Stop, think, digitise

Don’t look at the technology first but at what delivers the most business impact



In today’s digital world marked by tech-savvy consumers and intense competition in the physical and online market place, the buzz word is digitisation. But what exactly does it mean to a company to digitise its business? How does it go about doing this?

Ruba Borno, Vice-President, Growth Initiatives and Chief of Staff to CEO at Cisco, in a conversation with BusinessLine, explains digitisation and how it needs to be done. Excerpts from the chat:

There is a lot of talk around digitisation. But most companies don’t know where to start. They know that it is not about digitising just one function of the business but the entire organisation and the experience they deliver to customers. So, how should they go about it?

The first is, don’t look at the technology side but look at what is going to deliver the most business impact, what is going to help the business become most efficient and what will deliver top-line growth. So, start with that and decide what business outcomes you want to achieve and what are the ways to get it.

In a manufacturing company, for instance, it can be more efficiency in processes, more efficiency at the back-end, and ways to use efficiency in innovating on products.

There are three different phases — reduce cost in existing things, invest in new things that we haven’t done before, and create ways of monetising the new offers. Once we have put together the picture of what we could possibly do, we have to make a digital playbook.

I think of it as Maslow’s hierarchy for digital business. To implement technology solutions, security is foundation. Without proper security protection, you can talk about digitisation but it will not be realised or it will compromise some of the business.

Remember the wannacry attack? Hospitals that had to turn away patients, you had companies that no longer created revenue…so without security, you can stop the businesses’ ability to operate.

Hence, security should be the first thing you should think about. At Cisco, we have been investing in security in not only as its own business but also embedded in everything that we do… in networks, data centres, analytics portfolio, in collaboration portfolio; in everything that we do across the board, there is embedded security, because it is critical. The next thing in the playbook is automation. By 2020-2021, there will be one million devices coming online per hour. Just to give you a sense of scale, today, through our Jasper platform, which is the number one machine-to-machine connectivity platform, we connect 1.5 million devices per month.

This sounds impressive, but if you fast-forward four years from now, it is a million devices online per hour. That scale has to be done through automation.

The third piece that I would say is critical is analytics. One big trend in technology in the last few years is cloud computing.

This has been great, because you can access data from anywhere, so, what this has actually done is, it has reduced the ability to see which application is sitting where and where your micro service is being hosted and what’s the impact on the business.

Therefore, we have been investing heavily in analytics that provides visibility because the world is just getting more and more distributed, with more data being on the cloud.

What is the payback time? Can success of the new digital business model be measured?

In the Application Policy Infrastructure Controller Enterprise Module, the ROI is 400 per cent in less than a month. We know this because we have deployed it ourself and we are confident about that data.

Now, let’s say a customer is digitising something he has not done before. The possibilities, then, are truly limitless.

The Vice-Mayor of City of Linz, Austria, partnered with Cisco to connect their trams. Linz is a city of 2,00,000 people but it had another 2,00,000 people coming to work in the city every single day, so the population was doubling during the working hours. Their roads weren’t able to handle the traffic and they wanted improvement in public transport to manage the additional workforce coming into their city.

They brought in Wi-Fi on their trams, connected all of them, got better visibility into timing. The benefit was that they got data on start-up curves of those trams, and they were able to see that these trams were more efficient if they moved at a particular speed. When they started applying the start-up curves to other trams, they actually reduced the CO2 emission and their energy cost by 11.5-12 per cent.

When I asked the Vice-Mayor what the payback time was, he said, “honestly, we didn’t know that it will give us these benefits, the payback was in days.”

What is the cost versus the benefit? Companies that are digitising have to invest a lot in sensors and devices, right?

The cost of sensors is going down but every company has to do the cost-benefit analysis by measuring the ROI before it digitises. And we have to see the cost equation as a whole — the cost of digitising something to reducing the cost of something else.

Let us take the example of an automotive customer of ours in the US, who makes robots that build cars.

By connecting all their robots we were able to help them with a preventative maintenance solution. Now, they can keep an eye out for any aberrations in their robots, whether they require some maintenance. This is important because, when these robots go down, the cost is $20,000-30,000 per minute.

Not only is that costly, but it also has impact on time to market, customer satisfaction, etc. Preventive maintenance now enables them to address the problem before the robots go down, thus avoiding all those other costs.

Saving comes later, but first companies need to invest in the technology. How can this be managed?

We finance our customers, for technology, through Cisco Capital because we know payback takes time. Cisco Capital provides tailored, flexible payment solutions to Cisco customers in over 100 countries. India is a key focus area that ranks in the top five countries in the financing portfolio.

Many of our partners — the value added re-sellers and others — are also doing similar things in helping customers because they know they will realise the benefit over time.

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