India Economy

IoT to play a major role in ushering in economic transformation

Satya Sontanam Bavadharini KS | Updated on March 10, 2018 Published on November 18, 2017

KK Raman of KPMG talks of the technological developments - IoT, AI, Blockchain and more

KPMG, along with the CII, (Confederation of Indian Industry) launched a report on ‘The Intelligent Economy: Leveraging technology for the new era’. The report says that the new phenomenon of ‘internet economy’ is dominated by intelligent and interconnected machines, and self-learning algorithms.

KK Raman, Partner, Business Excellence, KPMG, India, shares his views on the various technological innovations that could revolutionise the business environment. Excerpts from a chat with BusinessLine:

How does Blockchain technology work and how is it evolving in India?

Blockchain is an evolution of overall technology from centralised systems to more distributed systems. The real need for Blockchain arises when consumers are dispersed and the system is to be operated with trust and connection. Financial services, where there is a need for distributed ledger system across the value chain, is the sector in which this application has been predominantly used.

We always see the developed economies cutting the first turf. In India, the Blockchain technology adoption is still in the nascent stage. We will see more applications of Blockchain in India as we move towards a digital economy.

In Blockchain, all the transactions are saved in a public domain. How safe is it?

As Blockchain works on a distributed ledger system, data is parked at various locations. Alteration attack at one place will not have impact on original data saved in the other ledgers. Because of the unmatched data, it becomes easy to find out where the changes have been made. Owing to this, Blockchain is considered safer than all the other existing data storage technologies.

Newer technologies always come hand in hand with lot of security concerns. When Cloud technology hit the road, the organisations were wary about the public cloud and invested only in private cloud. But now, one can see how the transformation has happened in adapting to the public cloud. It is just a matter of time before the benefit of new technologies is leveraged.

What are your views on AI (Artificial Intelligence)? Which sectors are deploying it?

AI is the buzz word in almost every industry. Indian enterprises are betting big on AI to revolutionise their traditional solutions and processes, innovate and build new solutions, and offer better customer services.

Several banks and financial institutions have adopted AI and machine learning technologies to automate highly process-based and data-intensive processes. Some of the leading private banks in India have also introduced AI-based chatbot to interact with consumers. Some of the other service-based companies in IT solutions and e-commerce also use AI technology to analyse the untapped needs of the customer and to do a better feedback analysis.

For the feedback, unlike collecting data using questionnaires, technology based ‘natural language processing’ is used. It captures will capture the words coming from the interaction, say, written or oral, and predicts customer dissatisfaction. It uses algorithms to do the analysis and provide us the useful input.

In India, AI developments are primarily focussed around enhancing customer products and services. The AI market in India is still at a nascent stage as compared to that in developed countries like the US and the UK, where AI is being widely used in almost every industry.

Another technology that is being mostly talked about is IoT (Internet of Things). How will businesses benefit by it?

IoT is the combination of all these technologies that we use right now. It is about connecting devices and maximising the value that we get from all these devices. IoT is poised to transform the way data is consumed and generated by businesses, consumers and industries.

When it comes to businesses adopting IoT, it is at a nascent stage in India. It will lead to industry 4.0 – Intelligent manufacturing, which transforms the economy from services oriented to automated manufacturing economy. This is the key shifting point, and IoT has a major role in this transformation and will have enormous applications. IoT could actually convert all industries into technology-based industries.

It has an important role is in the supply chain processes as this technology will would help in interactions among silos. With IoT in place, the entire band, from where it is produced to where it has been installed and how it has performed can be shared between the key parties to prevent any kind of risks and also to find out the next potential need.

Another area that IoT is targeting is automotive. The future is going to be more about connecting cars. We are seeing companies developing self-driving cars, which is the future and reality. Two cars on the road will have interaction on the roads and they could even predict when an accident might happen based on past data. This is the sort of technology that is coming to light and we believe, in 2020, the value of a car will be looked at from the perspective of software. That said, we will have to wait and see how IoT evolves.

When we talk about technology in the work place, there is worry about job displacement. What is your view?

When a new technology comes in, the skill set required will change. Earlier, the transformation was from manual to automatic and now it is changing from repetitive tasks to analytical tasks — one should be able to use analytical tools to deliver outcomes. But what have remained common are the jobs that require relationships, human judgement and creative thinking. It will take some time to settle down and do re-skilling.

Your take on cost versus benefit…

The return on investment on some of these technologies is quite well proven. There are many ways to adopt technology without incurring higher costs, say on ‘pay per use’ basis.

Thus, an organisation that adopts such technologies doesn’t look at just money but at the customers’ satisfaction. The organisation leveraging digitisation may have better customer satisfaction than the other, which in turn generates more revenue and loyal customers.

What are you primarily looking for, from the government policies? What kind of changes do you expect?

We are looking at a vision, in terms of the government creating a clear framework, supporting cyber security and privacy features. As and when there is a capacity to augment data, there is need for greater technology to protect the data along with talent upgradation and employability of people. That would be the standard fiscal incentives for adoption.

We have seen technology disruption in the last 27 years. What are the sectors still lagging behind?

We haven’t stayed behind anything, all industries have really come a long way. If we look at it from a national perspective, Banks and financial services sector took the first step. Improvement is seen in manufacturing and healthcare also.

That said, sectors that require more focus are tourism, handicrafts, co-operative institutions and institutions with mass involvement but with no large organisational support to grow.

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Published on November 18, 2017
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