<b>Ganesh Natarajan:</b> Time to get serious about digital transformation

It shouldn't be just another technology initiative, rather an overhaul that will impact businesses

Digital India has been one of the key themes of the Narendra Modi government and amid the euphoria in the party over the huge electoral gains last week, there is a case to be made for the digital transformation occurring in the country to take some credit for the strong wave in favour of the Prime Minister and his team at the Centre and in the states. The digital push provided by demonetisation is just one positive outcome of the move to a digital nation. Today, the electorate is more aware, empowered by a new-found digital literacy and information as well as money available at their fingertips through smart mobile apps. They are willing and able to take decisions based on data before casting their vote. Digital India is transforming the nation in many ways, possibly more than what was earlier envisaged.

While the nation may be progressing well on the digital path, digital transformation in its truest sense continues to evade most business corporations, which have seen the opportunity loom large but still use a few mobile applications as a surrogate for true digital transformation. To address digital transformation comprehensively and to use design thinking to optimise employee and partner journeys with digital touch points, CEOs and strategists will have to recognise and address both the customer demand pull and the technology push that is necessitating a fundamental rethink of the way business is done. They have to undertake a re-architecting exercise to drive higher performance metrics for the firm.

Illustration: Binay Sinha

Addressing the technology push is the first and easy part of any digital transformation agenda. Technology refresh, which most organisations are undertaking to move away from clunky legacy systems towards nimbler stakeholder-centric business applications and digital platforms, is being made possible by cloud computing, ubiquitous connectivity and the opportunity to migrate from ownership models to “everything as a service”. The power of big data and analytics coupled with deep learning and artificial intelligence to discern patterns emerging from the analysis of previous transactions and to develop true predictive and prescriptive ideas by modelling and stakeholder behaviour prediction is key to the future digital firm. To make stakeholder journeys more productive, firms needs to aggressively deploy sensors and the Internet of Things, expand mobile technology, and the use of social networks and natural user interfaces for “always on” access to company services.

What kind of demand pull can digital thinkers envisage or generate for the future? We will look at this sectorally in future columns, but in a generic sense, the three main themes to be explored would be productivity improvement for internal stakeholders, experience enhancement for customers and partners, and completely new business models that can dramatically change revenue models and numbers, and reach out to unserved or underserved customers. At a global level, research by McKinsey & Company shows that 15 to 25 per cent of traditional technology spend can be saved by going digital; 80 per cent of new spend in the next few years of this decade will be on digital.

How can one embark on a truly transformational digital programme? The first rule in the book that has not been written yet is to ensure that digital is not seen as just one more technology initiative but as a transformation that will impact business processes, stakeholder experiences, organisation culture and, potentially, organisation structure if it has to be effective. The second idea, potentially contradictory to the first, is to not address digital transformation as a “silver bullet” idea but to take on a number of initiatives on the technology, process, culture and strategy fronts. A digital programme office is recommended that keeps the big picture in mind and balances the attention paid to modernising systems of record, building new systems of insight and creating opportunities for radical systems of engagement. Positioning this digital programme management office at the right level in the organisation and arming them with the authority and the teams to come up with big ideas, validate quickly and move on to implementation is an area worth spending substantial time on in the early stage of the transformation effort. Of course, large doses of top management intervention and culture change exercises may be necessary at various points along the journey.

Finally, back to the national digital agenda, which will accelerate the pull for both businesses and government to reach out to every citizen and customise solutions for each individual using digital technology. In Pune, where the smart city agenda is driving change at a rapid pace, the digital agenda is being played out through digital literacy for every household, skills lighthouses enabled by digital technologies in every ward of the city and digitisation of every citizen facing process and engagement mechanisms provided for every section of the city’s population through easy digital access. This initiative, being delivered on the ground through a collaboration between the corporation, city corporate entities, national and local foundations, academic institutions and civil society, needs to be replicated at the national level for true transformation to take place and for a true Digital India to emerge. The fruits of that labour will be truly sweet.

The author is chairman, 5F World and NASSCOM Foundation