for the extension department. Here is a simple math why conventional agriculture extension is not working: India has around 120 million agricultural families. Even if we have one agriculture field for every 1000 agriculture families, India needs 12 lakh field staff. However, we have only one lakh agriculture extension field staff in India. Clearly technology is an enabler to address these solutions. Especially digital technology - ICT solutions (Information & Communications Technology) - can make a key difference for our nation. As the smartphones become deeply penetrated even in rural area, there is tremendous opportunity to leapfrog current agriculture extension methods through innovative content delivery methods.

Existing Agri-ICT solutions landscape:

Most of the existing ICT solutions in agriculture space are either focusing on monsoon or on market. There is hardly any dedicated solution which handholds farmers with “agronomic practice”. However, it is evident from some published results of World Bank research that farmers are keen on learning more about “Growth phase” instead of market or monsoon. Monsoon is very important factor in agriculture. Unfortunately monsoon becomes an illusive guest even during the rainy season in India. Hence getting to know about weather report twice a day on mobile phone loses its importance. Similarly, ‘market information’ also has its own limitation. Most of the current market connect ICT solutions are dealing with few commodity products but it has its limitations in terms of

logistics, geographical spread.

Although some ICT applications have been developed by private and government agencies to address the information gap in terms of agronomic practice, they are internet dependent. In developing countries like India, information gap is further challenged by connectivity gap and hence dependency on internet is clearly not scalable at this point of time.

Jayalaxmi Agrotech a rural based start-up has developed several crop specific mobile

apps for farmers in regional languages to address the information gap. Apps are designed to break the literacy barrier and deliver information. Suite of 20+ crops specific apps for agriculture, horticulture and animal husbandry are available in several Indian regional languages.

Jayalaxmi Agrotech is trying to bring the most happening technologies like Mobility, Analytics and Cloud into the hands of farmers. Apart from content, several analytical techniques like decision trees, fertilizer calculator, and reminder mechanisms have been introduced.

If a farmer downloads sugarcane app, it provides complete information right from planting to harvesting. It provides audio visual details on different planting methods, symptoms of various diseases, micronutrient deficiencies, use of growth hormones, water management, fertigation process, fertilizer

or agrarian nations like India,

agriculture is critical for sustainable development and poverty reduction, and agricultural

growth can be powerful means of achieving inclusive growth. Although technological innovation emerged as drivers of growth, most of the benefits of the high growth rates achieved over the last few years have not reached the rural poor. We are in the era of knowledge intensive business; however, agriculture is still input intensive due to knowledge or information gap.

Information gap in agriculture is still challenged by wide technological divide. In India, due to information gap (digital divide) agriculture has become "input intensive” but not "knowledge intensive". As a result, agriculture is not profitable. Youths are losing interest in farming and migrating to urban areas. It is evident from some unpublished results that 30 farmers are leaving agriculture every minute in India.

Some of the pressing problems that most of the farmers face are just because of information gap as follows:

• 90% of farmers are not aware Lack of awareness on varieties:of disease resistant varieties, drought resistance varieties etc.

• : Indian farmers water the soil Irrigation and water wastageinstead of watering the plant. We are still spending 3000 litres of water to grow 1 kg of rice.

• : Whenever there Disease managementis disease or pest, they still depend on pesticide shop dealer to recommend the spray. They always recommend the product which has more margin. This is leading to irrational use of chemical pesticides.

• : Many Micronutrient managementfarmers are unable to differentiate disease and micronutrient deficiency.

• : 90% of farmers fail to Package of Practiceadhere to package of practices recommended by experts.

• : Many farmers have been growing single Monocrop culturecrop for decades as they don’t have knowledge to grow other crops.

• : 99% farmers in India are not aware of Fertilizer calculationNPK fertilizer calculations.

• : Huge chunk of farmers Improper usage of growth hormoneslose their crop due to improper usage of growth hormones as they are not aware of PPM calculations.

• : Many Lack of awareness of traditional aspects of farmingyouths are not aware of traditional agricultural practices

• : It is evident from dipstick survey that Agro-climatic region82% of farmers in India are still not aware which agro-climatic region they fall under.

F


Several crop specific mobile apps for farmers in regional languages to address the information

gap


calculations, post harvesting techniques etc. Apps also have auto reminder algorithms to remind the farmer which helps in adhering to package of practices. We have developed separate apps for each state to address the regional variations, language issues etc. We brought in multiple effects to increase the reach. It means, if one farmer has downloaded any crop specific app, he can transfer to another farmer either through Bluetooth (without internet). This turned to be a major success. Today our apps are downloaded by one farmer every 5th minute. Till date we have touched one lakh downloads and have emerged as the fastest spreading agri-ICT solutions in India.

To address the connectivity gap, we have developed a hardware device called “Agri-Pole”. We have sold hundreds of these devices since its launch in early 2016. It enables farmers to download the app in the absence of internet. Some of the rural banks installed our Agri-Pole devices in their rural branches through their CSR initiative. One such device per village is good enough to bring digital literacy. This innovative approach gained huge credibility and recognition at national and international forums. However, to take these innovations to needy people, we needs enabler to bring the social transformation.

Some of the observations from the survey results on what kind of information farmers value the most are shown below:


Sustainability:

Entrepreneurship in agriculture space is very turbulent and challenging and we are no exception. Our journey was a difficult one. Our venture Jayalaxmi Agrotech is a “Triple bottom line” venture. Earlier we were trying to sell the apps to farmers, but very soon we realized that it is not a scalable model. Off late we changed the business model. Today we give apps to farmers free of cost but we find other avenues to sustain the venture. Revenues at early stage come from sale of Agri-Pole devices. Once we have some user base, we can leverage second stage revenues through in-app advertisements.

Third and crucial revenues from analytics service would kick start once we have significant user base. This way we would be able to generate revenue at various stages which would give early stage sustainability. We set examples of what can be

achieved with very little in terms of funds but an extraordinary amount of impact by scalable solutions, lean team, hard work and by shining a fresh lens on persistent and emerging challenges. Through our social innovation, we have tried to demonstrate that some of the social challenges in agriculture can be solved and in a way that at the same time it creates economic and social benefits. Our partnership with enablers like SKDRDP has been a great support.

Impact:

Through our innovative approach, we have touched lives of one lakh farmers. Early stage survey result shows that our ICT solutions reduce the input cost by 14% and increase the profitability by 17%. Once our solutions are adopted at scale, there will be huge environmental benefits. Reduction in chemical fertilizer usage would reduce the subsidy burden, enhance the soil health and eventually the health of individuals who consume agri-produce through organic farming. Through this bottom-up approach the estimated amount of chemical fertilizer saved this year amounts to 50,000 tons.

Challenges:

Social entrepreneurship in agriculture space is challenging in India. Although, there is much hype about startup ecosystem, impact investors, incubation centers etc. across the nation, it is still quite challenging for grass root level ICT innovators to find a match and sustain.

Namesake ‘impact investors’: Although, some innovative approaches are commercially sustainable in a long run, but seed R&D capital may not be recouped and may not be very profitable especially in agriculture ICT space. However, significant social impact is definitely possible in some of the models. But, so called “impact investors” still look for quick revenues. So grant funding is the best possible support to materialize these kind of innovations.

Challenges with ecosystem: Government or DST approved incubators who are supposed to nourish the startup ecosystem unfortunately have typical investor mindset. In my view, this is the biggest bottle neck for social entrepreneurship especially in agriculture ICT space. Several best in class entrepreneurs and innovators put down the incubation opportunity after going through unilateral ‘term sheet’ that incubators push the entrepreneurs to sign. Their terms sheets for INR 10-15 lakhs seed funding resemble $10-15 million investment. Since government is a big stakeholder in agriculture space, ICT for agricultural extension projects need to be compared and evaluated objectively.

Pilot syndrome: Many agriculture ICT solutions in India have not taken off beyond the pilot. In most of the cases, funding (govt. or private donor) agencies take initial advantage of press and media coverage by supporting pilot with small funds, but don’t put serious effort to take it beyond pilot phase.

Data sensitivity: Some agri-ICT entrepreneurs built their solutions on strong IT architecture and gathered huge amount of analytics data, app usage data etc. Although they are not profitable at this point of time, they are sitting on valuable ‘big data’. This data is not just valuable but sensitive too. Government should capitalize on this kind of data before some MNCs take over it.

What are the features you most liked in the app?

Ability to work offline

Local language

Audio visuals

Easy to carry

DSS

Package of practices

Reminders

Analytics

Size of app

Others

87%

59%

33%

31%

28%

27%

17%

10% 7%

1%

Why do you want this app on your mobile?

52%

19%

13%

6%

5%5%

Identify disease

Package of practices

Help others

Growth hormones

Self learning

It is free

To address the connectivity gap, we

have developed a hardware device called

“Agri-Pole”

Digital Disruption: Healthcare

Common Digital Platform for Healthcare Service Providers

Rahul Aggarwal and Ravi Chandra, Co-Founders, MedMap, explain how bringing all stakeholders

of healthcare on one digital platform can contribute to reducing outpatient expenses

capability to cover OPD expenses, thus bringing down the

healthcare cost for the consumer.

With the exponential growth of wallet transactions in India, we

have observed comparatively less friction in enabling cashless

payments across our network of care providers. However,

challenges are being faced due to reasons like internet

unavailability at billing counters, lack of mobile network in the

basements etc. We have developed a range of solutions within

the app to address most of the cases, enabling users to make

successful transactions using Wallets, Cards, NetBanking or

UPI. Consumers today are able to use MedMap to make

payments using offline OTP (One Time Password) at many

places like Axiss Dental, EyeQ Hospital, Cygnus Hospital and

many more healthcare service providers across the country.

