Digital transformation: Unlocking true business value through technology

Microsoft Asia Pacific Vice President of Sales, Marketing and Operations Alberto Granados (left) with Microsoft Sri Lanka Country Manager Brian Kealey

By Hiyal Biyagamage

Digital transformation is surely a hot topic among global leaders, despite the many industries they represent. As an imperative force, digital transformation is ushering in an era of unprecedented change. ‘How ready is your company to be transformed digitally?’ is the million dollar question that everyone seeks an answer to. 

The world is being transformed by new technologies, which are redefining customer expectations, enabling businesses to meet these new expectations, and changing the way people live and work. Digital transformation, as this is commonly called, has immense potential to change consumer lives, create value for business and unlock broader societal benefits.

Some may argue that digital transformation is not just about technology. Yes, it may be at the core of every digital transformation, but digital transformation uses technology to define the new values of a business and how they can relate to the many needs of their customers. If you analyse logically, digital transformation is as much about the transformation of how individuals work and the cultures of organisations, as it is about technology. 

We sat with Alberto Granados, Vice President of Sales, Marketing and Operations, Microsoft Asia Pacific, recently to talk about digital transformation, its role in the Asia Pacific region and how Microsoft tackles the challenges it brings. Microsoft Sri Lanka Country Manager Brian Kealey also joined in. Following are excerpts:

Q: According to a recent Forbes article, digital transformation is in the pilot’s seat when it comes to the strategic agenda of an enterprise. Many high-ranking executives believe that the next two years are going to be critical in this regard. How has digital transformation changed the business landscape of global organisations over the last few years?

A: Many analysts believe that we are in the fourth industrial revolution. We are seeing different technological disruptions presently. One is cloud computing which eliminated the barrier of what you could do with a limitless amount of data. It is challenging multi-million enterprises as well as medium-sized businesses. Cloud has created many interesting trends such as the change of CIO’s (chief information officer) role in an organisation. CIOs are now challenged to find new ways transforming technology on business value. It is a continuous conversation we are having with our customers: how you can help us to transform the technology and how we can embrace digital disruption to create business value. 

One of the general patterns we are seeing across Asian organisations is that many of them are starting to embrace cloud as a way of gaining more agility and optimising efficiencies – managing classical infrastructure, data centres and moving them to cloud – and get the possibility of investing and financing on digital transformation so that they could innovate rapidly across the board like implementing IoT (Internet of Things) solutions, omni-channel solutions, machine learning to optimise organisational processes etc. 

It is a very exciting time for us because Microsoft feels that it is an amazing opportunity to help our partners succeed in their digital transformation journey.

Q: What is Microsoft’s overall view on digital transformation and how it works for Asian organisations?

A: Our CEO Satya Nadella expressed that our vision concentrates on three important pillars. First one is personal computing and how we can change the mobile experience of our users which also includes strengthening the security of the device and seamless access to information. There is a lot of emphasis on secured protection and providing right protection to fight against cyber security. Second pillar is productivity and business processes; how cloud can help you to be more productive, connect and engage with your employees. With the help of solutions like Office 365 and Dynamics, we have helped many enterprises and SMEs to grow their businesses. Our third pillar is intelligent cloud. It provides solutions which can help companies to embrace cloud technologies and disrupt the way they innovate. 

When you talk to customers, they are thinking on how they could engage with their customers and provide a different customer experience. We actually did a survey with 1,500 companies across Asia where we asked them ‘how are you embracing the digital transformation’ and ‘where are you going to apply it’. The number one priority was how they engage with their customers in a different way and how they understand the sentiments of customers. Second priority was how organisations empower employees; how organisations going to leverage digital transformation and transform their employees to be more productive. 

According to the survey, the third point was optimised business processes. For example, you can take Surbana Jurong in Singapore. With the help of Microsoft Azure, they are developing a cloud-based Smart City in a Box solutions – an integrated set of solutions with a dashboard that allows city officials to load customisable applications in four key areas: security, efficiency, sustainability and community. This will enable officials to track, monitor and manage cities better. Using Microsoft Azure’s predictive analytics services, including machine learning and video analytics, Surbana Jurong will be able to enhance its predictive lift and asset management services.

