Forbes India 15th Anniversary Special

Mahindra Group: Primed for a digital leap

A small army of cloud warriors has been working towards leading the $19-billion Mahindra Group into the digital age. Expect customer experience to be different soon

Harichandan Arakali
Published: Sep 11, 2017 07:19:39 AM IST
Updated: Sep 7, 2017 05:31:29 PM IST

Mahindra Group: Primed for a digital leap
Anish Shah, group president for strategy at Mahindra, says there is a culture of fostering entrepreneurship within the company
Image: Vikas Khot

It’s a dusty, sweaty, noisy 45-minute ride from the city centre of Bengaluru to a Mahindra & Mahindra SUV dealership en route to Electronics City, where the gleaming buildings of Infosys and Wipro house tens of thousands of young engineers.

Many of them would identify with the ‘Live Young’ exhortation from the maker of some of the country’s well-known SUVs, and stepping into the dealership would probably take the desire to own one a notch higher. Smart young salespeople like SK Nithya use tablets to capture useful data about potential customers and explain the finer points of an increasing number of data-driven digital services you can expect as a valued customer.

A little over a 1,000 kilometres to the northwest, in Mumbai, a massive brainstorming session is taking place. Among those involved are people who have previously worked at companies like Microsoft and Google. Some have designations such as ‘chief digital officer’ while others are senior general managers and above—all specifically tasked with digital transformation in the company, something they have been working on for the last two years.

The intent is achieving end-to-end digital transformation across the group’s various units by breaking silos and allowing all multiple standalone efforts to come together and amplify each other, says Namrita Mahindro, a senior general manager for digital transformation at automaker Mahindra & Mahindra, the flagship business within the group.

“The last major overhaul we did in terms of an experience was in 2011 when we did the XUV launch, and thereafter, the customer has significantly moved in terms of needs, aspirations and behaviour,” says Mahindro, adding, “Are we still relevant to the customer of today and tomorrow, and what do we need to deliver on those aspirations?”

Mahindro declined to go into specifics because this end-to-end transformation attempt at the automaker is nascent, as new as 10 weeks old as this story goes to print, and also, at this point, fairly competition-sensitive. What is clear, however, in broad terms is that from the drawing board to final manufacture to the customer, across the supply chain, the company is setting out to understand what kind of digital interventions it will need, in the context of where the auto business, and the group itself, wants to be in 3-5 years.

Mahindra is working with some top-notch global partners for this project. And the idea is that once the project is implemented, it should become a way of life, something that will also involve a large scale re-skilling of staff and new training programmes across the group.

Tech Mahindra, an IT services provider, is at the forefront of digital technologies in verticals such as telecom because of the very nature of its work. But the rest of the Mahindra Group, which builds trucks, SUVs and tractors, offers loans, and promotes holiday destinations to families, too, is primed for a massive digital transformation.

“There are certain capabilities that we need to build, and the acceleration started about two years ago when we brought in some senior digital leaders from various companies to come in and give a better structure to what digital means,” says Anish Shah, group president for strategy, who has previously worked at consultancy Bain & Co, and then at the engineering and finance conglomerate General Electric (GE) for many years.

Mahindra Group: Primed for a digital leap
Jaspreet Bindra says at Mahindra Group, the plan is to focus broadly on digital transformation

These experts helped articulate what digital was and what it meant to each of the businesses in the group. They put together roadmaps for the different businesses, which are now in various stages of implementation, with several early instances of how the group’s transformation journey is overhauling customer experience at Mahindra.

Jaspreet Bindra, senior VP for digital transformation, is sort of the de facto chief digital officer for the group. He explains that the idea was to “focus broadly on digital transformation”, which simply could mean how to take the existing businesses into the digital era. In practice, it will mean literally overhauling everything on three fronts.

Top of that list is improving customer experience because today people move from the physical world into the virtual world and back effortlessly—say, like using a smartphone to hire a cab, checking mail or streaming content while on the trip, and stepping out again.

In the case of the auto business, says Bindra, it means figuring out “right from the time a customer even thinks of a car all the way to an upgrade”, what can be done that will “delight” him or her.

The same philosophy has been applied in every group company. One of the earliest projects was at Mahindra Holidays & Resorts India, where getting and holding the customers’ attention is everything and where references are an important source of generating business.

Mahindra’s digital team built a smartphone app, which was launched towards the end of 2016. Today it could be a bot, but at the time, it was an app, Bindra says. What it did, however, was change the entire company behind it. A simple example is, earlier on, if a customer had a complaint, there’d be an email and it would take at least a few hours to half a day, depending on the complaint, to find a solution.

We’re trying to be part of a second green revolution, but this time with data and analytics.

With the app, a person wants immediate answers. That means the entire customer service process behind it changed, and automation is an increasingly important aspect. The app is also focussed heavily at ensuring a customer comes back to it.

A simple example is sitting in a resort and using the app to book various services, like, say, an hour at the spa. Or use location-based features to show what a family can expect to find en route, as well as community engagement—pictures, videos, social media commentary and reviews sourced from customers who have previously gone on holidays at various Mahindra resorts.

