Bijoy Sagar on driving digital transformation at Bayer and beyond

Bayer is using drones to collect farming data across 80 million acres and satellite data to predict soil moisture down to the square meter. These are just two examples in a transformation that is impacting every part of the business and all 100,000 employees, as undertaken under the helm of Bijoy Sagar, the multinational’s chief information technology and digital transformation officer.

I recently had a chance to discuss Bayer’s tiered approach to digital transformation with Sagar, as well as the IT chief’s thoughts on ramping up digital literacy in the C-suite and the determining the right time to disrupt your legacy business. On the heels of one of the largest cloud transformations in Europe, Sagar has Bayer on track for a highly digital future. Following are excerpts from that conversation.

Martha Heller: How would you describe Bayer’s digital transformation?

Bijoy Sagar: We have three tiers of digital transformation. The first is building new business models. For example, we have a new digital farming business with drones that cover 80 million acres and collect a tremendous amount of data. We have our own access to satellite data, so we can predict within one square meter the moisture and content of soil, and we use those algorithms to plant crops.

We are also collaborating with Microsoft to build an open platform marketplace in the crop world. This will allow us to develop new solutions for farming operations, manufacturing, supply chain, and sustainable sourcing,

The second tier is digitizing our internal processes, and transforming HR, finance, and R&D to support our new digital platform businesses. We have hundreds of data scientists embedded in the company, who are working on algorithms to automate internal processes. This work is directly tied to our Global Business Services strategy so that we get maximum leverage out of our scale.

The third tier, which might be the least glamorous, is to create the infrastructure to support these new digital businesses and processes. This quarter, we are kicking off an all-cloud SAP 4/HANA implementation that will bring more than 100 ERP instances down to two.

In addition to the all-cloud ERP, what architectural decisions are you making?

We are driving an architecture strategy to move everything to one single middleware platform, and we are creating an API-first ecosystem, because new digital businesses cannot run on old plumbing.

With cybersecurity, we are implementing zero trust across the board. Countries are changing their rules on personal data, and I believe the internet is heading to ‘splinternet.’ How do you build a network architecture that works in the splinternet? These architectural elements are a part of our digital transformation journey.

How is the digital business different from the legacy business?

We have disrupted our traditional supply chain model by moving it online and changing it to a subscription model. The new model is more predictable and has healthier margins. But to make a platform business model work, you must be a market leader. If you are building a platform business in undifferentiated product areas, the consumer will not be interested enough. You need to establish market primacy before you disrupt your traditional business.

What was your playbook for developing these digital businesses?

The first was getting our leadership to speak the same digital language. We partnered with a business school to take our leaders through a three-week course, so that we could have productive, collaborative discussions about digital risk and opportunity. That was playbook rule number one, and it took some time.

The second was defining the business model. Should it be a brand-new direct-to-consumer business, or should we provide digital support to our current business model? We spent a fair amount of experimentation time to figure this out.

The third rule in the playbook is to have patience. While we wanted everyone on board right way, we learned that it can take some time before digital risk and opportunity become real and relevant for people. This is where skepticism can creep in. People will think, ‘We all agreed to this strategy, but where is the return on that investment?’

Bayer just completed one of the largest cloud transformations in Europe. What advice do you have for CIOs moving from an on-prem to a cloud infrastructure?

The first is to do your homework before you start the program. If you are at a company with dozens of years of technical debt, you must transform those processes and middleware before you move to the cloud. If you don’t change your processes ahead of time, your journey to the cloud will be constantly interrupted because you will be cleaning up the mess as you go.

Second, have a clear roadmap for the older systems that will not move to the cloud. Some can be containerized and isolated, but others cannot. If you don’t have a clear plan — and this happened to us — you start to move to the cloud and then realize there were additional interfaces that you needed to clean.

Third, have a very strong relationship with your hyperscaler partners, because you will need them to solve problems along the way.

Fourth, have a very good data lifecycle management strategy. Older companies tend to have a lot of data, so they need a long-term strategy for different data types. How much time, for example, do you need to keep data for regulatory compliance and algorithm training?

And then of course, we would not have been successful in any of this without a dedicated, hard-working, and professional team.

What attributes do you look for in your senior team?

Transparency, honesty, integrity, and credibility. When they say something, will people believe them? Are they putting the agenda of the company ahead of their personal agenda? I also look for the ability to create followership, because a leader without followers is just a person going for a walk.

My senior leaders also need a strategic mindset. Are they looking at the next quarter or a three-year horizon? As you move up in in the organization, your horizon needs to expand. Finally, I hire people who are very different from me; I hire against my weakness.

What advice do you have for CIOs driving transformation?

Transformation is not about technology; it is about change. Paint the picture. Why would anyone make this difficult journey? What’s on the other end? If you don’t paint the picture, people will see only the pain in front of them, because no transformation is painless.

Also, keep in mind the ethical use of all these technologies. Just because you can do something doesn’t mean you should.

Finally, remember that your biggest stakeholder is your employee base. Make sure all of those employees are excited to go on the journey with you. Convincing the board and the external world can be easier than convincing the employee base. We engineers don’t always focus on the people part of change, so we need to consciously adjust our focus.