Digital Transformation Engagements - A Hi-Tech Sector Perspective

Over the years, I have spoken with a number of Hi-Tech execs and upon reflecting on those conversations, I thought to note down some of the pertinent observations.

The Hi-Tech industry is rapidly evolving riding on the waves of rapid technology advancements, which often lead to disruptions in the established business norms, go-to-market strategy and revenue models. This makes the industry highly competitive for both the established companies and the start-ups looking to upend their chosen addressable market. The Tech. sector thrives on innovation and on ability to continuously bring new ideas to market.  Hence, it’s imperative that they imbibe the principles of being agile, innovative and apply continuous product iteration based on the market feedback.

That said, some of the challenges facing the Hi-Tech industry, as a whole could be listed as below -

·         Shorter Product lifecycle -  the rapid rise of new-age technologies including cloud-computing, AI, ML, 5G, etc. and rapid pace of innovation has shortened the traditional lifecycle of the product in the market. The firms need to quickly adapt and upgrade their products / solutions in response to the changing market-shift or face the risk of getting eclipsed by fast-moving competition. Eg., consider not so distant happenings in the product offerings related to blockchain or metaverse and the market/customer response. This trend of rapid innovation leveraging new age technologies and their ability to quickly find product-market fit or face quick obsolescence is only going to accelerate.

 ·         Creating differentiation in the market – the technology market is highly crowded with both large incumbents and startups in equal measure. To stand out in the market, the value proposition has to be differentiated enough to stand out amidst the competitions. This requires innovative thinking across product, marketing and go-to-market functions in a coherent and cross-collaborative manner. Eg., consider the positioning of iPhone during its launch vis-à-vis other smartphones in the market.

 ·         Shorter time to market – the shortening lifecycle of the product has put pressure on the time-to- market and the firms have to evolve their product upgrade, NPIs and product revenue model (licensing to subscription, consumption based, etc) to keep pace with the marketplace. Eg., consider ISV’s rapid response to adopting cloud-computing model in the past few years.

 ·         Cost optimization – Cloud-computing and other new-age tech-stacks have upended the traditional capex model, leading the firms to look for cost optimization measures and drive efficiencies in their business operations. Process automation, RPA and AI technologies are gaining increased momentum.

 ·         Developing Partner ecosystem, including partnering with a specialized digital transformation services provider with KPIs based on enabling business outcomes for the clients.

Such a digital partner can become a force multiplier to the several ends that the Hi-Tech firms may be looking to achieve. Based on my experience collaborating with some of these firms, I have highlighted below few of the key objectives and business outcomes achieved -   

a) Creating a new revenue stream for the client  - there are several ways to achieve this objective by looking across a firm’s product, solutions, go-to-market model, addressable market, the end-clients’ demand or unmet demand and channel these findings to provide a unique offering that can be monetized. For ex., one of the Hi-Tech clients was able to unlock new revenue opportunity by building an offering around data monetization.

b) Improving customer experiences – digital transformation starts with understanding the end-customer’s journey and ultimately making it as frictionless, intuitive and simple as possible. This reduces customer churn that ultimately gets reflected in client’s topline. Eg., one of the Hi-Tech clients embarked on a MarTech modernization program to improve their digital campaign visibility and ultimately reduce the customer churn.

c) Automation – the recent advancement in RPA, AI and BPR lend themselves to considerable opportunities for any firm to unlock value and efficiency gain by streamlining, simplifying and automating number of business processes - internal or market-facing. Eg., one of the clients deployed automation technologies to considerably improve their accounting & finance function.

d) Software development and Quality engineering – software has now become a tech. leverage to drive any kind of business transformation. The ability to quickly deploy cloud-native (containerized, micro-services led) software calls for digital partner, well versed in agile, DevOps, QE methodologies. Eg., one of Hi-Tech clients leveraged global delivery model to augment their engineering capability.

e) Expediting time to market for product or solutions – the right digital services provider can help to expedite products’ time-to-market by collaborating in a true partner fashion throughout the product lifecycle and help the client launch, iterate, evolve rapidly in response to market demand.

f) Orchestrating Partner ecosystem and alliances to address the end client’s solution requirement – often the product companies want to be seen as a solution partner to their end clients. This call for collaborating with multiple Tech partners in the end clients’ ecosystem to design and build solutions aligned to solving end clients’ business problems. It also calls for driving joint GTM - forming 360 relationships, which can often result in win-win for all the parties concerned. A digital services partner is well placed to serve as the orchestrator across the partner ecosystem with these multiple stakeholders. Eg., joint GTM on one of the HiTech clients’ cloud solution resulted in several new opportunities with their end clients.

g) Helping to sustain and evolve legacy product – the legacy product requires sustainment engineering for driving the existing customer engagement and also help it to evolve to a new revenue model which could be subscription or pay as you go model.

h) Augmenting professional services capability across geographies – often client deployments require complex implementation services and developing numerous API based interfaces or integrations across the applications landscape that the client would be operating with. A digital services partner can augment these services across product lines and geography. Eg., a client leveraged a trusted services partner to rapidly build their PS capabilities for a new cloud-based product with complex integrations.

i) Driving innovation – running pilots for the firms’ end clients leveraging new technologies eg AI, ML. Eg., partnered with a firms’ end client to run blockchain technology based pilot for a document management workflow use case.

Such business-driven outcomes, call for specific partner capabilities based on innovation-led design thinking, data-led digital transformation expertise and metrics-led agile pod delivery models that can help clients execute in a scalable manner. The digital partner can eventually become a catalyst to driving the business results of the client during the course of their transformation journey.