“The app has been a huge enabler,” says Ajay Kaul, chief digital officer at Mahindra Holidays. Six months after its launch, the app has grown to account for 35 percent of the bookings. “There was this pent-up demand [for better ways of exploring the resorts before booking] and we continue to enrich the app’s features,” says Kaul. More recently, enabling flight bookings from within the app was added. And going forward, registered users can expect to use their smartphones as their room keys, scan QR codes for historical information on locations in and around the resorts they holiday in, and even get information on the cuisine and data such as calorific value.

Kaul is also experimenting with augmented reality and virtual reality to show customers what a given resort is like in a more immersive manner.

The Mahindra Group also has a strong rural-facing set of operations—from finance to tractors to even the Boleros, rugged vehicles that farmers favour. Therefore, there is an attempt to “try and map a farmer’s journey and how at each point we can intervene to make his life better”, says Bindra.
Mahindra tapped IBM’s Watson cognitive intelligence unit to build an Artificial Intelligence (AI)-backed advisory for farmers. A portal it created, called My Agri Guru, provides relevant content to farmers, and saw some 200,000 downloads within the first 2-3 months of launching an app for it. It sees 200-300 queries every day, says Bindra.

Soon, more of the backend will be automated, with machine learning incorporated, which means the more a farmer uses it, the more the probability that the app will return increasingly relevant information to him.

“The world of agriculture is ripe for change,” says Ramesh Ramachandran, a senior vice president for strategy and precision farming at Mahindra & Mahindra’s farm division. There are some underlying factors that almost require it to change, including increasing population and limited land for use, and decreasing marginal utilities of all the current technologies for getting more out of the land, he says.

This is where all these digital technologies come into play—a confluence of the Internet of Things (IoT), cloud-based analytics and AI to enable the farmer to get more in terms of both quantity and quality in agriculture. Sustainability, says Ramachandran, is also crucial, “so you can’t just chuck more fertilisers and pesticides”.

Digital technologies are amenable to aiding precision farming, which involves fine tuning both inputs, such as fertilisers, and sowing and harvesting practices. The results, Ramachandran adds, can be a significant boost for farmers.

 “So, at the highest level, what we’re therefore trying to do, is to be part of a second green revolution, but this time with data and analytics,” says Bindra.

The second front on which the Mahindra Group is accelerating its digital transformation is the business model itself. It’s the same customer—even the same product, but the businesses make money differently.

“The customer today is far happier renting than buying, which means you can’t be just selling products. One has to move towards renting-based, aggregation-based, platform-based approaches,” says Bindra. Mahindra’s approach is to set up startups within each of its businesses, which work on new business models. These startups are still part of the main businesses, but are run independently.  

Take tractors, a space where Mahindra is one of the biggest in the world by number of units. “Everything is moving to fleets, the business models are changing for mobility all around and we believe it will happen for tractors also,” Bindra says.

Trringo is a startup within the tractors business, which is an “Uber for tractors—a shared economy model but rural focussed”, and it runs as an independent business within the group. There are 120 million farmers in India, but only 6 million tractors and “no matter how many tractors you make, you aren’t going to sell those many, so why not, but it has to be in a way that the farmer can relate to”, says Bindra.

That means, in a rural context, “services have to be vernacularised, payment mechanisms have to be different and call centres must be staffed with people who understand farmers”, he adds.

With Trringo, a farmer, today, instead of having to plead with a richer farmer, can summon a tractor. The service is in five Indian states. Similarly, SmartShift, another startup, is aggregating small commercial trucks. And Carworkz aggregates service centres. These are all structured with their own CEOs, “star CTOs” and tech teams, some of which are working in Bengaluru to ensure that the best talent is sourced.

Finally, the third front is about technology itself—evaluating the latest technologies that are emerging, and figuring out which ones to use. Their applications, from AI to augmented reality and virtual reality to blockchain, will affect the other two aspects drastically—customer experience as well as business models.

For example, for its financial services business, Mahindra worked with IBM to build a minimum viable product. Mahindra & Mahindra Financial Services is experimenting with blockchain technologies to see if even their tier-3 suppliers and beyond can be freed up to focus on the quality of their components, and not on worries such as short-term cash crunches they often find themselves in. Blockchain is a digital record of transactions done by the users of that record, where everyone knows what everyone else has done. One of the best-known uses of this digital ledger is how it is used to keep track of transactions made with the cryptocurrency bitcoin.

“We’ve been able to do a small invoice-discounting proof-of-concept on blockchain, which has been fairly successful. We will be getting it into production by the end of this year,” says Tina Singh, a senior general manager for digital transformation.

A large tier-1 component supplier getting short-term funding is “hardly a game changer”, Singh points out. But, suppose you get into the level of a supplier of a supplier of a supplier, that is where the entire process becomes more cumbersome for players like banks, she adds.

Banks don’t want to operate there because they see higher risk, says Singh. “That is where Mahindra Finance’s blockchain solution comes in, bringing all such suppliers on to one platform.”

This boosts trust with transparency. And people who wouldn’t otherwise get credit, with which they could actually do better, get that tide-over funding.

“We have used blockchain in the true sense. We have created a network of multiple parties that aren’t connected, we’ve created a transparent structure, making information available to everyone, and using of that information to bring benefits that were not available to anybody earlier,” Singh says.

Shah says there is a culture of fostering entrepreneurship within Mahindra. And that digital transformation has become the underpinning of that philosophy. The results are beginning to show.

(This story appears in the 15 September, 2017 issue of Forbes India. To visit our Archives, click here.)