IT WORLD FORUM: SMAC FOR BUSINESS TRANSFORMATION
New Delhi, 30th April 2014
R Chandrashekhar, President, NASSCOM
Highest relative industry share in national GDP
Largest share in total services exports
Offsets nearly half of India’s oil import bill
IT-BPM industry: All pervasive impact on India
Highest attractor of PE/VC investments
Largest private sector employer
Largest private sector women employer
Promoting Balanced regional growth
Spearheading the Indian MNC story >60Cross border M&A,28% share in total
$2.4 bn47% share in total
investment
99 IT-SEZs in Tier II/III44% share in total
>1 mn
Highest net value add sector
FY2015: Continued momentum, optimistic outlook
IT-BPM Export revenues*
Growth of 13-15%
E: Estimate, P: ProjectedSource: NASSCOM
IT-BPM Domestic revenues*
Growth of 9-12%
USD billion
INR billion
Customer Outlook
• 78% of decisions makers feel confident of planning for investment and growth in 2014
• Global IT spending projected to grow fasterin 2014- IT by 3.9 per cent, BPM by 5.9 per cent; increased contract volume for global sourcing
Indian IT-BPM Sector
• Exports expected to grow by 13-15 per cent, domestic by 9-12 per cent in FY15; revenues to cross USD 130 Billion
• Industry priorities- a) Help clients go digital, b) Understand and acquire new customers for clients, c) Grow their business
• Transformational outsourcing (value, technology, innovation and cost) will drive future growth
3
Created significant impact for customers
Savings of USD 200 Billion for clients in last 5 years
Solutions from India 50 per cent faster time to market for clients
Average client productivity up by 20-40 per cent
Over 70 per cent clients have derived global emerging market solutions from India
Source: NASSCOM
USD 120 Billion invested by clients in new, high return projects
Clients able to ramp up 30 per cent faster in India
100 per cent of clients have gained productivity improvements from India
SMAC for Indian IT-BPM industry: Driving incremental growth
5
• Social influence moves beyond ‘like’to incentive driven recommendations
• Social media impacts business infrastructures
17-19%
34-35%
33-36% • Creating actionable and predictive analytics from diverse data-sets
• Competitive advantages over rival organizations and result in business benefits, such as more effective marketing and increased revenues
15-17% • Adoption of benefit administration services due to ‘Obamacare’
• Enabling SMBs to challenge the market dominance of big businesses
5
USD billion
• Bring together elements for thought process based on the behaviour and buying trends of customers
• Build valuable leads of potential customers
• Productivity/Efficiency improvement• Customer satisfaction• Real-time connectivity• Consumerisation of IT• Employee/External stakeholder
demand
• Productivity improvement• Process improvement• Streamlining operations• Innovative product/service
development
• Driving consumerisation of IT• Accelerate reinvestment of IT cost
savings by clients• Leveraging cloud to drive market
facing differentiation
• On demand channel for real time communication & connection between enterprises and customers
• Setting new imperatives for operational efficiency and customer engagement
Digital Enterprises: The only firms that are guaranteed to succeed
Source: Accenture, NASSCOM
BENEFITS TO CUSTOMERS
• Real time customer engagement & superior customer experience
• Leverage collective Intelligence of employees, partners and customers
• Provide anywhere, anytime business transactions and contextual information
• Offers digitally intelligent products, solutions and services
• Predictability in its business value chain
• Align with Gen Y culture of employees, partners and customers.
SOCIAL MEDIA MOBILITY ANALYTICS CLOUD
REAL TIME CAPABILITIES
KEY COMPONENTS
7Source: NASSCOM
Digital Enterprises: Snapshot
• Digital technology re-imagining businesses to create a ‘Digital Enterprise’• Firms leveraging the maturation and convergence of Social, Mobile, Analytics/Big Data, Cloud and the Internet of
things to drive this agenda
PILLARS OF DIGITAL ENTERPRISE
SOCIAL
MOBILITY
ANALYTICS
CLOUD
• Evolving behaviour and buying trends of customers
• Build potential customer leads
• Productivity & process improvement• Streamlining operations• Innovative product/service development
• Customer satisfaction• Real-time connectivity• Employee/external stakeholder
demand
• Accelerate reinvestment of IT cost savings by clients
• Drive market facing differentiation
• SMAC reshaping businesses; consumers and all traditional approaches- the foundation for a Digital enterprise
• Customer behaviour, satisfaction –core theme for evolution
• Move to the next orbit of innovation with consumerization of IT
• Offering creative solutions - move to higher-margin business-creating a growing digital ecosystem
• Indian vendors expected to generate over $225 billion in SMAC related revenue by 2020
Convergence of mobility, cloud, analytics and social media presents further unique opportunities
• Communication, collaboration, and commerce providing a real-time source of consumer and employee sentiment
• Mobile social media solutions can also be used to create collaborative applications for employees
• Cloud social media analytics listens to social media sites like Facebook, Twitter, YouTube to analyse customer sentiment
• Social network and Cloud computing integration is used to host Social networks or create scalable applications within the Social network
• Distributed computing, virtualization, ubiquitous networking, and scalable access to specialized resources
• Mobility cloud allows enterprises to convert capex to opex, and enhance virtual computing power
• Improved visibility to drive operational efficiencies, guiding decisions, yielding new insights, and predicting what’s next
• Mobile analytics and business intelligence solutions allow executives to make decisions on the move
