CIO & LEADER-Issue-01-April 2018 (1)

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Cover Story The Rise of the B2B start-ups B2B v/s B2C focus on start-ups B2B v/s B2C focus across verticals Source: Nasscom-Zinnov Start-up report 2017 2017 Total base: 5000-5200 2016 77% 2017 New start-up additions: 1000 B2c B2B 73% 40% 13% start-ups both B2B & B2C 14% start-ups both B2B & B2C 59% 47% 6% start-ups both B2B & B2C 37% B2B share from 34%in 2016 Verticals Aggregators/eCommerce Enterprise Product Health-Tech Fintech Food Tech B2c 92% 19% 1% 100% 87% 26% 70% 49% 98% 8% B2B In 2016, ONGC launched an INR 100 crore Start-up fund to foster, nurture and incubate new ideas related to oil and gas sector. The aim of the ONGC Start-up initiative is to provide the entire support chain for start-ups including seed capital, hand-holding, mentoring, market linkage and followups. It is also to increase the contribution of fresh implementable ideas in the oil and gas sector. ONGC had also set-up a dedicated portal to take this initiative forward. The company invited technology start-ups to submit their proposals for business cases (purely business related or with IT intervention) on the portal. “There were 70-80 business cases and they were left to select one or more based on their area of expertise,” said Alok Khanna, Executive Director – IS, ONGC. After a tedious selection process of evaluating the proposal comprising a three tier interview process where start-ups showcased their technical and financial viability, the company selected around 11-12 start-ups to work on specific business problems. “One major advantage of working with start-ups is that they work dedicatedly on your business case and if the project succeeds, then the company will sponsor the project for a full blown implementation. What enterprise lack in domain knowledge, start-ups have in abundance,” said Khanna. “Budgeting and funding a start-up is not an issue— once you have committed to working with the start-up, even if IT doesn't have the implementation budget, business does, and will fund the project,” he added. End result: even if 20% start-up projects are successful, it means that we have been able to cut down our business problems. “We won’t be able to share specifics of start-ups as all these projects are at different stages of implementation,” said Khanna. #When an enterprise and a start-up can work together to improve the speed of execution of IT Organization: RJ Corp Start-ups: Undisclosed Outcome: Improve productivity and efficiency The Gurgaon-based drinks and foods group RJ Corp is a USD1.1 billion conglomerate. Its flagship brand, Varun Beverages is Pepsico’s second-biggest bottler and its fast-food outfit Devyani International has 500 retail outlets for Even if 20% start-up projects are successful, it means that we were able to cut down our business problems significantly. Alok Khanna, Executive Director – IS, Oil and Gas Corporation (ONGC) 16 CIO&LEADER | April 2018
Cover Story brands such as KFC, Pizza Hut, Costa Coffee and TWG Tea. With multiple brands at disposal, there is no dearth of opportunity for the company to improve the productivity and efficiency of its vast-spread businesses. There is also a huge scope of innovation at the heart of RJ Corp and the company believes in quick decision- making when it comes to IT. According to its Group CIO, Kamal Karnatak, it has been collaborating with start-ups in the areas of data analytics, video analytics, machine learning and artificial intelligence, for the last three years. “It doesn’t matter if there was an IT project or not or if we had the budget for it but if you can create a business case, you can implement the idea.” Karnatak , who is a pursuing a research doctorate from IIT, Delhi, has a long history of association with start-ups, and mentors them from time to time. “An advanced start-up is always looking for a means to enter the enterprise market. They are ready to experiment, learn and understand your business, as well as gain exposure of their own solution,” said Karnatak. When it comes to working with start-ups, the conglomerate’s only motive is solving business problems quickly - within a short span of six months to one year. “Unlike traditional partners who spend a lot of planning and excuting a project, a start-up takes less than half of that time. Some start-ups are only interested in increasing their own evaluation. You can gauge the motive of such organizations,” said Karnatak. Take for instance, the conglomerate was using an old analytics platform to generate reports. However, their Area Sales Manager (ASM) didn’t have access to the platform due to huge licensing costs. To solve this problem, they worked with a data analytics start-up who provided a platform that not only granted access levels to ASMs but enabled an analytics interface to generate these reports. Similarly, the company also worked with a machine learning/ AI start-up to help them predict the sale of next 14 days with an 85-90% o accuracy rate. With the Nike brand, the company is trying to measure the sales per store using the same start-up. This is evident of the fact that the same start-up was able to find multiple use cases within the same organization. In their work with a video analytics start-up, the primary purpose was to track footfalls in a single store. However, Karnatak asked the start-up to help them gather more data on their customers – the time they spend in the store, the ratio of male to females who We regularly reach out to new and innovative startups via referrals, technology forums, incubators and innovation summits. Nitin Chugh head-digital banking, HDFC Bank Start-ups should not compromise on their business ethos and cultures went for trials, etc – and integrate it with the sales system. “We are internal sellers for startups, and we need to make sure that we are able to mould the start-ups and help them create a typical business case that will generate business value,” said Karnatak. In short, “If I can show the value of 5 crore, I can get a budget allocation of 1 crore,” he added. #When an enterprise and a start-up can work together and grow together Organization: HDFC Bank Start-up(s): Niki.ai Outcome: Create new channel for doing business and improve customer experience HDFC Bank launched a new Facebook Messenger chatbot, OnChat. It was created in partnership with Niki.ai, a 2015 AI start-up. The chatbot can help customers pay utility services like bill payments and mobile recharges, make cab, bus and movie bookings. So far, the largest private sector bank has observed 160% month-on-month growth in transactions since its launch in December 2016, and has over 2.4 million messages. The number of repeat users, which is close to 34%, further bolsters the confidence in conversational banking. The Messenger chatbot also opened up yet another channel for customer acquisition, with nearly 25% of OnChat users being non-HDFC Bank customers. April 2018 | CIO&LEADER 17
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