The ready availability of information has empowered the

consumer and is changing the buying behaviour. The consumer

wants a service that helps, educates with relevant information,

and is time and cost efficient. Healthcare is not a discretionary

purchase and is need driven. The best of discounts and offers

would not affect healthcare consumer traffic unless the need

has arisen. Therefore connecting with the consumer at the

right time becomes one of the important factors for success.

To address this, our approach has been to start by offering our

services to the corporate sector; a sector that wants to

provide all conveniences to its time constrained employees, a

ver the past 10 Years, smartphones and mobile

internet have changed the way we do things and

the way we communicate with each other. This

digital revolution has transformed many sectors

in India including healthcare. More than a

hundred companies are developing new mobile technologies

that offer better healthcare choices to the consumer. While

many aspects of healthcare are being addressed, neither the

new age digital companies nor the traditional insurance

companies have addressed one aspect of healthcare which is

pinching the common man every day. It is the rising cost of

Out Patient Department (OPD) healthcare services. Among

the many reasons, the most important are the lack of an

integrated digital platform to deliver the services and

substantial amount of data required to arrive at risk based

pricing.

We have developed an integrated healthcare platform backed

by scalable technology with an objective to cut down the OPD

cost and bring all the elements of healthcare like doctors,

pharmacies, labs, wellness centres, online consultations, online

purchase of medicines, discovery of medical services etc., on

one platform – MedMap. We are now enabling thousands of

offline care providers like pharmacies to accept payments

through MedMap wallet powered by Yes Bank and all the

transactions are being recorded in real time. The data being

captured over a period of time will enable insurers with


O

Rahul AggarwalCo-Founder, MedMap

Ravi ChandraCo-Founder, MedMap

Within two months of formally launching our services we have

enrolled more than 50 corporates standing at 20,000+ active

users in NCR region as of today.

The government’s move to withdraw INR 500 and INR 1000

notes has come as a bonanza to all payment solutions startups.

At the same time, does demonetisation really switch one of

the most cash intensive economies in the

world to cashless mode? Are all these

startups solving merchant problems at

this hour of need? The answer is a big

NO. There are still many barriers like

poor internet penetration compared to

the size of smartphone market. Even

Point-of-Sale terminals penetration in

India is among the lowest in the world.

The most important barrier is millions of

consumers adapting to the change while

the most used way of cash payment is

taken away suddenly.

Overcoming all these barriers

takes time and with the push given

by the government, we are all

witnessing rapid transformation in

every sector. Being a closed ecosystem

for only corporates, we have received

many requests from several healthcare

providers to create wallets for their

patients and enable cashless transactions.

We have created a special QR code valid for

limited time for all our care providers using which retail

patients can download and use MedMap wallet. Along with

many startups in various industries, we are playing our role in

healthcare by creating new business models that can be part of

India’s Digital Transformation journey.

sector that needs everything on the go, integrated on a single

platform. That’s where our offering, MedMap, comes handy. All

your healthcare needs are fulfilled by a single platform, by the

best healthcare providers nearest to you, at special

prices, allowing you to do cashless transactions

and helping you build your health record

seamlessly.

From laying the basic specifications and

requirements for developing the

product to publishing the latest

version of the app with integration

of wallets like Mobikwik,

Freecharge, PayU, etc., we have

come across a long journey of

understanding consumer

requirements and adapting to

rapidly changing technology.

Besides enabling the consumers to

find all types and specialisations of

trusted healthcare providers in and

around their location, MedMap lets

the consumer to run a background

check before trusting a provider by

bringing about relevant and authentic

information about each provider and

the services offered by them. As a

secure and dedicated healthcare wallet

service, MedMap spares its users the

pain of managing medical bills and

prescriptions by providing an in-app storage for saving all such

records and all of these without the hassle of adding another

password to your memory list.

We have crossed our first milestone of onboarding 3000 care

providers in Delhi NCR, where we are operational at the

moment, and are constantly building our network every day. Opinions expressed in the article are the authors’ own

The rising cost

of OPD healthcare services

is mainly due to lack of an integrated digital

platform to deliver the services and

substantial amount of data required to

arrive at risk based pricing

Digital Disruption: Blockchain

Blockchain: Key to Radically Transform Business

Ravi Jagannathan, Founder and Chairman, KrypC, shares his

views on how blockchain can disrupt many industries and holds the

key to transform how businesses operate

transparent way.

The momentum blockchain has garnered is considered akin to that of internet. The transformational capabilities it holds is unimaginable. Blockchain can disrupt many industries and holds the key to transform how businesses operate by strengthening trust, bringing transparency to transactions and records, securing transactions cryptographically and improving efficiencies by reducing cost, time and effort.

Now that blockchain is deciphered to an extent, exploration is the next step. The challenging part is to find competent techies to develop blockchain applications; as it requires a lot of effort, time, coding skills, infrastructure setup and interactivity with

legacy systems.

KrypC addresses these specific challenges through an enterprise friendly tool, KrypCore. KrypCore consists of four main components:

⦁ Crypto: There is an identity integration needed to make transactions secure and legally valid from a blockchain perspective. So Crypto ensures that transactions or actions performed in the block such as certificate management, e-signer components, and certificate validation are legally valid.

⦁ API: This layer allows for interactivity with enterprise data and applications. It

translates all the messages and actions by various actors for recording of transactions into blockchain and extracts data from blockchain for reporting and third-party API.

⦁ Protocol Wizard: A protocol layer supports connectivity to the protocols by capturing parameters relating to protocol, nodes, actors, block, assets, and data elements.

⦁ Process Framework: It enables inclusion of actions, messages, and documents relating to transactions in blockchain by validating access rules, binding rules, and business rules defined therein

KrypC is a decentralized application development services company established to help enterprises to embrace blockchain technology. Anyone who reasonably understands their current business process and appropriateness of applying blockchain, can easily design and deploy their own blockchain application using KrypCore. KrypCore facilitates seamless decentralized application development without much coding effort and provides easy interactivity with legacy systems. KrypC provides a 30-day trial of KrypCore at www.krypc.com to enterprise users, who are keen to explore and adopt blockchain technology. KrypC provides "full-stack" consulting and development services in addition to educating business leaders about how blockchain will transform their businesses.

he buzzword in the technology realm today is – blockchain. Yet it may seem like a very cryptic topic to most business folks. Its transformational potential is immense, and it is popular in industries such as banks, financial services, supply chain,

healthcare and more. However the complexity of the technology leads to ignorance about what blockchain holds to transform our future. To realize the potential of blockchain, one must value the importance of sharing information among parties with trust deficit. Let’s say, two unknown parties want to engage in a business transaction which is quite possible in the digital world. There is no established trust between the parties which raises doubt of uncertainty in proceeding with the engagement. And hence there is a need for a third party trusted by both – typically, an established financial institution. Yet in recent times, trust is crumbling even with large financial institutions as they are sole controlling parties in the ecosystem with limited transparency. This calls for a system, which enables trust, transparency, secured transactions and permanent storage. Blockchain is synonymous to such a system.

Technologies have gradually disrupted and provided innovative solutions. For instance, over time coins got replaced by paper currency, plastic cards, online banking, mobile wallets etc. While these technologies aid the conventional business processes to become better and better, the emergence of crypto currency powered by blockchain technology opened up unlimited possibilities to redefine the conventional business processes or models. Blockchain adopts private and public key cryptography technology smartly to assure transactional security and immutability which provides for embedded trust at transaction origination level. Thus industries across the world are keen to embrace Blockchain in a wide variety of cases wherever trust is crucial. We are already seeing that blockchain is making a mark in the financial services industry by progressively being employed in trade finance, retail lending, inventory funding, and mortgage lending among others.

Another viable industry that is conducive for this technology is supply chain. When products like diamonds, leather or drugs are made and sold, their origin and product lifecycle remain unknown to the customer. The lack of traceability and absence of transparency in the process gives scope to inadmissible activities such as diamond smuggling, counterfeit drugs and hunting of endangered species. Blockchain helps track the product from its source till it reaches the customer by storing its information in a transparent and tamper proof manner thereby eliminating the scope for occurrence of any inadmissible activities.

Blockchain can revolutionize the healthcare industry as well. Hospitals keep their patient data private and confidential resulting in absence of an integrated up-to-date database of all patients across geographies, which can enable doctors to provide medical advice after consideration of patient’s comprehensive medical history. Blockchain can play a pivotal role in facilitating hospitals to build an ecosystem among themselves to share patient information in a secure and

T



Blockchain is making a mark in the financial services industry by progressively being

employed in trade finance, retail lending, inventory

funding & mortgage lending among others

Local Vendors going Cashless without Smartphones

Mohammed Maccarim Badrudeen, Founder & CEO, PayTonic, elaborates on the innovative

solutions for ambitious small business owners who would want to accept the cards that customers

swing in their faces, but have no clue how to

Powered by YES BANK, PayTonic aspires to

be the solution a small vendor so craves. For

years all of us have come across many

ambitious small business owners who want

to accept the cards that customers swing in

their faces, but have no clue how to.

Recently, there is also inhibition and

hesitation to load and unload virtual wallets.

Hence, PayTonic was created as an enabler

for easy transfers between bank accounts.

