Growth cannot come by merely pushing people to move fast and requires a transformative vision and a change in the culture, the head of the USD 110-billion conglomerate said, delivering the Nani Palkhivala Memorial Lecture here.
The comments come amid a slide in growth to a decadal low of 5 per cent expected for current fiscal, and also years after the Narendra Modi government made ease of doing business as its priority, along with a commitment to less of government.
“We need to reimagine our economic and business culture. Culture is most critical. Growth must not come from pushing hard. There is no point to tell people ‘drive fast, drive fast, drive fast’. It (growth) will come by removing obstacles,” he said.
A “transformative vision” which will ensure we move away from “a controlled vision of micromanagement” is the need of the hour, he said.
“We need supervision, we don’t need suspicion. And we have suspicion. All our rules start from suspicion,” Chandrasekaran said.
He rued that people who work hard and honestly are put through enormous difficulties and Indians excel in making an ordinary task into an extraordinary one.
There is a massive risk aversion within the system, which has led to an “undesirable equilibrium” where it is safer to avoid or delay decisions, he said, pitching for better oversight and supervision of work.
Achieving growth inherently involves risk taking and we need to applaud the risk takers, he said.
The biggest aspect which India needs to sort out at the earliest is ensuring that we deliver jobs for the society at large, he said, warning that 90 million people will be joining the working age in the new decade.
From a sectoral perspective, Chandrasekaran flagged construction, real estate, infrastructure, power, banking and tourism as the areas which need policymakers’ attention.
Chandrasekaran, who sits on the central board of the RBI, also pitched for reducing the state ownership in the public sector banks through stake sales as a measure which will ensure they perform better.
Discoms are losing over Rs 1.4 lakh crore every year due to poor distribution and there is need to privatise them at a city level, he said.
Referring to the government’s USD 5 trillion GDP target, he said none of the milestones can be achieved without ensuring educated, skilled and vibrant workforce.
He also advocated policy efforts on sustainability, inclusion, health and education, and added that creativity, collaboration and problem solving become the “second nature” for the youth.
Chandrasekaran also welcomed government’s efforts at unwinding legacy problems on public delivery, corruption and tackling non performing assets at banks.
Sterlite Technologies to continue to look for buyout targets
Anupam Jindal, chief financial officer at Sterlite Technologies, said the company would continue to look at inorganic growth opportunities that allow it to expand its customer offerings or give it access to new customers.
sterlite.jpg.webpAnupam Jindal, chief financial officer at Sterlite Technologies, said the company would continue to look at inorganic growth opportunities that allow it to expand its customer offerings or give it access to new customers.
Two weeks ago, the digital technology company announced that it had acquired a 12.8% stake in Israeli firm ASOCS, a vRAN (virtual Radio Access Networks) company. In September last year, it had acquired European data centre design firm IDS for about $15 million. The ASOCS stake acquisition will help it boost its capabilities in the wireless and 5G solutions segment.
The company is transitioning from being an optical fibre maker to offering more services to tap into the growing data centre market. The IDS acquisition, for instance, gives it access to a leading hyperlocal data centre operator and strengthens its offerings in the cloud and data centre business.
Sterlite was recently awarded a T-Fibre project worth about Rs 1,100 crore to deliver digital infrastructure to six million rural citizens of Telangana, and was selected by Telekom Albania for its multi-year, multi-million-dollar digital transformation programme.
Jindal said India would remain a dominant part of the company’s business. “At present, India accounts for about 65% of our revenues. Going ahead, we are looking at expanding to the Middle East, Southeast Asia, Africa and the Americas,” he said.
While 2019 was a tough time for the industry, Jindal said the company was seeing early signs of improvement. “We see the market coming back. We have built strong capabilities in the services business to meet the emerging requirements,” he said. “Most of the investment cycle is over and now we are ready to start monetising it.”
The UPI effect: Why Indian banks need to up their cloud game in 2020
It is the banks that have to invariably do the heavy lifting for UPI transactions.
the-upi-effect-why-indian-ban…In the experience economy, we live in a world of ‘Insta-Everything’. Finance platforms have become so effortless and interoperable that it is easy to innovate and disrupt with a simple idea. But are banks catching up? What’s their 2020 game plan going to be?
Banks today are under strong pressure to both perform and stay relevant in the market at the same time, thanks to rapid innovations in the sector. Take the introduction of India’s very own payments platform, UPI (Unified Payments Interface). It has simplified and democratised payments to such an extent that the entry point for anyone to build a brand-new UPI payments app is very low.
