Corporate

There’s a new cloud platform coming soon that will open a world of data insights for agri-industry players, including animal feed producers, food processors, farmers cooperatives, and commodity traders. Built on Microsoft’s Azure Cloud, the solution fuses agriculture datasets sourced from many providers and uses them to build artificial intelligence (AI) or machine learning (ML) models, offering more accurate insights into current and future production down to the farm level. Used intelligently, the promised data modeling can be integrated into planning and production systems, offering greater visibility on the supply and quality of agricultural commodities. The new agri-cloud promises enormous opportunity for the whole agri-food ecosystem, where there are close links between growers and farmers, manufacturers and distributors. These interconnected players are finely tuned to changes in farm management and grower services, commodities markets, and supply chain complexities.

Supporting a platform approach

As any one of these segments adapts to take advantage of as-yet unknown opportunities, there will be a blurring of external and internal services. The ability to scale quickly through shared data platforms will be critical to future success in the sector. The agri-cloud will form a key plank for the Agri ecosystem, providing intelligence and predictive analytics for industry players connected to commodity production, transformation, and distribution.

Agri manufacturers will be able to adapt more quickly to changing growing environment and consumer demands, leading to improvements in product quality and reduced food waste and carbon emissions. Trade in commodities will become more transparent, with improved visibility of overall commodity and currency exposure.

About those connected cows and smart equipment

As for the connected cows and smart equipment? These are being used to collect data from farms, which don’t have access to power in the paddocks and face patchy internet. By attaching sensors to livestock and tapping the data already collected by major equipment suppliers, the Agri cloud can gather and store huge amounts of information. Other sources, such as drones and satellites, help flesh out a more detailed picture of farm conditions including pest and disease infestation, drainage and irrigation, and weed growth patterns. The data gathered supports AI models to predict future growing conditions, providing predictive insights into future yield quantities and quality.

The future is now

Connectivity coverage is increasing almost everywhere. By 2030, advanced connectivity infrastructure of some type is expected to cover roughly 80 percent of the world’s rural areas (McKinsey), enabling new capabilities in agriculture. Low-power networks and cheaper sensors will see IoT scale up, enabling precision irrigation of field crops, monitoring of large herds of livestock, and tracking of the use and performance of remote buildings and large fleets of machinery.

What next

The agri-cloud is the culmination of years of research work and contributions from more than a dozen agriculture majors from around the world. It’s in public preview now and we’re excited about the opportunities it will offer to agri-businesses when it launches. Connect with one of our agri-industry experts to learn more: Email: info@sonata-software.com

The experiences of successful digital businesses such as Amazon, Airbnb, WeChat, Didi, Uber, Spotify or Expedia have implications for both consumer markets and the digital transformation of businesses across a wide spectrum of industries. These platform-based business models have four characteristics in common: they are open, scalable, connected and intelligent. Their success is largely due to their focus on a two-sided platform and the creation of a holistic business that skews a siloed approach.

Traditional businesses, because of the legacy they have in terms of business models and technologies, have struggled with their digital transformation when compared with born-digital companies. Is it possible to learn from platform-based companies?

Spanish firm Inditex, for example, opened its first Zara store in 1975. In the following four decades, this vertically integrated apparel manufacturer and marketer expanded throughout the world into more than 120 countries with 10,000 physical stores. Any company undergoing such dramatic brick- and-mortar expansion might be at risk of failing to adapt quickly enough to the digital revolution. In the apparel and footwear retail sector, about 9% of the dollar value of sales take place over the internet, with this growing at 24% a year traditional channels are growing at less than 4%.

Inditex decided a decade ago to transform its entire value chain, not just the retail end of it. It invested heavily in an integrated platform covering relationships with suppliers, factory management, distribution logistics and sales. The benefits have been diverse: more efficient inventory management and logistics, faster customer feedback and overall optimization of assets. As an integrated platform, Inditex capitalizes on omnichannel sales, including physical stores, department store corners, catalogue sales, telephone sales, online stores, mobile apps and a social media presence. By 2019 about 14% of all sales were digital in the markets in which it had already rolled out this strategy.

Click to read the full article: https://www.weforum.org/agenda/2019/12/benefits-of-platform-business-model

This blog was originally published in the World Economic Forum.​

Tourism in India accounts for 6.8 percent of the GDP and is the third-largest foreign exchange earner for the country. The sector over the years have relied on technology to significantly improve time-to-market while lowering operational costs and improving customer services. In an exclusive interaction with CXO today,

Bernaad R Chetty, Assistant Vice President, Sonata Software
technology trends and opportunities in the travel domain

The Bangalore-headquartered company delivers application frameworks and solutions to some of the biggest airlines, tour operators, OTAs, corporate travel groups, hospitality and logistics organizations. Toward this end, Chetty also explains the role of a CIO in the travel and tourism sector.

