How does Core Technology Platforms work for PhonePe?
The approach that PhonePe has taken is not typically what most startups did, at least 5 years back. There is a value in that, and it is not easy because it demands much more time and patience from the company as a whole. But we, as a team, myself, and the engineers who have joined very early, own and run the technology platform at PhonePe. We are clear about having a blueprint that separates our core platform from the business verticals or the technology layers built on top of it to deliver for the business. To name a few, there is a core payment platform; there is an accounting platform, there is a growth platform, and there is a risk and fraud retention platform.These are the core platform; most of our business verticals are built on top of this.
The approach that we have taken is a clear set of principles that we operate with on each of these. For example, we follow a clear shared-nothing architecture, where we don’t allow common databases to exist across the company, where you are overloading it with all the data; a design part that is followed mainly because it tends to be the easier path to take and its tends to have a certain level of short-term optimization where all the data is available in a consolidated manner for any of the microservices to fetch and deliver.
Similarly, we have a principle around non-caching; we don’t create mega caches; it’s always a gain to have a mega cache just behind your edge layer so that you can deliver most of the data that is pseudo-static quickly to your app or your website. It is a design pattern that has short-term gains but creates long-term problems, whether it’s about the staleness of the data or whether it’s about having integrity failure when it comes to the data itself because of staleness.
Today, each of these is an ecosystem by itself; we scale them independently because you realise that your workloads are different as we grow. A workload on your growth cluster could be very different from your workload on the payment cluster than on your account cluster. We can manage a clear allocation strategy when it comes to hardware; we can focus on the performance and scalability of these systems individually because they are not intertwined, they are core ecosystems, and we can improve them at their own pace. We are able to think about externalising some of these services and create almost all revenue tracks out of technology. Now, if you have to follow a design pattern that was significantly intertwined or was almost monolithic irrespective of whether you are a microservice or architecture or not, you could be monolithic as the technology stack in a company, and then you are never able to imagine possibly creating a business line out of the technology.
It is not about AWS, but each of these services by themselves has a vast IP that we could externalise. We are now imagining our world in that direction as a technology group, not as a company; just as a technology group, we can create revenue lines. I think it has already paid us massive dividends. The other thing that has helped us go down this path is a very clear demarcation in the company about demands on the core platforms vs demands on the business verticals. Everybody takes a long view of the demands on the core platforms; even they are compliant about it within the company that it takes a long time to develop new capabilities in payments or risk and fraud or growth. They also realise that they can extract significantly higher value when they get built. So even if it takes six months to build a new core capability in payments, they know for a fact that the next year or a year and a half, they have the opportunity to milk that capability. So they have developed patience in terms of not being top-down with dates. Unless it’s a compliance or a regulatory requirement, we try not to impose top-down dates on our core platforms. On the business vertical itself, you make a growth hike; that is what it does because this model forces product managers, businesses and engineers to try and create more value out of the features that have been developed versus gravitating towards the next shiny object. Culturally, we have designed ourselves to operate in this model, so it is a combination of the tech principles as well as the model of operation that delivers the results.
The way asset back lending works is whenever you give credit, you actually look at the value of the asset. Let’s take gold as an asset class, since gold is our current focus, and we will certainly have more assets in the future. When we look at gold and specifically at jewelry since Indians are sitting on a large amount of gold jewelry, you have to look at the purity of the gold. We take a lot of images to figure out how the color changes, how the transformation happens, we collect net weight. We apply the image visual processing to figure out what parts of the jewelry are stone, what part of jewelry is actually the gold. We collect a lot of data, and we use all of this data to figure out the appraisal value of gold. And getting the right value is very important from the regulation standpoint and to manage your risk. You can’t give loans beyond certain values. If we don’t get that right, two things could happen if we don’t appraise it right, either we end up giving more exposure meaning, eventually, customers would not be able to pay back. There’s a lot of emotional value attached to gold, if you don’t basically appraise it properly, the other thing that could happen is you may not end up giving enough value to the customer, so you don’t want to be in either spot. The goal is to be balanced so that the customer gets the maximum value.
On Data Science
We have a lean data science team, it is extremely crucial to our success. We have invested in data science across the spectrum in many areas. We use data science to figure out which of the leads are coming to us. We have a higher probability of converting or getting a loan. We are using data science to figure out what is the probability of customers renewing the loan using data science models to figure out what is the probability of a loan going to auction? While it’s unsecured lending, 1% of the customers do get into auctions. It may be a small number but anything that goes into auction is a loss to the business and we try to work on that. We are using data science to automate the appraisal capability. So, we are investing heavily. I think there are very interesting things we’re learning. One of the things we are debating internally is, if we can predict the gold price. It’s really difficult. Gold prices have fluctuated a lot. So what happens is, when the goal prices go down, it really impacts us because customers are not going to go on the sideline. They want to try to come back so that they can get more value. We are trying to figure out at least the moment the gold price goes up to a certain fraction so that we can give customers better products and better loan value ratios.