PayTonic is not a wallet. There is no money

to be loaded in PayTonic. PayTonic enables

transfers using credit cards, debit cards, net

banking, mobile wallets and UPI straight to a bank account.

This helps ease security related anxiety as money is always in

the bank and not in a 3rd party wallet.

PayTonic is currently being adopted by anyone and everyone –

roadside vendors, retailers, milkmen,

newspaper vendors, cable operators,

house maids, drivers, a host of freelancers

etc. Apart from facilitating Peer to

Business transactions, PayTonic is also an

uncomplicated choice when it comes to

Peer to Peer transfers.

It is important for our fraternity to realize

that it is our responsibility to work

towards financial inclusion of the unbanked

sector as well. By providing them with

solutions and helping them open bank

accounts, we are ensuring financial

stability, freedom from domestic abuse and

bright future for their kids. Ultimately any

solution that we come up with, is only

helpful if it transcends acceptance

capability or if everyone adopts it.

Recently, to cater to evolved business

owners, PayTonic has launched the

‘PayTonic for Business’ app which includes

customer management and invoicing

abilities. For vendors who bill customers’

monthly like newspaper vendors or cable

operators, the app comes in handy for

communicating bill amounts and maintaining customer

databases. PayTonic for Business targets vendors who are

looking for an ‘on-the-go’ solution as opposed to expensive

ERP based solutions that are packed with features that are

hardly used.

n a world where going cashless

is the new mantra, a majority of

the working class find the idea of

online payments a horse of

another color. For years together, a local

newspaper vendor or a milkman or a

vegetable vendor or a dhobhi or other such

people have always believed in cash

transactions, and continue to do so even

today. This segment of vendors forms the

backbone of every household in this

country, where dealing with them on an

everyday basis is inevitable and yet who are

worlds apart from the customers they serve. Increasingly, they

are being faced with questions about accepting alternate modes

of payment but easing them into the routine still remains a

challenge. A challenge that banks and wallet providers are

trying to tackle head on but have had little

success.

There is no doubt that unlocking this

segment is the key to a cashless India:

simply due to the nature of these

recurring transactions and the sheer

volume. Back of the envelope guesstimates

point to a potential of about 5.5 billion

transactions a year with volumes running

into lakhs of crores in the top 20 cities.

But the challenges that need to be

addressed are humungous too.

To address most of these, YES BANK has

joined hands with PayTonic- an upcoming

startup with a promise of enabling these

lowest rung vendors to accept electronic

payments- even without a smartphone.

A prime hurdle in enabling these vendors

is lack of knowhow about handling a

smartphone. Expecting them to master a

payment app is simply far-fetched.

PayTonic has created an SMS based

1-minute registration process which is

simple for even a feature phone holder.

PayTonic is a payment network that allows

payments to any mobile number in India. While the sender

needs PayTonic app to pay, the receiver has no such

compulsion. Whether the receiver has a smartphone or a

particular app is irrelevant with PayTonic. Hence, the merchant

doesn’t need a smartphone. All they need is an active mobile

number and a bank account.

Local vendors are faced with questions about

accepting alternate modes of payment but easing

them into this routine still remains a challenge

A promise of enabling these lowest rung vendors

to accept electronic payments - even without a

smartphone

I


Digital Disruption: Mobile Payments



Can Digital Innovation disrupt a Billion Lives?

Kumar Abhishek, Founder, ToneTag, describes how innovative technologies can potentially

bridge the last mile and provide cashless payments to everyone

Though, smartphones were commonplace in India, we can see that even in 2016, smartphone penetration in the country is less than 30% of all active devices. Despite this mobile phones, especially feature phones and 2G cellular networks have spread across the length and breadth of the country. Hence we decided that if we were to make accessible payments possible, it’ll have to be via feature phones. Internet connectivity was also an issue at many rural and remote areas, so a completely offline solution was required.

With this information in hand we developed the sound based technology that forms the basis of ToneTag. The ToneTag

SDK (Software Development Kit) encodes data into soundwaves. The sound encrypted data could be transmitted contactless over air or could be transmitted via a phone line as well.

Armed with this idea we were able to realise feature phone mobile payments that were as easy to perform as a phone call. The customer didn’t have to worry about internet connectivity

either. We now knew that we could potentially enable anyone to make digital payments easily. But acceptance was the major hurdle with digital payments.

After significant research and development, we were able to integrate the ToneTag SDK into all platforms of smartphones to enable contactless payments as well as acceptance. We were also able to develop the technology so that it could accept payments from any POS device, regular desktop PCs, laptops and thin clients. But the biggest break was when we integrated the SDK into both legacy and EMV EDC devices. ToneTag is the first company to enable contactless payments on EDC devices through sound waves.

Since we have taken care of the technology part, now was the time to actually make it a reality. ToneTag has been forging partnerships with issuers, banks, PSPs and merchant acquirers to deploy the technology across India. Soon Indians living in remote areas with limited resources and infrastructure will be able to use their bank accounts to make payments without having to travel large distances to withdraw cash or check their balances. They’ll be able to perform certain important functions of a

payment app without having a smartphone or internet connection, over 2G networks.

This, we think is a landmark innovation in enabling India to go cashless and digital. We’re delighted to have achieved such a milestone as a young company. We also urge other contemporaries in the fintech and banking industries to work towards financial inclusion as it’s a large sector with untapped potential for growth.

hile we’re talking about the contributions in innovations that banks and startups have made in the fintech space and how the Indian financial

market is rapidly changing today, we often forget that there are still millions of Indians who aren’t interested in these conversations as they have always been locked out of financial services.

Just two years ago, world bank statistics said that India was home to 21% of the world’s unbanked. The Pradhan Mantri Jan Dhan Yojana has significantly brought this number down by assisting a large number of Indians to open up a bank account. But it must be noted that just having a bank account doesn’t mean one is completely included in the financial ecosystem. The world bank has also said that 72% of the Jan Dhan accounts lay dormant. This is largely because Indians living outside major urban centers don’t have enough avenues to use formal banking services as the penetration of bank branches, ATMs and POS that accept card payments is very low and inconsistent in these areas.

According to RBI statistics there were 665 million cards issued in India but there are only 1.24 million EDC POS terminals. This means that there is just one card payment terminal for every 536 Indians who are card holders. This is a dismal number. Initiatives by banks and recent government directives are working towards increasing the number of POS terminals around the country but this is going to take some time to be realised.

With the recent demonetization initiative, the ones who have been affected the most are those who are marginalized without banking services. Today there is an urgent need to solve the problems of these individuals and bring them forward to a less cash, formal economy. There is a huge opportunity to be had here as well.

Though ToneTag was initially founded to solve the loose change problem which was a great friction point during cash transactions in India, after doing some primary research we soon found out that there were even bigger problems that people in India were facing.

Men and women in rural India had to miss work, spend their hard-earned money and travel great distances just to deposit, withdraw or check the balance of their accounts. They were forced to transact in cash as they had no other options, and more often than not, they were not able to acquire a loan from a formal bank due to a lack of banking and transaction history.

We decided to make it a point to solve this problem at the grass root level. We started experimenting with technologies that could potentially bridge the last mile and provide cashless payments to everyone. But these payments still had to be very simple to perform.

If we were to make accessible payments

possible, it’ll have to be via feature phones

W

Perform certain important functions of a

payment app without having a smartphone or

internet connection, over 2G networks

Digital Disruption: Mobile Payments


Non Editorial

Financial Services

Fintechs & Banks: Towards a Win-Win Solution

Amit Sachdev, Co-Founder & CEO, CoinTribe, thinks that partnerships between Banks and

Fintechs offer a win-win solution for both the players and customers through breakthrough innovation

non-banking players, multiple Fintech models

with technology led innovations have

emerged with focus on easier transaction

enablement such as mobile wallet, POS

aggregators, payment gateways. The

exponential growth of some of these models

is testimony to how small ticket high volume

segments can be made profitable using

technology effectively. Banks have now

begun to collaborate with these Fintechs to

offer state-of-the-art solutions to their

customers and leverage the tremendous

potential this part of business offers.

Asset side of banking has seen the least amount of tech

innovation so far. Less than 70% of bank’s asset base is

deployed in loans and over 50% share is of the corporate

segment in the loan market. Further compounded by vast

unmet need in MSME lending, the competition in retail and

MSME loan segments has been relatively less compared to

liabilities thus reducing the urgency of technology led

innovation. Consequently, the processes and associated

efficiencies involved in retail and MSME loans have largely

remained the same over the years with plenty of manual

intervention at each stage. Turn-around-times (TAT) of 15-20

days and complex processes involved for small business loans

that was okay till a few years back,

suddenly seems arcane to customers who

have become used to simpler processes

offered by the likes of Amazon, Uber,

Paytm etc. Just like it happened in

transactions space, this leaves significant

room for Fintech companies to emerge in

each part of the loan value chain –

customer sourcing, onboarding, credit risk

assessment, pre-disbursement operations,

collections, customer servicing. While several interesting

Fintech models have emerged in online customer sourcing,

little has been seen on use of technology in the complex area

of risk assessment.

Banking ecosystem is structurally not conducive to technology

led innovation. Multiple elements in banking ecosystem such as

limited competition given licensing requirements, philosophy of

(over) compliance, large and complex organizations with

multiple decision contributors (not makers) that slow down

decision making etc. make it difficult to incentivize and breed

innovation in the banking DNA.

