Globally, enterprises are preparing to enter the digital age, with over $30 trillion in market capitalisation across 8 key verticals ready for disruption, revealed a Zinnov study – “Enterprise Digital Transformation -The next era is already here.”
The study identified the digital transformation market size, areas that demonstrate high potential for digital transformation and opportunities for India to take the lead in this space. In order to drive exponential business impact, today’s data-driven enterprises leverage contextual public and internal enterprise data and employ new-age technologies for generating deep insights that are both predictive and prescriptive.
According to the study 465 new companies moved out of the Forbes 2000 list between 2011 and 2013 and another 550 companies will move out the list between 2013 and 2015 because of disruption from the digital age. Almost 50% companies in the Forbes 2000 list will experience churn from the list because of the impact of the digital era.
The study highlighted 6 key areas where organisations need to digitally transform themselves range from better customer targeting and engagement, supply chain optimization, digital products and services, to workforce and partner enablement and, operational excellence and risk management.
Enterprises will need to spend $70 billion in 2015 in order to stay competitive against new emerging digital native organizations. This spend is expected to grow at a 26% CAGR to reach $230 billion by 2020.
Of this, enterprises in North America are expected to take a lead with a spend of $26 billion which is expected to reach $73 billion by 2020, propelled by the presence of digital hubs in Bay Area, New York City and the availability of a more mature digital ecosystem. Verticals with a high degree of direct consumer connect are likely to witness greatest degree of disruption. These verticals include Retail, BFSI, Media & Entertainment and Travel & Hospitality, the study indicated.
While a majority of organisations over the last 5 years have been focusing on modernization of IT Infrastructure, the same strategies cannot be applied for enterprise digital transformation as they both are fundamentally different. The impact of Enterprise Digital Transformation (EDT) has on the entire value chain and the stakeholders required to drive the change management are critical differentiators, the study pointed out.
The study outlined a recommended approach for enterprises embarking on a digital transformation journey.
Large organisations willing to drive their digital transformation roadmaps will need to focus on multiple initiatives. This includes re-looking at their organisation structure and building capabilities for a digitally enabled organisation.
Organisational re-structuring will result in creation of new roles such as chief digital officer, data scientist, data visualiser etc. However, in order to build these capabilities, firms will need to invest in skills in areas such as Machine Learning, User Interface Design and Development, Mobility and Data Analytics.
India, with a strong technology ecosystem of MNC R&D centres, service providers, IT global in-house centres and startups is well placed to play key role in the digital era. Indian talent can potentially power the digital transformation for enterprises around the world. The study estimated that India is home to digitally ready talent pool of 500,000 engineers suitable to execute digital transformation projects. This is expected to increase to around a million engineers in 2020.