IT COMPENDIUM

For
GD/PI Mentorship

Compiled by
Team ThinC
Contents
Indian IT Market ......................................................................................................................... 3
Current Performance- FY 2016 ........................................................................................... 3
Future Trends...................................................................................................................... 3
Indian IT-BPM Industry Outlook ......................................................................................... 3
Indian IT-BPM Industry- Outlook ........................................................................................ 4
Key Trends – FY 2018 .......................................................................................................... 5
IT, Telecom, Media & Education ......................................................................................... 5
Impact of GST ...................................................................................................................... 6
Brief Sector Analysis................................................................................................................... 8
FMCG Sector ....................................................................................................................... 8
Human Resource Management .......................................................................................... 9
Financials........................................................................................................................... 10
Banking ............................................................................................................................. 12
Artificial Intelligence in Banking ................................................................................ 12
Robotics in Banking Operations................................................................................. 13
VR/AR in Banking ....................................................................................................... 14
UPI (Unified Payments Interface) .............................................................................. 14
Media and Entertainment Industry .................................................................................. 15
Market Dynamics ....................................................................................................... 15
Recent development/Investments and M&As .......................................................... 16
Telecom Industry .............................................................................................................. 19
Some major developments........................................................................................ 20
Changing landscape ................................................................................................... 21
Developing Operational Competence: A possible solution ....................................... 22
Human Resource Management ........................................................................................ 23
Tales of Talent Acquisition ......................................................................................... 23
Automated HR ........................................................................................................... 24
Data Analytics to the rescue ...................................................................................... 24
Insurance........................................................................................................................... 25
E-Commerce...................................................................................................................... 29
Recent Developments .............................................................................................................. 35
Tech Acquisitions .............................................................................................................. 35

1|Page
 Tech Trends ....................................................................................................................... 35
Common Terminologies Explained .......................................................................................... 38
Bitcoin ............................................................................................................................... 38
Blockchain ......................................................................................................................... 40
Augmented Reality ........................................................................................................... 42
Virtual Reality.................................................................................................................... 43
Mixed Reality .................................................................................................................... 43
Applications ............................................................................................................... 44
SMAC ................................................................................................................................. 45
What sets SMAC apart? ............................................................................................. 45
Social Media ............................................................................................................... 45
Mobility ...................................................................................................................... 46
Analytics ..................................................................................................................... 46
Cloud .......................................................................................................................... 46
Big data and Analytics ....................................................................................................... 47

2|Page
Indian IT Market
Current Performance- FY 2016

Revenue from IT services amounted to USD 75 Bn, constituting 24% of the total Indian IT-
BPM Market revenue. Export revenue amounted to USD 61Bn, which amounts to 81% of the
total IT-services revenue. The geography, vertical and service line-wise breakup of the
revenue has been provided below:

Future Trends

• Firms are building automation platforms and

segregated digital units
• Enterprise mobility – Managed mobility
services to grow at 30.5% CAGR in 2014 –
2019 period
• SaaS adoption rates to reach 35% by 2020
from present 15%
• Pricing shift to hybrid and outcome based
• Increased emphasis on value addition and
innovation, gaining customer experience, and
building digital talent pool
• ~40% of revenue growth by 2020 expected to come from new industries turning to
offshoring and new geographies, particularly Asia-Pacific and Europe

Indian IT-BPM Industry Outlook

As per CRISIL research the Indian information technology (IT) services sector is expected to
grow at a slower pace between 2015-16 and 2020-21 in the export and domestic segments
compared with the previous five years. As commoditisation of services will keep billing rates
under pressure, growth will largely be volume-driven.

3|Page
India’s IT-BPM industry is feeling the impact of the global slowdown and global political
uncertainties as clients go slow on their decision-making and investment processes. The
industry is projected to grow nearly 8% in FY2017 – from USD 143 billion in FY2016 to USD
154 billion (excl. eCommerce), an addition of over USD 11 billion.

Share in total service exports is estimated at >49% and the industry’s contribution relative
to India’s GDP is >7.7%. Overall, the industry is estimated to employ nearly 3.9 million
people, an addition of ~170,000 people over FY2016.

IT services segment has a 52% share, followed by BPM and ER&D and packaged software
(19% each) and hardware (9%). eCommerce market is estimated at USD 33 billion, a 19%
growth over FY2016. The industry comprises 16,000+ firms that offer the complete range of
services. With a presence of over 4,750 start-ups –India is the 3rd largest start-up ecosystem
in the world.

Indian IT-BPM Industry- Outlook

On June 2, 2017, Indian IT industry body Nasscom forecasted the sector’s export revenues
to grow at 7-8% in 2017-18, around the growth levels seen last year, as the industry faces
continued headwinds from the US market. The more-than-$150 billion industry saw exports
rising 7.6% in 2016-2017. Revenue for the domestic market is projected to grow at 10-11%
in 2017-18. The Indian IT industry is facing uncertainty as US President Donald Trump
considers tougher US visa policy, raising fears of higher labour costs as companies look at
hiring more expensive US workers.But the industry is also expected to benefit from positive
factors, such as improvements in financial services and digital businesses, while focusing on
increasing investments in digitization and automation. The Indian IT industry is expected to
add around 130,000-150,000 new jobs during the year.

4|Page
Key Trends – FY 2018

• Financial services revival with Fed increasing rates

• Higher growth in Digital
• Legacy business improvement
• Increased automation based projects driving deals
• India market growth driven by enterprise digital adoption

IT, Telecom, Media & Education

The domestic information technology (IT) services segment is expected to scale Rs 1,438
billion in 2020-21 from an estimated Rs 895 billion in 2015-16, reflecting a CAGR of about
10%. Growth is likely to be slower at a CAGR of 10%, compared to 12.3% in the previous five
year period.

Long-term growth will come from a range of factors such as: technological up gradation, e-
governance initiatives of governments, IT adoption by state governments and ramp-up in
orders from the central government; the largest contributor to domestic IT revenue.
Investment in emerging verticals by IT-intensive sectors such as banking, finance, insurance
and telecom will also boost growth. The government's spending on digitisation, IT
infrastructure improvement and implementation of technology in healthcare,
manufacturing and agriculture are all expected to contribute to the growth.

5|Page
Domestic Market is not as attractive as exports market. Low billing rates, delays in decision
making and payments, low margin and fierce competition due to small projects have been
the major deterrents for the domestic market.

Impact of GST

Goods and Service Tax has been implemented in India with effect from July 1, 2017. The IT
sector with services such as software development, mobile app development, website
design and more, is one of the major sectors that is likely to be impacted.

Tax Rate: The prevailing service tax rate on IT services is 15%. However, the recommended
revenue neutral rate is at 15–15.5% and the standard rate is expected to be around 17–18%.
Therefore, the cost of IT services will elevate, especially for end customers who do not
usually claim the tax input credit.

Cascading Effects of Taxes: The cascading effect of taxes will be effectively addressed under
the GST regime. Traders, under GST, will be eligible to avail the credit of services such as in
the case of AMC (Annual Maintenance Service) contracts. Currently, IT service providers
can’t claim credits of quality including the assessment or deal charge spent on setting the IT
infrastructure. Also, services charged by an IT service provider to a client who is a broker is
an expense incurred for the IT service provider. Under GST, both the IT service providers and
their clients will be eligible to claim full credit of GST.

Business Process Change: Under GST, which is a destination-based tax, tax is collected by
the state where the goods or services will be consumed. Most IT companies are registered
only with the Central Service Tax authorities and usually all billing and accounting tasks are
carried out from a central location. Under the GST regime, service providers are required to

6|Page
obtain registration for all the states that they are catering to, i.e. all states that they have
customers in.

eCommerce Sphere: For eCommerce traders, the GST is expected to increase administrative
costs. Also, since e-tailers have hundreds of sellers on their platforms, it significantly
increases compliance burden. Small sellers will face cash-flow issues and will claim for
refunds on the tax paid on inputs, which the eCommerce platform may not support. The tax
collection at source (TCS) guideline under GST will increase the administration and
documentation workload for eCommerce firms.

Compliance: The model GST law recognizes at least 111 points of taxation which means IT
companies providing services all over India will have to seek registration in as many as 37
jurisdictions that will include 29 states, seven union territories and the Centre. This means
that IT companies will have to register and file compliance reports at as many as 111 points.