Two-speed world – Innovation friendly

vs BAU industries

We are fast witnessing the emergence of a

two-speed world. One end of this world is

witnessing technology driven disruption in

innovation friendly industries such as e-

commerce, telecom, travel and tourism,

logistics etc, while at the other end there is

Business-as-Usual (BAU) in industries that

are insulated from significant competition

due to regulations, government control,

capital intensive nature or involving technical

complexities such as infrastructure, utilities etc. The constant

focus on building competitive advantage through enhancing

user experience, simplicity, and convenience in innovation

friendly industries, as experienced in Uber, Airbnb, Paytm etc.

is taking customer expectations to a new high every day. With

customers using the lens of innovation friendly industries to

also judge the quality of products and services offered by BAU

industries, the gap between customer expectations and what

BAU focused industries offer is widening. The end-result on

customer satisfaction levels in BAU focused industries is

anybody’s guess and leaves room for a new entrant with the

slightest of innovation to cause disruption.

Banking - Innovation friendly or BAU

industry?

This needs to be looked at in the context

of three different aspects of banking –

liabilities, transactions and assets. Opening

up of banking industry to private

competition in four different phases

between 1994 and 2016 has led to liability

customers benefiting from several

technology-driven innovations. With internet banking, mobile

banking, tab based banking, ATMs, Cash Deposit Machines and

now Bots based customer services, liability side of banking has

been one of the early adopters of technology. Given larger

amount of bank’s focus on retail liabilities and the increasing

competition, these innovations helped private banks garner

large share of liabilities from public sector banks.

While some banks could build profitable models around small

ticket retail transactions, most banks found this as

economically unattractive. Since this area was opened-up to

Banks have deep capabilities to contribute to such innovation in the

form of significant experience and

knowledge



learning from pilots, the model and technology platform can be

defined more sharply thus significantly improving the chances

of success while this model is being rolled out and scaled up.

More importantly, the partnership model should focus on a

regular feedback loop so that business model and tech platform

can be tweaked on an ongoing basis to

keep pace with changes in customer needs

and evolution of the ecosystem around.

There are multiple partnership structures

– joint ventures, equity stake, acquisition,

start-up incubation arms, Fintech focused

VC funds, transactional partnerships - that

can be potentially used for this purpose. As

mentioned in a recent report - PwC Global

Fintech Survey 2016, large majority of

banks prefer to engage through equity

participation with Fintech companies. This

enables both partners to work in an open

environment of trust and brings out the

best from both partners. However, it is important for banks to

be very careful in selection of Fintech partners. It is important

for banks to partner with Fintech having complementary

capabilities and focus on constant innovation. Trust is the

hallmark of bank’s relationship with customers and banks have

strong brands and reputation to protect. Hence, it is important

for banks to work with partners who are credible, have strong

management and promoters backing.

Partnership between Banks and Fintechs: Potential

Solution?

Partnerships between Banks and Fintechs offer a win-win

solution for both the players as well as customers through

breakthrough innovation. Banks have deep capabilities to

contribute to such innovation in the form

of significant experience and knowledge of

customer needs and preferences, banking

products, credit modeling, and operations.

Banks have brands and large distribution

footprints. They also have rich data on

each of these areas to aid analytics and

decision making for various aspects of

business model innovation.

Fintech companies offer the nimbleness

and agility required for quick pilots and

experimentation in the form of flexible

technology systems and new development

at a faster pace. They also offer outside-in perspective and first

principle thinking on how to solve some of the complex issues

simply and with good user experience.

An ideal partnership model between banks and Fintechs would

involve co-innovating the business model leveraging the

strengths of both partners. While this business model design

would offer some clear answers, there would be quite a few

hypotheses to be tested. The tech platforms of Fintech partner

can be used for rapid prototyping and multiple pilots across

segments and geographies to validate these hypotheses. Basis

Fintech companies offer the nimbleness and

agility required for quick pilots and

experimentation in the form of flexible

technology systems and new development at a

faster pace

Opinion expressed in the article are the author’s own

Open Source Technologies: An Ideal Approach

Faster innovation through ecosystem collaboration, and scalabilitySovik Brahma, Director Finance, Red Hat India

Unlike proprietary, hardware-based storage, which limits your ability to keep up with today’s immensely growing data stores, the Red Hat Storage portfolio gives you an open, software-defined storage platform that scales across physical, virtual, and cloud resources—without limits. Red Hat has been leading with two disruptive storage products. Ceph which focuses on object storage and is a great fit for Open Stack or Cloud, and Gluster which is a distributed file storage currently positioned with Open Shift, the enterprise PaaS product. Both of these are seeing really strong interest and adoption, specially with Ceph that adoption has exponentially increased with the adoption of Red Hat Open Stack.

How are Red Hat’s offerings for virtualization enabling businesses to scale up rapidly while retaining agility?

While the foray in cloud technologies has been the focus for last few years, Red Hat has also been a very strong player in data centre virtualization with its industry renowned product the Red Hat Enterprise Virtualization (RHEV in short). It is based on the solid KVM kernel virtualization that has matured as part of the Linux kernel for more than 7-8 years. Using

RHEV the customers have been able to migrate from bare-metal deployments to virtualized environments significantly increasing the server density and efficiency.

What is the potential for the innovation ecosystem for Open Source Software (OSS) in India? How can OSS contribute to the success of Digital India Mission?

The biggest benefit of using OSS for a country like India is retaining control of

massive amounts of the citizen data it generates as part of the Digital India Mission. OSS also ensures competing technologies can integrate seamlessly via standard based interfaces at the same time there is comfort in having easy and community validated access to the code along with vendor testing and packaging efforts. OSS will be critical to avoid vendor lock-in and content ownership.

Investments in innovation and R&D have long gestation period and uncertainty of returns. Being at the helm of affairs, are you looking to acquire technologies or invest long term to build internal capabilities?

Both these approaches have been leveraged by Red Hat as it looks to ramp up investments in existing product technologies at the same time invest via acquisitions like the recent Ansible to augment its product and technologies portfolio. As respected and strong open source proponent, Red Hat prefers to consider acquisitions for its needs where active upstream communities and projects already exists and nurture them further.

With digital interventions, Indian businesses are seeing improvement in customer experience, productivity and turnaround time. In your opinion, what should the strategic focus – disrupting with new technology or improving existing technology for competitive advantage?

Every organization today wants to be competitive in the digital economy and to achieve this they either need to transform their business or disrupt. However, while driving this change the focus should not be just on the IT infrastructure, but more so around the remodeling of their businesses to be more agile and innovative. In relation to this, open source technologies present an ideal approach in terms of flexibility, reinvention of processes, faster innovation through ecosystem collaboration, and scalability.

How did Linux based platforms become a major disruptor in the enterprise IT solutions segment. What has been Red Hat’s role in this regard?

Linux is the first truly disruptive technology to enter the market 25 years ago, having successfully challenged the archaic single vendor software licensing model. The concept is way ahead of its time, created by a collaborative, non-profit, and open source community of smart developers instead of one single company.

Fast forward to today, with Linux, Red Hat has successfully built a subscription-based business model, empowering enterprises to harness its innovative capabilities in a secure, supported and productized way, making this technology accessible to all and cementing its success. What is more remarkable is the best has yet to come.

Red Hat has been actively contributing to the most exciting open source projects available now and well into the future. But more importantly, giving our customers access to many of these projects in a way which does not lock them in, while offering enterprise-level service and support that accelerates the current pace of digital transformation.

Cloud based IT infrastructure is giving rise to an innovative model - Infrastructure-as-a-service(IaaS). How do you foresee the impact of this model on business efficiency?

IaaS will help align the IT Infrastructure costs to the business growth and ensure the customer avoids over investing in light of difficult business environments and at the same time can easily scale when business grows. This creates a huge potential for business efficiency. Apart from this it will help reduce to a great extent internal IT manpower needs.

What are the innovations in data storage pioneered by Red Hat? What has been the adoption level of these solutions amongst your enterprise clients?

The focus should not be just on the IT

infrastructure, but more so around the remodeling

of the businesses to be more agile and innovative



TReDS: Treading the Digital PathSundeep Mohindru, Founder & Director, Mynd Solutions, on the roadmap for success of

Trade Receivables Discounting System (TReDS) and the way forward for Fintechs

digitised or are in the process of getting digitised. It is only the adoption by various stake holders that is taking time. The banks and fintechs are fine tuning these processes in digital formats and making it more attractive for the stake holders. This will improve the adoption of digital way of doing trade transactions. This disruption is happening globally and India is one of the front runners in this initiative under the aegis of RBI.

Mynd Solutions also works with clients across the globe with presence in over 60+ countries through its network. Through M1 exchange we are catering to an enlarged

audience. Though TReDS is one product, we are looking at adding more products and services in M1 in the times to come. M1 has built-in capability for digitisation of trade products and intends to launch them in various phases. As M1 is a regulated entity, hence the launch time and the final products will be released after appropriate regulatory approvals.

Fin-techs: The new frontier

In this era where finance is riding the wave of technology, there are numerous examples in our daily life ranging from e-wallets to loan aggregators vide online portals, where Fintechs and banks together are servicing the growing needs of business and retail customers. Hundreds of small sellers have been funded based on their rating and past track record on the portals. In the normal scenario it would not have been possible

to reach out to so many sellers, make detailed credit appraisals, create charge on collaterals and fund them in such a short turnaround time of 2-3 days.

Fintechs are supporting the entire banking eco system to transform and enhance the speed of serving customers. The speed of innovation and its implementation has grown manifold with deployment of technology in financial world by Fintechs.

