Transform or perish

Tags: Knowledge

Social, mobile, analytics and cloud are determining the way enterprises manage changing customer relationships

When was the last time you visited a bank branch? Or sent an SMS text to communicate, or better, used a phone that only makes and receives calls? Probably not in the recent past. This is more than a tell-tale sign that the digital age has well and truly arrived and is here to stay. And businesses know that turning digital is an imperative today and goes beyond being merely an IT intervention. Companies are transforming themselves into digital enterprises, irrespective of the line of business they operate in. In other words, businesses need to transform the way they operate, to survive and excel in an increasingly digital world.

Social, mobile, analytics, cloud and internet of things (SMACI) are determining the way enterprises manage changing customer relationships, value proposition and internal processes. Organisations have now realised the need for new dedicated roles within their ranks to drive digital transformation, like chief data officer and chief digital officer, who focus on information assets and customer interactions respectively. The good news is that the process of digital transformation has begun in many companies, while some are still testing the waters before going full-fledged.

Organisations are relying on research and analysis to understand their readiness for going digital. To analyse their digital maturity, they need to first identify the key challenges at various levels: strategic, organisational, operational and technology. They need to assess to what extent they are in a position to create a dynamic business model, or present innovative business offerings, whether they have the bandwidth to accommodate innovation in business processes, whether they have the skill sets to create a digital organisation, among others.

To understand the impact of digital transformation on our lives today, let us look at a few examples that are disrupting traditional business models. The retail industry is on the threshold of a massive churn. Retailers are now talking of enhancing the personalised services they offer their customers through cognitive applications that track a customer’s purchase patterns and also recommend shopping lists.

In addition, the applications integrate social media and internet of things (through devices like RFID) to show product reviews and comparisons in real-time, while omni-channel payment systems enables payment through mobile in just one click. The loop is closed when the retailer uses mobile and internet to obtain customer feedback. This is the scale of digitalisation businesses are working towards achieving.

Similarly, the insurance industry is now moving towards innovative business models like social insurance services. For instance, the German insurance company Friendsurance lets customers pool their premiums so that any unused money at the end of the year goes towards lowering renewals in the following year. This is also an example of how social networks are disintermediating insurance providers.

Also, Ola Cabs effectively leverages mobility for transactions and social media for marketing, without spending huge amounts on traditional offline marketing channels. They have a significant presence on platforms like Facebook and Twitter which they use to communicate events and promotional offers to increase share of voice.

Concepts like smart homes, smart parking, waste management among others, are significant developments that use internet of things. Smart homes, for example, are dwellings that incorporate advanced systems that help residents in monitoring and control of the building’s functions, while smart parking leverages advanced analytics and social to monitor available parking spaces in the city.

The examples above are futuristic indeed, but the world is yet to adopt digitally driven business models extensively. To achieve that, there is a necessity for greater IT and business alignment in organisations. To reiterate, IT should not be considered as a mere enabler of business processes, but as an integral part of the company’s business strategy.

Organisations would do well to build adaptive systems, create ability to manage huge volumes of data, undertake measures like improving security and freeing up internet bandwidth to better enable a digital enterprise. The back-end as well as front-end of the business should work in concert. For example, advanced data analytics systems in the back-end will aid effective marketing campaign management at the frontend.

The time has never has been more right to launch full-fledged digital transformation programmes in India. The prime minister’s Digital India initiative also resonates with the cause of digitalisation of institutions. Today, we also have companies with deep expertise and experience in digital transformation, offering specialised consulting services to both businesses and governments.

Digital transformation is now more than a buzzword. It is the reality every institution has to wake up to. To put a spin on the timeless quote, now is the time to transform or perish! zz

(The author is vice president, global consulting businesses, Nihilent)


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