MRSSL Interview with Lakshaman

In an interesting interview with Mr. Lakshaman Bandaranayake, we got the scoop on the digital revolution in Sri Lanka and its impact of businesses as well as the research industry.

Mr. Lakshaman Bandaranayake, is the Founding Publisher and Director of ‘Lanka Business Online (LBO)’. He is a well-known figure in Sri Lanka and possess much knowledge in the fields of politics, business, marketing, the digital environment and how it has evolved over the years.

He is also well known for the inspiring and engaging LBO summits held through the year that bring together the greatest minds in the industry to discuss and educate on various topics. One key area of discussion in the recent past being Digital in Sri Lanka, we found him to be the best candidate to give insights into the digital revolution in Sri lanka.

Let’s have a much interesting read into his opinions…

How would you define ‘being digitally forward or progressive’?

It is not about having a website or a Facebook page or a mobile app. Not about using digital as a tool in various functions. But whether digital has been embraced as a new business philosophy and augmented the user experience by aligning the organizational resources and processes.

Let me provide an example to illustrate what I meant by leveraging digital as a business philosophy. Think of two digitally driven services you may have experienced -“Pick-Me” and “Uber” versus Kangaroo cabs. All these three businesses are customer focused. All three provide on-demand mobility solutions to customers. But the difference lies in the user experience

Pick-Me and Uber leverage digital – mobile, cloud computing, artificial intelligence and analytics – to create a business model and an operating model built on the philosophy of putting the customer at the center. Both companies offer convenience, real-time information on the status of the ride, relevant contextual information such as traffic, fare transparency, customer feedback opportunities. They empower the customer, so the passenger could make real time decisions about and around the ride.

computing, Uber tracks drivers’ phones to make sure they’re driving safely. They could also measure success not only on the business operation oriented parameters such as the number of hires and revenue, but on customer focused parameters such as waiting time and the quality of ride-experience etc.

To be digitally progressive is to understand the disruptive power of digital, and to leverage it to

another renaissance, which she called the “Digital Renaissance”. She observed that, as in the first renaissance, digital would be a liberator of the inventive imagination.

We have seen how the emergence of new business models built on digital has disrupted multiple industries. Retail, publishing, hospitality, aviation, logistics and financial services and many other industries have undergone transformations in pushing the boundaries in two areas; customer centricity and organizational excellence.

Let me try and explain the relevance of these technologies to business. Servicification is an unusual term. Simply said it is about leveraging digital to build services around tangible products or further enhancing existing services.

Think of your smartphone. Of course you buy an iPhone partly for the design and the form factor. But the real value you derive from a smartphone comes from the services bundled into it – what we commonly call apps.

Ever since Uber was launched in Colombo I am less and less inclined to drive. If not for my wife’s insistence, I probably would have got rid off the vehicle. I do not see a vehicle as a product to own; I see it as means to obtain mobility solutions. I believe autonomous cars will arrive in Sri Lanka within the next five years. I am dreaming of the day when I can summon an autonomous car on my mobile, navigate it using an app in my mobile and pay the fare on my mobile. Imagine the freedom from the drudgery of driving in crowded Colombo roads and being chauffeured by an intelligent vehicle.

Next is the platform economy. I may be over simplifying things, but let me put take a historical view to explain what a platform means.

Platform economy is nothing new; it has existed even in the old days. Take for example traditional paddy cultivation in Sri Lanka. Labor is shared in villages in every stage- from planting rice seedling to harvesting and threshing. The tradition of the unwritten contract that existed among the villagers was the platform. That enabled sharing labor, which enabled a “sharing economy”.

In the modern world, a retail chain is a physical platform. Retailers store a range of products from multiple vendors for the customers to buy. Nowadays you can access certain services as well – such as bill payments and cash deposits and withdrawals.

In the virtual world a platform is a technology-enabled process of interaction between sellers and customers. This involves cloud computing, smartphone apps and social networks to facilitate economic activities between parties in supply and demand sides. The platform doesn’t own any inventory or provide the end-service customers seek. “Pick –me” and Uber connect passengers with taxis; e-channeling connects patients with doctors; Airbnb connects guests with hosts; TicketsLK connects patrons with cinemas.

made presentations to few leading agencies- will digital end the marketing as we know it or will digital end the 30-second communication model. None of the industry leaders were willing to see digital as an opportunity or a challenge then.

What are the biggest advantages Sri Lankan companies have to progress in this?