Even as we speak Fintechs are working with banks on several fronts for example

bringing down the cost of operations , improving the TATs of various processes, making new solutions, helping compliance and mitigating various operational risks, improving the customer experience , to bring new solutions which hitherto never existed because of various barriers of scale and reach.

Way forward

Fintechs bring to the table innovation and efficiency. This is the prime reason for the existence of Fintechs. Their lean and agile structure enables them to challenge the existing paradigms. Their survival and success depends on out of the box thinking and simplifying the lives of the stakeholders. Their main role is to eliminate mundane tasks and provide exciting user experience while bringing together the Gen-Y through re-inventing the wheel and making the life of people better. They should be able to support better governance by making processes complaint and safe for the people. These are the key pillars which will make or break a Fintech enterprise.

Genesis

Mynd Solutions has been in the business of vendor management for large corporates. We have been working towards client needs for automating this service and felt the need for automation of vendor payments and financing needs. As RBI announced the need for such a platform in the Indian financial system, it reconciled with our thought process for digitization of trade transactions. This was a much needed step towards the growth of Indian economy as much as the growth of medium and small enterprises. This move by RBI is slated to bring all stakeholders – large corporates, their suppliers (small and medium enterprises) and banks on one platform to transact their business and all will benefit from the efficiency of the process and platform.

Mynd Solutions has been leader in offering advisory and outsourcing services to a number of clients, which include large corporates, banks and medium sized businesses. It was only appropriate for Mynd Solutions to pitch for the mandate given our expertise in dealing with the main stakeholders of TReDS on a daily basis. We also understand the complexities of working with large businesses which helped us win the confidence of RBI.

TReDS: A game changer

The main purpose of TReDS platform is to facilitate smooth flow of liquidity in the system and make available the finance at a competitive rate. As soon as the bills are raised by the MSMEs and approved by large corporates on TReDS platform, banks or financiers can bid for them based on the risk rating of large corporates. MSMEs will receive their dues from the banks or financiers without waiting for the credit period agreed with large corporate. The shortening of payment cycle and the smooth flow of liquidity through the platform will ensure that MSMEs do not lose out on business opportunities due to shortage of funds. The cost of funds will be reduced for MSME’s as banks will be bidding basis the risk rating of a corporate.

Banks will also benefit through the platform as cost of acquisition and servicing the business will reduce substantially. Further the MSME funding on platform will qualify for Priority Sector lending (PSL) criteria, thereby enhancing the compliance for the banks.

The current industry size is expected to be between INR 30,000 to 50,000 crores. Only three entities have received a node from RBI to launch their platforms, including Mynd Solutions. RBI has been meticulous in its endeavour to grant licenses to three different entities with their own expertise and skill-sets. All three have the capacity and capability to ensure that TReDS is a success story. We thus expect the industry to grow manifold in the near future thereby opening the gates for all players to cater to the market needs.

Further Scope

Almost all of the trade related transactions have already got

The main purpose of TReDS platform is to

facilitate smooth flow of liquidity in the system and make available the finance

at a competitive rate

Innovation

77 CFO Insights | | |Volume 9 January 9, 2017


Strategy

are full of skilled technicians; the need of the hour is those who can imagine new ways of doing things.

Entrepreneurship is the drive and ability to start, build and run one’s own venture. Large firms are often uncomfortable with entrepreneurial individuals because they may not conform, and they may question or challenge their bosses’ decisions. Nevertheless, companies need ambitious, independent leaders to launch the new business units, product lines, and platforms that will keep them growing and gaining market share.

DICE and Digitization

The world of IT – information technology – often claims to be the world of innovation. It is true that computers have done more than any invention of the past century to transform the way we work. At the same time, a thoughtful review of the history of the digital era reveals that almost all of the inventions in the world of hardware and software have done little more than to increase computing speed and power, to make computing mobile, and to make microprocessors

perform more business and personal tasks.

Digitization often promises exceptional results, but sometimes fails to deliver on those promises. While I was watching the TV news report on RFID-enabled toll booths, I recalled what happened at the toll plaza near Ambience Island on the

Delhi-Gurgaon Expressway several years ago. Most drivers took a pass on the new RFID tags, preferring to stay with cash payments. As cars and vans approached the toll plaza, drivers ignored the signboards and often ended up in the wrong place, blocking the tag-only lanes. During peak commuting hours, despite all efforts to ease the situation, waiting times to cross the tollbooths reached 30 minutes.

Complaints by commuters became so numerous that eventually, the authorities decided to remove the toll plaza entirely. Here, digitization offered the promise of significant savings of time and money for commuters, yet the gains were not realized, and the effort failed.

On the other hand, the story about BookMyChotu.com made me think of the success that digitized services such as Uber and Ola have had in transforming the taxi industry. Here, wireless connectivity, global positioning systems (GPS), and mobile wallets combined to revolutionize the way many people book and pay for their rides.

The connection between DICE and digitization may not be

hile I was dining at a local eatery recently, three news stories playing on the restaurant’s TV caught my attention. One was about digital start-ups, including BookMyChotu.com. The second was about RFID tags and toll

booths. The third story was about a new directive for government ministries to switch from paper cheques to electronic payments.

These stories shared one element: they all involved digitization of an existing process, whether booking household help, paying tolls, or paying bills. I hoped that all the initiatives would be successful, but I wondered if the entrepreneurs, the highway planners and the bureaucrats who were responsible for them had applied DICE to ensure that they would succeed.

What is DICE?

DICE stands for Design, Innovation, Creativity and Entrepreneurship. This set of skills may seem radical, vague or impractical to managers who studied engineering, computer science, finance or marketing. Yet, it is exactly these skills that will enable companies to create and sustain competitive advantage in our high-tech, globally-connected economy of the 21st century.

Design is similar to art in some ways, but there is one important difference. A painter or sculptor creates art in order to express his own vision, usually without having to think about how others will respond. By contrast, a designer creates products, garments, software and many other types of solutions just as an artist creates, but with the express purpose of delivering great experiences for customers and users.

Innovation, in simplest terms, means inventing things. In the corporate world, my preferred definition of innovation is “combining existing elements in new ways to create value for customers.” The emphasis is two-fold. Corporate innovators do not need to invent new elements; they merely need to become masters at making new combinations. Second, corporate innovation only succeeds when it creates enough value for others who are willing to pay for it.

Creativity in business signifies the ability to imagine and produce things that are entirely original. It’s important to distinguish business creativity from the type of creativity shown by musicians and craftsmen, who excel at reproducing and rendering the original works and designs of others. Companies


DICE: The Key to Creating Competitive Advantage through Digitization

David Wittenberg, Professor of Entrepreneurial Innovation,

Indian School of Management & Entrepreneurship (ISME),

believes that the future will belong to those who are creative enough

to imagine valuable new uses for new technologies, wise enough to

follow the Design Thinking process when investigating possible

solutions, innovative enough to build the right solutions, and

entrepreneurial enough to turn their solutions into business ventures

W

Design can be defined as “making things look good and work well”

79 CFO Insights | | |Volume 9 January 9, 2017

DICE: Design, Innovation, Creativity and Entrepreneurship

Innovation is the distinguishing factor that turns digitization into disruption. Many corporations are satisfied to adopt software and hardware that have been proven fit for a purpose. This kind of digitization can improve results. However, since it is merely a “me too” response, the best possible outcome is that the company will catch up with rivals who are already

using the application.

Instead of copying others, innovators develop new digital applications. By doing so, they gain first mover advantage over competitors. In the best cases, such as Apple’s iTunes, Wal-Mart’s inventory control system, and Amazon’s online stores, they disrupt entire industries and become global behemoths.

Creativity is the powerful ingredient that enables a company to innovate in a disruptive way. It takes an original thinker to imagine a Facebook, a Flipkart, an Alibaba or an OYO Rooms. Companies that focus only on executing their current processes better will never discover the next breakthrough.

Finally, entrepreneurship is the driving force for much digital innovation. While such giants as IBM, Intel, Bell Labs and Xerox can take credit for many of the technological discoveries that have fueled the Information Age, most of the commercial successes have been achieved by micro, small and medium enterprises. It was not corporate managers, but two entrepreneurial college students, Larry Page and Sergei Brin, who decided to build a better search engine and founded Google.

Computing power has increased exponentially in our lifetimes, and the cost of hardware and software has dropped precipitously. Developments such as artificial intelligence (AI), the Internet of Things (IoT), and 3-D printers have opened new possibilities for digitization. The future will belong to those who are creative enough to imagine valuable new uses for these new technologies, wise enough to follow the Design Thinking process when investigating possible solutions, innovative enough to build the right solutions, and entrepreneurial enough to turn their solutions into business ventures.

obvious. Analysis reveals that one factor alone—design—may explain almost completely why the Gurgaon toll plaza failed and Uber succeeded.

Design can be defined as “making things look good and work well”. The Highways Authority and the founders of Uber both thought that they were making things work well, but only one of them had followed the process of Design Thinking.

Uber started by understanding its users, their habits, their beliefs and their problems. They identified a challenge for travelers: it was difficult to book a taxi. Further, they identified an unmet need of drivers: more fares to earn more money with their cars. Uber imagined a cab-hailing application that would run on a mobile phone, based on their insight that their target users were already comfortable using mobile apps. They prototyped their service in one city, ironed out the bugs, and expanded globally.