What are the latest tech trends in the travel industry? How is it different from say 5 years ago?

Consumerization of IT has continued to have a significant effect on the travel industry. While Travel has been ahead of the curve in the e-commerce shift even earlier, the increasing penetration of mobile and internet has further accelerated change. The challenge now is in ensuring a seamless experience across multiple channels and stages of a travel experience with technologies such as omni channel commerce and mobile enabled content & tasks. In-depth analytics based on big data tools helps precisely target the customer giving him the right information at the right time. Personalization and convenience are the objectives. Geo and location based technology, wearables and near field communications are leading to a new level of targeted on-time and on-spot services. Increased customer satisfaction which would ultimately lead to customer loyalty needs creative use of these technologies to deliver a better travel experience.

Where do you see CIOs face the maximum challenges?
CIOs and their ‘X’ level counterparts essentially face challenges on two fronts. The immediate primary challenge, of course is to have a strategic and creative understanding of how new technologies like mobility, analytics and social can be applied to redefine customer experience, value and in some cases even business models.

The rapid pace of technology change and specialized solutions further means that making the right technology choices is an important aspect. Incumbent leaders further face an added challenge of integrating these solutions appropriately to existing legacy systems. A proper plan for which application need to be upgraded or replaced can impact both the final effectiveness and cost of IT systems to support the way ahead. We see significant scope for CIOs to take the lead in making a stronger contribution to technology on these counts.

How can companies such as Sonata help them address these challenges?
Travel IT providers like Sonata with a long track record of experience in this industry can make a difference to CIOs wanting to innovate and stay ahead. With our experience supporting some of the world’s largest travel companies across multiple segments like Online Travel, Tour Operators, Airlines and Corporate Travel, we have a view of multiple technology applications, business processes and channels. From front end omni channel & mobile commerce solutions to GDS in mid office, on to support in running these systems, we can give seamless support for innovation and operations.

We also have a substantial portfolio of IP based solutions that can add a competitive advantage to customers. A case is Rezopia, the first cloud based SaaS ERP system for travel. This award winning platform provides complete end-to-end travel reservations, back office, packaging and distribution system integrated all-in-one. With its technology innovations, Rezopia allows travel companies to gain flexibility, faster time to market and lower TCO in meeting customer needs.

What are the top three ways predictive analytics can help travel companies address customers better?

Travel being a very customer centric industry, predictive analytics is an important and widely used tool in the industry. Predictive analytics helps travel companies in offering the right products and packages for the customer and in demand forecasting to plan in advance their inventory of flight tickets, hotel reservations, etc. Predictive analytics also helps in the right product pricing by measuring and modelling yield. This not only helps in maximizing revenues but also helps in optimizing inventory utilization.

How is e-commerce changing the travel sector?
The pervasiveness of ecommerce thru mobile and geo based services has seen aspects of travel such as niche local attractions and last mile travel services such as taxis being more effectively integrated into travel offering these days. Social media and online service offering comparisons, which are now increasingly available even on mobile, has impacted buyer search and decision making process significantly – giving customers more competitive choices. Emerging payment systems are making travel impulse purchases more convenient. However, the interesting thing is that the continued shift to digitally- driven commerce has changed the focus technology as a transaction enabler to a travel experience enabler!

What are Sonata’s plans for this sector for the next 2-3 years?
We want to continue to be a leading-edge provider of IT solutions for this industry. And like our customers, we are doing so by focusing more closely on their end consumers and how technology can give them a wow in their travel experience. We are developing a range of front end solutions integrating multiple technologies like wearables, omni-channel commerce, analytics and mobility that come together in particular customer use scenarios across the buying and service consumption cycle to define the ideal customer experience. We are looking to be ahead of the curve in helping our customers define and achieve the future of travel.

Strengthening our core IT services to develop and sustain the larger IT systems that anchor business is another aspect where we want to be relevant. We believe customers can rely on us taking this load so that they are better placed to tackle the challenges of innovation with a clear mind. A stronger focus on IP led services such as Rezopia and our hybris Travel Plus solution is another key aspect of our strategy.

What are your tips for CIOs venturing into the travel and tourism sector?
Travel continues to be an extremely exciting and dynamic business where technology continues to play a very vital role. CIOs need to wear the business hat and play a more impactful and important role in the change and lead their company to face the challenges - by making information technology a core part of the business strategy. Another important area where the CIO needs to play an important part is in the development of a comprehensive technology roadmap that provides systems across the traveller’s lifecycle giving them a seamless and personalized experience by leveraging new technologies such as mobile, cloud and analytics more comprehensively. They need to be able to think ‘customer’ more strongly.