Unlike nuclear power generation, railway or broadcasting the advantages of digital are more or less equally available to everyone at the same cost and the same time. It doesn’t take generations to transfer technology form where it was invented to rest of the world.

Digital crosses conventional boundaries, and economic and other strata at lightening speed. There are two factors that could hinder in exploiting digital advantage; regulations and reasons of economy. Sri Lanka has a significant advantage in the regulatory space. Market friendly regulatory framework in telecommunication industry, no doubt, accelerated the digital accessibility, thanks to foresightful regulator Rohan Samarajiva. The mobile broadband, which I am sure, will be almost universally available in next few years and fiber-backbone are other advantages. Despite the best effort by finance ministry to deny us the cost advantage with 50% levy on data, our data cost is still much lower than most of the countries.

What about the mindset? What kind of mindset is required to succeed in this new age of marketing in Sri Lanka?

In an era of rapid transformation, the most difficult task, which is vital for success, is sense making. Making sense of what’s going on around you. If you are not cognizant about that, you are fossilized, sooner or later. I believe, in any era of transformation in the history of human civilization, those who are open-minded, curious, and explorative and making sense of what’s going on thrive. Others fall through the cracks.

If we were to fit research into this equation. What role do research organizations play in this new age?

think market research practitioners must ask the same question themselves. What new value has the market research industry added by leveraging digital?

Market research is about helping clients in sense making and in informational action. That fundamental role hasn’t changed, in my opinion unlikely to change soon.

In the digital age, marketing as a business philosophy is increasingly becoming more and more relevant. But marketing as a business function needs to be reinvented. The very foundation of the 100-year-old marketing model is under stress as consumers migrate to digital.

transform societies; economically, socially and politically.

If you take Sri lanka as a whole, where would you say we stand in this digital revolution? What would be the challenges we need to overcome? What would be the advantages we have as a nation?

Certainly not where we ideally should be. We may be somewhat ahead of the peers in the region, but we got to benchmark ourselves against nations with higher level of economic development. Within the next two to three years the vast majority of consumers will be accessing the web through mobile broadband. Most of the new digital users are likely to be exclusively mobile Internet users. The mobile industry has been very progressive in propagating digital access to the public.

While traditional media is lagging behind in development a newer and richer content experience digitally, citizens themselves have taken content creating in their hands. So we have a population that is fast adopting digital. Let me explain now what I meant by we are not where we ideally should be. As for making citizens’ services digitally enabled, we have a long way to go. It is a shame that a country which boasts a high level of literacy, universal access to primary and secondary education, a high ranking on the human development index and of course is the leader in the mobile technology in the region, has not yet being been to leverage digital to improve public services in a significant manner. Digital enables sharing and collaboration, yet there is hardly any use of digital to promote citizen’s participation in governance.

We still need to fill paper forms and stay in line, and we waste our time in inefficient government offices to get many things done. You won’t believe the amount of paper you need to submit and amount of time you need to waste to file an application for VAT registration. And most of the documents needed are already with the Inland revenue Department.

By not making digital access universal, the government has created a digital divide, which has warped the playing field. Our education sector has miserably failed to enrich the learning experience by leveraging digital. Kids in affluent households, who have ubiquitous Internet access, enjoy a distinctive advantage over those who are less fortunate.

Those who are following Pearson Edexcel qualifications have access to a trove of content – past papers, mark schemes, examiners’ reports etc. They could also access an unlimited number of online resources such as Khan Academy or Wolfram to complement their school learning experience. The mass tuition-classes are the only supplementary resource available to students who do not enjoy such digital privileges.

There is a cost in failing to digitally power public services. The country is loosing economically and will not be able to take quantum leaps in productivity and competitiveness unless the government acts with a sense of urgency. In my opinion, the

E-channeling, Airbnb, Uber, TicketsLK and Pick-me are platforms focused on one single product or service. They are more like single product market places. WOW, eBay and Amazon offer much larger assortments and bring the benefit of network effect, the economies of scale and scope.

YAMU has a very interesting proposition and a great platform brand. To exploit the full potential of the platform, and gain network effect, YAMU should keep building features and improve user experience, to make it more than a content experience. I think it has a huge monetization opportunity by linking to a restaurant reservation and an online food service engine. YAMU could also build analytics to data collected from such an engine and provide analytics for targeted marketing.

