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Digital Age to Disrupt 30 Trillion in Market Capitalization: India Well Placed to Emerge as Digital Hub with a Digitally Ready Talent Pool of a Million by 2020: Zinnov Study

September 3, 2014 - Bangalore, Karnataka, India

Key Findings of the Study
  • 30 trillion in market capitalization across 8 key verticals will be disrupted due to current digital age
  • During 2013- 2015, 550 companies will move out of Forbes 2000 list due to digital disruption
  • Data-driven enterprises leverage contextual public and internal enterprise data and use new-age technologies to generate deep insights that are both predictive and prescriptive to drive exponential business impact
  • 6 key areas have been identified for digital transformation -Customer Targeting & Engagement, Digital Products & Services, Risk Management, Supply Chain Optimization, Operational Excellence, Workforce & Partner Enablement
  • Over the last few years, a majority of CIOs have been focusing on IT modernization. However, the approach for digital transformation is distinctly different from IT modernization
  • India is will be home to a digitally ready talent pool of a million engineers by 2020
  • Product Engineering Vendors are well placed to take up leadership role in Enterprise Digital Transformation

Enterprises around the world are preparing to enter the digital age, with over USD 30 Trillion in market capitalization across 8 key verticals ready for disruption, revealed the latest study by Zinnov, a globalization advisory and management consulting firm. The study on “Enterprise Digital Transformation-The next era is already here”, launched today, identified the market size for digital transformation, areas that demonstrate high potential for digital transformation, and the opportunities for India to take the lead in this space.
In order to drive exponential business impact, today’s data-driven enterprises leverage contextual public & internal enterprise data, and employ new-age technologies for generating deep insights that are both predictive and prescriptive
Zinnov study found that 465 new companies moved out of the Forbes 2000 list between 2011 and 2013 and another 550 companies will move out the list between 2013 and 2015 because of disruption from the digital age. Almost 50% of the companies in the Forbes 2000 list will experience churn from the list because of the impact of the digital era.
The study highlights 6 key areas where organizations need to digitally transform themselves range from better targeting & engagement, supply chain optimization, digital products & services, to workforce & partner enablement, and operational excellence & risk management.

The 6 key areas have been highlighted below:
  • Customer Targeting & Engagement
  • Digital Products & Services
  • Risk Management
  • Supply Chain Optimization
  • Operational Excellence
  • Workforce & Partner Enablement

The study reveals that enterprises will need to spend USD 70 Billion in 2015 in order to stay competitive against new emerging digital native organizations.  This spend is expected to grow at a CAGR of 26% to reach USD 230 Billion by 2020.  Of this, enterprises in North America are expected to take a lead with a spend of USD 26 billion which is expected to reach USD 73 billion by 2020, propelled by the presence of digital hubs in Bay Area and New York City, and the availability of a more mature digital ecosystem.
The study also indicates that verticals with a high degree of direct consumer connect are likely to witness greatest degree of disruption. These verticals include Retail, BFSI, Media &Entertainment, and Travel & Hospitality.
In addition, the study revealed that while a majority of organizations over the last 5 years have been focusing on modernization of IT Infrastructure, the same strategies cannot be applied for enterprise digital transformation as they both are fundamentally different. The impact EDT has on the entire value chain and the stakeholders required to drive the change management are critical differentiators.
The study outlines a recommended approach for enterprises embarking on a digital transformation journey.

According to Pari Natarajan – Co Founder and CEO, Zinnov Management Consulting, “We recommend four steps for all traditional enterprises that are undertaking the Digital Transformation journey; building EDT knowledge base and understand possibilities, assessing business and digital priorities, establishing a step-by-step methodology for digital readiness and finally implementing digital solutions incrementally and iteratively.”
The study reveals that large organizations willing to drive their digital transformation roadmaps will need to focus on multiple initiatives. This includes relooking at their organization structure and building capabilities for a digitally enabled organization. Organizational re-structuring will result in creation of new roles such as chief digital officer, data scientist, data visualizer etc. However, in order to build these capabilities, firms will need to invest in skills in areas such as Machine Learning, User Interface Design & Development, Mobility, and Data Analytics.
India, with a strong technology ecosystem of MNC R&D centers, service providers, IT global in-house centers, and startups is well placed to play key role in the digital era. Indian talent can potentially power the digital transformation for enterprises around the world. The study estimates that India is home to digitally ready talent pool of 500,000 engineers suitable to execute digital transformation projects. This is expected to increase to around a million engineers in 2020.
Taking advantage of this trend, global service providers such as Accenture, Cap Gemini, and Pivotal software are making digital one of their key focus areas. They have created practices to offering services from consulting to implementation support.
Given the nature of skills required to execute Digital Transformation projects, service providers with strong product engineering services capabilities are well positioned to take a leadership role in the industry. This need for product engineering capability is seeing niche product engineering focused service providers such as Persistent, Symphony Teleca build deep digital capabilities.
“Enterprise digital transformation is fundamentally different in objective and approach from the modernization of enterprise IT. Separating the two is crucial for enterprises to approach digital transformation as a technology led or software driven business journey. Persistent Systems, with our DNA of building software products and businesses, is working with several customers on this journey and is strongly positioned for this market opportunity.” says Anand Deshpande, Chairman, Managing Director and CEO, Persistent Systems.
Vikram Sundarraj – Engagement Manager, Zinnov Management Consulting, says, “Many Indian service providers are creating dedicated EDT practices to cater to this rapidly growing market. Companies like Infosys and Cognizant are providing consulting services on digital transformation focusing on areas such as Omni-Channel Commerce, Marketing, Collaboration, Mobility and Customer Experience.”

About Zinnov
Founded in 2002, Zinnov – meaning Zeal in Innovation – is a leading Globalization and Market Expansion Advisory firm, with specialization in areas such as Global Sourcing, Emerging Markets Expansion, Human Capital Optimization, Small & Medium Businesses, Innovation, Cloud Computing and Enterprise Mobility. Zinnov offers advisory services to global leaders in business and technology and works collectively with them to tackle prevailing organizational challenges by analyzing changing dynamics, improving performance, and building institutional capability. The services delivered to its clients through advanced reasoning and analytical techniques, provides solutions help in integrating organizational vision, business definition and processes.

Source: Business Wire India


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