7|Page
Brief Sector Analysis
FMCG Sector
Over the last few years, FMCG companies have leveraged the massive potential of the
burgeoning supply of information about customers’ behaviours, needs, and wants. The
volume of data emanating from multiple consumer touch points including point of sale, in-
store engagement, mobile platforms, and social media is exploding at an unprecedented
level and unleashing value in ways that go beyond operational efficiency. This is leading to a
fundamental change in what businesses expect from technology. Senior executives across
all functions now realize that IT is capable of game-changing innovation and business
transformation that can spur revenue growth, faster time-to-market, and sometimes
generate entirely new business models.

Companies are adopting new IT services at a faster rate in other functions such as in
manufacturing to improve productivity and leveraging labour efficiency levels at the factory
shop floor. IT solutions to track new product formulations, cross functional team working
co-ordination are also gaining acceptance. Logistics solutions which aggregate orders to
move stocks efficiently across the country and track customer orders to achieve higher
service levels are also being used across different FMCG verticals to push for supply chain
dominance. They're adapting their traditional customer relationships as well, by moving
away from large scale surveys to focus groups and social media research - bringing the
business closer to their consumers.

FMCG companies can make these disruptive moves to win in the digital world:
• Shaping digital influence: This entails connecting with the consumers along the
purchase pathway by building brand equity online and creating strong advocates for the
brand.
• Winning with E-commerce: Creating a profitable e-commerce business entails strategic
choices around the channel - brand.com or/and market places/vertical specialists.
Companies would need to think through operating choices to avoid channel conflict.
• Digitising operations: Companies can create substantial value by leveraging digital
across the value chain to enhance efficiency and effectiveness of operations.
• To realise these opportunities, some old-world capabilities need to be recast, while
others need to be built afresh.
• Recasting old world capabilities: Capabilities from the physical world such as product
placement, supply chain, and partnership with retailers need to be recast for the digital
world.
• Building new capabilities: Companies would need to build new "fit for purpose"
capabilities to compete in the digital world. These would include analytics based
decision making, a digital ready organisation, and a nimble IT system that allows
companies to follow a 'test, scale and grow' approach in digital.

8|Page
Human Resource Management
When it comes to human resource, technology helps in the all process from recruiting to
retire functions and it has greatly changed the way managers and employees gain access to
human resource data. However, it is quite a challenge to use technology as a human
resource tool because of its complex, but if it is well applied, the organization will save time
and money during the process.

• Recruitment: Recruitment marketing automation software makes formerly time-

consuming activities such as posting and marketing jobs, sourcing resumes, and
communicating with candidates, a seamlessly streamlined process with the right
technology. Today's high-tech applicant tracking systems are an essential part of the
hiring process. Then the job seeker will select their field of expertise and apply for that
particular position online. Nowadays, these portals have even made e-recruitment
visual, by enabling Job seekers to post videos describing what they can do as well show
case some of their potential. There also other media where these job postings can be
found for example social media sites. Many people have been recruited through social
networks like Facebook and LinkedIn. A business simply posts a job position on its
LinkedIn or Facebook page and its fans will apply, if any of them qualifies for the
position they will get that job. This process has also made human resource
management more social than ever.

• Training & development: After the process of recruiting is finished, human resources
manager will have to use technology to train new employees. Many agencies have
started implementing different technologies into their learning and development
programs, using these tools to cut training costs, reduce carbon footprint, and increase
continual learning outside the classroom. Even though they qualify for the position,
there are some things which the human resource manager has to clear before new
employees take their positions. Technology will allow the team to access required
documents on every specific position via a decentralized computer ”Database” and they
will read through to understand every aspect. If illustrations are required, the human
resource manager can use a visual illustration to explain some points in details. This
saves time and makes the process easier.

• Performance management: By using HR software, employers can easily communicate

their goals with employees and make expectations for employees more visible. Human
resource manager can use technology to monitor the performance of employees. With
the help of tools like CPM (Computerized performance monitoring), the manager can
know how much work has been accomplished by each employee as per a given period
of time. Also the same software can help in the flow of information about employee
performance across the organization. HR tools such as ReviewSnap can help ensure
employee reviews are completed at the proper intervals and help employees receive
9|Page
 real time feedback. At the end of the day everything is transparent and production is
guaranteed because humans once monitored, they will do their best to look good.

• Virtual Manpower: With the help of internet, businesses can recruit people to work
from the comfort of their homes. Telecommunication and service providers have
implemented this module of recruiting and parties are paid per work done. Many Tele-
centres and data entry firms have resorted to this module of human resource
recruitment to increase on output and also increase on their ROI (return on
investment). With this system, a business can hire hundreds of employees across the
globe to perform a given task, and then they get paid per task completed. This saves
both money and time to the business.

Financials
Asset Management: Advances in the asset management industry include increased access
to alternative investments, improved performance and reporting protocols (e.g. XBRL), and
new products (e.g. crowdsourced ETFs and managed marketplace loans). Most of the actual
interest is now days focused on data analytics and automation of asset allocation, areas
typically associated with “robo-advisors”.

Bank Technology: Financial institutions are baking and bolting on Omni channel solutions
including intelligent lending, fraud detection, and integrated analytics into their core
systems. Others are rebuilding legacy infrastructure using full stack and white label product
solutions.

Crowdfunding: Online platforms such as Kickstarter now offer accredited investors the
option to fund seed and early stage companies.

Cryptocurrency: Bitcoin and other cryptocurrencies have gained a lot of traction in recent
times. Aside from the upfront benefits of lower transaction costs and increased access to
capital markets for those in technology deserts, the block chain and similar technologies
provide the foundation for revolutionary APIs in biometrics, finance, medicine, and beyond.

Information Portals: Big data has created deep demand for analytics and visualization
software in the finance industry as well as increased access to financial information for
consumers. Online platforms allow for collaboration and crowdsourced analyses in real
time.

Investment Management: Consumers are benefiting from reduced administration and

product fees as well as more streamlined and targeted professional advice. Investment

10 | P a g e
professionals are empowered by more robust portfolio management software and the
development of new products (e.g. crowdsourced ETFs and managed marketplace loans).

Machine Intelligence: With its origins in peer to peer and social lending, marketplace
lending has the potential to provide borrowers with lower rate loans and investors with a
differentiated, higher yield source of fixed income. Interest rate quotes are algorithm-driven
and oftentimes take non-traditional factors such as education and social network into
consideration to construct more holistic credit files.

Money Management: Whether simplifying business and personal expense reports,

protecting against consumer credit card fraud, or unlocking biweekly pay checks, money
management firms offer smarter tracking and spending recommendations. Lower overhead
and simpler, lighter-touch software oftentimes mean lower fees and faster processing.

Payments: Payments companies are seeking to simplify the process of transferring and
trading money from mobile point-of-sale solutions to remittances to payday loan
alternatives. These firms are developing and rely on new technologies such as the Block
chain to circumvent the traditional ACH network.

Private Markets: The availability of information has increased potential for more robust
relationships between advisory services and private companies. Access to capital markets
can occur more efficiently, in more targeted fashion, and with lower service fees.

Real Estate: Similar to their crowdfunding counterparts, online real estate platforms seek to
connect investors with development projects in more transparent, democratic fashion. By
increasing velocity of and access to investments, real estate platforms seek to mitigate
individual investor risk, increase portfolio diversification, and broaden the project
ecosystem.

Trading: Advancements in trading include: Open-access Wall Street analyst estimates,

crowdsourced investment ideas, real-time investment professional tracking, and algorithm-
driven portfolio advice.

Interesting Reads:
• https://www.bcgperspectives.com/content/articles/financial-institutions-technology-
digital-fintech-in-capital-markets/
• https://www.mckinsey.com/industries/financial-services/our-insights/bracing-for-
seven-critical-changes-as-fintech-matures
• https://www2.deloitte.com/in/en/pages/financial-services/articles/fintech-india-ready-
for-breakout.html
• http://www.mckinsey.com/industries/financial-services/our-insights/cutting-through-
the-noise-around-financial-technology

11 | P a g e
Banking
Digital will be the next frontier for financial services industry to ingrain within itself to
remain relevant in an emerging business scenario as fast changing technology offers
innumerable opportunities while also presenting significant threats. The manner in which
technology has been evolving, a conventional retail bank will have to adapt to the digital
highway to remain efficient while also capturing the new business value.

Cisco, the global networking giant in its report titled: “A roadmap to digital value in retail
banking” estimates that with the right technology investments, banks can capture their
share of a massive $3.1T in digital value at stake for the industry between 2015 and 2024.

The key focus areas of the Indian fintech companies are in payment processing (that include
transaction gateways and platforms, online/mobile wallet, ATM & POS services, remittance
and cash cards) and trading. According to Morgan Stanley, the global mobile payments
could increase from $175 billion to $250 billion in coming years. This will include $45 billion
in developed markets and $30 billion in emerging markets, especially considering the
ongoing penetration of increasingly less expensive smartphones.

