TCS Amsterdam Marathon

Practical Steps to Doing Digital Transformation

Blog post   •   Oct 31, 2014 11:00 GMT

An interview with Seeta Hariharan, GM & Group Head, TCS Digital Software & Solutions Group

In a recent interview with Ashley Csaki, Seeta Hariharan, GM and Group Head of TCS Digital Software & Solutions Group, shared her thoughts on ensuring the successful Digital Transformation of an enterprise, and her upcoming presentation at the Knowledge@Wharton Customer Centricity Summit.

In her interview, the transcript of which is enclosed below, Seeta identifies some of the challenges organizations face on the path to Digital Transformation. She suggests thoughtful steps that enterprises can take to harness the power of data to better understand their customers and deliver differentiated experiences that build sustainable competitive advantage.

Q: What do you see as the major challenge organizations face on the path to successful digital transformation?

A: The biggest challenge that enterprises face today is developing a clear strategy for achieving the dream of digital transformation.

Let me elaborate.

  • Customers that I speak to on a regular basis understand that transforming their business to the new paradigm of digital technologies, such as Mobile, Social, Cloud and Big Data / Analytics, is mandatory not an option anymore.
  • Customers understand the investment required is not small – on an average, Fortune 1000 companies are investing approximately $120M in 2014 on digital transformation
  • Customers also understand that the strategy needs to be specific to their enterprise – there is not an industry wide standard or a ‘one size does not fit all’ approach– which means they need to map out their own digital journey.

The questions before them are:

  • What should be my starting point as I embark on the digital journey?
  • What digital initiative will give me the maximum bang for the buck?
  • In what timeframe can I see a reasonable return on investments?

These are not easy questions to answer.

Q: How can enterprises start to tackle this challenge in addressing Digital Transformation?

A: Before we ask ourselves how to tackle this challenge, we should examine why enterprises consider Digital Transformation a must.

For enterprises, the foremost reason for undergoing Digital Transformation is their need to understand and serve each of their customers’ better. This is a must for staying relevant in today’s environment.

And the recipe to understand their customers and deliver relevant, personalized customer experiences is to harness the power of Data.

To get started, an enterprise needs to assess their level of data maturity using the four levels shown below:

Level 1: Enterprises use data merely to run their business

Level 2: Instead of just running their business, enterprises use data to manage their business

Level 3: Enterprises start to use data to enable innovation – develop products, capability, routes to markets to serve their end customers better

Level 4: Enterprises clearly view and use Data as a competitive differentiator, which is the ultimate level of maturity.

Once they understand their current level of maturity (level 1, 2, 3 or 4), they must ask themselves, ‘What is their desired level of maturity?’  This will enable them to put together initiatives to achieve their desired state.

This sounds cumbersome and, at first blush, complicated.  But is doesn’t have to be.

At TCS, we have put together a Digital Value Assessment tool. This tool allows enterprises to enter information about themselves and based on industry specific modeling, the tool provides the following outputs: a) the enterprise’s current level of digital maturity, b) their desired level of digital maturity, c) various initiatives that will help them advance their digital agenda along with a clear line of sight into investments and returns of investment.  It takes approximately 45 minutes to run this tool from start to end.  It is that easy. And, we plan to make this available externally, at no charge, by January 2015.

Q: What is the benefit to enterprises as they advance on Digital Maturity?

A: As organizations transition from level 1 data maturity to level 4 – it helps them to move from being just reactive to getting predictive, and more importantly, becoming prescriptive.

Let me illustrate by taking the case of a Utility Company and its residential customers.

We have all heard about networked homes where all the devices including electrical appliances are connected to the home network. This is not a distant reality…it is happening in many of the Intelligent Communities that have surfaced in the last 5 years. These networked homes also have smart meters that allow Utility companies to collect information related to consumer’s energy usage. Consider the intelligent home as the example.

The Reactive Phase

Using historical usage data, utility companies provide information to customers on their usage trends. You and I have seen this on our monthly utility statements. Based on the usage trends of customers over a year, utility companies plan for their power generation. This is what I call the reactivephase.

The Predictive Phase

The next challenge for organizations is to get predictive. In this phase, the utility companies use not just the historical data but also the weather patterns to start to predict the power consumption in a particular geographic area. This helps them optimize their power generation.  Utility companies can now also provide information to its customers on optimal usage of power. As an example, the utility company could advise a customer to use the washing machine during the early morning or late evening hours to minimize the load on its utility network. Based on the recommended usage or shift in consumption patterns, the utility companies can predict for its customer the monthly savings in their energy usage. Utility companies can motivate customers further by adapting the energy price to the usage patterns.  This phase is what I would call predictive.

The Prescriptive Phase

The third and more advanced phase is prescriptive. It is not just about using the historical data, energy prices, demand and weather patterns, but prescriptive actions that customers can take in real-time.  In the case of networked intelligent homes, the utility companies can detect that increased energy usage on a hot summer day may be the result of increased strain on the air conditioner due to the fact that the blinds are open. Customers can then be instructed to draw the blinds in their apartment or home to cut down on their energy consumption. This is a specific action occurring in real-time and this is the prescriptive phase.

Prescription is not restricted to just the Utilities industry. It applies equally to all the industries. As an example, some Banks analyze transactions in real time to map the customer spending behavior against the past trends so they can effectively coach customers on their investments, credit standing and relationship with the bank. Specifically, a bank could send an alert to their customer when the checking account transactions are trending above average. This provides an opportunity to help the customers proactively manage their finances.

As you can see, when organizations move from reactive to predictive and then to prescriptive, they can start to better and better serve their customers.

Q. Any closing thoughts, Seeta?

A: Certainly. Most enterprises understand that the Digital Transformation presents huge opportunities. I believe it was Mark Twain who said, “While everybody talks about the weather, nobody seems to do anything about it.” There is so much talk about the importance of Digital Transformation and why we must embrace it. Now is the time for leaders to shift from just talking about it to doing something about it. To shift from “why” to “how.” To shift from what I call “Talking Leadership” to “Doing Leadership.” Enterprises that make this shift now will reap the biggest rewards and leave competitors wondering what happened.

To hear Seeta discuss these thoughts and recommendations in more detail, please consider attending theKnowledge@Wharton Customer Centricity Summit on November 6, 2014.