The builders of the Gurgaon Expressway also identified a user problem: slow traffic between Delhi and Gurgaon. They knew that a highway would allow for faster travel, but their challenge was to recover the cost of construction. They proposed to meet that challenge with a toll booth. However, they skipped the step of studying the users to understand how they would react. They assumed that drivers would want the savings offered by an RFID tag. They also skipped the step of prototyping and testing the system with users. They built the toll plaza without a pilot or a test. Their assumptions about driver behavior and payment preferences turned out to be wrong, and the mistake cost crores of rupees.

Applying DICE in Business

By following the five steps of Design Thinking—Empathize, Define, Ideate, Prototype, Test—companies can ensure that digital solutions will meet the needs of users and also be acceptable to them. They can validate their ideas quickly and inexpensively, avoiding large losses and achieving great gains in the process.

Innovation is the distinguishing factor that

turns digitization into disruption.

Creativity is the powerful ingredient that enables a company to innovate in a

disruptive way.

Entrepreneurship is the driving force for much

digital innovation.


Technology

and information captured for delivery, time taken for delivery and most importantly feedback at the organization’s end, all of which is possible through digital innovation and integration.

I have had the experience of using an app which makes live product wise sales information of the stores available to the management staff. Info about cancellation, returns or abnormal transaction is also reflected continuously in the app thus creating a system which is efficient and transparent. The gains were significant and the organization has been successful and nimble.

In the back end, business integrated with the supplier wherein orders, corresponding suppliers’ invoices and the GRN’s in the distributed outlets are digitally exchanged, help to create significant efficiencies and enable a lean organization. I have personally experienced its benefits.

Additionally, the cost of cloud technology becoming increasingly affordable is creating opportunities for innovation in the back end for the food industry. Abroad, start-ups are using technology to help companies keep food safe and HACCP compliant. Handheld temperature sensors links back to a central cloud system, allowing for transparent control point regulation and more efficient checking processes.

Creating A New Customer Experience

Mobile apps are a key link between the online and offline worlds of food retail. Brands that rely on home delivery, such as pizza chains, were quick to recognize the benefit of apps. Let

me share an example of a unique digital innovation strategy from outside of India. Italian restaurant Zizzi took customer engagement to a new level, through gamification, adding an element of fun. It launched an online board game which captured data through competitions and voucher uptake .The result was 3X sales increase in its 140 outlets.

Similarly, Starbucks which has one of the most effective loyalty card programs in the

US, continues to now push hard on its use of technology and mobile apps as a way to boost sales and increase service speed. Its mobile app became an instant hit and has now become one of its core strategies. It lets customers order and pay for beverages in advance and pick them up without waiting in the cashier line. There are rewards like free beverages for using the app. Through strategies like these Starbucks has made a leap from convincing people to drink coffee to concentrating more on customer experience and convenience. I love their idea of Barista Chatbot that lets customers place their orders via voice command or messaging interface and hope to be able replicate it at some point of time.

In the dine-in business, technology is supporting the reinvention of many food outlets. From diners placing their orders on tablets to customers being welcomed or being given dietary advice, technology is doing a lot more than just letting customers locate restaurants, book tables and rate their meals online. Proximity sensors can enable customized offers based on past buying behavior when customers are near-by but not yet in.

t is said that there is no digital strategy, just strategy in a digital world. The application of technology to build new business models, processes, software, and systems that result in more profitable revenue, greater competitive advantage, and higher efficiency

have become the cornerstones of digital innovation.

The rapid pace of change in business and technology means that more and more companies will find themselves being disrupted. A lot of times, the new developments can certainly be disruptive. Who would have thought that the Unified Payments Interface (UPI) or digital wallets would be front page news and capture national attention in India, or that the finance minister himself would be announcing sops for digital payments; thereby rapidly accelerating digitization change.

Digital is no longer the glittering front end; it is integrated into every aspect of today’s organization. Despite business leaders anticipating dramatic change over the coming years, most believe digitization presents exciting opportunities for them and four in five see it is as a positive force. Digital innovation is important for sustainable growth today. One needs to be at it, and all the time.

Transforming Processes and Business Models

Mobile and web technologies have transformed the way business has been done in multiple industries. It has touched the food industry in a similar manner making the process of ordering food simple and fast. The impact is both in deliveries of food as well as on dine-in business.

When the food delivery market started to show signs of over-saturation, digital innovation provided opportunities to innovate upon existing business models. ‘On-demand’ food does not necessarily mean delivered food, and startups started working on this opportunity, looking for faster ways of getting quality food on the table. The links between the offline and online culinary experience are stronger than ever. Also, greater personalization is the key to rebooting growth.

In the restaurant industry, food aggregators have become facilitators for restaurants and other food service providers to tap customers online. Emergence of these players lets the user choose from listed eateries, check prices and place orders online, or through mobile apps. Customers find multiple options to choose from and bypass the bother of placing an order in person or over the phone. This also bolsters sales without investing much on infrastructure and manpower.

However, what appears as a simple order on the food app at the customers end involves complex digital integration with the restaurant company’s systems at the back end. The order must reflect instantaneously on the POS of the retailer. I cannot help but point out the criticality of time in the food industry, in terms of food preparation, food expiry as well as customer delivery. In case the restaurant is unable to service the customer request, the information should reach the customer through the app immediately. Also the order has to be tracked


Digital Innovations in the Food Industry

Tanmay Kumar, Chief Financial Officer, Burger King India,

describes how mobile and web technologies has had an impact on the

food delivery and dine-in business

I

Knowledge is not competitive advantage anymore, connecting

knowledge to maximize innovation is


issues of our time. Technological revolutions are highly disruptive to economies and societies. While technologies advance rapidly, organizations, people and skills absorb the change slowly. We have had the chance to experience this first hand through demonetization.

Knowledge is not competitive advantage anymore, connecting knowledge to maximize innovation is. Digital

organizations build real-time information systems to support decision making. Digital teams are increasingly subjected to similar expectations as in house teams and evaluated under similar parameters. This has become a possibility only through digital innovation.

To support decentralized and empowered culture, real-time, mobile-enabled information platform are available. Everything the company does, from hiring to customer acquisitions to service to employee engagement, can be done either through cloud based platform or through mobile apps. District managers and leaders in headquarters can monitor hiring, MBO tracking, employee satisfaction and sharing of information as well as best practices at

different geographic locations. This can create an outstanding operating structure of “network of teams.”

A customer focused retail organization which is as widely spread as a multinational western QSR chain; has to ensure consistency in culture, training standards and operating practices. It has launched a “link” which everyone in the company can go to; to access, share, collaborate and network.

Conclusion

Digital innovation is primarily about investing in new technologies that yield lasting, long-term returns, as well as a consumer-facing challenge that it's trying to solve. However, it is not only about bringing about transformational operational changes. It has to be backed by bringing about an improvement in what the business has already been doing. While the front end is foremost, the back end is equally important. Digital innovation requires empowered and informed teams.

Food and social media share a unique relationship, they have almost become inseparable. Visuals of people’s brunch, cocktails, and tea-time snacks are splashed across Instagram and Facebook. Food Talk India which began as an invite-only Facebook group in mid-2013 with a few people who were passionate about food and wanted to talk about what they were trying, and where to eat. Barely three years later the company has a pan-India social following of about 500 thousand people. Their app is a visual platform that allows people to log on and discover dishes and restaurants recommended by others.

Burger King in India, even before a formal store opening had a pre-sale launch of its burgers on e-bay which created a noise that was unprecedented in the digital world. Additionally, Burger King turned to social media platforms including Twitter and Facebook to promote this idea.This successfully stoked pre-launch interest among consumers instantly making Burger King the talk of the town. This is how the company hopped into the e-commerce bandwagon setting a unique example of increasing customer base through digital innovation.

Social listening tools monitor the entire cloud for brand mentions and interactions. They give an opportunity to understand the reputation of the brand, understand the existence of different target markets, ranging from prospects to competitor’s customers, respond to or simply engage in conversation with customers.

The digital platforms facilitate the interchange of large volumes of information that characterizes usage patterns, preferences, and the intent of users. The value of this information can be tremendous, and a coherent strategy can emerge post mining and analysis. Among the very first things to invest in, is a common server wherein the tables from all the different softwares will be polled in and enabling a data warehouse which has the POS data, and the online site data as well as the financial data, which we can use subsequently for business intelligence.

Empowering Workforce Innovation

The digitization of the economy is one of the most critical

The digital platforms facilitate the interchange

of large volumes of information that

characterizes usage patterns, preferences, and

the intent of users. The value of this information

can be tremendous, and a coherent strategy can

emerge post mining and analysis


Disruptive Technology: Accelerating Paradigm Changes

CFO Insights in conversation with Sidharath Kapur, President, Finance and Business

Development, GMR Airports Limited, on how his organization is maintaining leadership position

by adopting disruptive technologies

maintaining service standards has been crucial for us. Today’s passengers interact with Airport through multiple channels. Every touchpoint of passenger travel has the potential to improve passenger experience. Digital channels, social media and self-service solutions are a given. However, future Airports need to be based on Customized, Responsive, Interactive, Social and Personalized (CRISP) service experience. This direct connection with the individual passenger and the subsequent convenience and empowerment for the passenger will make the digital airport their airport of choice. With Airports having access to rich data and information, service excellence can reach new heights by providing customized services by adjusting to cultural, time of day or demography.

How is technology facilitating environment friendly and energy efficient operations in airports?

Airports are guzzlers of electricity and water. Reduction of power and water consumption coupled with environment friendly power and water consumption is a mantra for a modern airport. At GMR Airports we rely on technology to achieve these objectives.

