Digital 2020: The march towards an intelligent enterprise

Published: December 30, 2019 1:00:53 PM

2020 is not just another new year that beckons us. It’s the end of a glorious decade and the start of another one.

With so much change in business, political, economic and technological environment—driving growth today and ensuring survival tomorrow has become a moot point for most organisations.

By Deb Deep Sengupta

As we enter 2020, India faces an incredible paradox. While at one end, we have set ahead of us a bold, audacious aim of becoming a $5-trillion economy, we are faced with the stark realities of a less than 5% GDP growth rate. As experts assure that the worst is behind us, we in the technology industry must not lose focus on the possibilities that lie ahead of us thanks to the strong emergence of the digital economy. Even policy makers are upbeat about the myriad possibilities. Digital India is expected to contribute more than $1 trillion to the $5-trillion economy. To bring this to life, India’s policy makers have introduced many programmes and reforms in form of its plan for 100 smart cities; launching the world’s most extensive biometric identity programme, popularly known as Aadhaar; reforming India’s tax structures by way of introducing GST and e-Way bill; launch of Ayushman Bharat to offer medical coverage for 500 million Indians and many other such initiatives that all use technology as the backbone for citizen services.

Any conversation about Digital India is incomplete without a mention of the success the country has had with the emergence of startups. While there are various estimates around the size of this sector, a KPMG report pegged the total number of startups in India at 50,000 in 2018—a 7x jump from 7,000 is 2008. While this number may be debatable, what’s not is that in the last 5-6 years, India has produced 30 unicorns with over $80 billion in valuation cumulatively.

To put this in context, this amounts to 4% of India’s Sensex. The sharp rise of these technology incumbents is giving traditional enterprises a serious run for their money, and the scare is palpable. In an exchange with the media, the founder and executive vice-chairman of India’s second-largest Indian private sector bank by market capitalisation said, “I keep wondering at night, will I have a bank the next morning, or will some technology company be doing banking without needing a bank?.”

With so much change in business, political, economic and technological environment—driving growth today and ensuring survival tomorrow has become a moot point for most organisations. As organisations and their leaders paddle hard to adapt to this new world of digital, one question occupies them the most, what business model will work the best for them. And this is where I believe organisations need to be ‘try the new’, ‘fail a lot’, ‘learn very quickly’ and ultimately ‘come out strong’. We call this ‘Thinking X+O’. Simply put, while O stands for Operational Data (O-data) and is an outlook of the past, X stands for Experience Data (X-data) that talks about the future of experiences.

While O-data does not need any introduction and spans sales, finance, marketing and internal operations data, the question that presents itself is how organisations can find the X-data. This undefined X may lie in any part of the business. While the most visible challenges are in the back office (read compliance and governance failure), the other significant area of disruption available is the middle office (read changes to supply chains on account of GST). The most significant opportunity for transformation and hence the “x factor” lies in the front office (read delivering customer experiences that translate to increase in revenue).

This neat separation between the X and the O has organisations and leaders asking the obvious—how do you create agile and scalable innovation capacity at a cost structure that makes business sense? How do you industrialise innovation? To answer this question with high relevance to one’s organisation, organisations and their leaders need to look closely at the following steps:

Enable Industry 4.0: With exports as a clear priority for the Indian manufacturing sector, ensuring our products are globally competitive isn’t a matter of choice. Hence, organisations and their leaders needto strategically invest in and build skills (both white and blue-collared) for Industry 4.0.

Create a technology ecosystem for the intelligent enterprise: While the need to use Cloud and DevOps for competitive advantage is well-documented, organisations continue to struggle on accounts of unlocking capability of modern technology and creating non-linear shifts in process effectiveness. Overcoming these challenges requires infrastructure, data, platform, applications, process and user experience to work in tandem (and seamlessly) as partners and not as point vendors.

Build the agile innovation sandbox: Those well-versed with the workings of the startup world understand the exponential impact VC’s expect in their startup bets. The 10% that make it through to production will generate ROI in the order of the entirety of the investment. Traditional firms serious about innovation and being relevant in the new age of digital, need to use the ecosystem to define an innovation sandbox that enables a multitude of experimentation.

Run experience in real-time: As organisations battle it out with peers and new technology incumbents, winning in the market needs more than just being agile. It requires capturing real-time sensing of the experience of stakeholders it serves, including customers, partners and employees and ingesting these into existing business processes and policies. This will not only pave the way for sustainable growth and profitability in a VUCA world, but also leadership position in the experience economy.

Unlock the value of the data asset: As agility, experimentation, modern technology and experience management proliferate, organisations will start generating massive amounts of data, at the edge and all the way back to the core. Organisations that are serious about being relevant and thriving in the new world equilibrium must put the onus on data as core to their strategy. The collected data can be leveraged throughout an intelligent enterprise—in the front office for loyalty and wallet share, in the middle office for efficiency and the back office for minimising risk and maximising governance.

2020 is not just another new year that beckons us. It’s the end of a glorious decade and the start of another one. This new decade will be special for it will be etched in history as the times when many market leaders emerged. Those serious about keeping or attaining leadership in the new decade, must use the above five steps and answer the critical question on how to innovate and be relevant. In a world full of unknowns and factors outside our control—it will be down to our ability to experiment, learn fast, and pivot the business model which will become the real source of competitive advantage, indeed the X factor.

The author is President & Managing Director, SAP Indian Subcontinent

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