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Perspectives

Asian Paints: The Digital Odyssey of a Serial Reinventor

2018-03-29


A leading Asia-Pacific paint company has woven a modern digital backbone into the fabric of its organization to deliver a superior consumer experience. Its goal: become the top player in the paint-as-a-service and home decor markets.

Asian Paints is the leader in the Indian paint industry. With a consolidated turnover of over $2 billion, our company is the third largest paint company in Asia, a top-five player in decorative paints worldwide and the tenth largest coatings company globally. Our operations span 16 countries (largely emerging markets), with 25 paint manufacturing plants across the globe, servicing customers in over 60 countries. We distribute our products through carefully nourished relationships with over 45,000 dealers spread across India for over 75 years. 

In India, customers buy paint from hardware stores and hire painters, contractors or architect interior designers (AIDs) to do the painting. The do-it-yourself model doesn’t exist in the region. While the per-capita paint consumption in India is far lower than in Western countries, we’ve seen high growth over the last decade, spurred by increased consumer awareness and higher discretionary spend due to the growing Indian economy. Our growth mantra has been to create demand through the continual and proactive introduction of innovative products and services. That goal has been ably aided by a modern IT backbone powered by enterprise applications from SAP and the company’s HANA in-memory database, which automates manufacturing and supply chain management (SCM) and enables more seamless omnichannel journeys.

Complacency has always been anathema to our company. Whether we’re launching innovative products or introducing new services for the digital age, we’re continuously reinventing the company, keeping the customer at the center. Our relentless customer-centric efforts have established us as a leading Indian consumer brand, despite the fact that paint is not a regularly used product.

From Products to Services

A decade ago, we began transforming from a predominantly brick-and-mortar product manufacturer into an agile and adaptive enterprise that provides value-add services in addition to products that help customers make their homes beautiful.

Our services transformation began with our painting-as-a-service offering, when we launched a toll-free telephone service for customers to request home painting. This required a major mindset shift and was the first step toward offering differentiating décor services. 

The next step was reimagining our business as a home décor business. This change emerged from our understanding of the painting-as-a-service ecosystem and the number of customer touchpoints involved. Home renovations typically require customers to work with dealers, painters and contractors, while high-end projects could include architects and interior designers. At any point in the project, customers typically experience unexpected problems and setbacks. We have an opportunity to unlock value and address a larger share of the customer’s wallet by working through these issues with customers or eliminating the problems completely. 

When customers seek to change their home décor, they also need assistance with coordinating colors and textures that mesh with their existing décor. So, while paint remains the core of our business, we also began offering consultancy services beyond our professional painting services, which helped us differentiate ourselves and position our company as a partner with customers as they work to beautify their homes. 

Other strategic shifts include foraying into emerging markets and extending our home décor umbrella to include kitchen and bath spaces. This required us to make a few acquisitions and extend our enterprise in newly collaborative ways. This has been a significant shift involving cultural change and new IT systems. 

How Digital Transformed Asian Paints' Loyalty Program

Digital-powered Endeavors

In order to provide a consistent customer experience across multiple touchpoints and offer optimal product and service delivery, we needed to ensure strong digital enablement across the value chain. This drove us to digitize the organization’s functions end to end, from customer engagement systems, to all front-end CRM and dealer management systems and all supply chain and manufacturing operations. This meant keeping IT as a foundational element to make people efficient, accountable and focused precisely on the customer. Data analytics has been another foundational element across the value chain. 

Key digital initiatives that powered our transformation include:

  • Getting our arms and mind around the manufacturing supply chain. While paint manufacturing is not complex, we needed to improve our operations with large-scale automated factories. At the scale required, we needed fully-digitized recipe management, with full integration of shop floor operations with our SAP ERP system. 

