Future Group Banks on IT to Make Informed Decisions : Kishore Biyani

Interview Questions

Full Interview with Kishore Biyani

Kishore Biyani:

I am of the opinion that while you are small, you can take decisions based on instinct and gut. But, as you grow larger and begin to scale up, decision-making has to become scientific and you need to be in control of your processes to take informed decisions. In this scenario, I believe that IT gains paramount importance in organized retail. Without IT, you cannot make accurate decisions and hence cannot scale up. It's that simple.

 

Kishore Biyani:

It's difficult to have a clear-cut answer to this. Either way, you still need information. The extent of its granularity, accuracy and timeliness depends on the degree of your technological sophistication. If you look at the western world, it has achieved a certain level of advancement in technology. They will readily spend millions of dollars to achieve an additional 0.1 percent efficiency. In India, we are at a different stage. We are learning as we grow. I feel that you should not become a slave to technology. It should not dictate how you should do business. You should keep on learning, changing and adapting as you grow. I believe that one should always first discover how best to do business before getting into technology.

 

Kishore Biyani:

I look at information technology as a tool, which, coupled with human interpretation skills, can help arrive at the best decisions quickly. I credit human intervention equally here; because IT can only help you get information. Interpreting information into tacit and explicit knowledge that will benefit the business can only be done by humans. If you think that technology alone will help you do good business - it's never going to happen.

 

Kishore Biyani:

Retailing is all about inventory management. All the decisions I talked about earlier are either on the consumer or the inventory side. The speed at which you can rotate your inventory is critical to the success of a retail business. I believe that IT is a life-support system for us. We have to manage many SKUs (stock keeping units) and we also need information of each and every aspect of our business. IT helps us keep a tab on all the areas of our businesses. However, there are instances when even the best technologies fail to deliver. Since last year, for example, we have started hosting a mega sale for products at reduced prices in our hypermarket retail formats (43 Big Bazaar, 65 Food Bazaar and 5 Fashion Station outlets) around Republic Day. Between January 26 to 28, 2007, we virtually sold thirty percent of our stock.

Worldwide, I believe, no system can support the selling of more than two to three percent of stock a day. Even with the best systems in the world, it is impossible to sell one-third of your stock in just three days. Systems like auto replenishment did not work during the three maniac days we had. These systems will replenish once or twice a day, but in those three days, we replenished our shelves ten to twelve times a day. During those three days, we were forced to set our systems aside and work manually because of the kind of speed we needed. During those three days, even customers behaved irrationally. Hence, we also had to perform irrationally. IT can only do things logically but when business starts to behave illogically, IT has to take a backseat. Nevertheless, I sincerely feel that advancements in technology will definitely help us gain some sanity in the future during such maddening days.

 

Kishore Biyani:

This is more of a human journey. It is the journey of thoughts to ideas and ideas to prototypes. During this process technology doesn't play key role. IT takes over when the process to prototyping rapidly kicks in. Once we perfect the prototypes, then it is the role of IT to rapidly replicate the prototype and push it to production environment. What we have seen worldwide is that even the fastest 'Mind to Market' fashion retailers, such as Spanish retail giant Zara, are not very high on technology deployment. They have perfected their own way of doing things, riding on fundamental IT infrastructure.

 

Kishore Biyani:

With our earlier investments in technology, we have better control and grip over our business. Our accuracy and control over information is now also far greater. Based on this, we are now working on something that will increase our investments even more. We are going to pump in upto Rs 400 crore more in technology as we plan to build a retail backend-technology services company. This will help us digitize our processes across businesses and move them to a common, shared backend.

 

Kishore Biyani:

I think RFID can change the way we do business. It has strong potential and nobody can ignore it. We ourselves are looking at different options of how we can use RFID at various levels in our businesses. Even though what we are doing with RFID is at an experimental stage, we see a lot of promise in the technology. It is capable enough to get deployed on a large scale. In fact, until now, we were looking at RFID in isolated environments. I feel, to harness its potential, we should start to look at the technology with a holistic approach. We are now drawing up a roadmap of RFID so it can be used across various aspects within the organization.

 

Kishore Biyani:

With technology, nothing is short-term. In order to witness its successful impact on business and its benefits, its roadmap has to be spread across the medium and the long term. As far as RFID is concerned, I think, within six months we should start to deploy RFID at the consumer business level.

 

Kishore Biyani:

We are, honestly, open to both. Right now, we are looking at certain high-end, interactive technologies for our retail media vertical, which are cutting-edge. On the other hand, in the retail merchandizing environment, we prefer systems and technologies that are tried, tested and proven. It all depends on the domains.

 

Kishore Biyani:

Predictive analytics and artificial intelligence are subjects that really excite me, and are something we would love to deploy in our business. As human beings, we would love to have the power to predict the future. We want to understand quite a lot about our customers' behaviour in terms of what culture or caste or location or profession make people buy the goods that they do. We want to analyze a lot of behavior patterns. Though we do a lot of analyses, of now we are nowhere near - in terms of AI - to where we want to be. Once we consolidate all our consumer data at the group level, we will try to introduce predictive analytics and AI to help us foresee trends more precisely.

 

Kishore Biyani:

'Vision 2010' is a roadmap we have defined in terms of the revenue and categories of businesses we would want to achieve. We want our group's revenue to be close to Rs 30,000 crore by 2010-2011. More specifically, we would like to have our food business and fashion retail vertical to generate revenues close to Rs 10,000 crore each, and the rest will be pooled in by other businesses. As far as technology is concerned, we are currently trying to build a robust technology vision that will allow enough scalability.

I believe that technology can be effectively used to build a competitive edge and core competencies. It is much like the plumbing of a building. Even though we forget about it once we've put it in place, it remains of paramount importance. To me, technology is all about collecting, disseminating and sharing information. It aids informed decision-making, and helps the organization identify mistakes, rectify them and ensures that the enterprise does not repeat them. In our business even a single mistake can be lethal. Without technology you are prone such mistakes. Hence, it is critical to have a technology roadmap in-sync with the business roadmap.

Since technology witnesses so many disruptive innovations, we have to be careful while drawing a tech roadmap. Therefore, we decided to build a basic, transactional platform to operate within SAP for our businesses and then construct technology blocks above it to help us have a holistic view of our group in terms of data and information. Future Retail Services is a part of the new vision we have created: to build a backend for our design services and business process outsourcing that will take care of our accounting and finance, customer relationship management and a lot of other processes across our various verticals. In a nutshell, I believe, no businesses can run without information technology. IT is a loosely-defined term as it can equally stand for business apps or communication systems or networking infrastructure. Irrespective of its definition or role, I can't see any business running without a certain amount of IT.