True Digital Transformation Involves the Ability to Extract Meaningful Data: K Satya Srinivas, CIO, Pennar Industries

In an exclusive interview with Express Computer, , CIO, Pennar Industries, provides insights into their notable technological advancements and digital initiatives post-pandemic. The conversation delves into the impact of these initiatives on business operations, with a focus on cloud migration, AI integration, Industry 4.0 adoption, and data security. Pennar Industries, a key player in the manufacturing sector, sheds light on their strategic approach, challenges faced, and the future roadmap for their IT organisation. The dialogue unfolds as a rich exploration of how technology is reshaping the landscape of the manufacturing industry, and the considerations that drive Pennar’s digital transformation journey.

What notable advancements in technology and digital initiatives have your team undertaken post pandemic, and how have these initiatives impacted your overall business operations?

Certainly, loads of credit goes to the pandemic for this. The challenges posed by Corona have inadvertently facilitated a smoother transition in our lives. This is primarily attributed to the gradual shift towards different levels of maturity within various organisations. The pandemic compelled us to move towards achieving a faster maturity model within a relatively short timeframe. Management gained a clearer understanding of the importance of IT, its necessity, and the rationale behind investments, all without external consultation.

Another crucial point is our steadfast belief, particularly from an IT perspective, that productivity is inherently linked to sound IT investments. Providing accurate advice to management has made it easier for them to navigate challenges. The quality of Management Information Systems (MIS) is contingent upon the implementation of various platforms within the organisation’s DNA.

When discussing digital transformation, it extends beyond the concept of a paperless office. While many companies may have achieved a paperless office, true digital transformation involves the ability to extract meaningful data. The effectiveness of obtaining data points hinges on transactional efficiencies and data accuracy.

Our approach involves breaking down all business problems into manageable business processes. Identifying key processes results in defining Key Performance Indicators (KPIs), which could pertain to finance, operational efficiencies, or other aspects. Different industries, such as manufacturing, follow distinct yardsticks for measurement.

As we move towards digital maturity, setting a roadmap within a framework becomes imperative. Industries are now incorporating elements like Industry 4.0 or 5.0, emphasising IT assessments. Standard product tools, vendor assessments, and known best practices play a crucial role in achieving maturity.

Breaking down processes into verticalisation is essential. This process begins with identifying customers, fulfilling their requirements, and completing transactions. An effective Customer Relationship Management (CRM) system, coupled with a robust Enterprise Resource Planning (ERP) system, is fundamental to success. Manufacturing processes, especially, benefit from Manufacturing Execution Systems (MES) for track and trace capabilities.

For industries requiring a high level of sophistication, such as automotive or aircraft manufacturing, the integration of robotics, AI/ML, and smart factory concepts becomes pivotal. Assessments, such as Gartner’s assessment model, guide decision-making in IT roadmaps. Management can then prioritise investments based on their preferences.

What key digital initiatives has Pennar Industries undertaken beyond achieving a paperless office? This could include initiatives such as Industry 4.0 or establishing itself as a smart manufacturing unit. If possible, could you highlight some specific examples?

So, here’s the scoop on our digital initiatives. First off, we’re diving into the cloud scene. We’re looking to shift our applications up there. It’s all about nipping those data-holding risks in the bud. We’re all about staying in tune with the latest trends and tech, and who better to handle that than our trusty cloud partners! That’s just one piece of the puzzle.

Now, when it comes to applications, we’ve got some moves happening. We’re in the process of migrating third-party apps over to a slick SAP HANA cloud setup. It’s all about streamlining communication between applications with our homegrown MES system. We also develop the analytics for MS reports for KPS. In email front, we’ve pretty much set up on Google Cloud for our mail services. Yeah, we’re making moves!

We’re big on policies, especially when it comes to toeing the line with government regulations like the ID law. We’re on top of it, identifying and safeguarding sensitive and personal info with some solid policies.

Alright, let’s talk about the migration of applications to the cloud. Are both the critical and non-critical ones making their way to the public cloud, or is there a specific segregation plan in place?

So, when it comes to choosing our hyperscalers, we’re leaning towards them for a reason. Currently we are using CtrlS. The go-to preference is usually SaaS clouds because they not only take care of the applications but also have a handle on the entire cloud setup. This means smooth sailing when it comes to application upgrades and the whole backup and disaster recovery scenario. Of course, it’s all laid out in the contract with some conditions.

Taking a closer look at their shock controls, we’re gradually offloading responsibilities to them one by one. It’s a strategic move for a smoother operation.

What has been the impact before these were moved to cloud and now what kind of business benefits you are reaping after taking these initiatives?

I can’t claim that we always reap the benefits. The ease in administration for finance and infrastructure is undeniable; we rely on them, and we’ve experienced commendable service levels. No compromises there. However, delving into research, we grapple with understanding application integration, latencies, and the myriad challenges it brings. One aspect, and a crucial one at that, is the absence of any guarantee against ransomware from our cloud partners.

In my interactions with these partners, I often inquire about a comprehensive component that can provide alerts for ransomware. To my recent knowledge, Google lacks such a component or a state-of-the-art solution. While not exhaustive, it raises concerns. The cloud partners seem to operate in isolation due to competition, necessitating the establishment of a uniform framework. There should be a shared ransomware database among them, where any identified threat counts can be hosted for broader use.

