Digital Transformation Still a Buzzword?
A lot has been said about digital transformation, with varying opinions on what it truly means and why enterprises should care about it to drive business value. Digital transformation is nothing but a comprehensive change in attitude that enables businesses to remain relevant and competitive by keeping up with the fast-changing industry landscape, while also helping to retain existing customers and attract new ones. While the adoption of new technology, of course, forms part of this, it also involves a significant cultural shift which will have an impact on everyone in the workplace.
The technology sector is witnessing an era of digital transformation driven by digitization and process optimization. To be competitive, most IT/ITES companies need to have business agility to respond to the changing market dynamics and most of these companies are investing in technologies that can drive the differentiation.
Led by the Chief Information Officer (CIOs), digital transformation is enabling businesses to create new revenue sources, transform their business models, and remain agile. It is rightly described in the book titled Digital Transformation – What you should have done yesterday, which states that digital transformation is about business transformation and a journey for the entire company.
Digital Transformation journey in the IT sector
Companies should first establish the digital infrastructure that is required to test the pilot projects. These projects are mainly in the area of building intelligent ERP (enterprise resource planning) or using cognitive technologies to gather predictive business insights or setting up an IoT infrastructure.
The three main areas of digital transformation:-
- Set up a foundation infrastructure: It doesn’t mean just implementing private cloud or moving applications to public cloud. The foundation infrastructure includes setting up software-defined infrastructure giving flexibility to run workloads across hybrid cloud, building a cloud native application development platform that enables building new-age applications using micro services/container technologies, and exposing API (Application Programming Interfaces) framework to rest of the users for building applications in an agile way.
- Revamping traditional systems: Some IT enterprises believe in replacing the traditional infrastructure to make it more affordable and more efficient. Some IT enterprises believe in replacing the traditional infrastructure to make it more affordable and more efficient. However, this is changing now as enterprises are no longer looking to upgrade their traditional application projects (systems of record) with modernized ERP but instead building new age digital apps (systems of engagement) that create a differentiating user experience.. Keeping this in mind, KPIT has set up bi-modal teams, where one works on the modernization of the traditional infrastructure—upgrading from SAP to a newer version of SAP S/4 HANA—and the other on building transformative applications—using digital technologies—to develop the systems of engagement and intelligence, smart campus, and digital labs.
- Use of emerging technologies: From a trade perspective, the key focus areas for growth internally are to build conversational systems that use technologies such as machine learning, advanced analytics, and artificial intelligence for task automation and process augmentation. KPIT, for instance, is building intelligent chatbots to enhance the user experience and improve productivity.
At an organizational level, not all IT/ITES enterprises are early adopters of digital transformation. It needs a top-down approach. A CEO needs to be committed to investing in digital transformation projects to drive competitive advantage by attracting and retaining the right talent.
The key to the success of a digital transformation program hinges on its strategy. As companies adopt modernized technologies such as IoT, Big data, cloud, and mobility, securing the data and managing risks become pertinent. Companies that are on a digital transformation journey must make cyber-security a top priority. It is essential to maintain confidentiality, integrity, and availability of data in all these contexts—on premises, in the cloud, and in hybrid environments.
Following are the few aspects that can help companies embrace digital change internally:
- Providing requisite training to the CIO about the changes digital technologies can bring to the business.
- Bringing paradigm shift in the thinking process within the IT team considering new ways of building infra and systems.
- Building strategy for cloud-native applications and creating architecture, learning and utilizing open source technologies for faster innovation and cost optimization.
- Creating bi-model team structure, rolling out DevSecOps &CI/CD (Continuous integration/Continuous development/deployment) methodology.
Re-looking the relevance of the existing vendor relationships and identifying and developing new strategic relationships with digital startups and giants. Enterprises need to build a ‘Think Digital’ culture, where every employee is passionately curious about the digital future and every leader is profoundly uncomfortable with the status-quo. Companies with a futuristic vision should take a comprehensive view of their transformational strengths and weaknesses vis-à-vis technology adoption. They need an end-to-end transformation mechanism to streamline operations, develop new businesses that serve new customer demands, and eliminate those operations that don’t align with their organizational goals. Transformation on such a scale is a long process, involving several challenges. But, at the same time, it will also open up unprecedented opportunities.
By: Mandar Marulkar, Chief Digital Officer, KPIT