Data-science enhances the effectiveness of platforms. Analyzing customer behavior in fine granularity and providing predictive analytics for targeted marketing. Artificial intelligence and machine learning develop autonomous systems such as self-driving cars. You might think such technology marvels are meant only for Googles of the world. Not really. nCinga, a Singapore based technology company founded by a Sri Lankan, offers automated manufacturing systems which use IOT, analytics and artificial intelligence.

The next trend you need to keep an eye is blockchain technology. Google docs, which enables real time online collaboration among multiple parties is a simple example how the Blockchain technology works, as against you emailing a document to another an wait until you receive the feedback, and the document has to move back and forth several times until it’s acceptable to every collaborator.

Simulation and gamification are two other areas I would like to mention but in the interest of time I would not go into details.

In summary servicification, platform economy, data science, IOT, blockchain, simulation and gamification are some of the areas I think businesses should explore to improve organizational efficiency and stakeholder engagement.

What would you say the biggest challenges are for organizations in Sri Lanka to achieve this?

I think everything eventually comes down to two things – value proposition and user experience.

Invent an online value proposition that is relevant to the customer and provides an omni-channel experience, and integrate digital and legacy channels. And make sure your desktop and mobile experience is great- visually

It’s crumbling because the digital brings transparency, which holds business accountable. The power of one–way, a passive, manipulative and crafted message is diminishing. Social outweighs commercial communication in authenticity and believability. Consumers do not follow the linear sequential purchasing process text books profess. The validity of brand choice process and ATR model (at least what the marketers believed that existed) is eroding. On digital the, journey from awareness to purchase could be measured in nano-seconds, so to say. So the traditional marketing models are under the threat of becoming irrelevant.

Research industry should facilitate that transformation in marketing; in so doing it too should transform itself. To fulfill this, the industry needs to re-invent both in content and delivery. In an era of “data deluge” the value proposition should shift to facilitation of informational action.

What kind of impact would this have on the research industry? Positives & negatives? If you were to give advice to all the research companies in Sri Lanka today, what would it be?

If the traditional mass-marketing models were getting obsolete, so would the traditional market research be. Because the data-oriented traditional market research services were meant to serve the practice of traditional mass marketing.

Overall, my opinion is, digital is a positive development for research industry. This is an exiting time to be in research industry. The industry’s ability to add value could significantly enhance in many ways.

There aren’t any negatives, but of course many challenges. I believe most of the agencies now use mobile and cloud computing in collecting survey data. The result is cost and operational efficiency. I think research industry needs to look beyond efficiencies and focus on effectiveness as well.

Yet, digital offers many ways of augmenting existing services and developing new services.

Let’s look at some of the factors that appreciably reduce the effective use of research; data orientation, data deluge, long response time, limited facilitating of informational action. Top of that, from the client’s side there is still much room to inculcate the discipline of evidence-based decision making.

Market research is still focused on single source datasets and dabbles with small data statistics. And the research industry produces a large number of disparate databases in multiple syndicated studies. But the world is moving towards big data; applying advanced analytics, which are not possible in the past due to restrictions in computing capabilities and talent availability. Why should not the research industry use data science for fusion of disparate databases (both propriety and publicly available) to provide a more holistic vision of markets? It will not be too long that analytics companies will start re-purposing research output and provide much more relevant insights to clients.

private sector is also far behind where it ideally should be. For example, industries such as retail, banking and insurance, hospitality- to name a few- are sitting on vast amount of high dimension data sets. Not many have made significant progress in applying advanced predictive analytics to deliver mass-customized offers. The so called “loyalty cards” in the retail industry are just discount cards, the loyalty programs essentially burn the margins of the retailer without creating a competitive advantage. Banking is yet another industry that still has more room to innovate product interface, integrate legacy channels with digital channels and offer omni-channel experience.

The television and entertainment industry as a whole has not yet looked at digital as means to create new content-experience. One has to go beyond treating digital as just another channel to repurpose existing content on YouTube and Facebook.

For most of the players, digital is just another channel or a silo in a traditional enterprise structure. I think “Pick-Me” probably is the best native example for transforming an industry by making it intensely user-centric.

Technology, economy and talent are not the challenges. The cost of computing power and storage has been rapidly decreasing. “Cloud” and “Mobile” are making computing ubiquitous. Technology transcends geographic barriers at a lightening speed. SaaS makes large IT departments redundant, even a “petti kade” could now have access to CRM and an accounting application online on a subscription basis without any capital and maintenance costs. The biggest challenge to overcome in my opinion is of cultural origin. Most of our CXOs are digital immigrants; not digital natives. It’s the digital natives who are enthusiastic about digital, who will immerse in new technology. But our society, in general, does not respect, not admire, and not recognize the potential of young people.

