Proliferation of data and technology has molded how people consume content, communicate, and receive products and services. This new “digital” wave is also transforming how companies do business — disrupting their existing operating models and changing the way they interact with their customers, suppliers, employees, shareholders and the public at large. Research elucidates that digital disruption has led to more than 52% of the Fortune 500 companies either going bankrupt, closing down, or being acquired, since 2000. Moreover, the scale of this disruption is expected to impact companies across sectors. Amid this rapidly changing business environment, a company’s survival would be dependent on its response to the digital challenge.
The five elements of the ‘digital web’
Over time, new enablers of digital transformation have emerged that are constantly amending business processes and models. The amalgamation of these key enablers has paved way for a new “digital transformation web” that is creating an entirely new technology infrastructure.
This transformation web is interplay of Social Media, Mobile, Analytics, Cloud and Internet of Everything (SMACi). These elements, despite differing from one another, converge to build a smart, connected digital world. These technologies ensure that customers receive anything, anytime in a comprehensible, customized, contextual and cost-effective manner. According to NASSCOM, the global market for SMACi is expected to grow at a CAGR of 30% to reach US$1 trillion by 2020.
Social media has been leveraged to reach large customer audiences across diverse consumer segments, promote a company’s brand name, and co-innovate through crowdsourcing to build new and efficient products and services. It has helped businesses strengthen customer engagement by incorporating interactive tools in business processes.
Mobile technologies have replaced the conventional “desktop-based” approach in companies with “mobile-first” mindset for application development. It has been deployed across all segments and sectors — from e-retailers and mobile banking, to governments, reaching out to the masses using mobile devices.
Analytics has become a strategic focus area for companies to optimize business processes, increase operational efficiencies and customer satisfaction, and drive strategic decisions. Driven by an exponential increase in the volume of data collected and development of several tools, analyzing customer preferences and behaviors has led to strategic innovation.
Cloud has transformed the way technologies are offered “as-a-service.” It helps reduce the huge upfront investments in software, hardware and storage, adopt a scalable model for IT, and ensure business continuity and data protection in an outage or catastrophic events.
Internet of Everything (IoE) presents substantial business opportunities by connecting everything to the Internet. IoE will significantly impact both business-to-business (B2B) and business-to-consumers (B2C) enterprises by innovations in the cost of sensors, processing capabilities and connectivity.
Developing a ‘digital portfolio’
To reap the benefits of these technological enablers, businesses must devise a “digital portfolio” to innovate interaction with customers and employees alike. The portfolio will entail integrating technology across each of the digital dimensions:
- Digital products and services: that transcend new digital business models with enhanced processes and digital R&D. These can channelize into new revenue streams, provide a collaborative ecosystem to innovate new products and services, and also augment the existing portfolio by assimilating digital technologies.
- Digital customer experience: digitize marketing, channels and customer service to maximize customer satisfaction and convenience.
- Digital operations: ensure digitally-enabled field force, multi-channel integration, and digital maintenance and support to achieve agility and automation. This will also empower the sales force to identify new opportunities.
- Digital workforce: focus on establishing digital HR and a connected workforce by employing digital solutions in recruiting, training and performance management.
This digital portfolio can help companies effectively leverage the digital transformation across diverse sectors. It will help them improve customer experience, loyalty and retention; drive revenues and profitability through cost-effective and efficient processes; help innovate new products and services; optimize supply chain management; and enhance their branding and market reputation through improved awareness and marketing ROI.
To embark upon this fruitful journey of digital transformation, companies must become digitally agile. Companies can achieve this by challenging the existing mindset, re-aligning the organizational culture, enhancing the digital capabilities and performance systems, and analyzing information to support business decision making. Crafting a well-defined digital strategy that is envisioned and implemented by the company leadership is imperative.
Manoj Jha, Director, ITAS has also contributed to this article.
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