Founded in 1945, Mahindra Group has businesses ranging from automotive, defence and aerospace, technology, tourism, finance, real estate, logistics and agriculture. The Anand Mahindra-led group is far ahead of many other companies in terms of adopting emerging technologies such as analytics, artificial intelligence (AI) and internet of things (IoT).
While the group has separate chief information officers for different companies, VS Parthasarathy is the group chief financial officer as well as CIO. Parthasarathy has been with Mahindra for nearly two decades. Prior to Mahindra, he had spent close to 15 years at Xerox. For him, digital transformation is a continuous process and means being adaptive and agile so that the group stays ahead of the curve. In an interaction with TechCircle, Parthasarathy explains the group's initiatives. Edited excerpts:
How is Mahindra Group using newer technologies such as data analytics, machine learning, AI, industrial IoT to speed up production across sectors?
We use emerging technologies such as robotic process automation, AI, ML and IoT to challenge the status quo--improve our agility and competitiveness in a market that characterises itself with its novelty, fast growth, consumer impact, uncertainty and ambiguity.
For instance, at our Chakan vehicle manufacturing plant (near Pune), a few years ago, we could make only two variants at a time. Using robotics and automation technologies, we created a state-of-the-art facility where we can manufacture 40 varieties of sport-utility vehicles and still have the volumes which the multinationals are producing.
Analytics dashboards are helping us streamline assembly lines, rectify errors faster, and increase efficiency and productivity in the production process. These are only a couple of examples of how we are using technologies in Mahindra.
What are the major research and innovation areas for you at the group level?
We do not restrict our understanding of innovation as “high technology.” Alternative thinking, accepting no limits and driving positive change --the three pillars of Mahindra Rise--support our drive and thirst to innovate.
From a pure technology forefront, we have a strong focus on the application of emerging technologies like AI, ML, analytics, augmented reality/virtual reality (AR/VR) etc. Additionally, we are experimenting with blockchain, geo-fencing and 3D printing.
What does digital transformation mean to you?
The digital term stems from the sudden burst in the “consumerism” of technology or traditional IT applications over the past decade. Thinking ‘innovatively’ means we need to get the insights and information first, apart from being adaptive and agile. Otherwise, the companies will be left behind.
At Mahindra, we have a strong focus to transform ourselves--adapt and reinvent using technology by the formation of sector-wise Digital Centres with a primary purpose to prioritise customer experience leveraging technology.
We have created specialised teams to drive the digital agenda. The Digital Centre (DC) takes care of all the digital initiatives for Mahindra & Mahindra while the information and insight centre (IIC) team handles the customer insights and all other analytics demands.
We are also reskilling resources. We have an IT academy, which conducts programmes to educate IT and non-IT employees on new and emerging technologies.
Digital transformation at Mahindra may not always represent a quantum change but rather a continuous improvement in processes and products or services leveraging technology. Digital transformation can lead to creating innovative products or services, entering a new niche market, internally transforming the processes or all of these.
What is your budget at the group level? What is your investment in digital initiatives both in terms of expenditure and human resources?
As a matter of policy and ethics, we do not disclose the internal budgetary figures. To provide you with perspective, for every organisation or business unit there is a different monetary need and trajectory.
For example, in our existing businesses and initiatives, the fundamental need is to move from manual to digital and automated. For new businesses, it is “digital first”. For startups and new ecosystems, it is all about being “born digital”.
We aspire to be the digital evangelist for the entire group by creating and organising data, and building a digitally driven framework/backbone for a futuristic organisation that leverages emerging technologies to its full extent.
We strongly believe in being frugal. For our transformational initiatives, we believe in firing bullets prior to firing cannonballs! This invariably means we first nail it before we scale it!
How difficult is it to implement these initiatives in a large group with multiple businesses? As the group CIO, what are your challenges?
Each sector, each business has its own needs and digital priorities and they are empowered to make a call on their own. However, certain things, such as security, need to be controlled at a group level. I have created certain mechanisms to ensure these initiatives are aptly supported and data insemination happens smoothly.
