Kitchenware, a small utensil store located in the former Sadar Bazar of Gurugram, recently digitized its inventory. Each product in the store had a barcode, which facilitated the billing process. But the data was not used to analyze fast-moving and infrequently moving products, which could have simplified inventory management, such as which item to stock more or which item to re-order at more frequent intervals, among others. .
Now snack on that. When India entered its first Covid-19 lockdown in March 2020, GCMMF (Amul) was able to successfully roll out a frozen food supply chain to deliver dairy products overnight, RS Sodhi previously said , MD of Amul at Business Today. By maximizing the use of data, software and digital infrastructure, Sodhi was able to manage inventory in such a way that retailers never ran out of stock of essential items.
Although the scale of Kitchenware and Amul was obviously different, the fundamental need for digital solutions was the same. Yet it was Amul’s access to and analysis of real-time data that helped him overcome the lockdown challenge.
Over the past decade, large companies and organizations have increasingly embraced digital technologies. From deploying enterprise resource planning (ERP) solutions and customer relationship management (CRM) solutions to building mobile apps and enabling digital business enablement, organizations have adopted frameworks digital transformation as a way to reinvent themselves, remaining competitive in their respective businesses and industries. Yet most have only understood that it is about automating operations, and investments in the most critical area – data analytics – remain low. Niranjan Ramsunder, CTO of US technology and digital transformation company UST, says: “If we were to limit data-driven analytics to advanced analytics, machine learning and other similar areas, then we could say data, analytics, and ML-directed projects would be about 40% of total spend [on digital transformation].”
But why is data analysis essential? “Digital transformation starts with data, but the increase in volume, speed and variety of data makes it increasingly complex to gain valuable insights and make informed decisions,” says Irina Ghose, COO of Microsoft India, adding that with data analytics, organizations can break down data silos and generate insights for better decision making and sometimes even automate the decision making process itself.
Industries are opening up to the concept of predictive analytics for future decision making, but it still needs to accelerate. Accenture’s Business Futures 2021 report indicates that 78% of organizations in India have increased their use of internal and external sources of real-time data over the past 12 months, but only 43% said people in their organization are using systematically use real-time data in their daily work.
Piyush N. Singh, Senior MD and Lead of India Market Unit at Accenture, says there are no specific industries that are ahead or behind in digital transformation. “The reality is that, in every industry, companies can be categorized into three categories: leaders who take transformation seriously and therefore invest holistically across the entire value chain; laggards who only invest in parts of the value chain; and companies that barely invest in digital transformation. Leaders are still a minority – no more than 20% in any industry – and they will get ahead, he says.
By 2025, 180 zettabytes of data should be created. How much is it? You know a TB or a terabyte – most PC hard drives have a capacity of 1TB or 2TB. One zettabyte equals one billion TB. Try to understand what 180Z of data means.
This data explosion, while a bit frightening, also presents huge opportunities for businesses. Fueled by this data, smarter organizations are infusing AI and hybrid cloud agility to better predict and shape future outcomes and automate decisions. “By leveraging data as a strategic business asset, businesses can accelerate or scale digital transformation, and also contribute to high revenue and business growth,” says Kamal Singhani, Country Managing Partner for India/South Asia at IBM Consulting.
With data-driven digital transformation, a business can re-engineer, automate, and infuse intelligence into key business functions. According to Harvard Business Review, such a data-driven transformation can lead to a 54% increase in revenue performance, a 44% acceleration in time to market, and a 62% improvement in customer satisfaction.
The tight integration of data also highlights the skills of the organization and presents unlimited business opportunities. Satyakam Mohanty, Chief Product Officer of Fosfor by LTI (L&T Infotech), explains: “Information derived from real-world data will allow you (the company) to look further into the future than you (normally) could. . Instead of relying on daily snapshots of your business, you can set solid, measurable goals years in advance.
For example, Parle, India’s largest biscuit company, leveraged IBM’s hybrid cloud and artificial intelligence capabilities to bring its products to market at the right time and in the right place. Sanjay Joshi, chief information officer at Parle Products, says recent market dynamics “needed accelerating innovation with digital platforms, building our supply chain resilience and increasing decision support systems with AI”.
Apart from legacy businesses, start-ups are also building their business models around data. B2B e-commerce platform Udaan is becoming a preferred business partner of established brands such as Apple and Samsung, not only due to its reach in Tier II, III and IV cities, but also from information it brings to the table – what options your customers considered, why they were considered, and what choices were made. How does this help? “The industry is able to identify and plan SKU and brand preferences by region during lean and peak times. Digitization has also helped create predictive analytics for promotion planning,” says Hirendrakumar Rathod, Electronic Category Manager at Udaan.
A common misconception among many organizations is that the cost involved in data-driven transformation is higher, which Som Satsangi, senior vice president and general manager of Hewlett-Packard Enterprise, India, clarifies: “Data-driven transformations on data drives digital transformations and therefore the overall cost is usually part of the transformation itself. The difference, however, is in how you prioritize and move forward in your digital journey. We have seen that transformation data-driven digital is more effective.”
While data-driven transformation can be critical to business growth, there are also risks of failure. Businesses need to design a strategic plan and invest in relevant tools and services. Companies often take a piecemeal approach and copy what has worked for another company or industry, but technology solutions that have worked for one company may not work for another. “Lack of visibility into current operations and traditional gut-based decision-making on transformation opportunities often leads to missing the big rocks and focusing instead on the pebbles,” says Sankara Subramanian, partner for Lighthouse ( Analytics, AI & Big Data) at KPMG in India. He adds that siled initiatives and point solutions often miss the end-to-end view. Failure to align transformation with the business strategy of the company is one of the main reasons for the lack of impact. Another rule of thumb is to invest in scalable infrastructure, good quality data, and data-driven process understanding.
But to make this transition a reality, not everything can be outsourced. Organizations need to strategically invest in the right training/skills modules to empower their employees to work with these next-gen tools and achieve their business goals. “Development should be a priority from an employer and employee perspective. Gartner estimates that by 2023, more than 33% of large companies will have analysts practicing business intelligence, including business intelligence modeling. As business models and technology evolve, employees with emerging technology skills will become critical to organizational success,” said Trideeb Roy, Sales Director for Cloud Infrastructure & Software Group at Cisco India & SAARC.
It’s safe to say today that the future will feature data-driven approaches to business strategy. The next decade of economic growth will be determined by today’s investments and the speed of digital transformation using data and analytics.