What Organizations Should Do to Thrive in the Digital Economy

CIOL’s annual CIO leadership forum kicked off in Hyderabad with inspiring sessions by industry leaders, innovation gurus, and entrepreneurs, each giving a different perspective on how organizations should go digital. Here’s a summary of insights gained.

By Anil Chopra

C-Change 2016, CIOL’s annual flagship CIO leadership conference kicked off at Hyderabad today with inspiring sessions from BVR Mohan Reddy, Chairman-NASSCOM and Executive Chairman-Cyient, Ranjan Malik, the innovation guru, and Vijay Mahajan, Chairman-BASIX.

In his opening keynote, Reddy talked about what organizations should do to thrive in the digital economy. “E-Commerce for instance, isn’t really digital, but just one face of the digital economy”, he said. There are a lot of disruptive technologies and CIOs have to make sure these become core to their business. He talked about how the CIO’s role is changing considerably. They can’t just sit in isolation, but have to understand business much better, in addition to the disruptive new technologies.

Reddy highlighted a few key things to be done to become the digital companies of the future. “For one, you have to be unreasonably aspirational, and it doesn’t just mean doing social media marketing!”, he added. He then referred to how Steve Jobs and Apple computers had the aspiration to not just bring another form factor phone, but completely transform the user experience of how people use phones.

Second, he talked about bringing complex innovation. Today algorithms are available that can predict if a person is about to have a heart attack, he said. So, to survive in the digital era, you have to be the disruptor before somebody else does, pointing to what happened to Kodak and the film based cameras, and how the company ignored digital cameras and lost the battle. Automation and knowledge management is the other essential thing, he said. You have to understand how to create value you’re your data. “12% revenue acceleration has happened in companies that have digitized vs those who’ve not”, he said, and gave several examples. For instance, every aircraft engine has 120 sensors that produce 18 GB of data every second. If it were downloaded after landing, it would be meaningless. Therefore, it’s taken into a system inside the aircraft ‘on the fly’, and then analyzed. There’s a European travel service provider that can predict any defect in the train and repair it in seven minutes thanks to predictable analytics.

He concluded by saying as CIOs, we have to acquire the necessary skills, understand new tech capabilities, not just technologies in IT domain, but for business. So if CIOs aspire to become CxOs, they have to develop skills into business and technologies. That’s because they’ll play an important role in organizations of the future. Customers are changing, so you have to understand how to bring them under your purview, he concluded.

Ranjan Malik’s Storm the Norm

The next session was by the famous innovation guru, Ranjan Malik, who’s also written a book on the subject of his presentation. He compared technology disrupters as frogs in a pond, saying that in order for them to survive in water, they have to know the water better than the fish. Though they’re outsiders, they adapt much better than the ‘insiders’. That’s how outsiders come and ‘storm’ the market, he said, giving examples like how Sony missed the MP3 bus, how the biggest beverage brands missed energy drinks, how hotels didn’t foresee AirBnB, and the transport industry didn’t see Uber, and Banks missed Mutual Funds, Micro Credit and Crypto currencies.

“You can’t unsee what you see”, he said, alluding to how Napster was killed, but p2p sharing lived on. Software companies today are therefore not waiting for their ideas to achieve perfection. He called it elegant simplicity, where the first idea is simplistic, and then you iterate on it until you get the desired complexity.

Another great example he gave was how this world is made up of leaders, followers, and disrupters. When a winning formula emerges, there are lots of lazy people to copy it, only to fail. That’s why you have so many brands of digestive biscuits on the store shelves, each screaming about how it’s better than the others. But, does the customer really understand? Not really, which is where the disrupters come in. “If you want to be a disrupter, you have to learn from your own failures, go back to the drawing board of your project with new and fresh thought”, he added.

He concluded by talking about how the culture of innovation is being dealt with in a tactical manner in organizations. What happens within months of an employee joining is that risk averseness settles in, so there are no out of the box ideas. The problem is people don’t have reason to do it. “First come up with aspirations that are so audacious that you have to break the box to get there. Can we create conditions for it?”, he concluded.

Vijay Mahajan, Chairman-BASIX defines the “We” in Are we digitally aligned

The third speaker of the evening was Vijay Mahajan, Chairman-BASIX, a company that provides micro-finance to the most remote locations of the country. He talked about how IT and telecom have completely changed the definition of how to enhance reach and scale with agility. He talked about how the two worlds have combined in the last ten years. By making micro-finance available to people by allowing them to operate their bank accounts from a local ‘kirana’ store using a mobile phone and a handheld terminal to print transaction receipts. “So if there was Rs. 100 released for the needy earlier, only Rs. 18 reached them, but with this, the entire amount gets transferred to the beneficiary’s account, giving an impetus to schemes like the Jandhan Yojana”, he said.

Lastly, Vijay said that the “We” in “are we digitally aligned” are not people like us who have plenty, are well-educated, and know what to do. The “We” includes the vast majority of people who have low income, are illiterate or low educated, and living in very remote locations, and are perhaps unemployed. “It’s possible today to use the power of IT and telecom, and digital technologies to make a dramatic difference to their lives”, he said also pointing to the Aadhar, which is about to reach a billion number any day, which would be an enormous achievement.