Digitalization: the time to speed up is now

Digitalization: the time to speed up is now

The unstoppable digitalization of enterprises is happening all around us. Businesses are being reinvented, rejuvenated or being freshly built by a new set of tools, technologies and ecosystem integration to leverage the digital advantage. Clearly, going digital is an irreversible trend and businesses are investing heavily to stay relevant. Digital has moved beyond strategy discussions in the boardroom, to roadmap and implementation in order to bring unique customer experiences to the front-end and drive better efficiencies at the back-end.

A digital enterprise is a multi-dimension collaboration across customers, employees, partners, suppliers and broader ecosystems. It is about the ability to quickly adapt and change through the intelligent capture of real-time information. It is about enterprises having the heart to deliver amazing customer experiences and feeling the impact being created. It is about delivering significantly superior operational efficiencies at the back-end. It is about the long-term commitment to create an integrated approach to every aspect of any business which wants to be relevant.

Digital spend over the remainder of this decade is expected to be huge and contribute a massive 80+% of incremental IT spending. IDC estimates digital spend, including SMAC, to be USD 940 billion by 2017. Its CAGR is expected to be 3X compared to the traditional IT spend during the same period. The creation and direct measure of business impact is clearly the topmost reason why enterprises are investing in digital. To quote the CEO of a G500 manufacturing company from a recent meeting, “Digital is not only about using a set of cool technologies, it’s mostly about how can I run a more efficient end-to-end business that listens to all my stakeholders, and through analytics and rules, implement the changes required to drive real-time impact.”

Native digital companies – businesses born with digital as their mainstay – clearly have the maximum leverage and impact. They simply would not exist without digital technologies. Several market segments, e.g. media, technology, hospitality, services, etc., now have native digital companies and their numbers are rapidly expanding: Airbnb, Uber, Netflix, etc. are examples of such companies. Not only do they deliver great customer experiences which are unified, multi-platform, pervasive and always available; they also ensure phenomenal back-end integration with suppliers, partners, payment providers, etc. to drive seamless and higher operational efficiencies. Native digital companies are changing the rules of the game across industries, forcing traditional enterprises to adopt and leverage digital or become irrelevant.

Digitalizing a traditional enterprise is not a quick fix exercise. It involves significant commitment from every facet of the business to ensure an integrated approach. It certainly needs direct visibility at the CEO and Board level to ensure the highest level of commitment, support and investment. Several enterprises have hired or created the role of CDO, Chief Digital Officer, to own digitization across their businesses. The CDO must implement a unified strategy and integrated roll-out plan, working across the organization through IT, marketing, sales, finance, HR, services, manufacturing, etc. The CDO of a Fortune 500 financial services company spoke at our meeting about how she views the role, “Digital has the true north potential to impact the business in the most significant manner that we have seen in a long time. We now have the opportunity to integrate customers’ insights and asks on an almost real-time basis in defining new products and solutions. Working with IT, we will leverage cloud and digital service integration to drive massive operational efficiencies.”

IT plays a key and pivotal role as several areas are directly in their realm, and is an integral part of the digitization roll-out for any enterprise. e.g. Modernizing IT applications for service, middleware and data integration; enabling mobile and cloud for platforms and applications; enhancing security architecture to ensure total integrity across multiple platforms, applications, stacks, devices, sensors, etc.; and driving information analytics for rule-based and incident-based decision systems. Digital architects, product strategists and product managers are responsible for rich and consistent user experiences across all applications, and all of these components are critical aspects of digitization in any enterprise.

Digitalizing an enterprise does not have a silver bullet solution and there is no one size that fits all. Companies in the digitalization process should take stock of the current situation and, at the senior-most level, ask relevant questions such as where is the potential of maximum business impact? Which business processes/ functions can demonstrate success over a short term? Who is the leader who can drive this change? Who are the change agents and core to digitalization across the companies? Should talent be brought from outside the company or outside the industry to adopt digital best practices? Should customer experience be the starting point of digitalization, or drive operational efficiencies at the back-end first in leveraging digital? How would company culture need to align to this new digital world to create best impact?

Digitalization of an enterprise will be a continuous journey and embarking on this journey will be a never-ending commitment for any enterprise with its potential to create significant business impact and ensure relevance in the market place. It is no longer an option to not do so for any modern enterprise: the time to speed up digitalization is now.