Energy management

Commissioned environment friendly solar power plant within the airport premises catering to 40% of the needs

Replaced conventional CFL & Other lights to energy efficient LED (Light Emitting Diode ) lighting to improve efficiency

Implemented Building Automation System to effectively monitor & utilize Lighting, Elevators, Escalators, Ground Field Lighting etc

Optimization of air conditioning units according to ambient temperature and weather conditions

Vehicular fuel consumption reduction by relying on GPS based Tracking and monitoring of vehicles within the Airport premises

With digital interventions, businesses are seeing improvement in customer experience, productivity and turnaround time. Being associated with aviation and airport services, what is your strategic focus – disrupting with new technology or improving existing technology for competitive advantage?

As an organization, GMR Airports has always been focused on three pillars viz. people, process and technology to improve the customer experience. Technology is a significant enabler for not just making airports more efficient but also for improving passenger experiences, enhancing revenues and extracting more from the same capital asset. This is a challenging job given the multiple stakeholders and multi-dimensional interfaces in an airport. To ensure we meet our objectives of providing airport services - that are value added and cutting edge - with customer delight, one will need to embrace technology by not just technology interfacing seamlessly into operations but also at times providing cutting edge disruptive technologies that provides a paradigm change. Providing technology based operations that blend seamlessly into operational framework is an essential requirement today. However leadership can be maintained by bringing disruptive technologies. Disruptive technologies provide accelerated paradigm changes in way of doing business. Continuous focus on improving technology is like running a marathon. However during running a marathon one needs to run a sharp 100 metre dash by disruptive technologies. Both are enablers of value added business operations with leadership positioning.

Delhi and Hyderabad International Airports have won several awards, both nationally and globally. How do you see digital technology contributing to this service excellence and enabling GMR Group to win wide acclaim?

Delhi Airport has been ranking as number one airport in the last two years and Hyderabad Airport been constantly ranking among the top 3 Airports in ACI Ranking in their respective categories. With both the Airports facing exponential growth,




leads to revenue enhancement. Our airports have been at the forefront of enhancing technology based operations and also bringing disruptive technologies to meet these ends. However, one has to be cognizant of the fact that technology adopted blindly can fail. It has to be tailored to meet our specific requirements of compliances, safety and security requirements. Some of examples in our airports are:

E-Boarding

The E-Boarding Project has been conceptualized with the primary objective of enhancing PAX experience by enabling

Mobile based E-Boarding in addition to optimizing process times at various touch points of the passenger air travel. The other objectives of the project are minimizing the human intervention in the passenger flow right from the entry of the passenger into the terminal building all through to boarding the flight and thereby ensuring passenger delight.

The unique feature of this solution is it is integrated with Aadhaar Card and Biometrics for Passenger Identity, yet allows the traditional passenger without Aadhaar Card also to be processed through the system. It can also authenticate the passenger travel by integrating with the Airlines’ DCS Systems at the entry point itself and can enforce entry rules thereby enhancing existing security levels.

ACDM

Airport CDM is a concept which aims at improving operational efficiency at airports by reducing delays, improving the predictability of events during the progress of a flight, optimizing the utilization of resources, and also reducing Ground Movements costs.

Mobile Tablets

Terminal Operations, Customer Facility, Service Quality, Airside Operation Teams are given tablets in lieu of the Manual Checklists to avoid cumbersome and ineffective data entry system. This system has enhanced the accuracy and efficiency of the outcome and helped the staff to focus on the core deliverables in addition to providing the MIS to the top management on time.

Video Walls

Giant Video walls are deployed across the terminals to telecast LIVE Sports, NEWS & other channels to entertain PAX during their transit

Mobile App

Deployed to help PAX with latest Flight updates, Offers on all Retail & F&B, Airport Facilities, Navigation & Loyalty Programs etc.

PAX Tracking Solution

Monitor congestion at Touch Points (Main Entry, Security, Boarding etc.) and automatically alert concerned Operations team. In addition, will help Operations team to proactively plan on resource allocation well in advance based on the historic data.

Water management

Installation of water efficient devices

Installation of sensors to control water flow

Sensor enabled water taps, W.C.s outflow for optimum use

Optimization of water usage by monitoring & control

Further, we have initiated Silent Airport concept at the Delhi airport to reduce Noise Pollution at the terminal. At the Hyderabad airport, we have deployed an Automated Announcement System to regulate the announcements. The system has eliminated manual announcements and in the process reduced noise pollution levels by 60%.

What are the technology-enabled innovations in cargo operations and logistics that have been rolled out in airports managed by GMR Group?

Cargo operations is critical and a significant component of airport operations. Like any other part of airport business, technology interface that seamlessly integrates into operations is a critical pre-requisite to enhance efficiency, reduce time and cost, enhance customer delight and provide competitive edge. At GMR Airports, the following are some of the technology enabled innovations in cargo operations and logistics:

Complete elimination of all papers for all terminal handling processes at the cargo

Fully automated real time interface with airlines, agents, customs and other stakeholders for exchange of flight and shipment data using industry standard messages

Real time and milestone driven status update messages on flights and shipments to the airlines and agents

Online credit management and payments for all shipment (agents) and flight (airlines) transactions

Online tracking and monitoring of shipments and flights

Online city-side truck dock slot booking

Mobile application to enquire, pay, online truck dock slot booking and CRM (Customer Relationship Management) functions

Fully automated conveyors with in-line volume measurement, weighing, barcode reading and X-raying, for acceptance of export cargo

Real time data capture of all warehouse transactions, using HHTs (Hand Held Devices) by cargo handling staff and forklift operators

Hyderabad and Delhi Airports were the first in India to implement several IT enabled systems for passenger operations. Please elaborate on them and their impact on your business.

The airport passenger today is technology savvy, wants better experience through technology based platforms and is ready to embrace technology that not just saves time and cost but also

Future Airports need to be based on Customized, Responsive, Interactive, Social and Personalized

(CRISP) service experience

Technology is a significant enabler for

not just making airports more efficient but also

for improving passenger experience

be used to build a unified interconnect between all parties to improve information sharing in order to take critical decisions for smooth airport operations. Mobile phones are continuously evolving, from being just a passenger communication channel, to interaction and transaction driven interface for the passenger. This would help to reduce the time constraint and increase passenger’s ability to make informed decision and hence airports better manage passenger traffic.

GMR Airports operates in a highly capital and technology intensive sector. In your opinion, what are the policy enablers to accelerate the adoption of digitally enabled global best practices by Indian airports?

In India, PPP airports operate in dual system where safety, security and air traffic control are run and maintained by government and airport operations are run by private players. Hence introduction of new technology needs to meet the requirements of the sovereign agencies working in airports. For e.g. e-boarding solution implemented by Hyderabad

Airport required protracted engagement and interface with security authorities before it was finally accepted. ATC operations are another area where we have worked with sovereign agencies to improve airside capacity through more efficient management of airspace based on international standards. While there are many instances like these, a more holistic approach is needed. Having a Standing Technology Committee under the aegis of Ministry of Civil Aviation which constantly evaluates technology innovations and ensures it interacts with various sovereign bodies for a well-rounded and accelerated implementation will go a long way in providing cutting edge technology based approach to Indian Aviation.

Self-Bag Drop

Completed the Trails and currently progressing on deploying Self Bag drops to augment existing Baggage drop facility. The move is to encourage PAX to do mobile & web check-in boarding.

Major Indian airports are projected to reach their passenger handling capacity limit. How do you see the role of technology to help airports better manage passenger traffic with existing capacity?

India is the world’s fastest growing aviation market. Currently, passenger traffic in India is growing at a rate of 20% and is expected to continue this momentum for next few years. In my view, to meet this growth we have no choice but to, among other things, focus on technology to meet this huge growth requirements. With existing airports already capacity constrained, such high growth rates further put stress on passenger handling. As passengers flow through the terminal, five key areas are critical for smoother passenger handling viz. gate holding area, security, retail, baggage handling and immigration. The common pain points for the passenger has always been long waiting queues, insufficient information or boarding time update and difficulty in finding way. However, the problem can be solved by better embracing technology. For example, e-boarding facility enables faster processing of passengers with same infrastructure. However, introduction of this meant implementing technology that not just improves processing time but also meets the strict safety and security compliance norms in India. With passenger tracking, guided by advanced analytics and collaborative decision making, airports can track how the passenger moves — resulting in better customer service and leaner operations. Digital solutions can


However, one has to be cognizant of the fact that

technology adopted blindly can fail


Electronics sector comprises Consumer Electronics, Industrial Electronics, Electronic Components, Strategic Electronics, Semiconductor Design and Electronic Manufacturing Services. At the global level, electronics manufacturing is one of the largest and fastest growing industries. Japan, South Korea, Taiwan, China and USA are the global leaders of the electronics industry.

Where does the industry stand now?

India’s electronics (hardware) industry was pegged at around USD 64 Billion in FY15 vis-à-vis USD 55 Billion in FY14.

Special Feature

Electronics ManufacturingIn several countries, the contribution of electronics industry to GDP is significant - 15.5% in Taiwan, 15.1% in South Korea, 12.7% in China but only 1.7% in India. OEM (Original Equipment Manufacturing), ODM (Original Design Manufacturing), and local component suppliers are still in nascent stage in India with most of the OEM confined to last-mile assembly. However, India has all the resources for becoming a Global Electronics Manufacturing Hub.