With the growing number of smartphone users, the Online Travel Agencies (OTAs) are seeing massive growth in their business. The ‘always-with-the-traveller’ mobile devices are becoming the tool for the OTAs to provide personalized and superior travel experience to their customers, reports Abhishek Raval.

The new telecom subscription data from TRAI shows that till June 30, 2015, there were 980.81 million mobile subscriptions in the country. The TRAI report also shows that out of 108.85 million broadband subscribers in the country, 92.70 are using their mobile devices to access the Internet. With the majority of the subscribers preferring mobile devices to access the Internet, it is clear that the mobile is the future of the online travel industry.

Many of the OTAs are focusing only on the mobile space—they may even move completely out of the desktop zone. Sandeep Menon, Director – Marketing, Google India, says, “What we are seeing in India today is that a large number of purchase related decisions are being taken on the mobile. This trend is bound to have a significant impact on the tourism sector. Our data shows that more than fifty percent of all vacations are being planned on the mobile. We are working with the Online Travel Agents (OTAs) on how to make the mobile search experience as smooth as that on the desktop.”

The TripAdvisor Travel Trends Forecast 2015 reveals that the shift towards mobile channel is a global phenomenon—this shift represents a tremendous opportunity for entities in the travel business to improve the quality of travel experience that is being offered to the customer. Recently, the popular Indian travel portal Yatra conducted a survey, which shows that 21% of Indians are using mobile apps to make travel bookings. Cleartrip’s mobile insight for Q4’14 notes that over 53% of the site’s total traffic is sourced from the mobile channel. According to MakeMyTrip, 53% of the total hotel bookings in June this year were conducted through the mobile.

Mobility to improve CEM
In a world where the mobile is the permanent companion of the travellers, the OTAs must leverage the mobile technology and make efforts to use mobility for providing extra value to the customers. It is only by doing this that they can improve their score over other OTAs in the area of Customer Experience Management (CEM).

“Mobile will continue to remain an important point of connection between the OTAs and the user. Earlier there was no permanent bridge between them. Today the mobile is making that possible. It follows the traveller,” says Himanshu Verma, CTO, Yatra.com.

“Mobile enables the OTAs to personalize the service to the customer. There are two more technologies to enable personalization—Big Data and Machine Learning. The more data we churn, the more we will be able to make sense out of it. This will result in many more innovations, which in turn will lead to more personalized services.” He emphasizes that there is a need to understand the data via machine learning and improve the services that are being provided to the customers. Big Data and Machine Learning will ramp up personalization to a new level. “Today it is possible for the customer to use a website or mobile app to avail services, which are customized to the same level as the services that are provided by a travel agent,” he asserts.

Travel Planning on the Mobile
As solutions become more and more mobile-friendly, it is convenient for the traveller to use the mobile device for managing every aspect of the journey.

A range of mobile apps are available to provide relevant information to the traveller. “The use of mobile and geo-location based services for planning the travel as well as the local experiences makes it easy for the traveller to aspire for and probably get several unique experiences and aspects inserted in his tour-plan,” says Bernaad Chetty, Assistant Vice President, Sonata Software.

MakeMyTrip provides services on online as well as the mobile platforms.“We use a variety of engagement models to enhance our customers’ on-trip experience. We send out relevant notifications on our mobile apps and these cover the common use-cases of pre-trip and post-trip updates. For an “in-destination” experience, we recently acquired a startup in Bangalore called MyGola. They offer a great experience for users who are in a particular destination and want to derive the maximum value and maximum fun from those destinations, covering a swath of local attractions and local events,” says Sanjay Mohan, CTO, MakeMyTrip.

Cleartrip has launched the feature called ‘Activities’ in its mobile OS platform. “The feature allows travellers to book an option from a slew of activities that travellers can engage in over the weekend. Even while travelling, irrespective of the modalities of the travel booking, the traveller can book these activities at the destination. Cleartrip has partnered with the activity and event organisers,” says Ramesh Krishnamoorthy, Sr. Vice President, Technology, Cleartrip. The OTA provider claims to be the first in the travel space to have its app run on the Apple’s smartwatch.

Flash Sales in Travel

As in case of any other business, the travel sector has its own seasons. There are specific destination related seasons—there are the best times of the year for visiting any particular destination. To take care of the extra demand during flash sales periods, the OTAs have to be extra prepared. In India, travel flash sale is quite popular in the airlines industry. Different airlines give a hefty discount to consumers for certain destinations, during certain seasons. This leads to a rise in the passenger traffic.