Digitization can create many opportunities to transform sales and services in retail banking.
This includes everything from shortening queues to offering timely insights and anywhere,
anytime advice. The new bank-customer relationship can be built on personalized assistance
through a variety of channels, along with products that reflect a deep understanding of
consumer behaviours.

With the demonetization that happened last year mobile wallets are also becoming an
increasing choice of people to carry out their payments.

Artificial Intelligence in Banking

AI and machine learning can process a multitude of information about customers, do
comparison analysis, and find suitable product/ services that the customers need. This
essentially means finding what's right for your customers and complete set-up steps based
upon customers’ consent.

• Safer Banking: Leading banks are investing millions of dollars in AI integration to offer
security against fraud and theft in order to build a sustained and honest relationship
with their customers. Several popular banks already depend on AI to prioritize and
prevent cyberattacks. Thought leaders in the industry are now investing heavily on AI
research for developing advance solutions to tackle several issues, including
cybercrimes.’

12 | P a g e
• Earning customer loyalty: The rise of digital first banks has changed customer
expectations. The complex banking model is under threat, yet complexities in the
system are ever increasing. AI can be the answer to stay competitive in this cutthroat
environment. From using robots to greet customers, to providing voice banking or
selfie-pay, to deploying robo-advisors, there is immense scope for AI to drive customer
loyalty for banks. Large financial service organizations are already using AI to deliver
personalized advice to its wealthy clients and several others have invested in AI
technology to answer complex financial questions posed by customers. Organizations
are depending on machines to replicate human decision-making, in areas such as
financial service regulation and ticketing of IT issues.

• More productive workforce: AI is helping in freeing employees from mundane tasks

and helping them focus on more productive work. Right from customer service,
collaboration, to being an effective digital assistant – AI further augments employee
performance.

Robotics in Banking Operations

Banks, insurers, pension funds and other financial services institutions operate in a highly
regulated industry and are faced with high demands for auditability, security, data quality
and operational resilience. Robotic process automation allow modern banks to meet these
demands and achieve significant operational efficiency.

ICICI Bank, India’s largest private sector bank, has recently deployed ‘Software Robotics’ in
over 200 business processes across various functions of the bank. The bank is the first in the
country and among few, globally, to deploy ‘Software Robotics’ that emulates human
actions to automate and perform repetitive, high volume and time consuming business
tasks cutting across multiple applications.

At ICICI Bank, software robots have reduced the response time to customers by up to 60%
and increased accuracy to 100% thereby sharply improving the bank’s productivity and
efficiency. It has also enabled the bank’s employees to focus more on value-added and
customer-related functions. The software robots now perform over 10 lakh banking
transactions every working day.

The bank has implemented the ‘Software Robotics’ platform mostly in-house, leveraging
recent advancements in artificial intelligence such as facial and voice recognition, natural
language processing, machine learning and bots among others.

13 | P a g e
VR/AR in Banking
Goldman Sachs Group believes that virtual and augmented reality will make up an $80
billion market by 2025. Furthermore, in the case of an accelerated uptake, the market will
hit as much as $182 billion, says Goldman.

• Customer Relations: Several banks have created AR apps to help consumers find the
nearest branches and ATMs. While navigating through the city and looking at their
phone screen, a user can see real-time information on the nearing location, including
the distance and additional details, and book an appointment.

• Trading: Citibank traders have been testing Microsoft HoloLens as a virtual workstation
that combines 2D and 3D to complement the bank’s existing devices and workflows,
including proprietary trading software, news terminals, and more. With a colourful
bubble-map of the market in front of them, traders can detect holistic patterns in the
trading environment at a glance.

• Wealth Management: Fidelity Investments have come up with StockCity for Oculus Rift,
a tool that applies virtual reality and data visualization to help investors manage their
finances. It turns a portfolio into a virtual city where each stock is a building with the
height and footprint representing the price, trading volume and outstanding shares.

• Recruitment and Training: VR can also be used by banks and financial organizations as a
recruitment and internal training tool. The Commonwealth Bank of Australia has built a
VR application to attract technical talent by showing them through Google cardboard
goggles how innovative and agile the bank is in addressing customer and employee
needs. In this virtual journey, users are invited to join a project team creating an app for
one of the bank’s business customers. EON Reality, a 3D software provider, has taken
recruitment a step further with a virtual job interview simulator, where real candidates
face several avatars controlled by a single, real recruiter or department representative.
Here, in an immersive environment, everything seems real – the life-size and multi-
dimensional jury ask questions based on the candidates’ answers.

UPI (Unified Payments Interface)

Unified Payments Interface (UPI) is a system that powers multiple bank accounts (of
participating banks), several banking services features like fund transfer (P2P), and
merchant payments in a single mobile application. UPI was launched by National Payments
Corporation of India with Reserve Bank of India's (RBI) vision of migrating towards a 'less-
cash' and more digital society. UPI has built on the Immediate Payment Service (IMPS)
platform.

14 | P a g e
UPI platform can be used for:

• Immediate money transfer through mobile device round the clock 24*7 and 365 days
• Single mobile application for accessing different bank accounts
• Virtual address of the customer for Pull & Push provides for incremental security with
the customer not required to enter the details such as Card no, Account number; IFSC
etc
• Bill Sharing with friends
• Merchant Payment with Single Application or In-App Payments
• Scheduling PUSH and PULL Payments for various purposes
• Utility Bill Payments, Over the Counter Payments, Barcode (Scan and Pay) based
payments
• Donations, Collections, Disbursements Scalable

Media and Entertainment Industry

Market Dynamics
The Indian media & entertainment sector is expected to grow at a Compound Annual
Growth Rate (CAGR) of 13.9 per cent, to reach US$ 37.55 billion by 2021 from US$ 19.59
billion in 2016, outshining the global average of 4.2 per cent. Over FY 2016-21, digital
advertising will grow at 30.8 per cent. The largest segment, India’s television industry, is
expected to grow at a CAGR of 14.7 per cent, while print media is expected to grow at a
CAGR of 7.3 per cent.

India is one of the highest spending and fastest growing advertising market globally. The
country’s expenditure on advertising is expected to grow at 12 per cent to Rs 61,100 crore
(US$ 9.47 billion) in the year 2017. Mobile advertisement spending in India is estimated to
grow to Rs 10,000 crore (US$ 1.55 billion) by the end of 2018, according to a joint report
titled ‘Mobile Ecosystem and Sizing Report’ by Mobile Marketing Association (MMA) and
GroupM.

The growth potential of the M&E industry, analysed by PwC, is depicted country wise in the
figure:

15 | P a g e
Recent development/Investments and M&As
 The Foreign Direct Investment (FDI) inflows in the Information and Broadcasting (I&B)
sector (including Print Media) in the period April 2000 – June 2017 stood at US$ 6.58
billion, as per data released by Department of Industrial Policy and Promotion (DIPP)
 Growing internet penetration and data consumption is likely to increase digital
advertisement spends in India at a compounded rate of 30.8 per cent between 2016
and 2021
 Google's video platform, YouTube, plans to increase its user base in India to 800 million,
as rising internet penetration in the rural areas will enable the consumers to access
videos on their smartphones
 Hotstar, a digital streaming platform owned by Star India Ltd, has entered into a
partnership with Zapr Media Labs, a media tech company based in Bengaluru, to
perform analysis on mobile audience that can be leveraged by brands to create
personalised communication
 Dentsu Aegis Network (DAN), a global digital marketing company based in United
Kingdom, has acquired SVG Media Pvt Ltd, an Indian marketing services group, in an all-
cash deal which is estimated to be in the range of US$ 100-120 million
 GroupM, the US-based advertising media company, has acquired a majority stake in
MediaCom India, a joint venture between GroupM India and Madison Media group's
principal shareholder Sam Balsara, for an undisclosed amount
 PE major Warburg Pincus has purchased 14 per cent stake in India’s largest multiplex
chain PVR Ltd for Rs 820 crore (US$ 123 million)

16 | P a g e
 ITW Consulting, a global sports consulting and management company, has forayed into
the Indian market by launching its entertainment, media and communication arm, ITW
Playworx, which will be based in Mumbai with offices across Delhi, Bengaluru, Chennai
and Kolkata
 Reliance Capital, part of Anil Ambani-led Reliance Group, has announced the sale of its
radio and television broadcasting businesses under Reliance Broadcast Network to the
Zee group for Rs 1,900 crore (US$ 285 million)