  • Using data to add intelligence to a complex supply chain. Our industry is beset by seasonal uncertainties. Further, roughly 60% of our costs are attributable to raw materials, and about 50% of our raw material requirements are met through imports. We were using JDA Software’s advanced supply chain planning solutions for over two decades to help us plan better; however, given the increasingly VUCA world (with its volatility, uncertainty, complexity and ambiguity), global events often disrupt availability and impact costs. Macro factors and directional trends, such as commodity demand fluctuations and price volatility in international markets, significantly influence our cost structure. Effectively handling these uncertainties required us to remap procurement that typically deals with unstructured data. We developed an advanced SCM application using IBM Watson, which informed more effective decision making amid continuing uncertainty. 

    It’s crucial in the paint product category to ensure service levels at the dealer counters and availability of the range of SKUs. We’ve enabled optimized shipment creation and tracking to ensure high order fill rates. In some markets, we offer twice-a-day delivery to our dealers. Our SAP HANA platform-based solution reinvented our order servicing by empowering the sales team with timely information about the current stock, and the distribution team about inventory levels and possible SKU shortages. The distribution team is empowered with real-time visibility across all the company depots, and into shifts in demand and production schedules for effective decision making, as well as the ability to perform root-cause analyses for quick corrective action. This is done via a workbench that combines analytics with an execution engine. This application won the first prize at the 2015 SAP HANA innovation awards. 

  • Elevating CRM to new heights. Our CRM models all of our customer relationships (both dealer-enabled and direct). The system is built to handle a franchising model spread across 13 cities, comprising processes that involve organizing, contracting and executing an end-to-end painting service. The system effectively manages loyalty and rating systems, net promoter scores and customer satisfaction, driving customer centricity. We’ve recently launched a new service model, called PaintTotal, under which the dealers offer services using their own set of resources. The entire process is backed by a data architecture that funnels information to all sets of users. 

  • Achieving omnichannel consistency. In our relentless focus on enhancing satisfaction, we embarked on an initiative to provide a seamless experience to customers, dealers and influencers across physical, digital and human channels. When we began this journey, our data architecture wasn’t able to fully support the required changes. 

    To overcome this, we mapped the customer journey across channels and built a data architecture and IT platform powered by SAP enterprise application software, such as Hybris Commerce, Hybris Billing and Hybris Marketing. This is combined with Adobe’s Experience Management platform to provide a strong IT architecture that covers both the experience and transactional requirements of the company. This helped us facilitate seamless journeys across physical, digital and human channels. Powered by insights from data gathered at each touchpoint, the solution enables us to generate unique offers to each customer’s needs. A consistent view enabled by the IT architecture empowers the call center, stores and consultants, etc. to provide a delightful customer experience.  

  • Applying precision customer segmentation by blending behavioral and data science. Armed with our foundational data architecture that connects all systems, we’ve embarked on mapping the customer journey across our human, digital and physical channels to create specific behavioral categories. Supplemented by in-depth interviews and research, this led us to segment customers based on their demonstrated choices and behaviors. 

Our largest segment is a tech-savvy persona who conducts a lot of online research and becomes loyal to our brand only after interacting and transacting with us. Another customer type is a wealthy person living in a tier-two city who tends to display his accomplishments by painting his home in a dazzling display of colors. This customer prefers to deal with consultants and requires human interactions.

Connecting Digital with Human Expertise

By gaining a better understanding of the home paint buyer, we learned that our customers needed a better visual view of our products and services. Armed with this insight, we launched our 8,000-to-12,000-square-foot Asian Paints home stores in partnership with dealers. These stores employ 3-D visualization and virtual reality technologies to provide customers with more intuitive visual walkthroughs, enabling them to explore a bouquet of colors and textures and make their choices along the way, creating their own unique cache of choices. Subsequently, consultants step in to complete the decision-making process.

To facilitate this, we created a color consultant app that allows consultants to take pictures of customers’ home walls and apply color and texture. The app renders them instantly, providing a view of what they would look like if painted in different colors and finishes. The application is powered by our CRM systems and other front-end applications, such as our Paint Total app and Visualizer app.