“The travel industry is a layered industry. To manage flash sales, we have re-architected our IT system so that sudden spikes can be managed smoothly, without impacting the airlines’ Global Distribution System (GDS),” says Himanshu Verma of yatra.com. He is of the view that it is important for the OTAs to also think about the GDS system. This was not the case before the flash sales phenomenon took off.

“Flash sale offers are short-duration focused-selling techniques—they invariably lead to very high traffic on the website or mobile site for short periods of time. It is vital to have well-tested, robust and certified e-Commerce platform to succeed at flash sales. We also need a strong Product Information Management (PIM), proven integrations to vendor inventories and a fast secured payment gateway,” says Chetty. Adequate provisioning and management of infrastructure is also a key need.

From an infrastructure perspective, MakeMyTrip is provisioning surplus capacity to handle these spikes. The software systems have been architected in such a way that the front-end load gets distributed amongst the backend servers. “We employ a judicious mix of hardware and software technologies to allow us to handle such spikes in traffic,” says Sanjay Mohan of MakeMyTrip.

Acquisitions and Wearables

The OTAs are also building their technology muscle inorganically, by acquiring start-ups, which solve specific problems in the travel industry. These start-ups can also serve as boosters for the OTAs to scale up and provide personalised trip experience. “The travel and leisure segment is abuzz with ideas. Several startups are getting funded,” says Sanjay Mohan of MakeMyTrip. The company has acquired a host of startups like MyGola and invested in Inspirock and Simplotel.

Yatra.com and Cleartrip.com are also looking for opportunities to build capacity by either acquiring or partnering with the startup community. Sonata has invested in startups like Rezopia and Halosys.

While mobile devices are becoming the default platform for travel related activities, the ‘wearable’ segment is also developing at a fast pace. “Wearable devices are predominantly being used in the healthcare sector to track various health parameters. I see a fair potential for wearables to be used in the travel segment; a good amount of information can be pushed to these wearables and to the customer. The information can also be pulled back from these devices. This information exchange can be useful in the management of various security related concerns,” says Himanshu Verma of Yatra.com.

“We are now trying to ensure our presence in a very wide range of wearable devices. This is because we strive to stay always connected with our customers,” says Sanjay Mohan of MakeMyTrip.

The topic of Digital business transformation seems to polarize business and service providers alike! At Sonata we see digital as spanning many different contexts to business. While Digital initiatives can be planned across the spectrum of impact of business – we offer here a simple check list of 5 mantras that we feel you can apply to see if your initiatives are pointing you in the direction of a Digital Ready business.

Indian IT services industry grew 8.7 per cent in the financial year 2016/17, the slowest in more than a decade. However, Sonata Software, based in Bengaluru reported a top-line growth of 29 per cent. It was not a mere case of the revenue base being smaller although that played a role.

Sonata Software has been in the business for more than three decades. It was set up in 1986 and got listed in 1998. The company used to resell software in the domestic market and provided related services to its customers. But an early-mover advantage had not resulted in scale, size or significant success. Quick leadership changes at the top in 2011/12, when two chief executives departed within a year, meant most of the analysts had stopped tracking the company.

Sonata's margins shrank, and it was making losses when a new Chief Executive and Managing Director took charge. P. Srikar Reddy, a company insider, was anointed as the next leader but by the time he had stepped in, not many thought that the company would survive. The turnaround happened, nevertheless, and if one had the foresight to pick up the stock in 2013, he/she would have been holding a multibagger now. Sonata's returns are a jaw-dropping 680 per cent (excluding dividends) compared to 40 per cent delivered by the broader BSE IT index in the same period.

Script for Success
When Reddy came in, the biggest challenge he faced was low employee morale. The talent was fleeing the company, and there was no sales and marketing team for the global market. Much like other IT service providers, Sonata had a small international presence, but it was overly dependent on the domestic market that accounted for more than 90 per cent of its revenue. Understandably, the margins were low.

Reddy decided to focus on the lucrative but intensely competitive international market. "What helped was that even in the domestic market we had extremely good relations with global majors such as Microsoft, Oracle and SAP," he recalls. Leveraging those ties to get a foot in the door, Reddy pushed things further. As a result, nearly a third of the company's revenue comes from the global market. Sonata provides a bouquet of services, including application development and maintenance, software testing, enterprise resource planning (ERP), infrastructure management, supply chain management (SCM), cloud migration, and business intelligence, e-commerce and mobility-related solutions.