I would say the physical infrastructure- universal mobile service and the fiber backbone-which could deliver high-speed Internet access to the vast majority coupled with high mobile penetration, is the single biggest advantage we have as a nation. Both public sector and private sector should build services around these enabling assets.

Thinking about everything that is happening today with regards to this digital revolution, how does this affect everyday businesses? Are there any trends that you see emerging in the next few years?

Sixteen years ago years ago I had the good fortune to listen to Carly Fiorina, then Chairman and CEO of HP, at a technology conference, where she said humanity was going through yet

appealing, easy to navigate, easy to discover content.

Take e-commerce. Just type jewelry in Facebook search page. You will be amazed to see how many people are selling fashion jewelry on Facebook. Of course you cannot close the transaction online, but technically it is possible. “Kelly Felder” is a great success story – to build a brand purely on social and driving traffic to brick-and-motor store. And now they have a reasonably well-designed online user-experience.

Contrastingly, online grocery trade has met, so far, only with limited success. The value propositions that were very appealing in India and elsewhere in the region – convenience, assortment and economy- have not worked here, as yet. It could be a case of unappealing value proposition, user experience or both.

While talking to you I visited the website of one of Sri Lanka’s largest insurance companies. The user-experience is pretty bad. To being with the site is not responsive, not optimized to mobile screen. Not being present in mobile is a big disadvantage, in a world where people are increasingly accessing Internet through mobile devices. I am trying to figure out what the value proposition to me in this site. All what I see is a collage of advertisements.

FMCG brands too are not making use of digital meaningfully. The problem is there is no appealing, distinctive proposition. FMCG companies, mostly, use digital as an advertising channel, not an engaging experience. When I am reading NYT or WSJ on mobile, I see these ads or various brands of tea, noodles, soup cubes etc.

Let me offer a broader response too.

We, Sri Lankans are paradoxical by nature. We risk our lives to cross a road, against speeding traffic. But are less enthusiastic about taking business and professional risks. Good at being innovative in circumventing rules, but less innovative in our business and professional tasks.

There is a vast chasm between the mindset and the risk appetite needed to leverage transformative power of digital. However, Sri Lankans, by and large, are trapped in incremental mindset.

The other problem is denial or “head in the sand” mindset. That digital is not here; digital penetration is low; my consumers are not digital savvy; my competition is not using digital. Just check the velocity of digital adoption by consumers if you wish to know in which direction the world is heading. Act now, act with a sense of urgency. Fifteen years ago I

In the age where every consumer is potentially a perpetual 24×7 content receiver, creator and a disseminator, marketers cannot wait until brand equity and U&A studies are completed to get a sense of consumer perception. Listening to social chatter on brands is increasingly becoming an important tool to understand the changing dynamics of consumer perception and experience. What is the role research agency play here?

Time series databases such as A C Nielsen retail audit and LMRB Household Panel are fertile land for application of artificial intelligence (AI) and machine learning (ML) to develop predictive analytics. Such analytics will be useful in studying potential impact of changes in key marketing inputs on volume. AI and ML could also be used to develop self-service products.

Delivery is yet another potential area for innovation. If Amazon and Uber are offering customized online experience, why should not your clients get a similar service from the research industry? Clients’ should be able to access information, past present, in a manner useful to them on a mobile app.

What about new research tools that generate, analyze and provide near-real time information. Use IOT or mobile devices to track customer journey inside retail stores. I think the opportunities are endless.

My advice to the research industry is to be open about the challenges and opportunities digital is offering. Research industry need to redefine and reinvent. Your domain is not research but insights and informational decision. When you redefine your domain you will see more opportunities and challenges as well. There are digital only agencies, online survey research tools, social listening tool and the players in big data space. They all are chipping away the share of traditional research industry in what I call insights and informational decision-making market.

No doubt the industry is changing, but the pace of change probably is not fast enough. The industry seems to be lagging behind. You got to invest early to be ahead of the curve.

My advice to the research industry is to leverage digital and shift the focus from data –orientation and output to outcome. Measure your success by the impact.

It was wonderful talking to you and thank you so much to you and the Market Research Society of Sri Lanka for giving me the opportunity to share my thoughts.

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