Mobility Cloud
Mobile Analytics
Cloud Social Networking
Mobility Cloud
Analytics
Social
Companies that purposefully combine two or more of these emerging technologies can create fundamentally new ways to serve their markets
Mobile Social Networking
The integrated Social Media Analysis and Reporting Tool of Cognizant, iSmart, listens to social media sites like Facebook, Twitter, YouTube, crawls through web, extracts data from emails, PDF, text and excel files to analysecustomer sentimentBuilt on Big Data Platform making it a highly scalable solution.It uses Natural Language Processing and Machine Learning Algorithms to identify, process and classify the sentiments. Not only recognize the overall sentiment for a product/ brand / service , but also to identify the reasons for sentiment
The digital wave –defining business, defining India
•SMAC reshaping businesses, consumers and all traditional approaches - the foundation for a Digital enterprise
•Consumerization of IT driving growth
•Start ups setting the pace in SMAC solutions
•Opportunity for big companies to leverage start ups to expand and enhance global footprint
Source: NASSCOM
Entrepreneurial startups infusing energy and innovation
~500 ~400+
eCommerce Education
250+
MPE, Retail,Travel &
Hospitality
120-150
Telecom, Real Estate
Manufacturing
100+
Agriculture,BFSI, Energy, Govt,
Healthcare
Diverse start-up landscape (Number of firms)
Collaboration between large companies and startups
Emerging players~1,000-1,200
Small sized~15,000 players
Increase in start-ups focusing on solutions around SMAC
~150-200 ~750-800 ~800-900
Hardware and Devices
Internet/Web SMAC
• ~3X growth in new firms set up post 2005• Bengaluru – one of the Top 20 startup ecosystems
globally• Verticals- Education & retail gained significant
traction
INDIA: FAST GROWING DIGITAL ECONOMY
Mobile
130million
920 million telecom subscribers
40 million smartphones
213 million internet users
India 3rd fastest growing app market
300 million+ app downloads
INR 300 crore+ app market
Ecommerce revenues in 2013- USD 13 billion
4 year CAGR growth- 36 per cent
Social Media: Improving user experience, reach and engagement
12Source: NASSCOM, e-marketeer
12
Drivers & Trends
•Offers differentiated ability of gauging customer opinion to support marketing objectives and customer service activities
•Translate into a revenue mechanism that affects the profitability of the business
•Not a standalone activity, rather a part of digital marketing strategy
•Bring together elements for thought process based on the behaviour and buying trends of customers
•Marketing campaigns and strategies link to the ROI
128
247
2013 2016
Social Media users in India (Million)
66 million
Urban Users
India
2013
97% on Facebook
1: http://hbr.org/web/slideshows/social-media-what-most-companies-dont-know/6-slide
SMAC: The pillars of digital transformation
Impact is highly evident
•Create a new digital operating model and transformation to a permeable enterprise
•Engagement with a growing digital ecosystem
•Empower enterprises to embrace emerging technology trends and to benefit from the value expectations of customers
•Innovative thinking in business and enterprise architectures
§SMAC: A business reality
üSocial, mobility, analytics and cloud are reshaping the business, the consumers and all traditional approaches, Indian Industry has seen till now
ü Movement towards the next orbit of innovation with consumerization of IT
üOpportunity to move to higher-margin business by offering creative solutions
ü Help businesses grow dynamically instead of increasingly cutting margins for typical IT contracts
üLaunching luxury product lines that comprise the SMAC suite of technologies to go the next level
§ Huge potential for revenue generation
üIDC Indian IT vendors expected to generate over $225 billion in SMAC related revenue by 2020
Drivers/ factors contributing to thechanging landscape of Technology
TransformationRemodelling business processes through harmonizing technology
advancement
TransformationRemodelling business processes through harmonizing technology
advancement
Client- specific outcomesA meaningful change in the business
requirements i.e., end-to-end solutions
Client- specific outcomesA meaningful change in the business
requirements i.e., end-to-end solutions
New paradigm for businessEfficiency, Enhanced customer
experience, Reduced time to market, Connectivity, IT Consumerization
New paradigm for businessEfficiency, Enhanced customer
experience, Reduced time to market, Connectivity, IT Consumerization
Mobile payments Smart cities Connected Health Pivot merchandisingmBanking mHealth Smart Buildings mGovernance Platform-as-a-Service
Source: NASSCOM
Collaborative Strategy to transform India
Collaborate
Collaborate ConnectConnect
Co-Create
Co-Create
Domain
Domain
Prioritize domains based on
• potential size
• possible impact
• readiness of leadership
•Role of government
Identify relevantpartner associations
• Common vision
• Willingness to commit time and resources
• Industry participation
Build Councils •Domain (Sectoral) and IT industry members –to jointly define agenda, budget and priorities
Identify key focus areas and jointly build programs that enable this
Health is the first sector taken up under this strategy
Social Entrepreneurship Education and
Skills
Internet and Mobile
Security
Healthcare
Banking
Mobile payments, financial inclusion
Smart Meters, Supply Chain
Connected Consumers
School learning, vocational skills
Enable scale for
innovative solutions
Cyber security
Health records, National Rural Health Mission
… and many more opportunities
E-Governanc
e
Citizen services
Infrastructure and Logistics
15
Transforming India across sectors
Add Electronics &Telecom + Social entrepreneurship
THANK YOU
R Chandrashekhar, President, [email protected]