In his speech at the 20th All India Management Students Convention, Mithun Sundar, Microsoft India, shows us how hybrid working has ushered in a new world, which is hyperconnected and driven by AI.
When I think about AI, I can’t help think about it in the context of the last 18 months that all of us have gone through. We had a terrible pandemic. It troubled a lot of us but it has also resulted in a sea change in almost every industry. In healthcare, the adoption of telehealth is amazing. My own dad, 76 years of age, is able to consult doctors via a quick phone call or on WhatsApp, Teams or Zoom. Today, we are no longer scared if we walk out of the house without a wallet, because the phone has become the wallet. The requirement to have a credit card or cash has gone out of the window in India, even in the smallest of places. I am able to walk in Chennai Beach and pay a peanut vendor scanning a QR code. Our habits have changed dramatically and we are seamlessly interconnected.
In that context, I see four large trends that are coming up in this world from a business perspective.
- First: How can you lead and run a company, optimize yourself and your company in this new hybrid world, where all work is going to be hybrid? That is the first big shift.
- Second: Every company lives and breathes for its customers and consumers. How do you help your customers to build a truly hyper-connected business?
- Third: How can every business become a digital business? There are some which are born digitally native but there are several others which are not digitally native.
- Fourth: How do you protect all of this in a world where you and I can’t meet each other, and manage it with end-to-end security?
These are the four aspects which span across this hyper-connected, AI-driven world. Let me go there one by one. I work in Microsoft and I am sure many of you must have read the recent news which broke out about the ‘metaverse’ and how Microsoft is collaborating with a couple of other large tech companies to truly change how we live in the metaverse.
What is Metaverse?
We all live in the universe, but we are now slowly moving to a place we call ‘metaverse.’ It allows you to have shared experiences across both the physical and digital worlds; across people, places and things. It is a comprehensive set of resources that you will be able to leverage and work and do things in it. You will have things like an AI Avatar, which will be able to add points in time where you are not present. The AI Avatar will show up for you and be able to conduct what you would normally do. It will have access to all kinds of information at fingertips and it will be a place where people are able to be present—partly physical and partly in digital— ‘phygital’ is one of the words that we use, and that is where the world is heading. Several companies have already made the leap. Lots of people are getting towards the metaverse. Metaverse combines both the web and the internet.
Managing Hybrid World
When I speak about hybrid work, let me go back to my experience. When the pandemic broke out, I was based in Bangalore leading a fintech company which used to give loans to micro, small and medium enterprises in India. We have a pretty large loan book of almost 5,000 crores worth of loans out in the market. Overnight, everyone had to sit inside their homes. Think of businesses on the street side, the kirana stores, the cycle repair shops, an internet browsing centre or a peripheral store. These smaller traders had borrowed from our company and their businesses were dramatically hit. What did we do to adapt to the hybrid work? There is the easy part and the tough part. In normal days, I used to go to office and all of us used to meet each other. For meetings, we would sit in a meeting room, collaborate and figure out ideas on what to do. We could move that very quickly indoors as we were privileged to have seamless digital connectivity. So that part, while disruptive, was the easy part. All we had to do was to learn etiquette on how to manage hyper-connectivity and how to manage hybrid work in an AI driven manner.
But the next step is: what do you do with your customers—people who live in the real world? How will the hyper-connectivity help us manage those customers? We started to slowly get people on board. India now has more than 70% smartphone and internet penetration. That is a significant number with 3G and 4G coming in fairly quickly, with a lot of players coming up.
Relevant Services through AI
We were able to connect with our customers and offer them relevant services when they needed it. What do I mean by relevant services? This is where something like AI comes into play, at an intuitive level. The businesses we lent money were struggling with cash flow. They needed to pay out their migrant employees who had to move back to their hometowns. We wanted to help everyone but we also had to be prudent. We made use of large datasets.
When we spoke to any one business, we used to take from them 6 to 12 and sometimes even 24 months bank statements. Multiply that by the number of transactions that they have done, add their GST returns, then 3 or 4 of other statements. We have more than two lakh data points for a single customer. If we use this in an organized and efficient manner and make an intelligent forecasting engine, it can decide about how to help that customer, what kind of a working capital loan we should give them and what financial products we should provide. What we were happy to do during that period from March 2020 all the way to the end of the year was that we were able to collaborate with the financial ecosystem in the country, use the power of Data, AI and ML and relevant models to identify resilient entrepreneurs—say 20 to 30 out of 100 entrepreneurs—and extend them the right working capital support. For the balance 50 to 70% of the entrepreneurs, working capital support may not be the right answer. We offered insurance which is a different financial product.
All of these could not have been invented, sitting in a room without access to data point per customer, leveraged with the right kind of AI and ML to learn continuously.
The second angle I spoke about was, how to build a hyper-connected business. What do we mean by hyper-connected? I have worked in the e-commerce industry for about 23 years. I was in the fashion space with Myntra. I recently read a news about a company that started in the US which guarantees less than 10 minutes to deliver. They are doing it in about six or seven cities now though not across the country. Amazon Prime offers 30 minute delivery. There are people who offer ‘within 10 minutes’ delivery.