These efforts had a healthy impact on the bottom line. In the April-June quarter, Sonata's international business accounted for 32 percent of its total revenue and 80 percent of net profit.

A look at the numbers tells the story even better. When Reddy took over in 2012/13, Sonata posted a consolidated revenue of `1317.29 crores and a net loss of `28.10 crores. In 2016/17, the company booked a net profit of `153.72 crores and a revenue of `2,561.46 crores. The change in the business mix has not only seen the revenue double over the past four years, but its profitability has soared as well.

Focus on Platformation
Early on, Reddy decided to focus on picking and choosing the battles he fought. Travel, retail and distribution (logistics) and independent software vendors (ISV) - where Sonata could roll out ERP, SCM, cloud and digital solutions of its global partners - were the verticals of his choice.

To augment capabilities, Sonata has selectively acquired a few small start-ups, mainly for their technical prowess. These include Rezopia, a travel management platform; Halosys, a unified enterprise mobility solutions platform, and IBIS, a supply chain software provider. "Each cost us less than a million-dollar, but they did add to our technical capabilities, and we have been able to build upon those to cross-sell and up-sell to our customers."

Reddy is now helping new businesses with digital transformation so that they would succeed quickly. Sonata calls it 'platformation' whose four key pillars are open standards, data-driven intelligence, scalability and a partner-based ecosystem.

Those opting for its platformation can choose from ready, accelerate or custom package. Customers could use Sonata's intellectual properties or IP (under the 'ready' bunch of service) or those of its partners (under 'accelerate'). Those looking for 'custom' will have the solutions tailor-made for them.

Sonata has already deployed some solutions using platformation, and Reddy believes that the strategy will ensure even greater margins going forward. He points out that the company already earns about 20 per cent of its revenue from its IP solutions, and the number is higher than most of its larger peers.

Here is one case in point that shows how Sonata plans to increase its revenue per customer, based on comprehensive, value-added services. When a leading ANZ (Australia and New Zealand) rail operator asked the Indian firm to upgrade its reservation system, it came up with a customized travel SaaS (Software as a Service) offering, based on its IP. Now Sonata manages all its services, schedules, inventory, fares and rules as well as its multichannel booking engine - be it the Internet, call centres, station booths or agents. It even offers a dynamic shopping cart with ancillaries like hotels, transfers and other activities while ensuring financial data integration at the backend.

The Way Forward
Sustaining the current pace of growth may not be easy without being future-ready. Sonata is investing heavily in its 3,575 employees to ensure that they have the necessary skills as cutting-edge technology changes are taking place across the IT services landscape. Around 10 percent of its people have been trained in design thinking, and more such training is being planned. Such employee-friendly measures have also brought down attrition from 23 percent to 14 percent over the past 12 months.

With the return on capital employed and the return on net worth in high 20's, shareholders, too, have reasons to be happy.

However, IT services is a scale game. Is Sonata still an attractive player as consolidation seems to be taking over across the globe?

"I always believe that focused players, especially those who can add value, will be around even if they are niche ones. I am more focused on our strategy of growing our international business and our IP-led offerings, even as we consolidate the domestic market operations," says Reddy.

Some analysts are also gung-ho about Sonata's prospects. HDFC Securities, in a recent report, said "We like Sonata's scalable, IP-focused business model, quality balance sheet, high RoE (return on equity) and high dividend yield and reasonable valuations."

Reddy seems quietly confident about Sonata's prospects. "I am more focused on about making us a world-class player, who adds value to customers and attracts good talent." Given the turnaround story he has already scripted, not many would dismiss his vision.

Originally posted on Business Today

The new digital transformation offering 'Platformation' aims to help businesses move towards platform based business models backed by technology says Sonata Software CEO & MD Srikar Reddy

Sonata Software is all set to formally launch its new digital business transformation offering 'Platformation' in the next few months. This offering is designed and built with the primary focus on enabling businesses and organizations to adopt technology backed new business models and drive digital transformation.

"Platformation' is trying to address the key four dimensions that makes any platform based business successful, which includes massive scalability, create partner based ecosystem, open standards and data driven intelligence," Sonata Software's CEO & MD Srikar Reddy told ETCIO.com during an interaction.

"These are the four criteria that would allow companies to determine where their businesses are standing in terms of creating a truly platform based business," added Reddy.

While these four criteria are critical for the business, he informed that his company has come up with a technology solution that would match those business criteria's technology aspects.

The 'Platformation' offering

Sonata's 'Platformation' offering is a digital IP based technology led proprietary framework that takes into account some 16 key parameters that would enable businesses and enterprises to create technology platform based new digital business models. It's a cloud based offering agonistic of cloud service providers.

