by Peter Sayer

Software AG’s new CEO urges CIOs to drive digital transformations

Sep 27, 2018
CIODigital TransformationInternet of Things

Sanjay Brahmawar discusses why digital transformation is a career-defining opportunity for CIOs and encourages IT leaders to experiment to stay ahead of the competition.

Sanjay Brahmawar, CEO, Software AG
Credit: Software AG

Sanjay Brahmawar spent his first six weeks as CEO of Software AG touring the world to meet colleagues and customers. What he saw convinced him the company’s core integration capabilities are key to enterprise digital transformation. On his way from Sydney, Australia, to the company’s headquarters in Darmstadt, Germany, he stopped in Paris, where caught up with him.  

In the following discussion, edited for publication, Brahmawar talks about why digital transformation is a career-defining opportunity for CIOs, what skills liberal arts graduates can bring to software development, and why one of the hottest internet searches for Software AG is for its Bangalore office address. When Software AG was founded, its name said what it did. What business is it in today?

Sanjay Brahmawar: It’s interesting you said when Software AG was founded because before I started I went to meet our founder, Dr. Schnell, who is 80 years old now, and he was reminiscing about how when he started the business, and he told me, ‘In 1969, Sanjay, nobody knew what software was, it was all hardware,’ and he decided to go where the market was, which was in the U.S., and he was there, driving around going to companies and talking to them about software. … I think there’s a lot of heritage and a lot of pride we can have in where we started from. I mean, how many companies that started in 1969 working in software are still alive? There’s none, literally. And we are alive because we have a foundation that has a 33 percent stake, and has obviously protected us in some ways, but also the fact that we have been able to reinvent ourselves.

What is it that we do today? Well, I think we come from a pedigree of building transactional databases but on top of that we have built core integration capabilities. With the WebMethods acquisition we have now built many years, in fact decades, of experience around core integration. And if you think about today’s world, what is the biggest challenge that companies have today? It’s how do they use all of this data that they are creating, whether it’s data that’s created in their transactional systems or it’s data that they’re collecting now through sensors and devices and assets leveraging IoT. How can they leverage that data? Well the only way to leverage that data is if you can combine the different sources of data properly, data sitting in very disparate databases, and to do that you need core integration, you need our capabilities. And therefore we are integral to the digital transformation that organizations have to go through today, and so core integration plus now we have added IoT and AI capabilities, it’s all with the objective of being able to help companies capitalize on the power of data. You mentioned digital transformation. What does that mean to you at Software AG?

Brahmawar: Digital transformation does not mean implementing a new system in a company. It doesn’t mean that you put in something for your customer interaction or your ERP. That’s not digital transformation. What digital transformation is, is companies changing the way they work. It’s, in fact, transforming the way you are engaging with your clients; it’s the way you are delivering services to your clients. Companies that have been manufacturing products are now thinking about how they can deliver services to their customers and to be able to have a longer relationship, a recurring annual revenue kind of relationship with their customers. Digitalization is changing the way that companies work, and how they capitalize on this data and all the information they have, and how they can convert that into value with their customers.

To me, [there are] two successful criteria for digital transformation:  One is cultural transformation and the other is the talent. Companies are underestimating the need for the new talent, and the new talent is people that understand data science, are able to work with AI and cognitive tools, and those are not skills that have been developed well traditionally in the organizations. What background do these people need to work with cognitive tools?

Brahmawar: We hire a lot of people with STEM [science, technology, engineering and mathematics] backgrounds, there’s no doubt about that, and when you have to work with algorithms and you are designing algorithms or fine-tuning or programming, then mathematics is a good skill. However, here’s my caveat to that: At the end of the day we want to make these systems very easy to use for the end user, and that requires more creative skills, design-thinking skills, intuition and these are not skills that are only found in engineers. These are skills that are found in different types of background. In my previous job, when I was general manager for Watson IoT, we were hiring people with a literature background, or English background or arts background, simply because we wanted to integrate enough diversity into this talent to be able to work with systems and make systems and think about systems from the perspective of a user, really thinking about how do you make it so easy to use and so intuitive, absolutely like the Apple mentality. To what extent are those different profiles involved in the engineering?

Brahmawar: You have to see these as complementary skills. To make an AI tool or a cognitive tool, let’s assume you’re leveraging NLP, natural language processing. To design a system that is functional of course requires an engineer to be able to program it correctly. But to design a system that is actually usable requires somebody who thinks of it from the perspective of, really, a user, and what kind of strange things a user might throw at it or how would a user expect it to respond in an intuitive way. It’s a combination of those skills that are very important. You do need the technical skills to be able to program but you definitely need this influence of creative skills that make our capabilities more usable. What role do CIOs play in digital transformation, and what role should they play?