While a front-end and user experience can be built, owned, and facilitated by a third-party app like Whatsapp Pay or PhonePe, it is the banks that have to invariably do the heavy lifting for UPI transactions. Contrary to popular belief, QR code scans, VPA verifications, and fund transfers have to be processed by banks instead of the third-party apps to ensure user data security. The third-party apps therefore tie up with sponsor banks (or PSP) to enable this for customers. For example, a user of Whatsapp Pay is ultimately registered with a scheduled Indian bank, immaterial of where his/her bank account is.
oracle-vp-photo.jpg.webpThis is a huge problem for banks. On the one hand, they need to act as the middleman to securely forward and route the traffic; on the other hand, they need to process fund transfers in real-time using their core banking systems. Digital transactions using UPI at a local saloon or a pani puri kiosk down the street add to unprecedented transaction volumes that is difficult for banks to size/scale for and plan ahead.
A bank’s dilemma: The need to pay for play
The real killer is that cost per transaction remains high even for low-value transactions. Topping this, there is no room for errors as banks are shamed and their competencies are questioned when UPI transactions fail. For a bank, this leaves them with no incentives to participate because most transactions carry no margins and the ones that do are in the order of less than a rupee, because of MDRs (Merchant Discount Rates). This wasn’t the case with other payment instruments like debit cards or credit cards. UPI, the cards killer, is unlike any system that banks have witnessed before.
A ecosystem banks can’t afford to miss
We all know what happened to Nokia. Similar storied examples exist even in the biggest of tech companies — Sony Betamax, Microsoft Zune, Blackberry, Google Glass, Amazon’s Fire Phone are all examples of having fantastic tech but not focusing on the ecosystem. Not participating in UPI is not an option for Indian banks because their customers’ loyalties are at stake in this digital-first (soon to be digital-only) world.
For example, you have large e-commerce giants participating in UPI-based payments because it gives them the right set of tools to keep their users engaged within their ecosystem where they can get them to shop more. And the incentive for internet giants to roll out a UPI app is about building those engaging user experiences to retain users within their ecosystem where users can be plied with more and more advertisements.
Such ecosystems are becoming key to the survival of enterprises today and that is why every serious business in the consumer space right from large handset providers, desktop OS providers, mobile network operators, food delivery apps to cab aggregators participate in UPI. Such ecosystems are very powerful because they can dictate the terms on how other players like banks can participate.
For example, to get the user to open their wallet for the item in mind, an ecommerce company can entice them with cheaper EMI offers from other banks where they don’t hold an account. Not just a lost opportunity, it also leads to poor customer stickiness. This sort of commoditisation is leading to a dogfight that may ultimately push some banks into a corner where they will lose relevance and merely become ‘ledger-as-a-service’. Such a disaster is on the cards (pun intended). Many of us will witness it during our lifetime.
Survival of the fittest: Why banks need to innovate at pace
While the marriage-of-convenience with third-party ecosystems may pay in the short term today, banks will have to vigorously innovate to turn it around for themselves to stay relevant in the market. This will require them to adopt a culture of experimentation, where prototypes are built and deployed rapidly. They need to get used to failing fast and learning faster from the failures.
Why a traditional on-premise approach becomes the antithesis of innovation
Banks have spent too much time evaluating the cost-benefit advantages of cloud versus on-premise models and the cost of opportunity has never been accounted for. The intangible advantages of agility, flexibility, scale, performance far outweigh the costs. This requires a mindset change, a skillset change, and CIOs/CTOs need to play a far more aggressive role here.
Cloud, on the other hand, makes it convenient for business decision-makers and IT teams. With a software-defined hyper-scale infrastructure and a pay-per-use model — including ultra-attractive payment models such as universal credits and bring your own licence options — cloud enables quicker provisioning and de-provisioning of systems that keep the costs under control. There are also a wide-range of platform tools like autonomous transaction processing, developer cloud service etc that developers and system operators can leverage quickly to build features and deploy resilient systems to enable faster go-to-market.
This is very important because technology becomes obsolete over time and one needs to always be on the latest and most powerful tech to keep up the pace. And this is not possible anywhere except cloud. With RBI and NPCI keen to open the gates for banks to move UPI, Bharat Bill Pay and Fastag to cloud, it is very important that banks leverage the time and opportunity.
For banks, the writing is on the wall — take advantage of a Gen 2 Cloud with autonomous features and fast-track innovation, lower costs to remain relevant in the experience economy — or risk being outsmarted and outpaced by more modern, adventurous peers in 2020.
The author is VP-Global Key and Lead Accounts, Oracle India
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