1. 48 | October 15, 2014 www.dqindia.com A CyberMedia Publication | | A CyberMedia Publication www.dqindia.com October 15, 2014 | 49
Smita Vasudevan
smitav@cybermedia.co.in
Digital Enterprise—
Still an Unfulfilled Dream?
Enterprise | Cover Story Enterprise | Cover Story
I
f companies could give their relationship to digital
transformation a Facebook status, it would be ‘it’s
complicated. A study on digital transformation by
MIT Sloan’ Management came up with this inter-
esting and much valid statement. Digital technol-
ogy transformation is still a complicated reality for
most organizations, even globally. Of course, there
are successful cases of the likes of Burberry and
Starbucks who turned their fates around by going
digital. Burberry’s transition is often touted as a historic
example of transformation through digital technologies
turning the underperforming, aging brand into a highly-
valued, customer-centric digital enterprise of today.
A similar change happened at Starbucks when the
company after hitting a rough patch in 2009 took the
digital route to re-engage with customers and saw
massive improvements in its overall performance. These
are truly inspiring cases of digital innovations that any
enterprise would love to replicate. But if we look deeper
we see that such cases are a few and far between as
most companies worldwide are still struggling to grasp
the true meaning and extract the true value of digital.
If that is the scene globally, the India picture is not much
different. The emergence of the more disruptive forms
of digital technologies like mobile, social and analytics
has been quite recent and most enterprises are still not
prepared to handle it, and weave the different technology
elements together into a unified digital strategy.
With increasing Internet penetration and explosion of
smartphones, tablets, and other devices, and a booming
e-commerce industry, the case for digital technology
adoption in India looks pretty strong. Enterprises are facing
a generation of customers that has all time access to
information and demands an equally satisfying experience
across all channels. Any failure or disappointment in
doing so could do a lot of harm to brand image. At the
same time, there is a huge opportunity for enterprises to
leverage digital information to understand their changing
customers and connect with them at a more personalized
level. Sumeer Goyal, Director, Digital Technology, PwC
India says, “While digital definitely helps to drive efficiency
in enterprises, it also improves customer engagement
and significantly brings down the time to market. It also
adds to the revenues of a company by opening up newer
sources of revenue.”
Experts suggest that India holds a lot of potential for
digital technology adoption. A recent study on Enterprise
| A CyberMedia Publication
Digital technologies
hold the power
to unleash
new business
opportunities, bring
efficiencies and take
customer experience
to another level,
yet why most
enterprises are still
not ready to walk the
path?

2. 52 | October 15, 2014 www.dqindia.com A CyberMedia Publication | | A CyberMedia Publication www.dqindia.com October 15, 2014 | 53
Digital Transformation (EDT) by Zinnov Management
Consulting 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. The study also reveals
that over the last few years, a majority of CIOs have been
focusing on IT modernization. However, the approach
for digital transformation is distinctly different from IT
modernization.
Vikram Sundarraj, Engagement Manager, Zinnov
Management Consulting says, “Most CIOs in India have
just started to think about EDT. The concept of digital
is at a very nascent stage.” He adds that the transition
will be easy for the new age companies that emerged in
the digital era, also called digital native companies. For
the traditional enterprises it’s going to be a tougher ride.
These companies will have to modernize their technology
infrastructure before embarking on the digital journey.
Customer-The Strongest Pillar
Customer experience, business operations, and business
models form the three pillars of a digital enterprise. Yet
it is the ‘customer’ aspect that is driving most of the
momentum. Global surveys indicate that customer
engagement and improved customer satisfaction tops
the list of expectations from digital transformation.
Subsequently, customer facing industries like retail,
ecommerce and travel are seeing more disruptions in
the digital space. Uday Tembulkar, Co-founder, Empacus
Outsourcing Management Services, says, “Most impact
of digital transformation is on the customer experience
pillar more than the other two.” Although experts believe
that some amount of investment is happening on the
Enterprise | Cover StoryEnterprise | Cover Story
We acknowledge the disruption
the digital technologies will
drive; value chains will fragment,
industries will converge and new
ecosystems will emerge
—Mukul Jain
Senior Vice President & Head-IT, DLF Pramerica
Analysis of pre-digital, digital and post-digital era
Pre-digital Era Digital Era Post-digital Era
Organization structure Highly centralized Semi-decentralized Highly decentralized
Decision making process Management driven Management driven, with customer input In collaboration with the customer
Customers Lack information More informed Highly informed
Role of technology Support function Strategic function Business enabler
Disruptive technologies PCs Internet, mobility, social media Artificial intelligence, robotics, augmented
reality, cloud computing, BYOD
Source: KPMG report, The SMAC code
63%
Improved
customer
satisfaction
(ie. NPS)
53%
Higher
traffic
46%
Greater
converions
75%
Lift in
engagement
49%
Increased
lead gen/
sales
We asked strategists to share
the top five benefits they see or
anticipate as a result of formal digital
transformation efforts (see Figure 7).
Digital
transformation
carries
expectations that
its impact can be
measured at both
customer and
business levels.
Source: Altimeter Group Digital Transformation Survey, 2014. N=59.
28
FIGURE 7.
BENEFITS OF DIGITAL TRANSFORMATION
What are the top 5 benefits you see or anticipate as a result of your formal digital
transformation efforts? Select up to 5.

3. 56 | October 15, 2014 www.dqindia.com A CyberMedia Publication | | A CyberMedia Publication www.dqindia.com October 15, 2014 | 57
Enterprise | Cover StoryEnterprise | Cover Story
operation side as well, the business model transition is
the most difficult to achieve.
