Understanding Digital Transformation As Not One, But A Series Of Initiatives

Mani Mulki, CIO at Tata Capital | Tuesday, 17 November 2020, 07:14 IST

Mani Mulki, CIO at Tata Capital

The Digital Landscape in India is evolving rapidly. There are tectonic shifts in Consumer behaviour fuelled by rapid advancements in technology like AI / Robotics / Voice, Text, Image recognition etc.

With about 700 million internet users and 400 million smartphone users, India is one of the largest and fastest growing markets for the Digital Consumer. Its not only growing rapidly but also becoming pervasive across consumer segments. Until recently, India’s digital consumer were mostly male / from metros and millennials. Now, 50% is from rural, 40% women and nearly a third above the age of 35 years.

The Indian Consumer now treat information as an integral part of the shopping experience. 85% of the consumers check at least 2 data points before buying anything and nearly 50% conduct some sort of an online research. This is true even for a simple product like Yogurt which can come in many varieties like flavours, calorie content etc. The instances of transacting financial services online is growing rapidly. For eg., the number of people applying for a loan online has gone up from almost zero , a few years back , to 25 % now. The technology architecture existing in financial institutions today allow them to process the applications, assess the credit worthiness and disburse the loan in a matter of few minutes.

The Indian Consumer has become very demanding and wants personalised service on a real-time basis. Organisations that do not recognise this and embark on an aggressive digital transformation exercise, will soon face an existential crisis.

“85% of the consumers check at least 2 data points before buying anything and nearly 50% conduct some sort of an online research”

A key component in the execution of the Digital transformation journey in any organisation is a well calibrated adoption of Technology. It is the bedrock on which customer journeys are reimagined, processes simplified and platforms created to engage with the customer on different channels. The customer has to be at the centre of any Technology strategy and not the sophistication of the technology per se. The two most important parameters leading to a delightful customer experience are speed and convenience. Ergo, the technology architecture that is defined has to be very flexible, modular, and based on open architecture which would allow them to connect to various external partners easily and quickly.

However, despite the implementation of advanced technologies, many organisations fail in their Digital Transformation exercise, because of inadequate or poor Transformation. People often read and treat ‘Digital Transformation’ as one term which in reality are 2 very distinct terms. Digital means putting in place the necessary technology framework be it apps, bots, middleware, portals etc .. to enable an organisation to change its business models, improve operational efficiency, enhance customer service etc .. and Transformation means actually doing it. And herein lies the most difficult part and the most challenging hurdle to cross. It essentially means question the status quo, dramatically changing existing business models, destroying some of them, creating new processes and completely re-imagining customer segments and journeys. It isn’t easy for an organisation to let go of its wisdom and learnings carefully constructed over the years in favour of new ones which seem very radical. This is where the buy-in and the commitment of the top management plays a crucial role. It is absolutely critical for the top management to be completely soaked into the new Digital paradigm and come out with a compelling digital value proposition and create a continuous roadmap for a new customer value. A true Digital Transformation can only be driven top-down and not bottom-up and is always accompanied by cultural and behavioural changes.

Another structural change that is causing a major disruption in the digital landscape in India is the advent of Fintechs. Interestingly, what started out as a competitive distribution channel to the financial services sector, is mow morphing into a strong collaborative partnership. While the banks and NBFC’s have the scale and deep domain expertise, Fintechs provide the nimbleness and the technology which acts as a great equalizer. It would be difficult today for financial services organisations to serve customers at a large scale and simplify processes for greater efficiency without adopting the technology prowess of the new age Fintechs. Many of the complex segments in a financial digital journey like credit assessment, e-KYC, reading of bank statements, document uploads etc .. provided by Fintechs as open API’s can easily be integrated into the technology ecosystem of any financial services organisations resulting to much faster deployment of digital banking products. The collaboration between Fintechs and Financial services organisations is here to stay and will only become stronger in the years to come.

To sum up, a Digital Transformation in an organisation is not a one-stop solution to be implemented by a small core separate team. It’s requires a massive organisational upheaval in terms rebooting age old processes and business models and can only be successful if driven strongly by the CEO and the top management. It’s also important to note that it’s a continuous journey and it’s not necessary that all that is attempted will succeed. Its better to fail fast, absorb the learning, recalibrate the journey and move ahead quickly.

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