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V K Mathews | Executive Chairman | The IBS Group
Transformational IT Solutions for Travel, Transportation and Logistics
TiEcon Kerala | Le Méridien, Kochi | December 6, 2014
Start-up to IT Enterprise – The Digital Way
Global IT Industry - Highlights
2
Actual Actual
3.4% CAGR3.4% CAGR
Source : Gartner Worldwide IT Spending Forecast, Oct. ‘14
The Digital Future
4
“Digital” has opened up a plethora of opportunities for entrepreneurs across the globe
Mobile Process Automation
Internet of Things
Cloud Advanced Robotics Social Media Analytics
Digital Enterprise
Digital Enterprise leverages digital technology for transforming its internal and external operations to stay ahead of
competition“
”
The Digital Impact
5
Technologies will create disproportionally high value beyond its boundaries
(Estimated at 4-9 times potential value creation)
USD 3.7 trillion*
Cloud
IoT
Mobile
Automation
Robotics
Internet Technology
Global Tech. Revenues 2014
~ USD 16-39 trillionImpact of these emerging fields by 2025
And this will cause the emergence of disruptive non-traditional players
(Digital Bankers – Paypal, Alibaba, Tesco, NTT Docomo, Safaricom, Facebook – as big as a top 20 bank)
Source: McKinsey – Perspective 2025 for NASSCOM, Nov ‘14
The Digital Impact
6
15-25% of existing enterprise IT spend will vanish in the near future
9%9%
91%91%
33%33%
67%67%Traditional IT includes IT Infrastructure , packaged software, BPO, consulting & ADM
Digital IT includes legacy-digital integration, SMAC & cyber security
Source: McKinsey – Perspective 2025 for NASSCOM, Nov ‘14
The Digital Impact on Industries
Digital within(Targeted Solutions)
7
End-to-end digitization(Moderate Impact)
Digital or Death
(High Impact)
Retail banking
Health care
Oil and Gas
Auto
Media
Retail
Digital has now shifted from a hygiene factor to a survival means in many industries
‘Digital or Death’
Digital disruptions to affect industries differently to ‘Digital or Death’
LOW HIGH
Digital impact on industry
Source: McKinsey – Perspective 2025 for NASSCOM, Nov ‘14
The Digital Impact on Enterprises
• Digital Products – Improved asset utilization• “Mobility as a service” replaces the car (e.g. Uber)
• Platforms to transform products to services
• Digital Channels – Massive disintermediation• 50% bank branches shut
• 75% reduction in dealer visits
• Digitized Processes - E2E Digitization & Automation• Reduced staff costs
• Increased efficiency across manufacturing value chain
• Data driven Decisions• New use cases – ATM network optimization
• Artificial intelligence models
8
Impact to be felt across 4 dimensions at the enterprise level
Source: McKinsey – Perspective 2025 for NASSCOM, Nov ‘14
Financial Services•120 million rural households
without bank accounts•48% leakage in employment
guarantee program payments
The India Opportunity
9
Massive unmet demand for basic goods and services in most sectors
Digital + Last Mile connectivity can help bridge these gaps!
Health Care•1/3rd doctors per capita compared
with China & Brazil •43% absentee rate of health
workers
Education•88% of class 8 students in rural
India unable to read a class 1 text•500 million without secondary
education or skills training
“ ”Source: McKinsey – Perspective 2025 for NASSCOM, Nov ‘14
The India Opportunity
10
Widespread adoption of technology will herald the Digital Era
2014 20252014 2025
Internet Connectivity
Cloud
Automation
Digital Payments
Digital Identity
Internet of Things
100-130 million mobile internet
users
700-900 million users
~2 million SMEs on cloud
~20 million (50% of all SMEs)
60 million smartphone users
(intelligent app users)
700-900 million smartphone
users
1.5 billion electronic
transactions p.a.
12 billion e-transactions p.a.
~50% of population under
Aadhaar
~100% of population under Aadhaar
Connected devices - NA
3-10 billion connected
devicesOpportunities galore!
Source: McKinsey – Perspective 2025 for NASSCOM, Nov ‘14
Building an Enterprise
11
• Focus on domain expertise over entrepreneurial zeal
• Building internal capabilities – people, process, leadership, governance
• Ensuring your value proposition stays relevant
• Developing brand equity and sales capability
• Investing in capacity over solving internal problems
Very different from launching a start-up