The fourth pillar of this survey was the innovative approach of a company – innovating new products. We are starting to see this as the next trend in Asia where many companies are starting to create spin-offs and starting to become independent solution providers (ISP). We have many examples of enterprises who are embracing digital transformation to extend their portfolio by innovating novel products. It is interesting to see that many of our partners are interested in exploring new avenues of digital transformation and how it could disrupt their existing business model.

If you ask me whether we are seeing a massive adoption of digital transformation in Asia: not yet. It is something we are starting to witness. According to the survey, more than 80% of customers declared that they are evaluating digital transformation, 23% of the customers had a full digital transformation policy and the rest declared that they have no plans on taking on digital transformation. 

Q: Though the context looks to be very promising, Asian organisations seem to be still missing out on unravelling the true potential of digital transformation. Why is that?

A: One important factor for this that organisations have this initial concern about how cloud can be a secured channel for their business. Many companies are starting to realise that companies like Microsoft are rolling out different initiatives to mitigate these risks and vulnerabilities, through their investments. As an organisation, Microsoft invests more than $ 1 billion per year in modern technologies, people and services to tackle numerous cyber threats. We don’t just provide solutions but take necessary actions too, thanks to our cyber security experts and resources such as the Digital Crimes Unit in Redmond and Singapore. This is starting to open many doors now and we are seeing many organisations in the region are now gradually moving their critical overload and mission-critical applications to cloud. 

We are also seeing much more proactive decisions from governments in terms of regulations and policies. This is happening across all Asia. Over the last two to three years, we have been engaging with regulators and experts in many countries to understand how best we could help customers to understand the importance of cloud and eliminate fears. 

Q: If I ask you whether there is a definitive definition of digital transformation for the average Sri Lankan, what would be your answer?

A: If you compared to what happened during the last 4-5 years, technology has changed many aspects of life. We are democratising the complexities of technology. You can use machine learning to predict the forecast and you have simple tools to do that. Today, we can approach any retailer or hospitality company in Sri Lanka and have a conversation on how they can use massive amount of data to predict what is happening. These were difficult things to even think of few years back. Technology has created that accessibility for people. You don’t have to acquire complex data systems to analyse these information, that is why, for the first time, we could talk about how an individual could transform a business with tools that are very easy to use and much cheaper. 

When I think about digital transformation, it is about using technology to create business value, rather than picturing it as a CAPEX model that would take a long time to be implemented. Things have changed dramatically now; now we are thinking about solutions which could be set up within a very short span of time and get immediate business value out of them. Technology is moving from a position of being a silo that was owned by the CIO to a more people-centric, easy-to-use platform. 

Let me take another significant example for you. For years, when you talk about customer conversations and optimising call centres, how can we automate specific tasks so that we could take people away from routine tasks and assign them for value-added tasks for customers? A technology like Chatbot has changed the game for these companies and it shows up to be an extremely helpful tool that went onto create ‘Conversation-as-a-Service’. Chatbot as a technology helps companies to transform the way of engaging with their customers, bring value and free-up call centre employees so that they could be assigned for more proactive tasks. 

So, is there a definitive definition for digital transformation? I guess no. Digital transformation has a wider scope; it is not just about using a certain technology to create business value.

Q: How is Microsoft working to make cloud technologies much safer for customers?

A: One of things we did few years back was to start investing systematically to make our cloud solutions safer. We directed those investments into different areas as well. First area was technology and how we develop modern cloud solutions with highest security standards. Secondly, we built the Digital Crimes Unit (DCU) and the Enterprise Security Centre plus, the Enterprise Security Group. We hire experts from all over the world to support these important entities. 

