The Tata Group is close to rolling out an ambitious digital exercise, aimed at pushing the 145-year-old company to tap profitable options in the new-age economy and bring in rapid changes within structures in the group, while retaining core businesses.
The Mumbai-based salt-to-software conglomerate, which spends $10 billion (Rs63,750 crore) annually on capital expenditure, would invest about Rs1,000 crore for digital initiatives.
In an exclusive interaction with HT, Nirmalya Kumar, member, group executive council at Tata Sons, said the group will unveil three digital initiatives. While Big Data Analytics has just been launched, the remaining two – e commerce and a digital health platform – will be ready by the year end.
“We are a $100-billion-plus company. We would like to have the kind of growth where a quarter of the world’s population experiences our products and services. For that, you need to have growth from existing businesses (organic), some inorganic and also start new businesses,” Kumar said.
“In the new businesses, clearly one of the big trends is digital. We need to think how to re-imagine existing businesses in the digital world. It may mean, for example, that people will stop owning cars and go for car sharing. What are the business models that we can think of for our car industry then? This is what we are looking at.”
The new initiatives are widely seen as bringing in organisational agility in the group with new design that allows for sharing of resources.
The initiatives come at a time when the group has been facing slowing of businesses in flagship firms — Tata Steel posted a net loss of Rs3,925 crore in 2014-15 against a net profit of Rs3,595 crore last year. Tata Motors posted the lowest profit in nine quarters with the bottomline falling 56% to Rs1,716.50 crore in April-June.
Incidentally, at the group’s annual leadership conference recently, Tata Sons chairman Cyrus Mistry asked the group’s leadership and senior management to ensure sustainable profitable growth and develop agile businesses, including digital.
Among the three, the omni-channel e-commerce market place could be the largest with integration of store shopping and online buying. “It will be a marketplace of brands offering renowned names, both Tata and non-Tata, across lifestyle and electronics categories.
You will have curated brand stores instead of just a listing of products,” Kumar said. The platform will tie-up with about 80 brands, of which less than 10 are from the Tata fold — Croma, Westside, Tanishq and others.
The data analytics firm will be based out of Bengaluru and will manage data based on customer approval. “With the Internet of Things, there is a lot of data. This data will only be a cost unless you can use it to provide value to the customer or reduce costs for the company,” Kumar added.
The health platform will connect doctors and healthcare providers with laboratories and diagnostic centres as well as patients, so that all useful data can be accessed for better healthcare management.