ARPU on an uptrend post - digitisation

• With higher scope of introduction of new and niche channels with digitisation, ARPU
levels are expected to increase in the coming years
• ARPU for DTH subscribers has seen an increase of around 2.84 percent in 2016.
• The more promising trend is that DTH operators are able to increase collections from
customers by providing additional services such as HD channels, premium channels and
other value-added services
• HD adoptions continues to drive ARPU growth for DTH players with the average ARPU
of a HD channels subscriber standing at ~ 1.5 to 2 times more than the ARPU of non-HD
subscribers
• Digital cable on the other hand, has not seen any significant ARPU increases as
compared to the DTH ARPU. For digital cable, deployment of different channel packages
will be the key driver to raise ARPUs
• Total number of DTH subscribers, as of December 2016, stood at around 97.05 million,
of which 62.65 million were active subscribers

17 | P a g e
Artificial Intelligence (AI)

An article in Outlook 2017-21 by PwC presented that in the fall of 2016, a pop song was
released in Japan. “Daddy’s Car,” derivative of a Beatles tune, had a soothing beat and
vaguely uplifting lyrics: “Good day sunshine in the backseat car / I wish that road could
never stop.” The ditty was distinctive for its authorship. Sony’s Computer Science
Laboratories in Paris produced the song, which was written by an artificial intelligence (AI)
system called Flow Machines. The melody and harmony were composed by AI, and a human
musician mixed the sound and wrote lyrics for the track.

The analysis of AI enabled Media & Entertainment, by PwC is given as follows, which
provides alternatives for future M&E Landscape:

Animation and VFX

The Indian animation industry was worth US$ 928.16 billion in 2016 and is expected to
expand at a CAGR of 17.2 per cent to US$ 2.05 billion by 2021. The entire animation,
Gaming and VFX industry is expected to reach US$ 1.66 billion in 2017. Growth in
international animation films, especially 3D productions and the subsequent work for Indian
production houses will help the growth in this segment.

18 | P a g e
VR

• Smartphone-based portable mobile VR headsets will far outstrip other forms

• Around 257.2mn VR headsets will be in use by 2021 with the installation base growing
at a substantial CAGR of 71.8% albeit from a very small base – over the forecast period.
• Of the total, 88.5% of the headsets will be portable devices that use a smartphone at
their core as they are both affordable and benefit hugely from the fast evolution, and
replacement rate, of smartphones.
• Google is launching an AR and VR object library called ‘Poly’.

Additional Readings

Global entertainment & media outlook 2017-2021, PwC

The marketer's dilemma: The new capability agenda for marketers and their partners

AI is already entertaining you

https://www.strategyand.pwc.com/entertainment-media

Telecom Industry

US consumers are looking at their devices more than 9 billion times a day in the aggregate—
up 13 percent from last year. This remarkable progress in telecommunications technology
has had, and will continue to have, an enormous impact on telecommunications
manufacturing and service industries. In particular, digital technology that integrates
transmission, switching, processing, and retrieval of information provides opportunities to

19 | P a g e
merge various service modes into an integrated whole. As the role of digital processing
increases, systems and services become more intelligent and labor saving on the one hand,
and more software-intensive on the other. In our information age, information retrieval is
gaining in importance, while concerns are surfacing about the integrity and authenticity of
the information to be provided, as well as the protection of privacy.

Some major developments

Convergence of service modes

• Rapid innovation in IT has made a variety of traditionally separate information services

increasingly related. This trend is often referred to as the convergence of service
modes; the result is a drastic change for telecommunications products and services.
• For example, telecommunication has already merged with information processing to
provide data communication or on-line processing.
• Facsimile communication service provided by common carriers and electronic mail
service provided by the post office will soon merge, eliminating the physical delivery of
documents to and from customers.
• One benefit of the convergence of service modes is that it provides economies of scale;
that is, many kinds of information can be provided in various forms through a variety of
media at a reasonable cost.
• These benefits, however, will be lost without a re-evaluation of regulatory measures,
which traditionally have been organized on the basis of separate services.

Low Power Area Network (LPAN)

 Low-power Wide Area Network (LPWAN) is a wireless wide area network technology
that interconnects low-bandwidth, battery-powered devices with low bit rates over
long ranges.
 Created for machine-to-machine (M2M) and internet of things (IoT) networks, LPWANs
operate at a lower cost with greater power efficiency than traditional mobile networks.
 They are also able to support a greater number of connected devices over a larger area.
 LPWANs can accommodate packet sizes from 10 to 1,000 bytes at uplink speeds up to
200 Kbps. LPWAN's long range varies from 2 km to 1,000 km, depending on the
technology.
 Most LPWANs have a star topology where, similar to Wi-Fi, each endpoint connects
directly to common central access points.
 LPWAN is not a single technology, but a group of various low-power, wide area network
technologies that take many shapes and forms. LPWANs can use licensed or unlicensed
frequencies and include proprietary or open standard options.

20 | P a g e
Operators accelerate the deployment of Narrow Band – Internet of Things (NB-IoT)

 This is a Low Power Wide Area (LPWA) technology that transmits data intermittently,
enabling connected devices that use only a small amount of data to operate with low
current consumption. This can greatly improve the battery life of IoT devices.
 Compared to propriety LPWA technology such as LoRa and Sigfox which operate in the
unlicensed spectrum, NB-IoT operates either in the LTE licensed spectrum or in re-
farmed GSM spectrum. This means it uses only a narrow bandwidth, leading to spectral
efficiency and allowing carriers to prioritize data-intensive internet services and
applications.
 As a cellular-based standard, it is critical to ensure the ability of the network to cope
with the huge number of additional devices, potentially exceeding that of current
networks by an order of magnitude or more.
 As a solution, NB-IoT devices can be flexibly deployed and scheduled within any legacy
LTE system, sharing capacity and cell-site resources with other connected devices, and
even using re-farmed GSM frequencies.

Virtualization accelerates the ‘Lab-as-a-Service’ market

 Virtualization enables businesses to leverage the ability of host software solutions in

the cloud. It enables companies to break free from the shackles of rigid hardware
solutions, which are typically expensive and a scarce resource.
 Conversely, virtualized software solutions can be accessed from anywhere at a much
cheaper price point, and also have the flexibility to be adapted based on the
requirements of a business.
 Virtual testing solutions will create demand for ‘Lab-as-as-Service’ solutions, where
operators and NEMs can license testing solutions on a subscription basis, rather than
paying for physical equipment.
 This can enable them to centrally manage and allocate their testing resources in a data
centre or cloud environment, testing services rapidly and cheaply, meaning
developments can progress in parallel.

Changing landscape
By observing the state of the industry today, an article by Strategy & PwC makes following
deductions-

 To a large extent, telecom companies have not succeeded in their efforts to monetize
the flood of data running through their networks.
 Their services have become more commoditized.

21 | P a g e
 Their ability to reinvest in network upgrades and digital advances has been severely
constrained.
 At the same time, many carriers have tried to be all things to all people, delivering a
wide variety of services to their customers.
 But as a group, they have not managed to excel at any of those services. So now they
are vulnerable to competition.

The fact that the Telecommunication Industry, as a whole, is under distress is evident is
some parameters like ARPU. The following graph shows the descend in the ARPU values in
the industry.

And the competition has arrived. Over-the-top (OTT) players, which offer apps and
streaming content directly to consumers through the Internet, have increased their
dominance, even in core communication services such as messaging and voice. For example,
WhatsApp, Viber, and Apple’s iMessage already represent more than 80 percent of all
messaging traffic, and Skype alone accounts for more than a third of all international voice
traffic minutes.

Developing Operational Competence: A possible solution

PwC recommends modernization of operations in the telecom industry as according to one
article; the telecom companies have been so frugal in recent years that their basic
operational structure has foundered. To revitalize their operations, focus on the following
fundamental goals is needed-

22 | P a g e
 Simplification: At most telecom companies, reducing complexity in commercial
offerings and market-facing activities is a haphazard and ill-conceived effort, chiefly
reliant on targeted cost-cutting campaigns designed to support or improve profit
margins.
 Digitization. They should be on the vanguard of adopting digital technologies, both in
services and in the back office. For example, all customer contact and sales channels
(online, mobile, and physical) should be linked digitally so that consumer activities are
maintained in a single database, making interactions with customers in all channels less
costly in terms of expended time and resources and enhancing customer convenience
and satisfaction.
 Network upgrades: The single most compelling thing they have to offer is network
speed and throughput; every customer is hungry for it. Investments in telecom network
improvements — fiber and 5G upgrades or other networking technologies — are critical
to preparing for more dynamic, competitive environments. Network enhancements
could also position your company to take back the technological advantage from OTT
providers.

