Digital transformation to contribute $154 billion to India's GDP by 2021, says Microsoft

Digital transformation by companies can contribute $154 billion to India's GDP by 2021, says new report. This will increase the country's growth rate by 1% every year.
 
The "Unlocking the Economic Impact of Digital Transformation in Asia Pacific" report by Microsoft in partnership with IDC Asia/Pacific surveyed 1,560 respondents from mid and large-sized organizations across 15 economies in the region.
 
In 2017, about 4% of India's GDP was derived from digital products and services created directly through the use of digital technologies, such as mobility, cloud, Internet of Things (IoT), and artificial intelligence (AI), says the report.
 
"Within the next four years, it is estimated that nearly 60% of India's GDP will have a strong connection to the digital transformation trends," says Anant Maheshwari, President, Microsoft India. "Organizations are increasingly deploying emerging technologies such as artificial intelligence, and that will accelerate digital transformation led growth even further," he adds.
 
The study identified five key benefits that companies can have from digital transformation: greater productivity, improved customer advocacy, cost reduction, increased revenue from products and services and higher profit margin.
 
The study indicates that while 90% of organizations in India are in the midst of their digital transformation journey, only 7% in the entire region can be classified as leaders. These are organizations that have full or progressing digital transformation strategies, with at least one third of their revenue derived from digital products and services. In addition, these companies are seeing between 20 - 30% improvements in benefits across various business areas from their initiatives.

The study indicates that leaders experience double the benefits of followers, and these improvements will be more pronounced by 2020. Almost half of leaders (48%) have a full digital transformation strategy in place.
 
The study identified key differences between leaders and followers, which contribute to the improvements tracked:
 

1.  Leaders are more concerned about competitors and emergence of disruptive technologies: The digital economy has also given rise to new types of competitors, as well as emerging technologies such as AI that have contributed to the disruption of business models.
2.  Business agility and culture of innovation are key goals: When addressing business concerns, leaders are focused on creating a culture of agility and innovation to counter competition. Followers, on the other hand, are more focused on improving employee productivity and profitability.
3.  Measuring digital transformation successes: Organizations across Asia Pacific are starting to adopt new key performance indicators (KPI) to better measure their digital transformation initiatives, such as effectiveness of processes, data as a capital, and customer advocacy in the form of Net Promoter Score (NPS). As organizations realize the potential of data as the new oil for the digital economy, leaders are much more focused on leveraging data to grow revenue and productivity, and to transform business models.
4.  Leaders are more aware of challenges in their digital transformation journeys: In addition to skills and cybersecurity threats as key challenges, leaders have also identified the need to bolster their data capabilities through the use of advanced analytics to develop actionable insights in fast-moving markets.
5.  Leaders are looking to invest in AI and Internet of Things: Emerging technologies such as AI (including cognitive services and robotics) and IoT are areas where leaders are investing in for 2018. Besides these emerging technologies, leaders are also more interested in investing in big data analytics to mine data for actionable insights than others.  

The study suggests that companies need to focus on capitalizing their own data in order to gain new market insights, create new digital products and services, and monetize data through data sharing securely, and in collaboration with its ecosystem.