'Platformation' has three variants – first is Sonata-Ready, which is the company's own IP based end-to-end solution with fast implementations and proven processes for businesses and customers.

Second is Sonata Accelerate, where company deploys and manages the platforms from technology partners like Microsoft and SAP for customers and businesses that already have initiated some level of business transformation initiatives.

And third is Sonata Custom - a completely custom-built solution based on either company's own platforms, which customers can white label it or source code the license and build on top to it.

Compared to the first and second option, which are based on a linear model of licensing, Reddy explained that the third one is where the customer will able to know the cost on licensing, running the platform and also can use it as per own requirements.

Backstory of 'Platformation' journey

Interestingly, the company's 'Platformation' journey had found its footings some 2-3 years ago when it had acquired some IPs which were digital in nature.

This included California based Halosys – an enterprise mobility management platform, Atlanta based IBIS (Interactive Business Information Systems Inc.) – a supply chain platform running on Dynamics AX solution and US based Rezopia – a cloud based travel industry software platform.

In the meantime, the company also built its own retailer platform 'Brick & Click'-- which is an omni-channel commerce platform for retailers to go online using Microsoft Dynamics. Besides, it has also created a horizontal platform that enables the deployment and management of other platforms.

During the same period, Sonata participated at the World Economic Forum, which had the theme of 'Fourth Industrial Revolution' based on the book by Professor Klaus Schwab.

"Over there they mainly discussed about the future of industry including the physical and digital sides led by the innovations of 3D printing, new material science, automation, robotics, etc. They coined the term 'platform based business models' for successful businesses globally which have adopted platform based business models," Reddy shared about the past incident. The influence of that industry forum and particularly the concept of 'platform based business models' was so high that it actually provided Sonata's top management the ground to ideate and research around some of the successful new-age digital companies like Amazon, Netflix, Airbnb, Uber and eventually come up with its next offering named as 'Platformation.'"We coined the term 'Platformation' which basically is digital transformation achieved through implementing platform based business models using technology framework that can help to create platforms," Reddy defined what the term 'Platformation' means.

Markets and customers

Company though hasn't formally announced and launched its new 'Platformation' offering in the Indian market, but already it has some overseas customers.

For instance, one of Australia's major railway networks has deployed the cloud based Sonata-Ready solution for complete running of its rail reservation system for passengers leveraging Sonata's travel platform.

Similarly, a global travel company has been using Sonata Custom solution with source code licensing to build a business model that suits the company's requirements by leveraging the travel platform.

From the market perspective, Reddy informed that the new offering is mainly for international markets with the key focus on four verticals including travel, retail, distribution and hi-tech or ISVs (independent software vendors). Company's services business largely comes from overseas market.

"Even our Indian business which is mainly the reselling of (software) products, we are trying to repackage that business as a platformation partner for our clients creating digital infrastructure and managing it with tools rather than just selling some products," Reddy commented.

Repositioning of business

Perhaps, Sonata's expanding focus on 'Platformation' may appear more like it is drifting from its old core revenue generating software selling business.

Although Reddy disagreed to that change, which is slowly evolving in company's business strategy but interestingly he called it "repositioning of business". "No, we are not moving away from selling of the software. But we are saying that value add while selling software is lot more rather than just seller of the software. A seller of the software that helps you with your platformation journey and will help you to manage it," Reddy emphasized.

"So we are repositioning, like our services business as a platform for our partners, we are repositioning our license sell that would help companies to become platform company using these things and applying the same logic," he said further.

With a strong IP led portfolio, The company is banking more on what it calls the IP-led services growth across those four three sectors backed with its strong domain knowledge and technology expertise.

"Ideally, 'Platformation' is a concept and it is not an offering, but finally the offering is either IP or services. So the message we are telling to people is that if they want a successful digital strategy than they need to adopt and embrace platform based concepts and we will help them," Reddy noted.

Going ahead over the next 3-5 years, Sonata wants to establish itself as a strategic platformation partner for its customers. Initially by working with some of its existing clients that have same vision around platform based business models and also tap new customers.