Additional Readings

Telecommunications Industry Outlook 2017

2017 Telecommunications Trends

How Telecom Technology is Changing in 2017

Human Resource Management

2017 has been an unforgettable year so far, hard-hitting, to say the least. Massive layoffs
are happening across the Indian techie giants, courtesy – automation trying to find its hold
in the IT industry both globally and in the Indian context. With job automation growing
rapidly, the onus is on the Human Resources to find the right fit of employees for the
organization. The only way to have a competitive advantage will be to keep reinventing the
fundamentals of HR.

Tales of Talent Acquisition

“Talent acquisition” is currently entering a new phase with organizations restructuring the
competencies that have been followed and implemented so long. This would lead to job
profile enrichment, enlargement and rotation. This will in turn require people to possess a
certain skill set in order to be employable. This would involve training the employees and
acclimatizing them to the work environment and making them adaptable to the different

23 | P a g e
kind of role they would be required to take on. And once they are part of the workforce,
resources have to be spent on retaining them by the HR team. Constant and continual
training has to be imparted and planned for them to remain relevant to the changing times.

Automated HR

HR technology is a domain that is the brain child of the application of technology to the
domain of Human Resources. HR Technology is now venturing into the sectors of Artificial
Intelligence and Natural Language Processing. Products like Cortana and Siri are common
examples that we would come across. Incorporating these in HR would redesign the way HR
works.

• The entire hiring process can be automated with the help of the softwares and models
provided by the vendors. This may include pre-hire assessment; interviewing;
onboarding process; new-hire orientation; and the first six months of training, meeting
people and learning. Firms like Cognizant and Deloitte have been successful at
automating almost the entire hiring process.
• Processes for employee career and job transitions, including assessment, internal job
search, job recommendations, interviews, job offers and acceptances, employee moves,
level or compensation changes, and orientation and onboarding.
• Exploration of retirement options, decisions about retirement plans, exit processes,
joining the alumni network, and creating an on-going relationship between the
company and the employee after his or her departure.
• Assessment of an employee’s potential, including modules for leadership development,
education, networking and coaching, as well as on-going performance management
practices for new supervisors.

Data Analytics to the rescue

As more diverse people join the organization, it is the duty of HR to understand these
people in a more customized and an individualistic manner. Analytics come to play a major
role in this. Organizations right now are investing heavily on data analytics for employee
understandability, performance and coming up with performance evaluations as well.
Organizations mostly source the software from vendors like Oracle, Cornerstone, SAP
SuccessFactors, Workday, ADP etc. Workday’s system can identify employee job changes
that will lead to high-performance outcomes. The products from Oracle and SuccessFactors
can recommend which training employees should have based on their roles and activities at
work, and Workday will soon have this functionality as well. Cornerstone’s system can
predict which workers are likely to become noncompliant or lapse in their mandatory
training and certification. There are systems that can analyse patterns of e-mail and other
communication to build "trust networks" and can predict where security leak or fraud is
likely to occur. Another company, Humanyze, sells smart badges that monitor workers’
locations and voice tenor to gauge when and where they experience the most stress. This

24 | P a g e
data can be used to help companies reorganize facilities, change meeting times and formats,
and drive engagement. As these embedded models continue to mature, HR departments
will need to hire teams that understand them and can apply them effectively.

It takes a few years - and often a big budget - to clean up HR data, bring it into a
consolidated environment and hire an analytics team to start doing the work. Technology is
the key to reinvent the basics of HR. As Josh Bersin aptly frames it, “The convergence of
mobile computing, video, sensors and artificial intelligence is taking place simultaneously
with an intense focus on employee engagement, culture, wellness and productivity. The
result will be a new breed of products that will totally reinvent what HR technology—and HR
itself—can do”

Insurance

Executive Summary

• During January to September 2017 period, the life insurance industry recorded a new
premium income of Rs 0.92 trillion (US$ 14.28 billion), indicating a growth rate of
21.14%
• The non-life insurance premium market grew at a CAGR of 12.1 per cent over FY04-161,
from US$ 3.4 billion in FY04 to US$ 13.35 billion in FY161.
• The market share of private sector companies in the non-life insurance premium
market rose from 13.12 per cent in FY03 to 45.4 per cent in FY16.
• Strong growth in the automotive industry over the next decade to be a key driver of
motor insurance.

Advantage of India

25 | P a g e
IRDA governs the Indian Insurance sector
• Insurance Regulatory and Development Authority (IRDA)
• Established in 1999 under the IRDA Act
• Responsible for regulating, promoting and ensuring orderly growth of the insurance and
re-insurance business in India

Premiums growing at brisk pace

 The total insurance market expanded

from US$ 23 billion in FY05 to US$ 68.88
billion in FY16.
• Life insurance companies in India
earned US$ 25.12 billion as first year
premiums in FY17.
• Gross premium written in India for non
life insurance sector for FY16 is US$
14.33 billion and in FY16, the gross
premium written in India for life
insurance sector stood at US$ 54.58
billion.
• Over FY05–FY16, total gross written
premiums increased at a CAGR of 10.49
per cent.

26 | P a g e
Life insurance market appears vibrant

• In August 2017 the Life Insurance

industry reported a 19 per cent
growth in overall annualised
premium equivalent with the help of
both private players and Life
Insurance Corporation.
• The life insurance market grew from
US$ 10.5 billion in FY02 to US$ 54.58
billion in FY16.
• The life insurance industry has the
potential to grow 2-2.5 times by 2020
in spite of multiple challenges
supported by long-term trends and
fundamentals underlying household
savings.
• Private life insurers in India posted 28
per cent year-on-year increase in its
annual premium equivalent (APE) for
June 2017.

LIC continues to dominate life insurance

sector in India

• As of March 2017, life insurance sector

had 23 private players in comparison to
only 4 in FY02
• With 71.07 per cent share market share in
FY17, LIC continues to be the market
leader, followed by ICICI Prudential.

Policies to aid the sector

• Insurance products are covered under the exempt, exempt, exempt (EEE) method of
taxation. This translates to an effective tax benefit of approximately 30 per cent on
select investments (including life insurance premiums) every financial year
• In Union Budget 2017-18, the government introduced an insurance pension scheme
that gives an assured return of 8 per cent for senior citizens through LIC to concentrate
on social security
• IRDA recently allowed life insurance companies that have completed 10 years of
operations to raise capital through Initial Public Offerings (IPOs). Companies will be able
to raise capital if they have embedded value of twice the paid up equity capital
• SBI Life has already raised funds through its IPO.

27 | P a g e
• Revival package by government will help companies get faster product clearances, tax
incentives and ease in investment norms. FDI limit for insurance company has been
raised from 26 per cent to 49 per cent, providing safeguard and ownership control to
Indian owners

Porter’s five forces analysis

28 | P a g e
Strategies adopted

E-Commerce
Executive Summary

The Indian e-commerce industry has been on an upward growth trajectory and is expected
to surpass the US to become the second largest e-commerce market in the world by
2034.The e-commerce market is
expected to reach US$ 64 billion by
2020 and US$ 200 billion by 2026.

ith growing internet

penetration, internet users in
India are expected to increase at
a compound annual growth rate
(CAGR) of 15.6 per cent from
391.50 million at the end of
2016 to 700 million by 2020.

