DIGITALIZATION STRATEGY

RAMACHANDRAN.R MATHAN KUMAR.S NAVEEN KUMAR.V

DIGITALIZATION STRATEGIES
Digitalization is defined as digital coding of information and the growing productivity gains in processing and transmission it enables.

Digitalization is a combination of various areas of Business, Social Sciences and Technology.

The main terms used in context of Digitalization are : Computerization (through computers) Electronization (conversion of physical data into electronic data) Digitization (conversion of analogue electric signals to digital signals)

These 3 are supported by other two components of networking and telecommunication that create a phenomenon of convergence.

Digitalization within and beyond Organizations

Computerization of Records etc. Interconnectivity through Computers Evolution of Telecommunication Intranet connectivity Digitalization Electronisation {e-banking, e-trading etc.} Digitization

Principles Underpinning Digitalization Strategies

The three -stage process for adoption strategies of Digitalization

In the 1st stage, organizations must consider reshaping their competitive landscape, like
Outsourcing to the customer by letting them perform many of the service functions on their own. Cannibalizing their markets before their competitors do it. Treating each customer as a market through mass communication. Creating communities of value by creating groups of like minded people in cyber space.

In the 2nd stage , the organizations must build new connections by linking closely to the customer.

Replacing human interfaces with learning interfaces through customer operated facilities.
Ensuring continuity for the customer by using Ecommerce, that helps the customers perform their own service functions. Giving away as much information to the customers. Structuring every transaction as a joint venture with the customer.

In the 3rd stage, the organizations must redefine their interiors. Treating physical assets as liabilities to be replaced as virtual assets.

Destroying ones value chain.

Managing innovation as portfolio to minimize risk.

Hiring children who instinctively understand digital technologies.

Transformation of Value Chain & Value System by Digitalization

Deconstruction: Services can be delivered digitally (like service manuals) Disintermediation: Some process in the value chain are eliminated (like online ticket booking) Re-intermediation: Process in the value chain are supplemented by 1 or more intermediaries (like online shopping sites) Industry morphing: Traditional boundaries of business are changed and transformed by morphing (like banks online banking) Cannibalization: Set of activities performed in value chain are replaced by new set of activities (replacement of travel agents with internet booking) Techno-intensification: Intensive use of technology and decreased use of human resources (outsourcing,3rd party alliances etc) Re-channeling: More focus on services, marketing, selling etc. of value chain process through online.

The Digitalization Strategies

According to Ravi Kalakota and Maria Robinson the 3 phases of digitalization strategies are
Choosing among the e-business patterns Choosing the e-business models Choosing the e-business designs

The five patterns of e-business are

E-channel pattern Click and Brick pattern E-portal pattern E-market or Net market pattern Pure e-digital products pattern

Benefits of digitalization
Customers Improve customer experience Increase marketing, sales and service effectiveness Develop multi-channel strategy

Suppliers and partners

Improve transaction speeds, lower costs Optimize the end-to-end digital supply chain process Improve supplier relationship management Optimize sales and operations planning

Employees Manage organizational change Develop social policies and governance Develop digital skills and capabilities

Digitalization Strategies in Indian Organizations

Most banks in India converted from traditional Banking to Hightech Banking. (ATMs, Internet Banking, TeleBanking, Mobile Banking etc.) Conversion of paper documents to e-documents. (Bills, Receipts in E-form in insurance companies etc.) Communications through teleconferencing, e-mails, SMS in medical fields, pharmacy etc. E-portal pattern in Railways(IRCTC), Airlines etc.

Thank you