Digital Will Disrupt Businesses, Bring in Societal Benefits
While we recognise COVID-19 has been a defining phase we should not lose sight of the fact that businesses have been evolving.
The pandemic fast forwarded this by a couple of years, accentuated the vision, intensified, and pushed the effort. The underlying theme is ‘better, cheaper, and faster’. The more evolved are also focusing on scale and sustainability. The medium is tech & digital, the tool analytics & uber targeting. The objective revolves around consumer experience through innovative business model effective delivery. The goal is to be ahead of the curve, even define it.
As businesses evaluate their strategy and examine their processes to enhance value, we observe and experience several shifts.
‘Work’ is what you do
Distributed leadership, remote members, dispersed teams started as ‘business continuity’ planning but is translating into process efficiency and output effectiveness.
‘Home’ work is on the rise, and many are already forecasting the death of office as it is. However, this is far from so in India. In terms of value over 25% of the services can be delivered remotely, but in terms of people no more than 10% will do it from home. While the doomsayers have data on their side, they may be ignoring the insight. India is a ‘low cost-high volume’ service market where the touch & feel is key to delivery. In addition, the organisations are beginning to realise the productivity dip because the ‘cost’ of colleagues being ‘disconnected’ and some even demotivated is higher than the saving from equipment, rent, electricity. There is a value in impromptu hallway discussion, as is in the laughter over a cup of tea. ‘Friendly persuasion’ as an influencing style beats logic & reason and is a ‘result’ enabler in large organisations.
A more near trend could be smaller offices, more distributed, ‘home shore’ operations not to cut cost, but more to reward employees to be ‘at home’. We see more offices in smaller towns, and more people going native (lower rental), living in their hometown but within reach of the hub.
Offices are coming to us, and not the other way around.
White collar Automation
Chatbots are taking over customer service inquiries, even engagement. White-collar automation will trend and gain momentum. We are already beginning to experience “digital humans” and remote counselling. Depending on the roles and the readiness, professionals like lawyers and doctors will be competing with smart robots, and with time deliver better through automated interfaces.
Decentralized Finance, Virtual Interfaces
Capital markets were in the centre of economic turmoil and continue to be nervous; creating a challenge for businesses that wants to raise capital. Crowdfunding, Blockchain technology, and other decentralized finance options are at work and will trend. We also see the death of ‘physical’ cards as mobile phone is all one needs to transact.
Social Engagement
During the pandemic, brands relied on engaging with their customers and ‘potentials’ across social media platforms. This will intensify to ‘authentic’ social media presence, that is less curated by social media experts. A close to a third of the shoppers are clued in, many more deriving insights from their social network. The new generation makes buying decision and is more vocal about their experience with the purchase. Social Commerce is providing heft to E-commerce and is now emerging as the most important sources of B2C relationship. Businesses will be engaging influencers to drive conversations and impact output with the customers.
Balancing physical and digital
App-based transactions have people excited. The next 5 years will see a ‘real’ drop of 40% in physical retail sales, while e-commerce will grow 5 times. Retail businesses need balancing their mix of physical and digital operations and are investing in real-time automation to optimize supply chains, empower staff and digitise point-of-sale devices.
Jobs: ‘Purpose & meaning’ is the new currency
Employees want more than a job; and are seeking purpose, meaning and experience. This trend will be fortified. Millennials constituting 75% of the workforce (in some industries) are already beginning to shirk competitive pay, traditional compensation packages. Pay checks are not compelling enough. Flexible work hours, paternity leave, work/life balance, remote work are the motivators. Organisations that don't have a clear or meaningful purpose will struggle to attract the best talent.
Personalized, Omni-channel Experiences
Brands will need to ‘personalise’ consumer interactions. Customers want to ‘sell’ themselves as ‘individuals’ with unique needs; and demand access across every channel, preferring online. They are willing to (concede) trade their privacy for a unique and personalized relationship rather than a traditional anonymous sales transaction. This is double edged sword. While omni-channel shoppers can be expected to be more loyal and they refer more, the margin of error is low, and diminishing, (85% don’t give a second chance). Many now choose to heed to the subtle promoters but ‘relatable’ influencers than the ‘distant’ celebrities; are averse to pay for advertising.
Digital: leaders and disrupters
Businesses have been harnessing advanced analytics to transform operations and reap benefits. The early adopters are emerging as digital leaders and disrupters and are likely to grow twice as fast as their competitors and will be equally productive. Their margin will improve thrice as much as the average. With the impending 5G network rollout, IoT will power devices to recognize, categorize, and recommend solutions to situations.
The early adopters are powering ahead, supported by the data they acquire and augmented by the AI capabilities and experience they are building. But the best is yet to come. A Crux study articulates AI could improve on traditional analytics. Deep learning could enhance value by about 25% in most industries, over 50% in some others.
Data as an Asset
Data is the new oil; we have just started drilling. While massive productivity gains across sectors are already visible, harvesting will need a holistic ecosystem (fusion of skill, tech & scale). To take advantage and to glean decision-making insights, investment will be needed in enablers, and the ‘supply’ side to process, analyse, and store the data streaming into the organization efficiently and effectively.
Even if a few better governed states could articulate a holistic technology policy framework, and implement well, the GDP growth could be about 2% higher in the next 5 years, and if dovetailed with the larger ecosystem another percentage higher.
Societal benefits will be many times more. AI is beyond hard numbers; impressive they may be. It has the potential to ‘effectify’ the efforts in areas like healthcare, climate change, education, policy design and contribute tackling several other socioeconomic challenges.
