Aurora Magazine

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“A thought leader versus an operation specialist are two different capabilities”

Published in May-Jun 2023

Imtiaz N. Mohammad, CEO, OrangeFox, speaks to Mariam Ali Baig about Pakistan’s digital transformation.

MARIAM ALI BAIG: How far has Pakistan come in terms of digital transformation in business?

IMTIAZ N. MOHAMMAD: From a holistic perspective, digital transformation means retaining the core of the business and digitising the processes around it to make it more efficient. If you do it just for the sake of digitising, it will not help anyone. As a business there needs to be a purpose behind doing something. If you do it because the seth said so, it will not fly because it doesn’t have ownership. It is always about the business. What is the business objective? At the end of the day, digitisation is nothing other than providing an efficient mechanism to transfer and store data, nothing else.

MAB: How important a factor is the cost of digitisation?

INM: Cost is very subjective and depends entirely on what you do. Some companies use online tools that are free, and as bare bones as they are, they may just do the job. Digitising something as simple as customer service could cost anything from zero to $80 per user. The cool part is that the companies producing these online tools want to acquire new customers and are more than happy offering start-ups free periods of use. I use a product called Zendesk for a bunch of my customers and we have managed to secure six months of free Zendesk for them, which means that they don’t have to think about the cost of customer support for six months. Several tools out there give everything for free; others like Zendesk have a free version, as well as nine, 10 and 12-dollar versions. When we talk about costs, it is important to look at it in the context of what you are looking to digitise. Some companies start by trying to implement a tool rather than a solution when they should be looking at the problem they want to address, at the resources they have and the bare minimum they need. For example, can they do a proof of concept with 10 of their customers instead of deploying it across 200? There are several factors they need to deal with. Cost is subjective.

MAB: Is there a talent pool with the knowledge and experience to carry out a digital transformation within a company?

INM: I don’t think it requires a specific skillset. Sure, if you are a large enterprise, you need people to scope the business problem and document the software development requirements. In Pakistan, there are between 450 to 500 registered companies that bring in about two billion dollars’ worth of revenue per year. But when it comes to solving smaller problems, you don’t need a skillset. You need the ability to do a Google search and put two and two together. I don’t think it is too difficult to find such people. I have been doing this for a long time, so it is easier for me to gauge how good a person is at finding an answer to a problem, compared to an HR department. They are not subject matter specialists, and the person doing the second interview will be fairly senior and unlikely to be a subject matter specialist on recent technology either. He or she may be a thought leader, but having a thought leader versus an operation specialist are two different capabilities. I recently interviewed someone with zero experience in tech. He was an electrical engineer from NED who had worked at a shipping company. Yet, I saw he was a problem solver by nature, and it’s important to look for such ‘fix it’ people. Most organisations do not have people they can go to and say, “I’m having this problem; how do I fix this?” It’s not even just about tech or IT, or marketing; you need people who can go into the trenches, find the solution, test it out and see if it works. People like that will learn a new skill on the fly in 30 minutes. You need people who can think on their feet and be okay with failing, which unfortunately, is a problem in Pakistan. We consider failure as failure, whereas I consider failure as a victory because you learnt one way that doesn’t work.

MAB: Doesn’t digital transformation entail a cultural transformation?

INM: The cultural transformation is huge. Five years ago, every investment and insurance company required that all the documentation had to be signed. This changed in 2018, when forms were digitised and shortly after, bank accounts were digitised. Back in the day, it was impossible to do anything without going to a bank; today they don’t want you to come to their branches, because a lot of services are available online, to the extent that the State Bank of Pakistan said every bank has to have an app, and the app must have a minimum number of features. When the order came from the top, it got done. But resistance is huge. It also depends on whether the organisation’s or the industry’s peers have taken similar steps. If you are the first to do it, you will face resistance, because you are not sure how it is going to fly and you much prefer knowing the mistakes other companies have made in order to mitigate the cost of failure. If you want to be the first in the market, you have to be comfortable with failing. Just don’t do it at a scale that kills your company.

MAB: Has the need to digitise percolated down to the SME sector?

INM: SMEs have a larger appetite for digitisation because of the quantum of the business they handle, and the number of companies that are similar in nature. Distributors can upload a catalogue on WhatsApp and send it to their customers and that’s it. That’s one way of digitising. The best part is that there are about 50,000 SMEs and you can confidently estimate they are operating across no more than 1,000 verticals. This means you can write one solution for one vertical and then cost effectively deploy it, with 90% similar functionalities, across the rest of that particular vertical. The ability to scale is easier. SMEs have to figure out what needs to be digitised. You cannot digitise manufacturing, but you can digitise order collection or the payroll. You have Abhi and a couple of other payment processing companies. Life has been made very simple because there are now companies that can solve digitisation issues. It is about identifying ways to finding a solution, and SMEs are doing this, especially those involved in imports, exports or distribution. I was part of an SME digitisation initiative by the Government of Sindh and we came across a lot of challenges. We noticed that although cities like Karachi have internet access issues, access is even worse outside Karachi. The moment you are an hour away from Karachi, you don’t even have 4G. So how do you digitise in the absence of internet? There are ways to do it; for example, through the neighbourhood internet shop or the mobile phone charging shop. In interior Sindh, there are a lot of shops with solar panels which offer a charging platform. They charge Rs 10 for your mobile phone while the chai dhaba next door sells you chai.

MAB: Are there any aspects of the economy that have escaped digitisation or are not ready for it?

INM: The government needs to digitise a lot more. It requires a commitment and the will to do something different and solve a problem. Another area that has escaped digitisation is the rural farm market; the farm-to-market route. Some work was done in that area, but those experiments kind of fell flat. When people tried to bypass the standard model of the middleman, it didn’t really fly. I think this needs to be re-looked at. Another area that needs to be reviewed is crop analysis and yield enhancement. Some companies have done some work there and there is a lot of scope and scale in this area. There is a company that does satellite mapping for farms and tells you how poor the yield is in certain areas. With digitisation, you can do a lot more on the same amount of land. Retail in the big urban centres has digitised but we need solutions for tier two and three retailers in those areas and in the non-urban and rural areas as well. They may be small markets, but they do exist as markets, and they have different dynamics.

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