The digital transition will accelerate in 2022. Cutting-edge technology trends are enabling businesses to move faster; these will push the method and delivery of services. Here’s looking at the digital transformation trends that will drive significant changes globally and possibly reshape business platforms to newer heights.
More Investments in AI and ML, increased demand for AI Engineers
When it comes to data analytics, three main factors make ML and AI great force multipliers: the speed with which AI can process vast amounts of complex data, the way ML can automate many of the tasks involved in the process; and the fact that AI and ML improve with each iteration. The fintech sector and health sector is expected to overtly run on AI adoption.
Generative AI can be used in a variety of tasks, including developing software code, assisting with drug development, and target marketing. Gartner predicts generative AI will account for 10% of all data produced by 2025, up from less than 1% currently. The demand for AI engineers grows when the technology gets advanced. AI engineering is a discipline focusing on the governance and life-cycle management of a wide range of operationalized AI and decision models, such as machine learning and knowledge graphs, as the use of AI grows.
Healthtech and Edtech to drive on 5G Connectivity While 5G installations in the sub-6GHz bands have been on schedule world over, more complicated 5G millimetre wave deployments have a lot of room for expansion. 5G is much more than just higher download, upload, and streaming speeds; its diverse use will be reality and pull up other technologies. 5G also has low latency that allows for dense deployments and generally improves cellular technology. Incorporating the Internet of Things (IoT) and cloud-based systems into your workflow will be easier and less expensive. To offer the finest client experiences, industries such as manufacturing, healthtech, edtech, telecom, entertainment, and transportation will base operations around 5G-tech and connectivity. Enhanced agility in decision-making with Hyperautomation
Hyperautomation will boost productivity, accelerate time to market, and enhance employee and customer satisfaction. In 2022, hyperautomation will combine technologies such as Robotic Handle Automation (RPA), Artificial Intelligence (AI), and Machine Learning (ML) to process data in more impactful ways, enhancing the quality and overall productivity. It will also provide real-time, continuous intelligence, as well as increased analytics, to improve operations and procedures even more.
According to Gartner, the majority of hyperautomation programmes currently undertaken will be mature by 2024. Organizations will be able to cut operating costs by a healthy 30% with hyperautomation and process re-design.
Transition from Hybrid Cloud to Multi-Cloud for Businesses
The stats of businesses relying on cloud is ever increasing. Multi-cloud, often known as connected cloud; is becoming increasingly popular among businesses of all sizes. It enables companies to adapt to rapidly changing business needs, such as cloud storage, security, and networking.
Because of their capacity to deploy cloud applications, assets, and software across several cloud platforms, multi-cloud systems will be one of the most important digital transformation trends to note. The shift from hybrid to multi-cloud will propel further.
Quantum Computing will be a new entrant
Quantum Computing designed to solve complex problems, is likely to leap over to implementation. With the steady acceleration of cutting-edge tech, we predict, quantum computing will step into business platforms in the coming year.
Quantum computing has the potential to help combat climate change, modernise the power supply, and improve cybersecurity… It can also aid in global food production and distribution systems by developing more robust and abundant crops and improving supply chain efficiency.
Quantum computing has the potential to help combat climate change, modernise the power supply, and improve cybersecurity. Healthcare professionals can use quantum computing to diagnose illness, identify new diseases and develop drugs quickly. It can also aid in global food production and distribution systems by developing more robust and abundant crops and improving supply chain efficiency. Some teething hiccups can be expected before the tech flows mainstream.
Blockchain as a Service Platform
Blockchain’s transparency provides a virtually fool-proof security feature that has the potential to revolutionise the way people make payments. Now we have developers working to make blockchain a plug-and-play technology, finding more productive ways than just cryptocurrency. AWS, MS Azure, Samsung, Alibaba, and other global heavyweights are seeking a method to make blockchain more accessible to the general public. They would do this by offering it as a subscription-based Blockchain-as-a-Service platform.
Other applications of blockchain such as food safety, real estate management, and intellectual property are also emerging. Given its possibilities, blockchain’s spread and exploration across varied industries will continue to thrive in the next few years.
Come 2022, we expect notable technology transitions that will dominate newer domains. Companies should closely analyze industry trends and existing technology landscape to incorporate pioneering technologies that could open up a slush gate to wider opportunities for the overall ecosystem. Currently, the dearth of qualified technologists is being viewed as an impediment as organizations compete for hiring the right tech talent. The need is to look more comprehensively at the overall tech talent attraction and retention.The priority of compensation, rewards, and benefits to Learning & Development (L&D), succession and diversity, equity & inclusion (DE&I) should also be raised in accordance with tech adoption and progression.
As businesses throughout the world ramp up their technology usage in the aftermath of the COVID-19 outbreak, India’s need for technology and software professionals has skyrocketed. However, hiring across sectors dropped during the middle of this year. Still, the tech job market bounced from the pandemic-induced downturn and many technology companies have been in full expansion mode. According to the Indian Staffing Federation (ISF), the country’s demand for IT professionals has doubled in the last 14 months as most global corporations rush to digitise and automate their operations.
