Enterprises around the world are
preparing to enter the digital age, with over US$30 trillion in market
capitalization across 8 key verticals ready for disruption, revealed the latest
study by Zinnov, a globalization advisory and management consulting firm. The
study on “Enterprise Digital Transformation-The next era is already here”,
launched today, identified the market size for digital transformation, areas
that demonstrate high potential for digital transformation, and the
opportunities for India to take the lead in this space.
In order to drive exponential business
impact, today’s data-driven enterprises leverage contextual public &
internal enterprise data, and employ new-age technologies for generating deep
insights that are both predictive and prescriptive.
Zinnov study found that 465 new
companies moved out of the Forbes 2000 list between 2011 and 2013 and another
550 companies will move out the list between 2013 and 2015 because of
disruption from the digital age. Almost 50% of the companies in the Forbes 2000
list will experience churn from the list because of the impact of the digital
era.
The study highlights 6 key areas where
organizations need to digitally transform themselves range from better
targeting & engagement, supply chain optimization, digital products &
services, to workforce & partner enablement, and operational excellence
& risk management.
The 6 key areas have been
highlighted below:
* Customer Targeting
& Engagement
* Digital Products
& Services
* Risk Management
* Supply Chain
Optimization
* Operational
Excellence
* Workforce &
Partner Enablement
The study reveals that enterprises will
need to spend US$70 Billion in 2015 in order to stay competitive against new
emerging digital native organizations. This spend is expected to grow
at a CAGR of 26% to reach US$230 Billion by 2020. Of this,
enterprises in North America are expected to take a lead with a spend of US$26
billion which is expected to reach US$73 billion by 2020, propelled by the
presence of digital hubs in Bay Area and New York City, and the availability of
a more mature digital ecosystem.
The study also indicates that verticals
with a high degree of direct consumer connect are likely to witness greatest
degree of disruption. These verticals include Retail, BFSI, Media
&Entertainment, and Travel & Hospitality.
In addition, the study revealed that
while a majority of organizations over the last 5 years have been focusing on
modernization of IT Infrastructure, the same strategies cannot be applied for
enterprise digital transformation as they both are fundamentally different. The
impact EDT has on the entire value chain and the stakeholders required to drive
the change management are critical differentiators.
The study outlines a recommended
approach for enterprises embarking on a digital transformation journey.
According to Pari Natarajan – Co
Founder and CEO, Zinnov Management Consulting, “We recommend four steps for
all traditional enterprises that are undertaking the Digital Transformation
journey; building EDT knowledge base and understand possibilities, assessing
business and digital priorities, establishing a step-by-step methodology for
digital readiness and finally implementing digital solutions incrementally and
iteratively.”
The study reveals that large
organizations willing to drive their digital transformation roadmaps will need
to focus on multiple initiatives. This includes relooking at their organization
structure and building capabilities for a digitally enabled organization.
Organizational re-structuring will result in creation of new roles such as
chief digital officer, data scientist, data visualizer etc. However, in order
to build these capabilities, firms will need to invest in skills in areas such
as Machine Learning, User Interface Design & Development, Mobility, and
Data Analytics.
India, with a strong technology
ecosystem of MNC R&D centers, service providers, IT global in-house
centers, and startups is well placed to play key role in the digital era.
Indian talent can potentially power the digital transformation for enterprises
around the world. The study estimates that India is home to digitally ready
talent pool of 500,000 engineers suitable to execute digital transformation
projects. This is expected to increase to around a million engineers in 2020.
Taking advantage of this trend, global
service providers such as Accenture, Cap Gemini, and Pivotal software are
making digital one of their key focus areas. They have created practices to
offering services from consulting to implementation support.
Given the nature of skills required to
execute Digital Transformation projects, service providers with strong product
engineering services capabilities are well positioned to take a leadership role
in the industry. This need for product engineering capability is seeing niche
product engineering focused service providers such as Persistent, Symphony
Teleca build deep digital capabilities.
“Enterprise digital transformation is
fundamentally different in objective and approach from the modernization of
enterprise IT. Separating the two is crucial for enterprises to approach
digital transformation as a technology led or software driven business journey.
Persistent Systems, with our DNA of building software products and businesses,
is working with several customers on this journey and is strongly positioned
for this market opportunity.” says Anand Deshpande, Chairman, Managing
Director and CEO, Persistent Systems.
Vikram Sundarraj – Engagement Manager,
Zinnov Management Consulting, says, “Many Indian
service providers are creating dedicated EDT practices to cater to this rapidly
growing market. Companies like Infosys and Cognizant are providing consulting
services on digital transformation focusing on areas such as Omni-Channel
Commerce, Marketing, Collaboration, Mobility and Customer Experience.”
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