29 | P a g e
 • Rising internet penetration is
expected to lead to growth in
ecommerce.
• India’s internet economy is
expected to double from
US$125 billion as of April

Growth of e-commerce in India

• Propelled by rising smartphone penetration, the launch of 4G networks and increasing
consumer wealth, the Indian e-commerce market is expected to grow to US$ 200 billion
by 2026.
• E-commerce is increasingly attracting customers from Tier 2 and 3 cities, where people
have limited access to brands but have high aspirations.
• With the increase in awareness about the benefits of online trading, there has been a
significant rise in investment in E-commerce business. Hand in hand with offline trading,
many established businesses
• With the change of working habits, and consumers opting for adaptability and
convenience, there are now innumerable small and large E-commerce companies
selling provisions and food items

Advantage India

30 | P a g e
Rising Internet Penetration
• Internet penetration in India grew from just 4 per cent in 2007 to 34.08 per cent in
2016, registering a direct increase of 89 per cent in 2016 over 2007.
• Analysis of ‘Daily Users’ reveal that both in Urban and Rural India, the younger
generations are the most prolific users of internet
• Rising internet penetration is expected to drive ecommerce growth in India

E-commerce Retail Market

• The e-commerce retail market is estimated
to be worth US$ 12 billion in Gross
Merchandise Value (GMV) terms as of 2016.
• Electronics is currently the largest segment in
e-commerce in India with a share of 47 per
cent and is expected to grow at a CAGR of 43
per cent by 2020.
• The apparel segment has the second highest
share of 31 per cent in the e-commerce retail
industry
• Currently, there are 1-1.2 million
transactions per day in e-commerce retailing

E-Tailing market by business model

Marketplace Model
• Marketplace model adheres to the standards and directions of a zero inventory model.
• The new FDI policy rules and regulations in the e-commerce market have permitted 100
percent FDI in the e-commerce marketplace model under the automatic route.
• Marketplace becomes a digital platform for consumers and merchants without
warehousing the products. Marketplaces do offer shipment, delivery and payment help
to merchants by tying up with some selected logistics companies and financial
institutions

Inventory-led model
• Inventory led models are those shopping websites where online buyers choose from
among products owned by the online shopping company or shopping website take care
of the whole process end-to-end, starting with product purchase, warehousing and
ending with product dispatch.
• A few examples of such are Jabong, Yepme and LatestOne.com.

31 | P a g e
Porter’s five forces framework analysis

Growth drivers and opportunities

Strategies Adopted

32 | P a g e
Factors driving e-commerce
• Internet content in local languages
• Growth in non-metro cities
• Mobile commerce
• Cashless transactions
• Growth of logistics & warehouses
• B2B ecommerce
Government initiatives

• Government of India has announced various initiatives namely, Digital India, Make in
India, Start-up India, Skill India and Innovation Fund.
• Government announced the launch of BHIM app
• Under the Digital India movement, government launched various initiatives like Udaan,
Umang, StartUp India Portal etc
• The recent announcement of GST roll out, another significant reform would help e-
retail competitors streamline their supply chain and simplify their tax structure, while
rationalising seamless integration of goods and services across the country. Moreover,
it will eliminate the dual taxes being imposed on the current ecommerce eco system.
• The Reserve Bank of India (RBI) has instructed banks and companies to make all know-
your-customer (KYC)-compliant prepaid payment instruments (PPIs), like mobile
wallets, interoperable amongst themselves via Unified Payments Interface (UPI) by April
2018

33 | P a g e
• In order to increase the participation of foreign players in the e-commerce field, the
Indian Government hiked the limit of foreign direct investment (FDI) in the E-commerce
marketplace model for up to 100 per cent (in B2B models).
• The Government of India has distributed rewards worth around Rs 153.5 crore (US$
23.8 million) to 1 million customers for embracing digital payments, under the Lucky
Grahak Yojana and Digi-Dhan Vyapar Yojana

34 | P a g e
Recent Developments
Tech Acquisitions
1. Broadcom offers $130 billion to buyout Qualcomm
2. Qualcomm’s offer to acquire NXP Semiconductors (pending, $47 billion)
3. Dell buys EMC for $67 billion
4. Intel buys Mobileye for $15.3 billion, 2017
5. Cisco buys AppDynamics for $3.7 billion, 2017

Tech Trends
AI Foundation, Analytics and Intelligent Things
The ability to use AI to enhance decision making, reinvent business models and ecosystems,
and remake the customer experience will drive the payoff for digital initiatives through
2025. A recent Gartner survey showed that 59% of organizations are still gathering
information to build their AI strategies, while the remainder have already made progress in
piloting or adopting AI solutions.
Intelligent things use AI and machine learning to interact in a more intelligent way with
people and surroundings. Some intelligent things wouldn’t exist without AI, but others are
existing things (i.e., a camera) that AI makes intelligent (i.e., a smart camera.) These things
operate semi autonomously or autonomously in an unsupervised environment for a set
amount of time to complete a particular task. Examples include a self-directing vacuum or
autonomous farming vehicle. As the technology develops, AI and machine learning will
increasingly appear in a variety of objects ranging from smart healthcare equipment to
autonomous harvesting robots for farms.
Augmented analytics is a particularly strategic growing area that uses machine learning for
automating data preparation, insight discovery and insight sharing for a broad range of
business users, operational workers and citizen data scientists.

Digital Twins
A digital twin is a digital representation of a real-world entity or system. In the context of
IoT, digital twins are linked to real-world objects and offer information on the state of the
counterparts, respond to changes, improve operations and add value. With an estimated 21
billion connected sensors and endpoints by 2020, digital twins will exist for billions of things
in the near future. In the short term, digital twins offer help with asset management, but
will eventually offer value in operational efficiency and insights into how products are used
and how they can be improved.

35 | P a g e
Cloud to the Edge
Edge computing describes a computing topology in which information processing and
content collection and delivery are placed closer to the sources of this information.
Connectivity and latency challenges, bandwidth constraints and greater functionality
embedded at the edge favors distributed models. Enterprises should begin using edge
design patterns in their infrastructure architectures — particularly for those with significant
IoT elements. A good starting point could be using colocation and edge-specific networking
capabilities.

Conversational Platforms
Conversational platforms will drive a paradigm shift in which the burden of translating
intent shifts from user to computer. These systems are capable of simple answers (How’s
the weather?) or more complicated interactions (book a reservation at the Italian restaurant
on Parker Ave.) These platforms will continue to evolve to even more complex actions, such
as collecting oral testimony from crime witnesses and acting on that information by creating
a sketch of the suspect’s face based on the testimony. The challenge that conversational
platforms face is that users must communicate in a very structured way, and this is often a
frustrating experience. A primary differentiator among conversational platforms will be the
robustness of their conversational models and the API and event models used to access,
invoke and orchestrate third-party services to deliver complex outcomes.

AR and VR
Augmented reality (AR), virtual reality (VR) and mixed reality are changing the way that
people perceive and interact with the digital world. Combined with conversational
platforms, a fundamental shift in the user experience to an invisible and immersive
experience will emerge. Application vendors, system software vendors and development
platform vendors will all compete to deliver this model. Mixed reality exists along a
spectrum and includes head-mounted displays (HMD) for AR or VR, as well as smartphone-
and tablet-based AR. Given the ubiquity of mobile devices, Apple’s release of ARkit and
iPhone X, Google’s Tango and ARCore, and the availability of cross-platform AR software
development kits such as Wikitude, we expect the battles for smartphone-based AR and MR
to heat up in 2018.

Blockchain
Blockchain is a shared, distributed, decentralized and tokenized ledger that removes
business friction by being independent of individual applications or participants. It allows
untrusted parties to exchange commercial transactions. The technology holds the promise
to change industries, and although the conversation often surrounds financial opportunities,
blockchain has many potential applications in government, healthcare, content distribution,
supply chain and more. However, many blockchain technologies are immature and
unproven, and are largely unregulated.

36 | P a g e
Event-Driven
With the advent of AI, the IoT, and other technologies, business events can be detected
more quickly and analyzed in greater detail. Enterprises should embrace “event thinking” as
part of a digital business strategy. By 2020, event-sourced, real-time situational awareness
will be a required characteristic for 80% of digital business solutions, and 80% of new
business ecosystems will require support for event processing.

Continuous Adaptive Risk and Trust

Digital business creates a complex, evolving security environment. The use of increasingly
sophisticated tools increases the threat potential. Continuous adaptive risk and trust
assessment (CARTA) allows for real-time, risk and trust-based decision making with adaptive
responses to security-enable digital business. Traditional security techniques using
ownership and control rather than trust will not work in the digital world. Infrastructure and
perimeter protection won’t ensure accurate detection and can’t protect against behind-the-
perimeter insider attacks. This requires embracing people-centric security and empowering
developers to take responsibility for security measures. Integrating security into your
DevOps efforts to deliver a continuous “DevSecOps” process and exploring deception
technologies (e.g., adaptive honeypots) to catch bad guys that have penetrated your
network are two of the new techniques that should be explored to make CARTA a reality.

The Intelligent Digital Mesh

Gartner calls the entwining of people, devices, content and services the intelligent digital
mesh. It’s enabled by digital models, business platforms and a rich, intelligent set of services
to support digital business.

Intelligent: How AI is seeping into

virtually every technology and with a
defined, well-scoped focus can allow
more dynamic, flexible and
potentially autonomous systems.

Digital: Blending the virtual and real

worlds to create an immersive
digitally enhanced and connected
environment.

Mesh: The connections between an

expanding set of people, business,
devices, content and services to
deliver digital outcomes.

