Digital Transformation In 2020 It Is The Right Time To _SHIFT_

Kanchan Ray, Vice President - Technology, Nagarro | Thursday, 21 November 2019, 06:14 IST

Kanchan Ray, Vice President - Technology, NagarroWhen you look at the megatrends identified by Gartner, Forbes– one thing is clear – this is probably the most exciting time to be in the business of technology. To me the first thing that stands out today is - the _SHIFT_ – everything across business and technology is shifting. What I find new in this version of the shift is – this time it is synchronous, almost like a tango that IT and business organizations are playing together. When I talk to the CXOs of different enterprises, I see two clear triggers that are causing the shift:

  • Shift in customer journeys: customers across businesses today are better networked and hence much better informed. A business today can’t treat their customer journeys as a collection of many journeys – all customer journeys are now connected journeys with multiple touchpoints. And these touchpoints are rapidly going digital. CIOs should treat this trigger as the demand side _SHIFT_.
  • Shift in IT landscape: IT systems running in silos can’t keep up with today’s business agility. The need for real-time everything (data -> information -> insight) is shifting the focus of CIOs towards a much more agile IT ecosystem. Virtualization of the infrastructure along with move towards cloud, edge computing and mesh architecture is changing the face of enterprise architecture. Think of these as triggers from the supply side _SHIFT_.

“Today’s CIOs probably have almost all the tools available with them to fulfill any business case. The big question to ask is _ what are the _SHIFTS_ that are important to your business?”

Along with these triggers (and a few more like – geopolitical changes, policy shifts etc.), we have technologies that are maturing very fast and becoming affordable. Today’s CIOs probably have almost all the tools available with them to fulfill any business case. The big question to ask is – what are the _SHIFTS_ that are important to your business? This is the right time to identify the shifts that you need to make to future-proof your business. I plan to cover a few of the big _shifts_ here and briefly show how to strategize for them.

_SHIFT_ your customer touchpoints: Start mapping your key customer journeys and highlight the touchpoints you have with your customers. Your customer journeys could be - product inquiry by customers, checkout counter at a shop, support hotline, track status of shipment etc. The first thing you will notice is - in the last few years, customer touchpoints are constantly shifting from manual to digital - and this shift is showing returns right away. As an example, if we look at the airlines industry, we will see the shift from manual touchpoints to digital and its effects. A lot of airlines check-ins are now happening online and via airport Kiosks than assisted by agents at the airlines counter and, a lot of flight related queries are answered by bots than live agents. The strategy for any business now should be to shift manual touch points towards a digital touchpoint as much as possible. For each such shift you should charter a path – create a use case for it, calculate the return-on-investment and create a phased plan for it. The interesting thing about shifting the customer touchpoints towards digital is – most use cases pay for themselves by way of cost savings.

_SHIFT_ towards an always-on business: if you have a sign at your business that says “our hours of operation are from 9AM to 5PM” – chances are, your competitors are opening before 9AM and closing after 5PM. Chances are also very high that you are having a lot of unserved and underserved customers who are looking for alternatives. Today no business can afford to have ‘operative hours’ and should move towards an 24x7x365 always-on model. Given today’s technology maturity, serving customers anytime – anywhere – is not difficult to achieve. Start by mapping your customer journeys – look at the current interactions and see how many of them might fall outside your “normal” hours. The goal should be to shift them away from a human/store interaction to an automated self-serviced interaction. For example – if customers are doing enquiries (stock availability, shipment tracking, price checks etc.) – shift that part of the journey to a web site or a mobile App. If customers are looking for interactive help on how to use your products, how to install – shift those journeys to an intelligent, interactive chatbot. The two simple KPI to track will be a) the number of customers served across different time zones and b) number of customer journeys served without humans (by smart bots).

_SHIFT_ your business model: I strongly feel this is the right time to explore alternative business models. The network economy, the everything-as-a-service, the shared economy – all these have been there for quite some time now. This is the right time to experiment with your business models without disrupting anything. Every business collects a lot of data – use that to build nice data models for your business. You can start with creating a data lake or even go for an advanced digital twin approach. Once you have collected enough data and have access to a few good data scientists - playing with different scenarios and validating assumptions should be easy. For example, if you sell a certain product now – if you collect all your sales, marketing, cost data and build a relatively accurate data model, you can easily experiment with a lease model. Without any disruption – just by doing A-B testing and validating your assumptions with your own data you will be able to tell if the lease-a-product model is going to work or not.

_SHIFT_ your decision making: any decision you are making in your business today has some level of uncertainty associated with it. Some businesses learn to live with them – some track them as risks. making right decisions can surely help you save cost, but a single bad decision can cost you 100x of that cost. Given today’s tools and access to AI/ML, decisions that are being made by humans can be enhanced tremendously. Start with a list all the critical business decisions your employees are making today. For each decision – associate a cost saving if you improve the accuracy of that decision and also calculate the penalty cost of wrong decisions. List all the data that is being used while making that decision. Now have your AI team build the model for you which you can use to replace the human driven decision making. This is a fundamental shift in automating your decision making and making them better in that process. Example – if you have a process to decide if a transaction is a fraudulent transaction or not, you probably have a set of complex rules today to flag transactions. The shift in this case will be - you give all the data to AI and let the model learn what is a fraud transaction. It will an iterative exercise to improve the model’s accuracy – and, when you are happy with the model’s outcomes - incorporate that AI model in your business decision workflow.

_SHIFT_ your infrastructure: the infrastructure cost to keep the business happy is always on the minds of CIOs I meet. Given today’s demanding and extremely agile business needs in mind – you should plan for all the spikes in demand, failovers and business continuity and that is not cheap. Moving to cloud is the right shift in most business cases. Cloud adoption is on the rise and there are many choices today. Along with the cloud shift, the other thing to consider is – moving towards edge computing as well. There are many scenarios where you can save a lot of cost (compute cost, storage and bandwidth cost) if you shift some bit of your infra to the edge. For example – if you are working on a smart city project and trying to automate the traffic signals, rather than sending traffic data to the cloud, deploy cheaper edge devices – which will collect data, make decisions and later send data to the cloud to upgrade the algorithm. Anytime the algorithm is updated – just send it back to the edge device.

There are quite a few more interesting shifts that are happening across the landscape. I see the _SHIFT_ towards reality technologies (in all 3 forms – assisted, augmented and virtual reality) is getting good return on the investments. Similarly – a whole new _SHIFT_ is taking user engagements to the next level with immersive experiences – both for consumer experience and worker training. The key to success is to embrace this _SHIFT_ and start experimenting. The digital tools that we have at our disposals today are not only affordable – you can create quick prototypes to test your use cases as well. I recommend creating a backlog of your use cases, start with simple minimum-viable-ideas and define MVPs along with business and IT teams. Once you start seeing positive RoI, take them to production by scaling them.

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