INTERVIEW OF THE MONTH
INTERVIEW WITH MR. ANINDYA KARMAKAR,
Head Digital Transformation, Aditya Birla Finance & Home Finance Ltd.
The term digital transformation has different connotation for different enterprises. What is your view of digital transformation? Do you believe that the term ‘digital’ itself has evolved in the past few years, and if so, how?
Many organizations look at digital transformation as doing things better, faster, cheaper. However, in a fast-changing world, playing the old game in a more efficient manner does not cut it. At best, it can create parity with the best player in the current market. A better version of this is when an organization looks at what it is doing currently and then does it in a fundamentally different way. But even that may not be sufficient.
Digital transformation needs to be seen in a more strategic way, as something which prepares the company for the future. This has the most promise but can also be perilous. If done well, it can reinvigorate the company’s growth engines. Many organizations have started looking at the digital twin concept. One transformation strategy strengthens the core business and operating model, another creates tomorrow’s growth engines. Both the strategies have to work hand-in-hand and not in isolation. The efforts have to be coordinated and carefully constructed.
How have enterprises leveraged digital for business performance?
In the not-so-distant past, technology was usually seen as making backend processes efficient and cutting costs. With the rise of internet, digital came to be seen as another channel to reach customers. With the rapid increase in the use of digital by customers, companies started to digitize their processes under the hood, those which were not visible to the customers but had a profound impact on their experience, e.g. paper-based processes being converted into digital processes. Over the last year and a half, people have come to realize that digital has become the core of the business. Apprehensive senior management has now embraced digital transformation wholeheartedly.
Digital has changed a multitude of things. It has made instant communication possible. Droves of data are getting generated every second by an individual. This is leading to products and services are being customized to a segment of one. There is higher transparency in the way business is getting conducted. The rise of tech start-ups has given organizations the leeway to partner with them and experiment and innovate. All this is leading to new business models evolving, new products getting created, new customer segments getting opened, and new unmet needs getting fulfilled. Today, there are new revenue streams enabled by digital business models, businesses are leaner and more efficient, and higher investments are going into digital initiatives which align with the strategic goals.
There are several examples of lots of digital transformation initiatives failing. Is there any ‘rule book’ or equivalent that when followed increases the chances of success?
A successful digital transformation is never about technology. There cannot be a rule book since every situation brings its own unique set of challenges. However, here are some of the reasons why transformations can fail.
- Often a transformation starts with how to become AI-first, mobile-first, data-first, etc. Instead, it has to start with the business defining where they want to be and how they want to reach there. The right choice of technology is only a means to reach there.
- Customer experiences often are designed inside out. But with the pace of change being witnessed, our own experiences are not the right inputs to designing a superior experience.
- Most of the organizations looking for digital transformation have a culture that does not allow rapid prototyping or celebrating failure. The org structure may not be flat enough for agile decision making, and complex projects may get entangled in a web of internal politics and power struggles.
- Many organizations may see digitizing a process or a customer journey the same as digital transformation. Digitizing is not digital transformation. Digital transformation is more about understanding your position in the digital world and reimagining your business model for value creation.
- In today’s fast-changing world, doing it alone doesn’t help. Value is better created by participating in or leading an ecosystem.
- Often digital transformation is handed over to the next digital wizard who is expected to bring in radical thinking and the latest and the greatest in technology. Transformation happens when someone works from within, someone who is knowledgeable about the internal constraints and can create processes within those constraints that can serve the customer better.
- Often the excitement to become digital can become all-consuming, leading to defocusing on existing businesses. Digital transformation should be seen as something which safeguards the core business as much as creating a disruptive digital business to generate additional growth.
How have digital solutions helped enterprises to improve actual business processes? Are you seeing any trends relating to this in the past year?
Any company whose business model had a physical element faced an extraordinary challenge during Covid. And everyone rose to that challenge and created digital models which addressed the restrictions on physical touchpoints and meetings. The pandemic propelled digital transformation rapidly across industries. Today most organizations would have achieved 5-10 years’ worth of transformation in a matter of a year. The best part is that this trajectory is going to continue and will be driven by customer expectations to transact and engage digitally with companies.
Investments in digital technology have risen across the board. Now almost all discussions related to the business model, product, customer experience, process, buy journeys start with how it can be made digital. This has a profound impact on the way businesses are getting realigned with the new normal. This has led companies have shed excess cost and baggage, have become leaner, core systems are getting revamped, decision-making has become more participative and agile.
Have you read or experienced any unique ways to incentivize people towards faster adoption of digital solutions within enterprises?
In digital transformation, employees may consciously or unconsciously resist change. This fear needs to be addressed first, and in my view, it cannot be done by incentivizing. Digital transformation should not make us less human or replace humans. Technology is only a bridge between people and the desired outcome. If designed well, technology should help people deliver better, faster, and cheaper.
I believe that the role of a human connection will never go away. On the contrary, we are witnessing a need for higher levels of collaboration across functions in an organization, and higher social interactions both internally and with customers. For faster adoption of digital solutions inside an organization, it is necessary to choose the right tools to help an employee improve service levels. And for a customer, it is necessary to humanize technology and establish a connection at an emotional level.
The views and opinions expressed or implied herein are my own and do not reflect those of my employer, who shall not be liable for any action that may result as a consequence of my views and opinions