37 | P a g e
Common Terminologies Explained

Bitcoin
Bitcoin is a form of digital currency, created and held electronically. No one controls it.
Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly
businesses, running computers all around the world, using software that solves
mathematical problems. It’s the first example of a growing category of money known as
cryptocurrency.

What makes it different from normal currencies?

Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars,
euros, or yen, which are also traded digitally. However, bitcoin’s most important
characteristic, and the thing that makes it different to conventional money, is that it is
decentralized. No single institution controls the bitcoin network. This puts some people at
ease, because it means that a large bank can’t control their money.

Who created it?

A software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic
payment system based on mathematical proof. The idea was to produce a currency
independent of any central authority, transferable electronically, more or less instantly, with
very low transaction fees.

Who prints it?

No one. This currency isn’t physically printed in the shadows by a central bank,
unaccountable to the population, and making its own rules. Those banks can simply produce
more money to cover the national debt, thus devaluing their currency.

Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins
are ‘mined’, using computing power in a distributed network. This network also processes
transactions made with the virtual currency, effectively making bitcoin its own payment
network.

So you can’t churn out unlimited bitcoins?

That’s right. The bitcoin protocol – the rules that make bitcoin work – say that only 21
million bitcoins can ever be created by miners. However, these coins can be divided into
smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is
called a ‘Satoshi’, after the founder of bitcoin).

38 | P a g e
What is bitcoin based on?

Conventional currency has been based on gold or silver. Theoretically, you knew that if you
handed over a dollar at the bank, you could get some gold back (although this didn’t actually
work in practice). But bitcoin isn’t based on gold; it’s based on mathematics.

Around the world, people are using software programs that follow a mathematical formula
to produce bitcoins. The mathematical formula is freely available, so that anyone can check
it. The software is also open source, meaning that anyone can look at it to make sure that it
does what it is supposed to.

What are its characteristics?

Bitcoin has several important features that set it apart from government-backed currencies.

• Its decentralized: The bitcoin network isn’t controlled by one central authority. Every
machine that mines bitcoin and processes transactions makes up a part of the network,
and the machines work together. That means that, in theory, one central authority can’t
tinker with monetary policy and cause a meltdown – or simply decide to take people’s
bitcoins away from them, as the Central European Bank decided to do in Cyprus in early
2013. And if some part of the network goes offline for some reason, the money keeps
on flowing.
• It’s easy to set up: Conventional banks make you jump through hoops simply to open a
bank account. Setting up merchant accounts for payment is another Kafkaesque task,
beset by bureaucracy. However, you can set up a bitcoin address in seconds, no
questions asked, and with no fees payable.
• Its anonymous: Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t
linked to names, addresses, or other personally identifying information.
• It’s completely transparent: Bitcoin stores details of every single transaction that ever
happened in the network in a huge version of a general ledger, called the blockchain.
The blockchain tells all. If you have a publicly used bitcoin address, anyone can tell how
many bitcoins are stored at that address. They just don’t know that it’s yours. There are
measures that people can take to make their activities more opaque on the bitcoin
network, though, such as not using the same bitcoin addresses consistently, and not
transferring lots of bitcoin to a single address.
• Transaction fees are miniscule: Your bank may charge you a £10 fee for international
transfers. Bitcoin doesn’t.
• Its fast: You can send money anywhere and it will arrive minutes later, as soon as the
bitcoin network processes the payment.
• It’s non-reputable: When your bitcoins are sent, there’s no getting them back, unless
the recipient returns them to you. They’re gone forever.

39 | P a g e
Blockchain

Blockchain is a technology for a new generation of transactional applications that

establishes trust, accountability and transparency while streamlining business processes. It
is a design pattern made famous by bitcoin, but its uses go far beyond. With it, we can re-
imagine the world's most fundamental business interactions and open the door to invent
new styles of digital interactions. It has the potential to vastly reduce the cost and
complexity of cross-enterprise business processes. The distributed ledger makes it easier to
create cost-efficient business networks where virtually anything of value can be tracked and
traded—without requiring a central point of control.

The application of this emerging technology is showing great promise across a broad range
of business applications. For example, blockchain allows securities to be settled in minutes
instead of days. It can also be used to help companies manage the flow of goods and related
payments, or enable manufacturers to share production logs with OEMs and regulators to
reduce product recalls.

The Problem and the solution

Before: Asset ownership and transfer between businesses is currently inefficient, slow,
costly and vulnerable to manipulation. Everyone has their own ledger where discrepancies
between business parties can increase settlement times. A new way is needed for Internet-
age market enablement.

After: Blockchain technologies can be used to share a ledger across the business network.
The network will be private to the parties concerned, permissioned so only authorized
parties are allowed to join, and secure using cryptographic technology to ensure that
participants only see what they are allowed to see.

The shared ledger will be more robust, since it is replicated and distributed. All transactions
against the ledger will require consensus across the network, where provenance of
information is clear and transparent. Transactions will be immutable (unchangeable) and
final.

The business network participants will be the same - disintermediation is not a natural
consequence of blockchain usage.

Goods and services are provided more efficiently, with the potential to lower costs on all
levels.

Key concepts of blockchain

A blockchain has two main concepts. A business network, in which members exchange items
of value through a ledger, which each member possesses and whose content is always in
sync with the others.

40 | P a g e
A business network
• A decentralized peer-to-peer architecture with nodes consisting of market participants
(such as banks and securities firms).
• Protocol peers validate and commit transactions in order to reach consensus.

Shared ledger
• It can act as a source of truth for businesses doing transactions on a blockchain:
• Records all transactions across the business network
• Is shared among participants
• Is replicated so each participant has their own copy
• Is permissioned, so participants see only appropriate transactions
• Often, companies have multiple ledgers for multiple business networks in which they
participate. It can be used for recording and totalling financial transactions.

Smart contracts
A smart contract can include a digital asset which is anything that has an owner and can be
converted into value. Digital assets can be tangible or intangible. A smart contract can also
include a digital representation of a set of business rules:

• Is embedded in the blockchain

• Is executed in a transaction
• Is verifiable, signed, and encoded in a programming language
For example, it defines conditions under which corporate bond transfer occurs

Consensus
Entries in the ledger are synchronized to all ledgers in the network. Consensus ensures that
these shared ledgers are exact copies, and lowers the risk of fraudulent transactions since
tampering would have to occur across many places at the exact same time.

• All parties agree to the transaction and validate it via the peer network.
• Rules can also be established to validate transactions.
• This trusted and trustless participation makes commitment possible at a low cost.
• IBM Blockchain uses a “pluggable” consensus system to meet the needs of different
industry segments.

Privacy and confidentiality

Ability to protect records with a personal digital signature — the blockchain generates a
private and public key to seal that record.

• It is encrypted, hashed, and sent to the network of validating nodes

• Unique IDs for customer, invoice and reference numbers
• Although the ledger is shared, sometimes participants require:
• Private transactions

41 | P a g e
• Identities that cannot be linked to specific transactions
• Transactions need to be authenticated, and cryptography is central to these processes.

The benefits of blockchain

Blockchain can help radically improve industries, beginning with banking and insurance.
However, the opportunities for blockchain go far beyond this. We predict that this
technology will be used to create smart(er), more efficient systems for supply chains,
Internet of Things networks, gaming, multi-media rights management, car rental,
Government proof of identity (or license) creation and insurance record management.

• More efficient
• Less risky
• More cost-effective
• Legal contracts
• Corporate treasury, accounts payable and receivable
• Trade finance, letters of credit
• Smart Property
• International payments
• Internal cash management

Augmented Reality

Augmented reality is defined as "an enhanced version of reality created by the use of
technology to add digital information on an image of something."

AR is used in apps for smartphones and tablets. AR apps use your phone's camera to show
you a view of the real world in front of you, then put a layer of information, including text
and/or images, on top of that view.

Apps can use AR for fun, such as the game Pokémon GO, or for information, such as the app
Layar.

42 | P a g e
Virtual Reality

Virtual Reality is defined as "the use of computer technology to create a simulated

environment." When you view VR, you are viewing a completely different reality than the
one in front of you. Virtual reality may be artificial, such as an animated scene, or an actual
place that has been photographed and included in a virtual reality app. With virtual reality,
you can move around and look in every direction -- up, down, sideways and behind you, as if
you were physically there.

You can view virtual reality through a special VR viewer, such as the Oculus Rift. Other
virtual reality viewers use your phone and VR apps, such as Google Cardboard or Daydream
View.