The technology leadership council is a congregation of CIOs and IT heads of the group who brainstorm about new digital initiates as a group.
The strategic leadership council comprises CFOs of the group who ensure the applicability of the strategy made in the TLC. We have deputed shared CIOs for smaller companies to drive the digital agenda. The objective is to leverage enterprise technology while saving costs.
We also have a security council--security cannot be taken lightly at times when cybercrime and cyberwar are on the rise--as a single apex body for all security-related concerns.
What are the group's immediate digital priorities?
There are three ways M&M is leveraging the power of digital. First, by going digital--we are digitally improvising our existing processes and products/services. Second, we are starting digital–we are going 'outside in' by bringing in what customer wants from us. We have created DCs and IICs to keep up with the pace of digital transformation.
A few examples of digital innovation include 'Digisense', a connected car platform using IoT, and a supplier chain financing using blockchain by Mahindra Finance. We also have a mobile-first strategy MeConnect, a bouquet of more than 80 apps, to bring the employees onto a digital platform. To digitally enhance the customer experience, we have initiatives like WithYouHamesha and SyouV.com.
Third, a few projects are born digital--their business model is based on digital platforms. For instance, Trringo and M2ALL. We have corporate garages to develop such businesses.
It may seem difficult to manage digital initiatives due to the federated structure, but we use the synergy among our group companies to ensure the smooth implementation of digital initiatives.
Where do you see disruptive trends the most?
No business, no industry can say that it is not getting disrupted by the digital wave. Our major focus should be on how to tackle this disruption. I would like to emphasise on certain fundamental business principles.
One, ICE – innovation and adaptability, climate change and experiential commerce – all business models will change because of this.
Businesses that will innovate and adapt in the face of climate change and experiential commerce will survive and thrive.
Two, enable, enhance and engender. At present, many organisations use technology to enable activity. Soon, they will start using technology to engender more and more activities. Technology will help us do things better, faster and smarter but only those organisations will survive that are ready to change their modus operandi based on the need of the time. Organisations that are built-to-adapt will last. I am not sure those built-to-last will adapt.
Has there been a significant change in the entire process operation of the group where supply to production to sales are streamlined?
M&M started Project Harmony in 2010. This was one of the world’s largest SAP projects in which multiple instances were consolidated and processes were harmonized in finance and accounts, HR, indirect material procurement, and setup of a unified analytics platform.
In the project, 50 companies went live in a short span of eight months. Today, Harmony supports more than 100 companies across the globe on this single instance.
The implementation of SAP HANA has helped us in streamlining end-to-end processes, thereby increasing efficiency and productivity.
Mahindra believes in “first time right, every time right”. Having control over the entire process ensures we are capable of delivering as per this philosophy.
The group also has IT companies. What kind of tech are you developing internally for the group and for other enterprises?
We have three IT companies in our group - Tech Mahindra, Mahindra Comviva and Bristlecone, each one being a global leader in the domain they operate.
Tech Mahindra helps businesses in digitisation, automation, verticalisation, innovation and disruption. Comviva provides mobility solutions and Bristlecone is a system integrator in the supply chain, procurement and analytics.
Internally, the group companies leverages the expertise these companies have built over decades, to transform their own business operations.
The IT companies extensively work in new-age technologies like mobility, connected device, big data and analytics, artificial intelligence and bots.
How is the group using analytics in order to make marketing and sales better?
We recognised early the power of data analytics in informed decision making. We have teams working solely on analytics project delivery both at the sector level and the group level, projects covering production to sales and post-sales activities.
To give an example, the analytics team uses an algorithm to identify the target segment for a vehicle and what kind of marketingcampaign should be used to capture that segment. This insight is passed on to the sales and marketing teams, which act accordingly.
What has been the return on investment?
I may use conventional ROI to calculate returns from a financial proposal, but when it comes to technology I treat it as a business expense. The conventional evaluation methodology will not be applicable for a technology investment. If I must stay ahead of the competition, I cannot hesitate to make massive bets on technology.
Another factor that one needs to consider is risk. With no ROI calculation to back up the investment, making massive bets on technology can be risky, especially when the technology is changing at a faster pace.