RPG goes digital to integrate all group functions

MUMBAI: RPG Enterprises, the tyre to IT conglomerate, plans to ring in a comprehensive digital change across its businesses that would integrate all the group’s functions across products, clients and even monitoring and rating of employees of the Mumbai-based group.

“Digital has become a way of life and key differentiator in RPG group,“ said Chairman Harsh Goenka. The company in 2015 and this year is investing at least Rs 27 crore in pushing for digitalization and says the returns have started coming in. The investments are not a fixed amount, said the group.

From this year, all board meetings in the business house have become completely digital. All decisions, discussions, points jotted down by Board members are on apps created for each company leaving no paper trail.


Eager to shake off the brick and mortar image, conglomerates like Tata Sons, Reliance Industries, Aditya Birla Group and Mahindra have marked out the need to go digital to keep up with the changing economic scenario and move into newer ventures. However analysts say that conglomerates need to realise that going ‘digital’ is not a onetime activity.

“It is a moving post and groups need to see their impact in business. Providing gadgets is not enough, how much sales growth has happened because of it is what matters,” says Sanchit Vir Gogia,chief analyst and CEO at Greyhound Research.

“For all small to medium impact initiatives, where we have invested approximately Rs 4 crore, our cost saving could be to the tune of Rs 25-30 lakhs per initiative. For the large impact initiatives, where the investments are in the range of Rs 10-12 crore, the cost savings would be much larger, maybe Rs 4-5 crores,” the RPG group said in response to an email query from ET.

The RPG Group has hired or transferred 5 resources in the digital space over the past 3 months and some like Sachin Nandgaonkar president – Specialty Sector, RPG Enterprises, and was brought in from BCG last year. Success in pushing digital business will be 20% of Nandgaonkar’s target.

“Companies need to get digital experts who can bring in the funds and every function needs to think the ‘digital’ way. It should not be confused with technology and for that one needs to hire experts who can help the group understand the larger picture, measure the change and have a defined outcome,” added Gogia.

RPG’s tyre firm CEAT, for example, is working on sensors that will measure the condition of tyres and mark the location and spot any problem with it. CEAT has invested Rs 13 crore to make their plant in Nagpur completely digital. In the plant, if any wrong material comes in, the machinery in the entire factory will shut down. Chances of errors go down, says the chairman, who hired consultants for the new factory.

The group’s IT firm, Zensar Technologies, has been told to offer digital as a value proposition to its customers. The mid-tier IT firm will concentrate on 3 geographies-US, Europe and South Africa- in three verticals -retail, manufacturing and insurance - and in three businesses –application services, infra and digital. In 2014, it acquired ecommerce technology firm Professional Access to help scale up its digital business. Digital was about 13% of revenue at the end of FY15 for the IT firm and is expected double in next few years. In the last few weeks, Zensar has created 4-5 app for customers and this number is expected increase up to 30-40 for better client focus.

“We have created a tool called Zenverse - any person can ask a query to the CEO and he has to be answered in the next 24 hours. Digital will become the business and everyone is thinking digital,” said Goenka.

Sales teams of group companies like RPG Lifesciences and CEAT have been given iPads through which they can log in all sales figures of the day, managers can monitor the clients met, outcome and work done on a daily basis irrespective of geographies.