Brahmawar: This is a tremendous opportunity for CIOs to get onto the business transformation agenda. We’ve had many, many years of CIOs being relegated to the run agenda, keep the systems running, keep the lights on. … Well, OT and IT are coming together. That’s the way we are going really. Software is so critical now. It’s a tremendous opportunity for the CIO to be right there with the CEO in terms of digital transformation. The CIOs who are spearheading and those who are visionary are going to grab this opportunity, and spearhead their organizations into the digital transformation. They will find very easy established solutions for the run, and they will start focusing their attention on innovation and digital transformation, and what is needed for their organizations to successfully compete.

For those who don’t do that, they will get confined to the run even further, and actually CEOs will appoint chief digital officers or chief transformation officers and you see that happening in many companies, where the CEOs don’t have the confidence in their CIOs, and they feel, ‘Oh, we don’t believe the CIO can take that step and that leap,’ and so you end up with these new roles being created. Personally, I believe there shouldn’t be any need for that: The CIO should be visionary enough to step up, and I know many CIOs who have done exactly that. What should CIOs do to get their career back on track in such cases?

Brahmawar: A CIO has to get out into industry forums, to understand what’s happening in industry. And the CIOs have to keep themselves truly ahead of innovation and technologies to establish some incubator projects within their own organizations, so that they are experimenting with technologies. They’re not waiting for technologies that their own competition has totally adopted and now they are catching up. They have to figure out what’s the next innovation, the next improvement that’s coming through, the next technology that they have to think about to be able to help their business beat the competition. This is the mindset I would encourage CIOs to adopt. It’s about a shift of mindset, staying ahead rather than playing catchup. Does Software AG make experimental tools or labs available to its customers?

Brahmawar: Absolutely. One of the things we have done is something called ADAMOS, Adaptive Manufacturing Open Solutions. Here we have created a joint venture, an actual joint venture where other companies have put in money to set up this company, with the machine builders in Germany. There are seven partners that we have today. Durr is a big one. It’s seven machine builders. These are not small-time machine builders; these are very unique machine builders. For instance, Durr makes painting robots, and painting systems into most of the large automotive manufacturers. They have the largest market share and they are the world leaders. What have we done with them? We have established a joint venture to create adaptive solutions and the solutions are going to be based on Software AG’s IoT platform, Cumulocity, and these companies, the machine builders, are bringing their domain expertise. They bring the domain expertise, we bring the platform and the IoT expertise, and together we create unique applications within their space so that they can take those applications to their customers like BMW or Volkswagen and have those customers use those applications to do things like predictive maintenance or condition-based monitoring, which will improve their output and their reliability. And these applications are sold as either services or included in the packages of offerings that the machine builders have. Is ADAMOS open to other partners?

Brahmawar: We are recruiting by the day: We already have seven, and we have a pipeline of about 15 partners that want to join. There is no restriction on nationality. It’s more to do with the industry: It’s about machine building. I want to take this internationally. One of the most frequent internet searches relating to Software AG is for the location of your Bangalore office. What’s going on there and why are so many people interested?

Brahmawar: Our largest R&D center is in Bangalore. In India in total we have close to a thousand people. We have 4,700 in total. We have three locations in India: Bangalore, Chennai and Hyderabad, but Bangalore is the largest. It’s an exciting place. We are supporting all our products from there. We are spread out in terms of R&D across the globe, but that’s where we are attracting a lot of talent, we are developing a lot of talent and we are a significant player in terms of innovation. We recruit from all the technical universities. As part of what I was saying about this diversifying of talent, we are recruiting from other universities also. For example, in Hyderabad we get a lot of engineers because that city is very famous for engineering skills. It’s quite exciting how we are managing to fight for the right kind of talent in spite of having everybody — Microsoft, IBM, Google, everybody — fighting for a similar kind of skills. We are able to bring in and retain them. We have a very low attrition rate in Bangalore, a very surprisingly low attrition rate. That boils down to our leadership and our family environment. Is the traditional labor pool even in India exhausted? You have an initiative there, the ‘Return to Work’ campaign for women.

Brahmawar: That’s a brilliant initiative. We truly believe in these initiatives because we have this very strong link with our foundation also, and together we have been investing in quite a lot of social projects, and this is a great program to be able to encourage and support very talented women to come back into active work life. It’s just that companies tend to have no real understanding of how challenging it can be for a woman who has taken some time off her career to come back again and not feel intimidated with the pressures of the work environment. What we are doing in this case is we create buddying environments, we create a gradual step environment to bring the person back in, and then we create clear visibility and transparency on career paths. That’s the other thing that is also quite worrying and concerning any employee: When you take some time off and you come back into your career, how are you going to be treated? Will you have the same opportunities? Here we give similar opportunities to be able to put them back and fast-track them back into the career paths. Our leader in India, Padma Reddy, is championing this initiative and I think we’re getting tremendous response.