With virtual reality apps, you can explore places you have never been, such as the surface of
Mars, the top of Mt. Everest, or areas deep under the sea. The New York Times has a virtual
reality app that lets you experience virtual environments on Earth and other planets. Google
Earth also has a virtual reality app.

Mixed Reality

43 | P a g e
Mixed Reality (sometimes called Hybrid Reality or MR) aims to combine the best aspects of
both virtual reality and augmented reality.

In mixed reality environments, users seamlessly navigate through both the real and virtual
environments at the same time. Instead of residing in an entirely virtual world (i.e. virtual
reality), virtual objects are anchored into a user’s real world space and augment their real
world environment, making virtual interactions appear to be “real.” These interactions
mimic our natural behaviour of interaction, such as objects getting bigger as you get closer
and the changing of perspectives as you move around an object.

Applications
• Both VR and AR have been touted as one of the keys to training medical students by
replacing textbooks. Medical students can use either to work on digital cadavers or
dummies that can easily, and cheaply, be reset for constant reuse by hundreds or
thousands of students. Additionally, VR can be used to create digital labs that allows
students to get the hands-on experience they need without the cost associated with
physical labs.

• VR can also be used for emotional needs. You can use VR to distract someone from
pain, but you can also use it to create empathy, putting people in situations that they
might not be familiar with. On top of that, you can use it to recreate your memories,
though that comes with a whole series of ethical questions humanity might not be
ready for.

• The Layar Reality Browser is an application for iPhone and Android designed to show
the world around you by displaying real time digital information in conjunction with the
real world. It uses the camera on your mobile device to augment your reality. Using the
GPS location feature in your mobile device, the Layar application retrieves data based
on where you are and displays this data to you on your mobile screen. Details about
popular places, structures and movies are covered by Layar. Street views show the
names of the restaurants and businesses superimposed over their storefronts.

• The potential opportunities Virtual Reality offers to the media and entertainment
industry is notable; albeit in an experimental capacity. The technology has the potential
to define not only the experience of sporting events and music concerts, but also span
to the film industry and television broadcasts, by providing an immersive experience for
the user that might also find favour with advertisers, especially with the potential of eye
tracking technology being incorporated.

44 | P a g e
• Automotive companies are experimenting with creating virtual “test drives” that
demonstrate the experience of driving one of their cars through an immersive
experience. Similarly, retailers are finding VR helpful to enable shoppers to experience
products they typically require viewing in person for “fit and feel” from the comfort of
their home

SMAC
SMAC is a concept that is built on the symbiotic integration of the four ends of technology-
Social, Mobile, Analytics and Cloud. It develops an ecosystem that allows businesses to
enhance their operations and maximize their reach to the customers with minimal
overhead. Also, the fusion of these four wings unleashes a surge of new ideas for business
innovations regarding workflows, methodologies, services and products. In short, the SMAC
technology is a comprehensive and a single tool that provides a holistic solution for
businesses.

What sets SMAC apart?

SMAC is distinguished from its past generations of technology architectures by one
significant attribute- diversity. It is a collaboration of multiple disruptive technologies, each
carrying further layers in them, rendering a multitude of options, equally diverse and
assorted.

Social Media
Social media is no more just a fad. It has turned out to be one of the most important areas
of focus for businesses. In fact, today it has become instrumental in shaping the consumer
decisions as well as behaviour. The usability of social media has grown exponentially; people
are now using social media for advice on what products to buy, where to shop and even
regarding what firms they want to work with. Hence, social media renders immense scope
for customer engagement and brand building. Therefore, building a social media strategy
has become a mandate for all enterprises.

While most companies exploit social media for their customer service function only, many
enterprises have now begun using this platform in tandem with their sales and marketing.
This in turn enables them to utilize the data generated by the customers effectively to
further serve their bigger bunches of customers. Furthermore, Social media demolishes the
barriers that limit the sharing of knowledge amongst various networks, thereby encouraging
rapid exchange of collaborative information which can boost the business marketing results.

45 | P a g e
Mobility
Mobile devices have revolutionized the way people access digital content. In fact, the rise in
the use of mobile devices has been so prolific that it has led to the inception of a new
stream of business, called mCommerce.

With the introduction of smartphones and tablets, digital content has come to the fingertips
of consumers. Given to such an easy accessibility, there has been a dramatic shift from
laptop/desktop to mobile devices. Another factor that is driving the use of mobile devices is
their flexibility/mobility i.e., users can obtain data on the go without having to be stationed
at a fixed location.

Mobile banking has emerged as one of the most innovative products in the financial services
industry. This has led to a tremendous increase in the use of mobile devices by customers.
Not only do the customers buy products through these devices but also carry out the pre-
buying activities including browsing and product comparisons.

Analytics
Every year, enterprises generate billions of gigabytes of data. The availability of lower-cost
hardware makes it easier and more feasible to retrieve and process information, fast and at
lower costs than ever before. These data, if effectively analysed and utilized, can prove to be
an extremely valuable asset which can be later used as a competitive tool by the companies.

It is essential for the companies to recognize the prospect analytics which could be
preserved for building future business strategies. Analytics can help retailers predict buying
decisions of consumers. Likewise, it can expose fraudulent transactions. Also, these data,
especially Predictive Analytics, could be adopted in various scenario building activities.

A vast range of data sources have emerged over the time, which have brought about a
revolution in analytics.

• Internet data comprising of social media, social networking links

• Primary research including surveys, experiments, observations
• Secondary research, basically industry reports, consumer data and other business data
• Location data – mobile device data, geospatial data
• Image data which comprises of video, satellite image, surveillance
• Supply chain data i.e., vendor catalogues and pricing, quality information
• Device data sensors- RF devices, telemetry.

Cloud
Cloud has emerged as one of the most effective methods of storage, collaboration and
internal and external sharing of data. It is widely adopted by enterprises, IT vendors as well
as customers given to its scope for fostering innovations and improvising productivity.

46 | P a g e
Cloud Computing is gaining immense importance with each passing day given to the fact
that this method maintains transparency and speed because of the participation of multiple
users in the process. While the financial services and government sectors are mostly moving
to a private cloud model due to information security concerns, other industries like
healthcare and retail have adopted public cloud.

There are three major channels through which Cloud computing services are being offered,
namely: public cloud, private cloud, and hybrid cloud among which public cloud services
own the largest space in the total market owing to their easy availability, accessibility, and
low cost of adoption.

Examples

• “G,” a Delhi-based restaurant, encourages customers to book tables at the

restaurant on Facebook. This has helped the restaurant to engage new set of customers
through a new channel.

• “C,” a courier company, provided a mobile application to its consignment delivery

executives to update the delivery status of consignments. This resulted in significant
streamlining of its delivery-to-cash cycle.

• “A,” an automotive company, has developed a point-of- service tool to help its
technicians. The application connects wirelessly to the internet and provides them access to
online catalogues, repair manuals, etc. If the application is connected to a car, it can retrieve
test codes and secure the help of independent dealers on repairs required.

• “F,” a food chain with a presence in several Indian cities, takes orders on Twitter and
interacts actively with customers. People who want to order food from the food chain can
tweet on their Twitter account and the order is confirmed by a prompt response from F.

Big data and Analytics

All technology giants are now moving towards Artificial Intelligence based Data analytics
(Big Data) to get a deeper understanding on the immense unstructured data available. They
are looking at various sources to look out for data, classify it and get better understanding
on their consumers, their behaviour and market dynamics. It is this analysis that is helping
organizations to take more informed decisions.

Just to iterate some of the advancements with some real corporate examples, Cisco, the
world leader in Technology has come up with a innovative way to use big data to their
advantage. They came up with an advertising web banner, connected with a High Definition
Camera for face recognition and backed by AI based analytics tool. The camera through the
facial recognition, identifies the age of individuals passing through that street and feeds that
data to the back-end analytics tool. It then analyses the data and comes with an

47 | P a g e
advertisement which satisfies the need of that age group. For example, in the morning, a lot
of elderly people go for morning walks. So it displays an advertisement which showcases the
need of elderly people.

Similarly, during afternoon, a lot of school goers move on that street because of school
break. Thus it analyses that and shows different add pertaining to needs of that segment. In
the evening, young adults and youths are the major public passing the street and so a
different add is popped up on the screen.

Social Media, Mobility, Analytics and Cloud are changing the media landscape and type of
Marketing Communication strategy organizations use. The organizations could actually save
a lot of hard earned money on marketing spend and yet add really significant values to the
lives of customers through these technologies.

The decision making process nowadays solely depend on the insights generated through
data analytics and not just through assumptions. In other words, the decisions are made
through data insights and data insights come through technologies advancements.

48 | P a g e