Digital transformation – a long journey

Despite so much buzz around the digital business in recent times, Reddy concluded in more cautious and realistic terms that it's a long 12-15 years journey and not a short overnight trip for businesses and enterprises to become digital platform companies."Basically digital transformation is a CEO issue and not CIO, CFO or CMO thing because it's the CEO's idea of what business he or she is running and how can technology help transform it. So we need more tech savvy CEOs to drive this kind of initiative because it's a fundamental change that has to come from the top," Reddy said. Originally published on ETCIO.com

The impact of technology on business is there for all to see — ‘born digital’ companies such as Amazon, Airbnb, Uber and Alibaba have built multi-billion dollar business at a never-before-seen speed in the corporate world. In achieving this, they fundamentally disrupted many traditional industries and posed a serious challenge to some of the long-established companies in their field. The success of these companies makes it clear that there is a qualitative difference in the way leaders need to think about this new inflection point in how business and technology are shaping up. The secret to the success of the best and biggest ‘born digital’ players is their ability to think and execute on platform-based digital businesses backed by building technology platforms that are unique.

Hence, the important questions one need to ask are:

Are there lessons or takeaways from the ‘born digital’ companies?

Yes, a platform-based business model. At a simple level, platforms can be seen as bringing together three layers to create economic value — a network of value seekers and providers, systems that enable value exchange between them and underlying data that powers matching of value across participants. Firms now need to look at non-linear business models as opposed to a linear demand and supply in a traditional ‘pipe’ structure. Firms have to see how vendors, partners, influencers and customers can all be brought together for more value-added fulfillment.

Is there something in common?

Yes, it can be more appropriately interpreted as a connected ecosystem of customers, business, vendors and partners, intelligent decisions driven based on data generated by the ecosystem and open, flexible scalable systems that enable innovation and execution. Platforms leverage data generated from the ecosystem to drive intelligence that enhances value.

Is there a framework or concept that can help me achieve successful digital implementations?

Digital transformation of businesses can be achieved through a platform-based approach that is focused on the nuances of the vertical or industry of operation. However, the ‘born digital’ players have been disrupting business not only with their platform business models — but also with their underlying platform approach to IT too. The technology environment, application build approach, and the IT operations model work together as one system and to a very different rhythm. This is encapsulated in the concept of ‘Platformation’ which covers the four key dimensions of open, scalable, connected and intelligent. These four dimensions are encapsulated in 16 technology attributes.

What could a road map look like?

Business leaders need to quickly move to transform their business to be ready for the age of platforms — both in terms of business and technology. An immediate priority would be to strategize and implement elements of ecosystem thinking, data-based value enhancement and innovation agility of key systems, as parts of their existing core businesses.

As a part of the initiation of ‘Platformation’, one would have to examine the opportunity that can be capitalized and then embark on a business as well as technology readiness assessment.

The business maturity assessment would encompass three key dimensions — leadership and talent, vision and business model and execution approach. Similarly, the platform maturity assessment is also made on three dimensions — digital capability, data and architecture. The existing system’s capability to manage an ecosystem of stakeholders, the ability to leverage data for decision making and the inherent level of flexibility in the application architecture and infrastructure are assessed at this stage. The technology maturity assessment against where one is on the 16 point framework.

The combination of the above assessment would help map the position of the organization in one of the following four categories — beginners, technovators, challengers and visionaries, capturing the existing state of the organization. The gap analysis of individual elements of the maturity assessment framework then helps a business plan their path to the next ideal stage goals for digital and platform readiness.

What are the options for execution of a platform-enabled digital program?

Technology providers are moving swiftly to enable the kind of seamless software infrastructure, development and operations environment across a range of solution areas such as commerce, analytics, mobility and IoT on the cloud so that traditional enterprises can upgrade to platform paradigms for their IT systems. Other than the early innovators in this space such as Salesforce, mainstream enterprise software solution providers such as SAP, Microsoft and Oracle have invested significantly and offer viable platforms on which to build new systems. We at Sonata have worked to prepare ourselves to provide solutions using these platforms.

Organizations, once they map themselves against the maturity framework on business, platform and technology should then chart their path on all three dimensions.

What’s critical is to get the technology framework right so that a long-term flexible platform-based business model is constructed. There are many ways to implement a platform technology framework depending on where the business is and what the short-medium and long-term business goals are. The defining factors could be competition, how quickly the business is getting disrupted, how quickly one needs to act and how differentiated one wants the approach to be. Based on that, the solution approach reflects three key different ways of executing effective digital platform programs.

Industry-ready:
An end-to-end business platformation approach through industry-specific cloud platforms that are being set up by innovators, such as Sonata in this space.

Accelerate:
Popular horizontal platforms on leading ISV stacks that a business is already invested into, can be deployed if time, cost, and risks need to be moderated in going platform, especially with specific business process areas.

Custom:
A very unique set of business features and the willingness to invest time and money in setting up a differentiated platform may mandate an approach where a significant part of the platform is custom-built.

