Digital transformation 101: the dos and don’ts

By Dr Mukesh Gandhi, Founder and CEO, Creative Synergies Group

Amidst macroeconomic and geopolitical conditions, Indian businesses aren’t shying away from investing in digital transformation (DX). So much so that DX spending in India is expected to increase to $85 billion by 2026 according to IDC. But what’s the merit in DX? Can it support businesses through unprecedented external factors? Can it give a better customer experience and value?

There’s a significant shift in the digital environment across the world, and particularly in India. Customer behaviors are going through a disruptive change. While DX isn’t a magical band-aid to all the associated challenges, it can alleviate friction-points enough for businesses to gain a competitive advantage. This explains why large-scale businesses in India increased their IT spending by 13% in 2022 despite economic forecasts. It is certain that digital technologies will proliferate in the future. The technological enablers which come along with DX will empower businesses with invaluable innovative capabilities to support them through disruption. The same tools can also help businesses to improve customer experiences and increase their satisfaction in a significant way.

While all business sectors in India need to invest in DX, it can be a daunting task to take the leap without the right support. For sectors that are new to the game, it might be instructive to have a checklist in mind while investing in their DX journey.

The green flags

Defining a clear DX strategy: According to Gartner, 87% of senior business leaders stated that digitalization is a priority. But DX is a broader process that goes beyond implementing new technologies. It encompasses transforming the way businesses operate, creating new business models, and enhancing the customer experience. To achieve this, businesses in India need to define a clear strategy that aligns with their long-term and short-term objectives. Collaborating with vendors that specialize in DX strategies can help them prioritize initiatives and allocate resources effectively.

Sourcing right: Digital ecosystem is vast and businesses need to have the right choices of technology and partners. While outsourcing support as a partner in the DX journey is complementary and cost-effective, strategic collaboration with the chosen vendor(s) is also crucial. Constantly switching DX vendors can disrupt continuity, affect the quality of output, and can be counterproductive from a financial standpoint. It is critical to set expectations and goals from the start, to avoid lapses in decision-making. Sourcing partnerships with vendors that specialize in crucial enablers such as technology and domain knowledge can act as a safety net, as they can provide the capability to evolve their offerings and support the businesses long-term.

Invest in the right digital technologies: The ‘everything all at once’ principle may not work when it comes to DX. When starting out, businesses in India might feel the pressure of catching up to the international standards of digitalization. It might seem as though each technology is worth investing in, and in some cases, that may be true. But in times of economic uncertainties, it’s wiser to narrow down the technologies that are mission-critical to business goals and objectives and invest in them. For instance, if a business wants to improve operational efficiency, investing in the right computing environment (cloud, mobile) robotic process automation (RPA) and artificial intelligence (AI) can be helpful.


The red flags

Ignoring data privacy and security: The rose-colored glasses of ‘instant results’ with DX could fade quickly if businesses don’t prioritize placing precautions in place. Technological integration points to working with vast amounts of data–which can’t be compromised. According to IDC, 74% of large enterprises in India invested in embedded IT security in new business initiatives in 2022. And while security spending for small businesses increased by 17% in the same year, when coupled with DX, security would need to be taken a lot more seriously.

Avoiding training employees on digital skills: Employees need to know how to interact and work with new technologies. Failing to do so could lead to missed anticipated returns due to cultural resistance. Considering the existing IT skill gap in India, what businesses should aim for is a balance between human and automation roles, and investing in skill development and training programs is crucial to make this work. According to Nasscom, reskilling has become a key industry priority for sectors such as automotive, retail and IT-BPM, to drive innovation and efficiency. Other sectors with high growth potential such as manufacturing, need to catch up soon.

Focusing solely on technology: Businesses could get into the habit of having a tech-based single-point view on DX. Despite its technicalities, DX is a creative process. It holds the ability to deliver innovative and transformative outcomes, not without creatively positioning technology into the future of a business. The system of ideating, creating solutions to challenges that once plagued the business, and streamlining outcomes is a highly strategic, yet creative process. And this perspective can get companies out of the data-based viewpoint that could distract them from the end objective of making tech work for them.

Measured actions 
Overall, only about a third of companies achieve the target value through digital transformation, according to a BCG report. Without strategic planning, even a large proportion of investment in DX could turn futile. Companies need to study the market, bank on their selling point, analyze what the competition is investing in, and then implement technology that complements their operations.

While there is a lot of planning that goes behind a successful digital transformation roadmap, the high return on investment and the future-proofing capabilities make it worthwhile. Businesses in India need to deliberately weigh out their course of action to scale and compete at an international level.

digital transformation
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