Role of the Government

The industry is governed by the Ministry of Electronics and Information Technology (MeitY) which was formed by giving the status of ministry to the Department of Electronics and Information Technology (DeitY) of the Ministry of Communications and Information Technology in July 2016.

India’s policy for electronics manufacturing is broadly guided by the National Policy on Electronics formulated in 2012 (NPE 2012) which got a further boost with the government’s flagship ‘Make in India’ initiative launched in 2014, and the government’s thrust to digitization under the ‘Digital India’ programme.

The major initiatives taken by the Government for the sector are as below:

Under the Modified Special Incentive Package Scheme (MSIPS), the Government will extend INR 100 Billion, aiming to support local manufacturing of electronic products and components by capex and tax subsidies

Preferential Market Access Policy: Supporting local production by requiring official institutions to procure domestic electronic products

Electronics Manufacturing Clusters (EMC) and Special Economic Zones (SEZs): High quality ecosystem for manufacturing units

Setting up of two Semiconductor Wafer Fabrication (FAB) manufacturing facilities for backward integration

Sector Skills Councils for skill development

Establishment of an Electronics and ICT Academy and funding of PhD students in Universities across the country for research in industry specific needs

Other major factors like ease of acquiring licenses, clearances and making land available

Tax Structure and Concessions

While Government is taking several efforts to reduce trade deficit of the electronics industry, additional aspects that can be looked into are:

End tax uncertainty and simplify tax regime

Export supportive and import heavy custom duty structures

Incentives linked to the investment quantum and prospective job creation

Fiscal and duty benefits to domestic manufacturers of inputs for electronics goods to make them globally competitive

0

10

20

30

40

50

60

70

29.9

7.7

32.4

54.6

32.7

6

36.9

63.6

Production(Revenues)

Export Import Domesticconsumption

FY14 FY15

Note: The above table does not include data for Semiconductor Design and Electronic Manufacturing Services

Source: Electronics and Computer Software Export Promotion Council, Electronic Industries Association of India, NITI Aayog

Note: The above table does not include data for Semiconductor Design and Electronic Manufacturing Services

Source: NITI Aayog

Segment wise import and export data for the electronics industry during FY15 is given below:

0.4 0.8 1.9 1.9 1

67.2

4.15.4 5.4

14.7

36.9

0

5

10

15

20

25

30

35

40

Computerhardware,peripherals

Consumerelectronics

Electronicscomponents

Electronicsinstruments

Telecominstruments

Total

Exports USD BN Imports USD BN

6.1

13.2

31.231.7

17.919.6

11.2

14.7

14.7

39.9

0

5

10

15

20

25

30

35

40

45

Computerhardware,peripherals

Consumerelectronics

Electronicscomponents

Electronicsinstruments

Telecominstruments

Exports % Imports %


Taiwan Miracle in Electronics

Taiwan Miracle refers to the rapid industrialization

and rapid economic growth of Taiwan during the

latter half of the twentieth century (with real

growth in GDP averaging 8% over past 3 decades).

One industry which benefitted was the electronics

industry – particularly the semiconductor industry

which with sales of around USD 72.5 Billion in 2014

is the third largest in the world. Learnings for India

from the rapid gains made by Taiwan are

summarized below:

Government as an enabler by prioritizing

infrastructure development (electricity,

transportation, communication and core

industries)

Creation of Hi-tech parks and dedicated Export

Zones for specialized electronics manufacturing

Foreign investor friendly policies which attracted

leading companies from US and Japan

Vibrant and sharp entrepreneur community

which led to proliferation of SMEs across the

industry

Forging PPP to steer industry into new markets

(Taiwan government partnered with Philips,

Netherlands to setup TSMC and enter

semiconductor chip manufacturing)

Is India turning over a New Leaf on Electronics Manufacturing?

In the last two years, there have been multiple announcements from global and Indian players to setup local manufacturing capacities.

In the first half of 2015, Xiaomi and InFocus partnered with Foxconn to start manufacturing devices at the latter’s Andhra Pradesh facility

In July 2015, Karbonn Mobile set up a 150,000 sq. ft. plant in Noida in partnership with Water World Technology Co. Ltd.

In July 2015, Lava International Ltd announced to invest INR 26.1 Billion over the next seven years to set up its second factory in India by 2017

In August 2015, Lenovo started assembling smartphones at its Chennai facility

In October 2015, the Chinese company Coolpad Group Ltd. partnered with Videocon Industries Ltd. to manufacture Coolpad devices in Maharashtra

In April 2016, Micromax inaugurated its manufacturing facility at the semiconductor hub Fab City in Hyderabad

In October 2016, Samsung announced investment of INR 19.70 Billion over the next three years to double manufacturing capacity at its Noida facility

Insights from the Taiwan Case Study reemphasize the roles to be played by the Government and the industry to replicate similar success in India.

Source: Media Publications

Key Snippets

100% FDI allowed in the sector through the automatic route in non-defence electronics

Supportive government policies like National Policy on Electronics and initiatives like Digital India and Make in India

65% of current demand met by imports; huge opportunity for import substitution

Large pool of skilled manpower and the third largest pool of scientists and technicians

Source: www.makeinindia.com

Source: YES BANK Research, Media Publications


Electronics manufacturing sector in India

Innovative funding structures comprising a mix of

funding in rupee and foreign currency

Suitable promoter comfort and collateral for initial

projects

Conclusion

“Necessity is the mother of all invention”. Criticality of the

sector to the economy coupled with government focus has

led to a number of policies and a conducive ecosystem

being created. The upwardly mobile demographic dividend

will ensure demand for the sector. However, as with any

industry, implementation of policies and ability to innovate,

in the wake of changing dynamics and the fierce

competition, will be key to the success of the industry in

India.

Funding the sector from a Lender’s Perspective

For a sustained growth and for reaching the stated goals by

2020 as per the National Policy on Electronics, the sector in

India needs access to the right sources of funding. While

equity can be provided by the promoters (domestic and

foreign), equity markets, private equity players, etc., debt

funding is equally important given that the investments run

into billions of rupees.

While bank financing to the electronics sector in India is

increasing at a high rate, it still represents a very small pie

of the total credit to industry. Bankability of the sector in

India does have its share of challenges as is with the

bankability of any nascent sector. The following measures

could help resolve the challenges faced by the sector:

Regulatory support for funding the sector in the form of

a deemed “Infrastructure” status

Favourable debt equity mix which would result in

comfortable debt service ratios

Strengths

Availability of skilled manpower at competitive rates

Presence of established distribution network in urban as well and rural regions of the country

Presence of a vibrant knowledge economy in the country

India has a robust software industry which provides support for development of electronic manufacturing industry

Weaknesses

Poor integration into global manufacturing chain

Limited innovation and new product development initiatives within India

Opportunities

Rising disposable income and availability of finance resulting in huge potential for incremental domestic demand

Increasing thrust of Government of India on promoting Electronics Sector resulting in drafting of incentives based policies and increased government spending

Cheaper imports from East Asia

Lack of ancillary units and dependence on imports for the same

Competition in terms of innovative products from other global markets

Threats

Source: YES BANK Research

the result of built-in privilege, the author

encourages startups to be bold, have a clear plan,

build and dominate a small market and focus on

both product and sales.

Peter Thiel, a founder of Paypal and the data

analytics firm Palantir strongly advocates that every

start-up must begin small and monopolistic before

getting big. Though this might be one of the

rudiments for entrepreneurs, his quote - “The

paradox of teaching entrepreneurship is that such a

formula necessarily cannot exist; because every

innovation is new and unique, no authority can

prescribe in concrete terms how to be innovative”

- hints that there is no set formula for an

entrepreneur to succeed. Alongside giving business

advice of building a mini-monopoly to test product

with early adopters and giving importance to the

marketing and sales aspect of the business, the

author also shares some humanistic advice for

successful organization building – to treat fellow

founders as family, assign limited task to great

employees and allow a sense of belonging and

ownership.

Author: Peter Thiel, Blake Masters

Publisher: Crown Business

Pages: 223

The thoughts of Peter Thiel on start-ups, that he

penned down in his book with Blake Masters –

Zero to One, are very interesting. The book, by its

cover, may seem to be a self-help business book for

young entrepreneurs, however its redefinition of

the economic concepts makes it a thought-

provoking read.

The central theme of the book revolves around

how entrepreneurs should realize one single

“secret” that will enable them to differentiate their

company from the rivals and take them from 0 to 1,

instead of going from 1 to n by replicating what

somebody else has conceptualized and being a “me-

too” company.

The author begins by asking the contrarian question

– “What important truth do very few people agree

with you on?” Through the book he tries to defy

the conventional beliefs of doing business and

presents compelling cases to prove the same. The

book directs towards how entrepreneurs should

embrace monopoly instead of battling for the

minimum profits in a competitive market.

The book cites examples from the dotcom bubble

and how the technology space crashed leading to

strong beliefs amongst founders that one needs to

make incremental advances, stay lean and flexible,

improve on the competition and focus on product,

not sales. Defying the “principles” of a successful

business and refuting the argument that success is

Book Review

‘Unravelling the Entrepreneur’s Secret’


AnytimeBanking

Paymentsfrom ERP

In-builtsecurity

Application Interface Programming

AA PP I I

KNOWLEDGEBANKING

RESPONSIBLEBANKING

INNOVATIONAND

DIGITISEDBANKING

ROBUST FINANCIAL

PERFORMANCE

BRANDAND

SERVICEEXCELLENCE

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FINEST HUMAN CAPITAL

going digital: for disruption

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