Our early customer experiences validate the power of these approaches, depending on the existing systems, maturity and business transformation objectives of a customer.

Summary
It is time for proactive business leaders, all significant new innovation initiatives be seen through a lens of platform-based business and technology models. Any effort launched as standalone, isolated or point interventions will have a limited shelf-life and potentially give a false sense of comfort in being prepared for the emerging digital economy. Since this is easier said than done, the key to successful digital transformation is to have a concept like ‘Platformation’ — in order to provide the road map that is required to get there. Successful digital business can only be built on a robust framework like ‘Platformation’ that appropriately combines the business and technology foundations needed to make a fundamental impact.

In less than two days, a galaxy of experts from varied fields ranging from Computer Science to Economics will gather at the Indian Institute of Science, Bangalore, India to discuss the one phenomenon that has been a true game-changer of our times – the Internet.

The 13th edition of the Conference on Web and Internet Economics (WINE), scheduled to be held from December 17-20, 2017 in Bangalore, promises to be an excellent interdisciplinary forum to exchange thoughts and ideas and gain insights on the impact of Internet economics.

It is especially exciting, given that this event is being held in India for the first time. Previous editions have been held at locations such as San Diego, Boston, Shanghai, Amsterdam and Montreal to name a few.

The line-up of speakers is quite impressive and we’re especially looking forward to sessions around topics such as “Scale Effects in Web Search,” “Dynamic Pricing in Competitive Markets,” “Sequential Deliberation for Social Choice,” and “The Strategy of Experts for Repeated Predictions” that promise to play a pivotal role in determining the future course of business.

For Sonata, the extraordinary growth of the Internet has been an important factor in shaping our company’s focus. Our ‘Platformation’ approach is centered around enabling businesses and organizations to adopt technology backed new business models and driving digital transformation; of course, powered by the Internet.

That’s one reason we’re thrilled to be associated with this event as a Gold Sponsor, along with Microsoft, Facebook and Accenture.

If you plan to be at the event, we would love to catch up, exchange notes and gain insights on your perspective on Internet economics and its impact on the world of technology and business.

Do write to us at info@sonata-software.com to schedule a quick catch-up.

What is common to the most successful companies in today’s digital era? Whether it is Apple, Facebook, Amazon or Alibaba, they all use a platform strategy to power their business model. Infact, a Harvard Business Review study done earlier in 2017, showed that digital transformation is paying off for those firms that embrace it.

Digitally transformed organizations (“digital leaders”) performed much better than organizations that lagged behind (“digital laggards”) on not just financial indicators like gross margins, earnings, and net income, but also on operational indicators.

One very interesting revelation from the study is that this digital divide between leaders and laggards is not simply a function of spending money. The best-performing companies surveyed had technology budgets on par with digital laggards – average IT spend as a percentage of revenue was 3.5% for leaders and 3.2% for laggards!

The conclusion then is that, it’s not just about your IT spend, but rather about how you do it – your digital strategy – that matters. So, what’s the secret sauce for a digital strategy that delivers?

A Holistic Platform-based Approach

The need today is for organisations to move away from a ‘piecemeal, quick-fix technology solutions’ approach towards a holistic platform-based approach that has a bearing over all aspects of the business, if they want to overcome this digital divide. The broad deployment of digital technology requires rethinking both business and operating models.

Taking a ‘platform’ approach to IT often proves to be a good fit because platforms give businesses the power to be:

• Open: Easily accessible for users, ecosystem partners, and businesses to participate in
• Connected: So that they are always-on, always connected
• Intelligent: To use the data generated in the platform to enable more efficient and meaningful transactions
• Scalable: It gives the business the power to scale the platform by number of users, segments, and geography, easily

Driving digital transformation requires organizations to modify existing structures, not merely replacing old business assets and capabilities. It involves reconstructing traditional organizations around digital operating principles, integrating traditional assets to address new challenges and pursue new opportunities. To cross the digital divide, firms need to not just invest in technology but also develop data- and network-centric capabilities, apart from mind-set changes to put digital technologies to best use. For all of these requirements, a platform-based approach fits perfectly.

Recent research by Innosight claims that at the current churn rate, 75% of the US S&P 500 will be replaced by 2027. I suspect that the digital approach will be a big factor in this.

We at Sonata have seen our more proactive customers recognize the value of platforms and roll out initiatives to capitalize on the opportunity. They have included decisions to use emerging platform technology ecosystems from leading vendors to achieve an accelerated digitization of operations, as well as a choice to build custom social commerce platforms for new business models.

If you’d like to know more about Sonata’s technology framework for platformation and the approaches for adoption, you can find it here