In FY18, new technologies such as such as internet of things, cyber security, data analytics, and digital platforms contributed about 23 per cent to overall revenues ($7.8 billion) of IT major HCL Technologies, up from 18.6 per cent in FY17. The upswing is a result of the company's focus on digital transformation projects. The IT company also announced to invest $100 million in these new services going forward. In a conversation with Business Today, HCL's Digital and Analytics business head Anand Birje talks about how companies are looking at digital transformation.
BT: Have the companies changed their approach towards digital transformation process over the years? How?
Birje: Five years ago digital adoption was done in pockets, especially in the areas of least resistance or least legacy, for instance, on their marketing or front-end platforms. Take for instance, an airline company's mobile app, which is used by to book tickets and has a great user experience. But when the same customer goes to complaint about their missing bag, the executives don't recognize them. This is a classic case of a company that couldn't digitize its process end-to-end.
Enterprises have now realised that if they want to become digitally transformed, they can't have pockets of brilliance, when 80 per cent of applications are on legacy applications and legacy infrastructure.
Since the last two years, companies are taking holistic journeys of digital transformation, where they are viewing it as an ongoing journey. It isn't any more about a project or two but a cultural transformation, where we look at all backend technologies, business processes, user value chains on how a company interacts with its partners, clients, customers, consumers, employees; and then leverage technology to enable new value chains for new processes, new customer experience and so on.
BT: How has approach to digitization changed with newer business models that didn't exist earlier?
Birje: Due to disruption in business models, where e-commerce companies are getting into payments, or logistics firms are getting into financial services, companies are finding competitors outside their norm. So, they want to learn and adapt best practices from other industries. For instance, a retailer can learn customer engagement from a hospitality company. There is a lot of technology transformation, which is horizontal but there are certain vertical nuances too; such as regulations in that space, reimagining business processes, redesigning user experience.
For instance, a pizza company wanted to engage with its consumers not just at the time of delivery but before and after that too. So, they created an algorithm using video analytics and graymatics to involve customers in quality grading the pizza, where users upon delivery took a photo and the algorithm graded the pizza on toppings, its placement, quality of cheese etc.
BT: You mentioned significant portion of digital revenue came from 30 large deals. Which geographies are the focus for growth?
Birje: Almost 95 per cent of our digital revenues come from US, Europe, Singapore and Australia. The opportunity in APAC is huge so we are being razor sharp in our focus in these geographies. We don't do significant amount of business in India.
BT: How is the impact of digital transformation evaluated?
Birje: Customers are looking at how quickly they can transform their business processes. For instance, if they are able to change a business process that leads to faster decision making. The challenge of a large railway company in North America was they could not change their business processes fast enough, when oil prices crashed and switched to high value deals of transporting food grains. When they digitised their process, they became more nimble and they could change carriages, time table, movement, and transportation logistics, to take advantage of changing commodity markets. Here velocity of business processes is a metric.
Another big area is customer churn analytics in sectors such as insurance, healthcare, retailers which impact revenue, customer satisfaction, net promoter score. For that we work on modernisation of customer engagement platforms, use data science to understand where is churn happening and if it is in any particular demographics.