Digital transformation enabled by technology triggers ongoing change across business processes, business models, and organizational culture
This is an exclusive interview conducted by the Editor Team of CIO News with Jainendra Kumar, Vice President at Xceedance
About Jainendra Kumar:
Jainendra Kumar (Jai) is responsible for the product management, technology architecture, software engineering, professional services, and product support teams at Xceedance. Jai brings 25 years of experience in technology, engineering, and product management for multiple products and services organizations.
Prior to joining Xceedance, Jai served as senior director engineering and India site leader at Diebold Nixdorf, where he oversaw the global innovation practise and India software delivery teams. His responsibilities included driving innovation and product delivery in the banking area, focusing on cloud, artificial intelligence, machine learning, blockchain, APIs, and big data technologies. His role required collaboration with North America, Europe, and Asia-based teams.
Jai is the 2021 Indian Achiever’s Award winner for his contribution in the field of software product engineering. He holds a bachelor’s degree in engineering and an MBA in systems. He is a certified product manager by the Association of International Product Marketing and Management (AIPMM), an AWS certified cloud architect, and a Blockchain Council certified Ethereum developer.
What is the digital transformation?
“Digital transformation” is about using digital technology, people, and processes to improve operational efficiency, drive customer experience, redesign business processes, increase revenue, reduce costs, enhance customer retention, and design new revenue streams. It is a journey where organisations start by moving paper-based work processes to digital, then venture into a website, mobile apps, and chatbots targeted to improve customer experience, and finally create a digital transformation platform that orchestrates and automates multiple processes with a centralised data view. To do so, the digital transformation unit has to operate as a software unit mostly in a product-based model, says Forrester analyst Nigel Fenwick. “There is more value, or perceived value, created through software,” he says.
For the past many years, companies have embarked on the digital transformation journey, and they are at different stages. Interestingly, it is a journey where the goalpost is also changing by virtue of technological advances. Many things that earlier were out of scope can now be achieved because of new technologies like cloud, mobile, AIML, IoT, and 5G.
The digital transformation maturity model
There are multiple paths to digital transformation. Each differs based on the organization’s operating model, business model, product mix, culture, state of technology, system, and data. At an overall level, digital transformation maturity can be measured in two dimensions: 1) operational excellence; and 2) customer experience. Depending on the nature of the organization’s business, it would either start with operational excellence or customer experience, but as they mature, an approach that strikes the right balance between the two shapes up. In the initial days, the team would focus on digital conversion with digital assets; then the focus would shift to an overall customer and employee experience with better collaboration and data; and finally, a digital platform approach with data at the center, providing operational and business insight and bringing transparency along with support for strategic decision making.
Technology plays a major role.
A few of the technologies that will play a major role in digital transformation in 2023 and the years to come are:
- Cloud computing: Cloud computing is a vital technology for digital transformation because it offers adaptability, scalability, and agility. Traditional storage services are insufficient for securely and affordably managing enormous amounts of data. As a result of this knowledge, industries are shifting towards cloud technology. According to predictions, the industrial industry will use cloud technology to a remarkable degree during the next five years.
- Big Data & Analytics: Data has been accumulating at a rate never before seen, thanks to the rise in connected gadgets in recent years. Fragmented data can be challenging to organise and possibly harmful to companies. It is feasible to handle the enormous amount of data using big data analytics to extract the appropriate data for a specific organisation to help it model its strategies and make informed decisions. Big data enables firms to continue with their transformation strategies more successfully by delivering measurable results.
- Artificial intelligence and machine learning: Today’s businesses increasingly rely on artificial intelligence, which is no longer just a trendy technology. Artificial intelligence is being used by businesses of all sizes to help with decision-making, improve operational efficiency, and improve the customer experience. AI and ML are already being used by the IT industry, healthcare, retail, and other industries to enhance performance. Every critical choice that organisations and people make will soon be impacted by AI. Because of the advanced nature of the transition, it will have a significant positive impact on our lives.
- API-based integration: APIs are versatile and effective tools for sharing functionality and exchanging data. Developers can cut costs and development time while minimising the chance of mistakes by using APIs. A sound API approach enables the development of digital platform business models that, by inducing a network effect, exponentially increase the value of transactions. It enables the leveraging of partners, enterprise customers, third-party marketers, etc., and opens up adjacent business models (B2B, B2C, and B2B2X).
- Digital Twins (NFT): Another tool for digital transformation that will help close the gap between the real and digital worlds is the digital twin. It has already had a significant influence on traditional sectors. A “digital twin” can be defined as a digital replica of a physical object, such as a product, process, or task. You may mimic, work together, measure, forecast, and produce data from the shoes of this digital twin’s physical counterpart using it. The market for this technology is anticipated to grow to $35.8 billion by 2025 due to its high potential.
- Blockchain: Blockchain is an online database that is kept on a network of computers that everyone can use to access local versions of the database. The data saved in the blockchain database can only be controlled by the user due to the decentralised nature of the architecture and several encryption mechanisms. Due to the lack of a need for middlemen to record transactions, blockchain technology can provide a high level of trust in all peer-to-peer (P2P) transactions. Since then, companies in the B2B and B2C sectors are moving their products into a digital marketplace. Potentially, blockchain will be the most significant technology for digital transformation.
- IoT and 5G: IoT and 5G are two ground-breaking digital transformation technologies that promise to provide great efficiency across numerous industries. IoT devices require additional capacity, quick transmission speeds, and seamless connectivity, all of which may be provided by integrating 5G.
Change Management:
Digital transformation enabled by technology triggers ongoing change across business processes, business models, and organizational culture. These technology enablers include infrastructures (e.g., cloud computing, big data, machine learning, artificial intelligence, blockchain, 5G, and the IoT), applications and platforms (e.g., low-code, workflow, data management, and MIS), and an ecosystem (e.g., a marketplace). The adoption of a combination of these technologies not only improves existing business processes but also creates new digital business and revenue opportunities. Making big changes to existing business processes is usually a long journey and not easy, especially when revenues and business KPIs are linked with existing processes. Clear objectives, top leadership involvement, continuous communication, transparency, and adherence to budget are critical throughout the change journey.
Summary:
The goal of digital transformation is to use digital technology, people, and processes to reinvent company operations, boost revenue, save expenses, improve customer retention, and create new revenue streams. There are several ways to change an organisation to a digital one, depending on its operational model, business model, product mix, culture, technological status, system, and data. Operational excellence and customer experience are the two variables used to assess the maturity of digital transformation. In 2023, technology will play a significant role in the digital transition.
Also read: Digital literacy is now a basic requirement for employment
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