A New Hat for the CIO
The emergence of digital technologies has also led
to an overwhelming role change for enterprise CIOs.
From heading the IT department to spearheading digital
technology led business transformations and for that being
able to present the vision of a digital enterprise, the burden
of expectations is pretty huge. Most could falter under
the pressure, but that’s why having the right mindset is so
important while embarking on new digital initiatives.
IT has a pivotal role to play in not just embracing digital
technologies but also in inculcating and developing
the right culture within the team and the organization.
CIOs should be able to manage disruptive changes
and make the road clear by removing the technology
complexities that could stall the digital objectives. For a
smooth transition, the underlying technology has to be
modern and flexible. Experts indicate that Indian CIOs
are acknowledging the significance of going digital
and are giving it serious thoughts yet there is lack of
maturity and understanding about what needs to be
done.
Mukul Jain, Senior Vice President & Head IT, DLF
Pramerica shares his views, “We acknowledge the
disruption the digital technologies will drive; value chains
willfragment,industrieswillconvergeandnewecosystems
will emerge. Although in the insurance industry this will be
tempered by regulation, privacy considerations and the
fundamental nature of risk, insurers cannot escape the
changing mechanics.”
According to the EY report, ‘Born to be Digital’, the
most essential characteristic of a digital ready CIO is to
have a vision for how technology will transform business
and a roadmap for implementing that transformation.
Most organizations lack the leadership vision. The need is
to navigate through the technology complexities and look
at how digital technologies can be effectively executed
to bring improved customer experience, streamline
operations, and optimize business models. Lack of clarity
at the top derails the digital initiatives and fails to generate
confidence within the organization.
The Roadblocks
Most CIOs are willing to look at digital investments, but
they are not sure about where to start and how to start.
As the digital enterprise transformation is based on three
different elements, very often the problem is to decide
what to transform first—customer experience, internal
operations or business model. What makes setting up a
digital enterprise so challenging is the need to develop
a completely different set of skills and investments than
a regular brick and mortar enterprise. The digital world
is so fast paced that decisions have to be quick and
technologies need to be agile and flexible enough to
match changing consumer needs. “Digital technologies
also mean managing and addressing demands of the
always connected and globally distributed populace. In
a digital economy, businesses will have to be available
24X7, says Goyal.”
Another hurdle for CIOs is the difficulty to establish
RoI for digital technologies. Hence, CIOs often struggle
to present a strong case for digital transformation.
According to a report by Altimeter Group, ‘The 2014 State
of Digital Transformation’, globally many companies are
currently not investing in journey mapping, which leads
to challenges in proving the validity of and making the
case for digital transformation. The report also states that
digital transformation doesn’t mean digital investment
alone. Making separate investments into mobile, social or
analytics without having an integrated view of a combined
digital entity just spoils all the efforts. “The challenges
we are experiencing are around the rapid evolution of all
these technologies which makes adoption of one version
or one direction difficult. Further the customer behavior
including our intermediaries and employees are changing
rapidly. Making a bet on certain solution/technology and
weaving that into your organization architecture is a risky
proposition and hence a challenge,” says Jain.
Taking the Right Path
To effectively implement digital technologies, it is
important to have an enterprise wide digitization strategy.
The impact of digital changes on different business units
should be evaluated and clearly laid out. Also since the
digital landscape is continuously changing, the digital
Most CIOs in India have just
started to think about EDT. The
concept of digital is at a very
nascent stage
—Vikram Sundarraj
Engagement Manager, Zinnov Management Consulting
roadmap should be constantly assessed against changing
trends and market conditions.
Digital enterprise has the power to grab massive
customer attention but at the same time it carries a lot of
risk. Heading on to digital initiatives without having a clear
strategy in place can cause irrevocable damages. Also the
inventory has to match the high demand being generated
every second. The recent Flipkart ‘Big Billion Day’ mishap
was an example of how things could go wrong in case of
lack of coordination and adequate resources. Sundarraj
suggests that companies that are starting their digital
journey should not try and do everything all at once. Start
off with few things and see how it works. “Building digital
trust is critical for organizations. They also need to ensure
the security of customer data and security of their own
systems,” adds Goyal.
Global surveys indicate that integration of independent
digital efforts and coordination between IT and business
is a key to digital success. The Altimeter report states that
Digital transformation requires more than the intention
to invest in the relevant digital channels connected
customers are using. Ultimately, customers are the losers
when the experience becomes or remains disconnected.
It is clear that digital will decide the future winners and
losers in the enterprise race. As entry barriers are lowered
in the digital space, more and more players will come to
the scene. Those that are able to do some magic with
their ‘digital wand’ will be the ones that stay ahead.
Six distinctive traits of a digital-ready CIO
1 Digital-ready CIOs have a strategic vision of how
technology will transform the business—and know how
to implement it
2 Digital-ready CIOs innovate relentlessly
3 Digital-ready CIOs focus closely on driving growth—and
the relationships they need to support this
4 Digital-ready CIOs ensure their vision is understood
5 Digital-ready CIOs move beyond operations and
infrastructure
6 Digital-ready CIOs are courageous risktakers
Source- EY Report, Born to be Digital
Recommendations for Traditional
Enterprises Undertaking the Digital
Transformation Journey
1 Build EDT Knowledge base and understand possibilities
2 Evaluate business needs with respect to current and
desired state and prioritize them
3 Establish a step-by-step ‘How to’ framework for
enterprise digital-readiness
4 Implement digital solutions incrementally and iteratively
Source: Zinnov EDT Report, 2014