Tech Hiring Statistics in India
The immediate recruitment for freshers and others saw an increase in 2021, particularly in the areas of Artificial Intelligence, Data Science, Cloud Computing, Information Security, and Blockchain. Notable IT services and outsourcing firms in India such as Tata Consultancy Services and Infosys have been ramping up hiring to meet large client orders. According to the National Association of Software and Services Corporations (Nasscom), India’s five largest companies are expected to hire 96,000 people this year. Nasscom stated that India’s IT and business process management industry employs roughly 4.5 million people with a scarcity of software engineers, data scientists, and other professionals. In July, the annual growth rate for IT software rose by 212%, followed by ITes with annual growth of 46%.
The present pool of digitally skilled workers in India is insufficient resulting in a talent shortage in the software services sector. Tech organisations are in a hire-or-poach mentality, resulting in sky-high pay, with some even hiring non-engineering graduates to fill the gap.
The tremendous need for tech skills isn’t limited to recent graduates. In May this year, the 0-3 year band group experienced a 22% increase. The mobility of senior professionals was particularly strong, with a double-digit rise in the 13-16 year (+11%), 8-12 year (+8%), and 16+ year (+10%) categories. Leadership hiring is booming, many tech-driven organisations are incorporating pioneered technologies and require a leader to drive engineering teams.
According to industry watchers, these recruiting trends are likely to continue for the next three years, with IT firms forecasting a skills shortage for at least the next two quarters. What firms are looking for now, are innovative ways to hire people, including non-engineers. As a tech head executive search firm, one the most distinct trends Purple Quarter is noticing is the compensation metrics benchmarking. To allure Senior Tech talent, domestic firms rife with fundings are matching compensation at par with that of Silicon Valley, offering lucrative packages, ESOPs now.
Post-Pandemic Tech Hiring Challenges
The pandemic had revolutionised the focus of an organisation to customers and employee satisfaction. Furthermore, new abilities that are compatible with technologies are required for more efficient procedures. As workers require new skills to perform their current jobs, it becomes more challenging for HR leaders to quickly find the talent to meet the requirements. Indeed, organisations must ensure that they have the proper capabilities embedded by new-age technologies to adapt and take steps to ensure constant learning and reskilling of their employees with the relevant skillset.
However, the tech industry’s main difficulty would be obtaining and retaining qualified candidates, especially now that the job market is improving and voluntary employee churn is on the rise. Hiring the right talent by analysing the skill sets and stability is now a long term investment for tech-driven companies. The challenge will be enormous when it comes to an in-house tech leader search.
The Covid-19 pandemic has taught us that business and technological strategies are inextricably linked. The firms which have digitally matured, or are on the brink, are vigorously incorporating cutting-edge technologies post-pandemic. The CTO has become the forefront of transformation, there is now a renewed focus on the larger corporate environment and the CTO role has evolved dramatically in the last year.
Future Transformation of CTO
While the function of CTO is a staple of the executive team at many large corporations, it differs depending on where you look. Even in its most frequent form, Chief Technology Officer, the title, can have a wide range of functions and responsibilities depending on the workplace. And, regardless of how the job description is stated, the role’s major priorities appear to constantly evolve.
Tech acting more than an enabler, the CTO is dually playing the internal as well as an external role; owning the technology aspects of the company’s customer-facing products and services (especially more in tech-centric firms but also other industries). Today’s CTOs don the hat of a chief strategy officer as practically every organisation aspires to achieve digital transformation and create tech-driven consumer experiences.
The ability to harness advanced technologies (AI, big data, and machine learning, for example) to establish a strategic course for a business may be more crucial to the function than in-depth technical knowledge of hardware and code. The tech visionaries are expecting that CTOs may originate from sectors other than traditional IT, like R&D, data science, or sales, as the job description grows. Eventually, versatility and flexibility will be crucial intangible traits because the function of CTO progresses at the same rate as technology.
What will be most relevant to a CTO in future?
As a leader, CTOs must actively manage their team and find a system to communicate anything tech-related to the board of directors or other key stakeholders. Nowadays, CTOs are expected to be as knowledgeable about business as they are about technology.
Create a community and support system. Being a CTO is a very collaborative profession, rather than an individual contributor role. In the future, a CTO will be defined based on the network they are having. Hence, developing a community is mandatory to handle the role effectively.
Learn how to concentrate on and absorb crucial information about upcoming technology. A couple of years ago it was cloud; now it’s digital and someday it’ll be quantum. Keeping updated and working to stay relevant is another major key for all the CTOs to achieve success.
Improving “softer” abilities should be a priority for the CTOs. Patience and the ability to accept change, live with ambiguity, and operate under pressure are among them.
The role of CTO, unlike certain other roles, never stays the same. It’s continually evolving as per the time and the scale of tech innovations. Since technology is increasingly becoming the prime mover for a company’s success, the CTO’s function will become diversified. A Chief Technology Officer’s future appears bright, they will continue to play a critical role in maintaining business agility and continuity as we manoeuvre through the pandemic taking stock of the situation and rebuilding for better and more efficient processes.