TCS executive on the necessity of digital reimagination

15 September 2015

Business leaders find themselves at a major digital turning point, is the belief of Satya Ramaswamy, Global Head of the Digital Enterprise Unit of the Indian Tata Consultancy Services (TCS). spoke with the TCS executive about the necessity of embracing digital and how organisations can best address the transition.

According to Ramaswamy the transition to a digital consumer economy will have immense consequences. Not only within industries, where the relationships between suppliers may change dramatically; but also beyond industries, because the boundaries between them will fade. Think of Apple, which began as a computer manufacturer, but later switched to a variety of other products and services. Or Netflix and Amazon, who are competing with traditional media companies by making their own TV shows: they are so successful especially because they are based on intelligent Big Data analysis of online viewing habits of consumers.

TCS Digital Enterprise

How quick will this transition to a digital consumer economy be?
"As we have learned in the past, this sometimes goes very quickly. In 2008 I started Brightfon, my second start-up. We developed interactive, mobile solutions for physical retail environments. In 2009 we were one of the first users of the Hadoop data storage platform, which forms the heart of many Big Data solutions. Back then, almost no one knew that it existed. We also used Twitter in stores, but first we had to explain to retailers what it actually was. But quite soon after that, Big Data and Twitter were fully established. TCS saw the opportunities Brightfon offered and acquired my company in 2010. I moved with it to TCS in 2012 and became the Head of the Digital Enterprise Unit of TCS. Since then I have seen the level of digital 'empowerment' of consumers increase rapidly. Companies must join them, otherwise they will go out of business."

In the approach of your Digital Enterprise Unit, combining digital forces is at the centre stage. Which forces are involved?
"We have identified five. Mobility, Big Data, Social Media, Cloud, and Artificial Intelligence & Robotics. Until two years ago, you saw that companies were using these forces separate from each other. For example, they launched a number of mobile apps but then did not analyse the user data of these apps. In our work with clients, we find that the true strength lies in the combination of these five digital forces."

The Digital Five Forces

What about awareness on the use of digital technologies?
"The immense importance of them is now understood  by now almost everyone: according to the Global Trends 2015 Study by TCS, 95% of the 800 managers that were surveyed worldwide see digital technologies as essential to get in touch, or keep in touch, with customers. The issue is that the majority of these companies - only 6% have appointed a Chief Digital Officer - then take little concrete action; because after all, you are not there with the deployment of just a new digital marketing tool. Not only consumers and businesses, but also 'smart things' (Internet of Things) such as machines, watches, cars, the thermostat or refrigerator are more often online. This offers opportunities for the use of digital technologies. And it can almost instantly make a positive contribution to performance. As shown by the same research, investment in IoT technology often leads to revenue growth: 80% of companies that have invested in IoT, saw their revenues in 2014 increase by an average of 16%.”

If you want to digitalise further, where do you start as a company? Or as a consultant who guides the process?
"I distinguish three categories of digital initiatives; which are phases which you ideally go through one after the other. First, the phase of digitalisation, where you digitalise the physical. In this first phase, you keep your existing structures and processes in place. The second phase is that of digital transformation, which focuses on the digitalisation of distribution channels and the enhancement of online channels, for example, think of the change from a product driven to a user driven web design.

The third phase is that of digital reimagination. Here you redesign, supported by the five mutually integrated digital forces, the most important aspects of the organisation. This is much more radical than the implementation of the incremental adjustments in the first two phases. "

Digital Reimagination

To which organizational aspects is this digital reimagination applied?
"We can identify six. Firstly, our consultants help clients redesign their business models. Connect customers and the products they buy digitally with the company; for example, place smart energy meters in people's homes, or sensors on machines. This provides real-time information on how customers use the products effectively. For an auto insurance company we have developed an application that maps driver behaviour. Based on this output, the insurer can make a risk profile tailored to every individual, who then pays a lower premium if he drives more safely."

And the other aspects?
"To start with products and services: through conversations between clients via social media, a provider can improve his product. Then, business processes, which you can design increasingly digitalised and data driven, with all its advantages. The fourth aspect concerns customer segments, which are moving more and more to micro segmentation or even 1-on-1 segments thanks to technology. The last two aspects concern channels, think of printers which order toner by themselves, and everything around the workplace, such as mobile working.

Companies are only at the beginning of tremendous changes. However, with those changes it is necessary that they know and use the vast range of digital capabilities. Whoever does that quickly and thoughtfully can count on consistent competitive advantages in the near future.”