How do we make that happen in a cost-efficient manner? We can’t have a warehouse outside every apartment in every area. I grew up in the 90s in Chennai. At that time, there was this ’30 minutes delivery or free’ guarantee given by one of the famous pizza companies. Back then, it was revolutionary. Indians are always ready for a deal and I too tested the proposition quite a few times, living in a crowded area known as Choolaimedu in Chennai. 90% of the time, they managed to get the pizza in time. To do that, we have to build a connectivity from end to end.
In the Pizza business that I described, the ingredients are already bought. The base level is to create the right kind of infrastructure and network of stores in the city but the second level after that is to have predictive demand planning. If you expect your demand in a certain area, during a certain period of time to spike, you can bake sufficient number of Pizza bases for you to be ready.
Doing this at scale, across an entire country and multiple regions with all kinds of variability is possible when AI comes in, because our ability to process multiple variables starts to diminish. Analytics is an old phenomenon, which is now powered faster and faster, by newer ways of learning with machine based computing tools and AI. This is the example for a hyper-connected business.
My third piece is making every business digital. When I was at Myntra, we used to source our garments from a lot of brands. These famous brand companies started in a physical world. Myntra was at the front end of their digital world, where they were selling to consumers through us.
As time went along, they also wanted to directly reach their consumers for which they had to shift to truly digital companies. They had to reimagine their supply chain. Earlier, fashion seasons used to come only about two times in a year. Now the number of times people refresh their wardrobe has significantly increased. So a physical business must move to a truly digital business. This applies to almost any industry.
I have seen digital transformations happening even in industries which we may consider to be very old-world—the cement industry, for instance. Large players in India today have changed their entire sales force working based on apps that they have on their phone, to be able to order multiple varieties of building materials including cement and integrate with players who offer the other pieces of the puzzle.
Solving the Size Puzzle
Artificial intelligence can enable us to move truly at a higher level which we have not yet experienced. One of the biggest problems in India is that people buy clothes and often send them back because they don’t fit them. ‘Large (L)’ in one brand may be ‘Medium (M)’ in another brand. When I was at Myntra, we tried to address this problem. If you have purchased a ‘Jack and Jones’ shirt and retained it, then it likely means that you are satisfied with the shirt that you purchased. Now, if Jack and Jones size 42 suits you, I can use my AI and suggest suitable sizes of other brands during the next purchase, if you look for other brands. Thus returns can be avoided and the customer becomes satisfied. The customer experience improves. This is the power of AI.
There was another company which was creating a fit by asking customers to take a picture of them and send it. They would analyse the full scale picture and using artificial intelligence, suggest a suitable outfit and brand. This is how AI can truly transform businesses.
The last thing that I want to discuss is end-to-end security. How can we feel confident that the security is based on access and rights that we granted and not something that is taken for granted? Our data must stay integral and should not be used somewhere else. In a hyper-connected, AI driven world, companies which do that will stay differentiated.
- In the last 18 months, we have seen credible change, not just for businesses but people as well. You and I today work and live very differently from how we lived 18 to 20 months back. Lots of things which were originally physical have been dramatically accelerated to get into a digital world because we didn’t have an option.
- In such a digital world, the ability to stay connected with secure systems using AI and ML to power companies to growth will be the differentiator between successful companies and lesser successful ones.
- Companies must adapt to a new world of hybrid working. They must make sure their business is hyper connected end to end—from raw materials all the way through to the customer and that the data flow makes the experience a positive one for the consumer. Make every business a digital business. Make customer as the centre of all this and ensure security of data.
In an AI powered world, how can we solve for trust and security?
The sophistication and frequency of cyber-attacks have gone up. They don’t discriminate between small and big companies. We need to do three things:
• Get the right infrastructure and build it on a secure platform.
• Build resilience within the organisation through culture, process, training and other checks and balances.
• Investment in security and solving for risk must be a top priority.
How can companies adapt to the WFA (work from anywhere) and hybrid workplace culture?
WFA is an outcome of connectivity. What is required is live, updated information. We need to first build the base for this. We need to have the right piece of equipment that allows you to have remote conversations. The next level will be connectivity to have a great experience. I don’t think human connections will go away. We will continue to live in a ‘phygital’ world. We cannot substitute the trust that is built in a human connection.
Can you give examples of companies that have truly leveraged AI for success? What are the learnings?
From my experience, I can talk about Myntra World. Myntra created an AI engine to predict fashion. One of the biggest problems in the fashion industry is that you will make something in March. By July or August, people may not like that style. Chances are that 20% may get sold and the rest 80% may have to be written off. Due to this a) business suffers; b) customer experience is also hit because they don’t get what they want; c) It pollutes the environment, as so much is written off as waste.
We predicted the trend taking the data from the shopping information available on social media platforms like—are people going to buy more of stripe or more of dots? We created an AI engine that gives real information back to the company on what kind of style they need to manufacture. That allows the company to manufacture just in time and reduce the total wastage. It is a win-win situation. I have seen logistics companies across the globe being able to use it at scale and predict where the biggest demand and supply is happening. This has helped them predict problems well ahead of time and solve them.