It is not only about the cloud you use though. First, your cloud provider should provide the right level of security and safety in the data centre. That is our core business so you can imagine the level of measures and security systems to support organisations such as banks. It is also important to analyse the enterprise architecture of the customer. Security is not only about using cloud but how you manage your devices as well. It is about the technology that goes beyond the cloud to the device to the end point. We assure that you have the right threat protection and threat detection mechanisms and provide right solutions, even machine learning that goes along with cybersecurity. 

Beyond technology, as I mentioned before, it is important to have the help of experts. That is why we have made massive investments to hire the best of the best and create an entire group for cybersecurity. A customer who is engaged with us can always expect to have the right person with the right level of knowledge. 

Q: The role of digital has evolved into a level where it is now being considered as a selling channel and experts have coined a term called ‘digital mix’ to contest with the traditional ‘marketing mix’. How does Microsoft look at this trend?

A: There are a number of studies done based on digital transformation and how the digital mix could impact the profitability of an organisation. A recent MIT paper shows that companies which have embraced digital transformation are 26% more profitable than others and also lead in the game of market share. These stats are evidence for digital transformation is continuously disrupting businesses. It is not a marketing concept and we are not trying to sell any products with the help of digital transformation but the reality is it would definitely give you the competitive edge if you are wise enough to integrate it into your business.

One of the things we are using to help our customers is our digital maturity model. We are assisting our customers and partners in their digital adoption journey. We have a systematic way of doing that. If you are into manufacturing business and want to know how to engage with your customers, empower employees and innovate using digital; Microsoft is here to help them as digital advisors. This is an area we are very excited about. 

Q: How do you view the developments happening in Sri Lanka and Microsoft’s role in the country?

A: In this market, we find a unique talent pool with high skills. In this role, this is my first visit to Sri Lanka but I have been here few times. I have always been impressed with the talent you find in the partner eco system and how local ISPs innovate new solutions and sell them out of Sri Lanka. Azure is becoming a triple digit growth engine in Asia Pacific and we see a huge engagement in Sri Lanka for Azure with many projects being rolled out. 

It is good to see that our partners here are excited about digital transformation. I was able to chat with few of our customers and many of them have already started their digital transformation initiatives. I see there are many opportunities in retail and banking sectors and I am sure our partners will look into those opportunities well, with the use of our cloud technologies.

Sri Lanka is no different than other countries in Asia where millennials are gaining significant relevance in the workplace. I think that millennials will not tolerate a work environment that does not use technology and as more companies are opening their doors to the millennial generation, the expectation for technology is high. Technology is a huge part of this generation’s private life so they cannot understand how they are to work without it. 

They expect an organisation to have an online social presence; they expect to be able to communicate with their colleagues on digital platforms, to be able to gain insights and have access to information. Companies that embrace Digital Transformation can expect to attract fresh-graduates into their organisations.

Brian: Sri Lanka also has a long history of being community-oriented and charitable with each other. That means that people will collaborate and share knowledge much more than they will in some other markets where there is a lot more fear of losing an idea to a competitor. That creates these amazing businesses and they are partnering together within a single ecosystem, learn and grow faster. The opportunity for this market is ‘how do we take that in export so that we could grow the balance of payments’. We have been talking about creating jobs through KPO and BPO which is fantastic. There is so much latent talent of ingenuity here so if we could create a strong startup system here and create more diversity and inclusion – we have underrepresentation of women in our industry – I think the sky’s the limit. 

Q: There is an ongoing conversation about redefining Sri Lanka’s ICT policy and people often hear the term ‘digital economy’ in many discussions. What are your comments on that?

A: Many countries in the region are talking about bringing the digital aspect to their ICT policy so Sri Lanka is taking a very important step in that sense. I had the chance to meet the Minister of Finance and he was extremely open to get ideas from Microsoft and refer global case studies to embrace digital transformation and improve the agility of many Government processes. It is key that the Government partners with companies like Microsoft to get a clear understanding about digital transformation and its many advantages. I am very impressed by the work that has been done by the Government so far in terms of technology and there are so many opportunities to avail.