The context is crucial because, as we know, India has faced a high percentage of ransomware attacks. Focusing on mitigating these risks becomes paramount for us. My understanding is that ransomware doesn’t strike overnight; it lurks in the system for at least two to three months. These cyber perpetrators even target disaster systems, holding enterprise data hostage. While the cloud partner may not be directly at risk tomorrow, clients bear the brunt, relying heavily on data insurance as their safety net.

Are all these initiatives entirely aligned with the business outcomes of your organisation?

All our tech and digital initiatives are aligned with the organisation’s Board objectives. As an IT team, it is our duty to suggest to the Board what all technologies have to be implemented that could help in uplifting organisational efficiency and enable seamless business operations.

What are some of the areas where your organisation has leveraged AI technology, particularly in the context of Gen AI, a term widely discussed by thought leaders?

We’re contemplating the integration of AI into our manufacturing and metal processing, recognising that we haven’t quite reached the pinnacle of maturity in this realm. Over my nearly three decades of experience, I’ve observed that in India, we tend to be late adopters of IT trends. The rapid pace of adoption hasn’t been feasible for us, especially considering the swiftly diminishing product life cycle in IT. This poses a challenge; by the time products evolve and retire, we often find ourselves in the dark.

The Indian IT industry is still grappling with readiness for AI. While we’ve heard and seen a lot about AI, the feel-good factor doesn’t necessarily translate to real, tangible benefits. We’re open to adopting AI solutions in specific business areas if they’re presented to us, but articulating and defining these solutions remains a hurdle. We’re on standby, ready to embrace any AI or ML solutions that can genuinely enhance product quality and deliver a solid return on investment. However, as of now, we haven’t encountered any mind-boggling use cases.

Participating in discussions about AI and witnessing impressive presentations is one thing, but proving the practical applications and achievements is another. While AI undoubtedly holds promise and potential in certain areas, we’re cautious about making sweeping statements. It’s too early to unequivocally declare that AI will soar. In some industries and niches, pockets of potential for AI enablement exist, but it’s crucial to acknowledge that it can’t replace human resources across the board. In specific areas, like automating tasks such as IVR welding, AI-enabled solutions may offer superior quality compared to human counterparts. So, the journey into AI for us is still unfolding, with some industries showing promise, but we approach it with a discerning perspective.

You highlighted the motivation behind migrating applications to the cloud as primarily centred around data protection. Considering the security posture within your organisation, could you elaborate on the strength of the mechanisms in place to safeguard the main asset—your data?

We’ve got our security policies firmly in place, backed by our in-house teams conducting regular security audits. However, the game changes when we navigate our data through various uncontrolled networks. The maturity of our network security is primarily observed through certifications, and this introduces a perpetual concern. When relying on third-party certificates for security, there’s always a level of uncertainty.

We take a close look at security through assessments, identifying incidents and promptly addressing them. Fortunately, the occurrence of security breaches is rare, and we attribute this to our meticulous approach. Billing, a critical aspect for us, receives due attention with data elements carefully fragmented. Critical applications, such as HRPA and SBAS, are under tight control, ensuring a robust security posture.

For regular data that doesn’t reveal sensitive information, we maintain a standard approach. Normal network access is governed by a combination of access control policies, firewalls, and user controls at various levels. It’s a multi-layered approach to safeguarding our data and ensuring a secure environment.

Within the context of the manufacturing industry, what is the current position in the evolution towards Industry 4.0? Have you matured to Industry 5.0, or perhaps adopted a different paradigm?

Yeah, I get it. The whole world seems to be jumping on the 5.0 bandwagon, especially the German companies leading the charge with Siemens. They’ve practically aced the 5.0 game. However, when we take a step back and assess things—not just in our industry but on a broader scale—we find ourselves somewhere around 2.5 out of four. There might be pockets where things are looking good, and folks are riding the wave of those journeys. Some pockets might even have hit the mark, but overall, we’re not quite hitting the industry 4.0 mark. That’s where the potential lies, and there’s this noticeable gap in Industry 4.0 consulting.

Now, the tricky part is, we can’t just box IT into its own category when it comes to Industry 4.0. Why? Well, we typically separate ourselves from manufacturing and such. We focus on IT infrastructure, applications, and the whole cloud journey without really delving into the nitty-gritty of manufacturing equipment and its alignment with IoT, AI, ML, robotics, and smart factory setups. It’s like we’re missing a crucial link in the migration to Industry 4.0. We can’t just limit ourselves to saying, “I’ve done my IT assessment and maturity assessment.” To truly make strides, we need to dive deep into understanding the nuances of Industry 4.0 or even the upcoming 5.0. This, in my opinion, can significantly propel organisations to the next level in line with industry standards. It’s like setting the stage for whatever future standards might come our way, similar to how GXP standards shape up in the pharma sector. Certifications or alignments could be the key in ensuring we’re meeting those future benchmarks.

Lastly, looking ahead to the future outlook and roadmap for your IT organisation in supporting the overall business, could you outline the key three or four focus areas? Additionally, are there specific technologies you are heavily investing in, anticipating a substantial transformation in your line of business, particularly within the manufacturing industry?

Manufacturing is a key player here, no doubt. It’s an end-to-end game, and for that seamless flow, IT alignment is crucial. I strongly believe that having this alignment is what allows us to build data historians for quick and easy references. Plus, when every piece of equipment is IT-enabled, it opens up a world of possibilities. We’re talking about collecting data points from each machine and turning them into meaningful KPIs. This isn’t just about historical data; it’s also about diving into areas like predictive maintenance and analytics, especially in those pockets where we’re aiming for advancement.