Think big, start small, move fast

Stories of digital transformations are all around us. We hear about companies that are disrupting existing business models, such as Uber, Airbnb and Zillow, or those that are innovating with the changing times, such as Nike, Starbucks and Netflix. We also hear about traditional leaders such as BMW and Marriott Hotels actively striving to improve customer experience.

What we do not hear often are the stories of unsuccessful attempts made by companies. And I must emphasise that for every success story that we hear, there are dozens of failures that we don’t. Digital transformation takes real work and real expertise.

Let me share three critical aspects of digital transformations that companies overlook when embarking on this journey.

First is underestimating the complexity of digital transformation — especially the need for deep domain and technology expertise.

Digital experiences — web, social and mobile — that empower and delight customers require a thorough understanding of the business context and the right set of technologies to make them work. Enterprises often misunderstand digital to mean a monolithic block expecting it to deliver the same results across domains. That is not the case. Digital transformation approaches differ in each industry; it needs to be a lot more thought through than merely putting out a smart mobile app. Banks should strive to engage their customers continuously rather than just during a transaction. Retailers need to understand how their customers are combining the instore and online shopping experience. The hospitality industry must look at the needs of a connected traveller, and technology companies will need to look at how wearables and the Internet of Things (IoT) will change a consumer’s day-to-day life.

These changes need deep understanding of changing customer expectations. The experiences also need to be understood in the context of the channel the company is leveraging and not force fit the experience of one channel on to the other.

The second area that companies get wrong is to do with keeping an eye on the clock. They understand the need for speed, but often underestimate how complex these initiatives can be. Projects get delayed and are shelved.

Companies have to look at new ways of delivering quickly. We have seen that deploying agile development methodologies can accelerate digital engagements significantly. The iterative approach to development, focused on delivering features incrementally throughout the project rather than delivering them all at the end, is very effective for digital initiatives. Functionalities are broken into smaller modules, prioritised, and then completed in a short one to four week ‘sprints’.

This is also very useful as priorities often shift for digital programmes so it is important to ‘fail-fast’. A balance needs to be found between using a rigid platform and designing systems from scratch every time. Reusable, industry-specific frameworks make the process a lot quicker.

And the third area is how well various partners are working together. The fundamental requirement for a global enterprise is to own the customer experience and find the right partners for everything else. Global companies have a partner ecosystem that consists of multiple digital partners and it is important that they work synergistically together.

Big programmes need big teams, and lots of partners. Gone are the days when keys are handed over to a single partner to run the show.

For digital initiatives, decoupling can bring tremendous benefits. This means segregating technology operations and a creative execution of campaigns. Partners with deep technology expertise can ensure seamless integration and standardisation of digital campaigns across regions.

Avoiding these common mistakes will make digital engagements more effective. When it comes to digital, the rule to follow is to think big, start small and move fast, and prepare for the future.

The focus of IT service providers should be on two fronts: to enhance core IT efficiency and to provide innovative platform-based services for non-core processes. For example, travel expense claims can be moved out of the enterprise premises onto the cloud. The enterprise will have to pay according to the number of travel settlements made rather than licensing and hardware costs. On the same lines, enterprises would not consider moving their existing ERP or business intelligence investments onto cloud, and would prefer to renovate the applications rather than make any further capital investment. The cloud-based service delivery has brought a paradigm shift in the IT spend of enterprises and has also given them the flexibility to switch between service providers seamlessly, which is not possible with the in-premise traditional model of IT delivery.

To survive and be successful in the cloud era, IT service providers must transform from traditional product and services to delivering new and exciting platform services that add value to the customers’ business. That alone will ensure their continued success and prepare them for the future.

The writer is the CEO and managing director of Mindtree Limited