By: Khem Aithani, a senior manager in a global IT Services Company with 30+ years of IT Services experience
As an IT Services firm it is likely that you are already a digital business. If not, you could benefit by extending your business to Digital business. Services relating to Digital are growing at a rate of 25% to 40% versus 10%-15% of traditional IT services. The bill rates for Digital services are at a premium to traditional services. Whether Digital is a small part of your IT Services business currently or sizable, you could benefit from the following 7 rules in creating a thriving Digital business.
1.Internalise and agree on the relevance of Digital for the future of your business
All businesses are grappling with the change in market place and trying hard to morph into Digital businesses. Even GE, more than 120 year old industrial giant, is talking about a locomotive engine as a ‘datacentre on wheels’, have launched ‘Predix’ as an Industrial App marketplace, and more. The relevance of this Digital tsunami is much more for Indian IT Services businesses, as more and more of IT spends of customers are moving into their efforts on transformation to Digital businesses.
Do you and your management team understand and envision the World 5 years or 10 years into the future and imagine your own business in such a context? Do you all agree how your customers are being impacted by Digital and what do they mean by Digital? Each customer will define Digital in their own context and there are definitions dime a dozen in the market. While most will tend to agree that any business process which can leverage SMAC (Social, mobility, analytics and data, cloud) can be a target for digital transformation, you will have to define Digital in the context of your business. What is Digital in the context of your customers and your services? As an example, if you are a Testing Services provider, anything to do with testing and quality assurance of Digital applications and Digital transformation efforts, as well as using cloud, mobility, and analytics in the delivery of your own services might be considered as Digital revenue.
2.Fast track investments in building Digital offerings
Speed of change is frenetic in the Digital space. Therefore, you need to fast track your investments in creating and expanding Digital service offerings and solutions. If you are a latecomer, you will keep falling behind at a faster pace and catching up will be quite hard even if you decide to invest heavily later on. Fast tracking investment in Digital will also bring your entire organisation in the forefront of Digital readiness and awareness.
While large companies like Accenture, Infosys are acquired Digital businesses and allocating Innovation funds, for a smaller firm investment in Digital may mean infrastructure, hiring, training & development, partnerships or sales and marketing for your Digital business.
3.Ring fence Digital business operations
If you are venturing into Digital you may have to ring-fence the Digital business as a start-up within your organisation. Look at most large IT Services businesses. They have created a separate units to shepherd and grow Digital business which integrates digital assets and services across digital marketing, analytics and mobility. Needs of a Digital business are different. It will be a lot more rapid prototype, agile oriented, highly industry knowledge intensive, with special skills which are not usually found in usual IT Services set-ups – hence people and processes will be different and need special treatment and ring-fencing.
4.Demonstrate commitment and leadership in Digital
How do customers, market and employees see your commitment to Digital business as a strategic initiative and the bedrock of your business and not just as a tactical step towards appearing to be in step with the buzz words?
Some initiatives like roadshows of your Digital solution, investment in a small Digital Lab, sponsoring a research initiative in your specific Digital focus area, white papers on your Digital solutions, analyst’s recognition of your Digital acumen, presence in niche events, blogs and such will potentially demonstrate your long term focus on Digital and leadership in your specific Digital niche.
5.Operate as a Digital business
Most success springs forth from passion. To succeed in the Digital business, you will have the passion and drive for Digital and will believe that Digital can help transform not only your customers’ business but yours as well. Nothing is more effective than demonstrating that you practice what you preach. Do you use cloud based applications for your own internal operations? If you operate as a modern Digital business, your ability to service your customers and support them in their Digital transformation will be greatly enhanced.
6.Measure and Reward Digital business growth
Being that the nature and profile of Digital business will be different, your method of measuring and rewarding Digital business growth will be little different. As the deal sizes will be small, what is more valuable is the acquired customer’s profile and still more important how the initial project is transitioned into a multi-year managed services or factory model. Accordingly the reward and incentive mechanism will need to be aligned to promote such success.
7.Attract, Train, Retain Digital talent
With the huge growth momentum of Digital business, there is a resultant strain on the availability of quality human talent and connected attrition rates. The competition for Digital talent is even fiercer than usual and not limited to IT Services providers but even ecommerce businesses like Flipkart and Ola Cabs are an attractive employer for such experts. Therefore, you need a special focus on talent building program and ensuring a steady pipeline of experts.