To further engage customers, we employ a curated chat-like engine, using robotic process automation technologies, to empower dealers to recommend contractors to execute jobs. This also allows us to track the entire transaction to ensure customer satisfaction.

None of this would matter if we couldn’t provide white-glove service to our customers. Our call center handles around 100,000 customer interactions every day. Calls are recorded and analyzed to better understand niche requirements. Customers’ need for Vastu consulting (an Indian equivalent of Feng Shui, the Chinese philosophy of arranging personal surroundings in harmony and balance with the natural world) is a niche requirement that we’ve added to our menu of services and embedded into our mobile app after listening to many customer calls over the past two years. This has enabled us to better understand and standardize the process.

No digital makeover is complete without a website component designed to educate, encourage and entertain our customers in their home improvement quest. To that end, we’ve launched websites such as www.beautifulhomes.com to create curated customer experiences. These are geared toward storytelling and are not linked with sales. Our next step will be to discover ways to monetize these sites.

Selectively Applying Best Practices 

We applied a few best practices to guide and inform our business and digital transformation journey. These include:

  • Marrying IT and business strategy: At Asian Paints, IT strategy begins in the boardroom. IT leaders are an integral part of our organization’s operating council, and thus are engaged with the corporate strategy from the get-go. 

  • Early adoption of emerging IT: Transformative vision needs early onboarding of IT tools. Given our propensity for continual reinvention, we understood that early (and in some cases pioneering) adoption of IT is critical to success. Early adoption of an API-driven architecture worked very well for us. While the front-end kept changing rapidly, the back-end system remained supportive. We were an early adopter of HANA software and pushed its usage to the core. This was a pioneering adoption in India’s manufacturing sector. We also evaluate emerging technologies on an annual basis and plot them across the business areas to determine possible opportunities and selectively execute them.

  • Applying design thinking to create more intuitive applications. On the people side, we’ve adopted the design thinking methodology. We started with a boot camp at Stanford University, and after becoming certified coaches, we trained others and institutionalized the practice. The design thinking methodology allows us to stay focused on customer empathy, and reimagine solutions based on our deeply observed points of view. This has been the key success factor driving successful adoption of our various transformational applications.

    We now use this approach for most of our app development. For example, in the past, when we pushed information to our frontline workforce’s mobile device, the apps weren’t well used. Using the design thinking methodology, however, our IT teams spent time shadowing the frontline workforce, meticulously understanding how they interact with customers and at dealer counters. We noticed marked regional differences in user requirements. For example, in some markets, our regional managers prefer to first view collections, whereas in other metro markets, selling a premium product was the main goal. 

    In some cases, this involved listening to customer audio clips since these conversations occurred in vernacular languages for which voice-to-text application was difficult. We had collated clips, classified them and made them downloadable on an app to enable our employees to listen to interactions. This provided many insights, which are incorporated as features in future releases.

  • Empowering dealers, minimizing disruption. In the process of change, we strive to minimize disruption for our dealers and make them a partner in the entire evolution. We consider them a key stakeholder and focus on equipping them with the right technology tools they need to keep pace with a continuously reinventing Asian Paints. 

Author

Harish Lade is Vice-President of Information Technology and Systems at Asian Paints Ltd. In his 21 years at the company, he has led a variety of transformational initiatives in diverse areas, such as next-generation consumer engagement platforms, advanced supply chain planning systems, manufacturing execution systems, robotics, advanced and predictive analytics, and external and internal collaboration platforms. He is currently leading the IT team into the next wave of digital transformation at Asian Paints that will accelerate the company’s vision of becoming a forerunner in inspiring home décor. Harish holds a post-graduate diploma in computer-aided management from Indian Institute of Kolkata, India, and a B.E. in electronics engineering from National Institute of Technology, India. He can be reached at https://www.linkedin.com/in/harish-lade-6abb803/

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Asian Paints: The Digital Odyssey of a Serial Reinventor