Digitization: Transition not seamless, yet essential, says Nandkishore Purohit, HDFC Securities
Digital transition is not seamless and it will continue to be so unless companies realize that it’s not a threat, rather an opportunity waiting to be explored
By Nandkishore Purohit
Digital is not a futuristic word anymore, rather it has gone deep into the very fabric of organizations who are eager to use intelligence from customer’s behavioural pattern to serve them better. ‘Being digital’ today is a business necessity, a much required industry adoption required to expand reach and provide quality service. With the backdrop of expecting quick and effective integration of technology, the digital journey has its own roadblocks – especially understanding customer habits. The difficulty in living up to customers’ and employees’ expectations is the main challenge often faced by companies where very few have evolved fully as a digital player and are apparently performing markedly better. The real journey for digital transformation starts from the mind – rather than figuring out how to be digital, we need to answer elemental questions like what is digital and why we should be adopting it. The industry has witnessed a lot of failed digital ecosystems just because the adoption pace has overtaken the business objectivity.
Digital transition is not seamless and it will continue to be so unless companies realize that it’s not a threat, rather an opportunity waiting to be explored. Employees unwilling to move from a status quo stance are problematic, which along with corporate politics and insecurity, form a formidable barrier for digital transition. Overcoming the legacy systems and the comfort which people enjoy around it become difficult as they have been using them for a long time. Instead of attempting to push innovation and completely overhauling the legacy systems (as a few of them are mission-critical and much required to ensure business continuity), businesses should work out the best approach for innovating today and optimizing for tomorrow. Digital innovation should be undertaken while keeping the business purposes and the current digital maturity level in mind. Businesses should work in partnership with experts in digital innovation and transformation to deploy agile delivery techniques and spend the IT budget intelligently.
Customer experience is a top driver of digital innovation where organizations should map their processes to the customer journey. Many innovations today fail because they miss out on this crucial element. Today’s connected customers differ in fundamental ways from customers of the past. Therefore, businesses must drive innovation combined with artificial intelligence, including machine learning, predictive and prescriptive analytics.
One of the key deterrents to a complete digital transformation is the fear of failing. While being cautious is not a bad idea because of the investments involved, one cannot have the rebuke of failure cloud the greater purpose of ‘digitization’. This is where the senior leadership’s role becomes instrumental to make the apparent cultural change easy and non-threatening. The elemental mistake would be to change and expect to change too quickly, thereby opening quite a few avenues for conflict. A digital transition and transformation plan needs to be implemented in phases with in-house employees advocating the benefits of being digital. Hence, the success of internal drivers for digital change is much higher than a management mandate. This is particularly the reason why one would notice a lot of young (tech savvy) talent at the mid management level driving the digital agenda.
An environment conducive for innovation is required in organizations to nurture a digital vision. Unfortunately, resources are devoted to day-to-day business so that few remain for innovative prospects. This is a particular point of concern because it forms the ground for losing out on competitive advantage. Progressive industry players become market champions only because they are willing to spend the time and resources behind cementing a digital road. Managers need to identify the future potential of new ideas rather than discount them by factoring current challenges for implementation. Focus on short-term results drives out ideas that take longer to mature – which in turn might be extremely beneficial for the company. Hence managers should consciously stay away from looking for flaws immediately in new innovative ideas.
From the financial sector perspective, we can see a very vibrant partnership between institutions and fintechs. As a result of these partnerships, low-income customers who are left out or poorly served by the financial sector will have greater access to higher quality, more convenient, and less expensive products and services. However, to reach this scale, organizations will have to mentally upgrade themselves to operate digitally. Will it be seamless – probably not: will it be worth it – definitely yes!
We must understand that if we strategize around our products and not our customers, we are travelling on a sinking ship. With each day, our customers are evolving and are trying out different channels of communication and transaction. If we do not expand our horizon to provide a truly omni-channel experience to our customers, we will have to bear the burden of seeing them leave for other service providers. With the advent of blockchain, public cloud and artificial intelligence, we believe we can understand our customers better and give them very specific offerings according to their appetite and likings – across channels.
The beauty of the digital world lies in the fact that there is always room to do more, to think more. It is synonymous to an artist’s widespread canvas where the possibilities are as rich as one’s imagination. Digital is the evolutionary phase of customer service, presenting a great opportunity to unlock their orientation. With many miles of unchartered digital territory, there is scope for all sized players, a fact which should encourage organizations to become fundamentally digital. Focusing on what customers need and at what comfort levels are at the epicentre of digital strategy and innovation today. There is an untapped market for digital penetration- especially rural India where smartphone users are poised to rise substantially by 2020. Businesses will need to be digital to scale the geographical wall and reach out to masses.
(The author is the Head – Digital Business, Strategy, HDFC Securities)
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