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September 21, 2016updated 30 Sep 2016 12:26pm

How to deliver the value of digital transformation

Do businesses understand what digital transformation requires?

By James Nunns

Digital transformation has taken over the IT industry, and for better or worse, it describes the mass metamorphosis that businesses are having to undertaken in order to stay relevant.

Thanks to the rapid development of new technologies such as mobile, cloud, data analytics, the Internet of Things, and more, businesses have to move and adopt so that they are capable of serving the needs of their customers.

Satya Samal, Executive Vice President of NIIT Technologies, on digital transformation.

Satya Samal, Executive Vice President of NIIT Technologies, on digital transformation.

Importantly, businesses need to be able to move faster than their competition or risk losing market share, but now competition is coming from every angle.

Thanks to the barriers to adoption being so low whole new breeds of start-ups have sprung up and have set about disrupting the market incumbents.

CBR’s James Nunns spoke to Satya Samal, Executive Vice President of NIIT Technologies, about digital transformation.

 

JN: Digital transformation has become a widely used buzzword, do businesses understand what it requires?

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SS: “As is often the case, some businesses understand and some don’t. Even within a business, we see different perspectives on the meaning of Digital. However, one thing we see is when companies park the definition of Digital to the side and go back to asking what is it that they need to fundamentally change to make difference to their business, be it: the experience they deliver to their customers, new products and services they want to launch, simplify their business processes and operations. They, then bring in the Digital technology to enable this new ‘thing’.

“When these companies address the problem or go after the opportunity in this way, the question is no longer about the meaning of Digital, but about a fundamentally new of way of doing things with technology playing an enabling role.”

 

JN: Are you seeing any particular trends in how businesses are going about digital transformations?

SS: “Yes. We see some clear trends: first of all most digital transformations are a series of smaller engagements that deliver tangible business value in 3 to 6 months’ time. This is in stark contrast to large scale ERP transformations which ran for several years.

“Secondly, there is a lot deeper engagement and collaboration between Business and IT, but more importantly Business, IT and our client’s customers. The last bit is important and quite different to the way technology solutions are being designed and deployed.

“In NIIT, for example we do target our digital solutions to our client’s customers: what can we bring to the table that will give our client’s customers and emotionally enriching experience? This in my view is a departure from the past where IT solutions got developed primarily through Business and IT folks coming together.”

Gartner predicts that a third era of enterprise IT will be created by digitisation.

Gartner predicts that a third era of enterprise IT will be created by digitisation.

JN: What is your approach to delivering digital transformation?

SS: “The first thing we advise clients is to break the Digital beast in pieces. Digital can deliver significant value, but the trick is to do this in small steps and not one giant leap. Secondly, we advise clients to use the principles of Design Thinking to get under the skin of the business problem they are intending to solve and surface an innovative answer.

“Thirdly, we also advise our clients to set up a Digital Delivery Factory which can bring together seemingly conflicting objectives: predictability vs. agility; creativity vs. quality and punctuality when it comes to delivering digital projects.”

 

JN: Are businesses moving fast enough to fend off more agile start-ups?

SS: “Many companies have in-house incubation centres, have hired highly capable Digital Leaders to rise up to the challenges from the new technology and start-ups who use these technologies to develop an innovative business model.

“There are many established companies who surprise us with their agility and speed. Let us take Lloyd’s of London. One would think that an industry that has been in operations for more than 250 years will struggle with Digital. But you see these companies coming out with innovative products to underwrite risks from cyber security breach, drones etc. You also see them investing in technologies such as blockchain, the Internet of Things etc.

“In general though, as most companies will agree, the pace of innovation and technology adoption needs to go up.”

 

JN: What are you seeing as the biggest challenges?

SS: “There isn’t just one challenge when undertaking and delivering a digital transformation project; companies have to look out for a series of potential pitfalls; from reaching the original business objective to company culture.

“Overcoming these challenges is largely about having two things in place: firstly a strong strategic plan with a realistic timeline for delivery. Secondly, you have to work with a team that can deliver the project and has experience in overcoming the various “digital hazards” that are likely to come up.”

 

JN: Geographically where are you seeing the fastest movement? Which industries are moving fastest?

SS: “We see significant adoption of technologies in all our geographies – US, Europe, Asia Pacific. We also see a lot of innovative solutions coming up from start-ups in India, which are routed in the local context. We are partnering with some of these companies to bring the innovation that is happening there to our Western Market.

“With regards to the industries, any industry with a strong B2C business model and services component is strongly impacted by Digital. That includes all the 3 key industries we serve: travel, insurance and financial services.”

IDC data shows that very few businesses are 'Digital Transformers'.

IDC data shows that very few businesses are ‘Digital Transformers’.

JN: What technologies are the biggest enablers?

SS: “We see 4 key enabling technologies:

Digital experience: these are the technologies that enable you to deliver a seamless experience across all the channels of interactions e.g., be it mobile, web, kiosks, wearables etc.

“Analytics: Technology that enables large volumes of data from various sources to be crunched in real time and the insights presented in an easy to follow and easy to act way.

“Integration: This is another big area. While companies are investing heavily in Digital, they still need to work with the legacy systems built over the years. This requires integration technologies and that is a key enabler.

“Security: Digital is about getting the company, its customers and its partners coming together and this means significant investment in security so that nothing is compromised.”

 

JN: How far ahead are businesses looking with their technology choices?

SS: “In most cases, companies plan with a 5-year shelf life for the technology solution. Typically, however many applications live far beyond the 5 year horizon.

“As such it is important to make technology choices that give you the flexibility to make changes mid-stream.”

 

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