“If you think it as an opportunity, opportunity is already a positive term. You will always see what you can do best. And in that particular sense, you are already one step further, you will try to see how you can think of a new business model and how to give a best experience to your customer.” 

Intro:
Welcome to the Agile Digital Transformation Podcast, where we explore different aspects of digital transformation and digital experience with your host, Tim Butara, content and community manager at Agiledrop. 

Tim Butara: Hello, everyone. Thanks for tuning in. I'm enjoyed today by Rahul Bansode, digital transformation specialist with a wide range of experience across different industries, and he currently works at Kyocera Document Solutions America as program manager for business transformation. In today's episode, we'll be discussing the main challenges and opportunities for organizations that decide to digitally transform. Welcome, Rahul. Thanks for joining me on the show today. 

Rahul Bansode: Thanks, Tim, for having me. It is a pleasure speaking with you today. 

Tim Butara: Likewise, anything you want to add to the intro, or should we just jump straight into questions? 

Rahul Bansode: I think that we can jump straight into the meat of it. 

Tim Butara: Okay, we'll start with something basic. Basically, digital transformation has become somewhat of a buzz word across a whole number of industries, and I'm interested, according to you, what is digital information? How would you define it? 

Rahul Bansode: Tim, you’re right, digital transformation, this word has become a buzzword in the industry everybody is talking about. And like others, I also actually started learning about it, reported is what needs to be done with respect to the digital transformation. And I Googled, studied it. And what I found was that most of the people give emphasis on the word “digital”, but real sense, the transformation is the most important part of it. Digital, which is related to the technology, is more of an enabler. It's more often the technology to aid the transformation. 

So if you look at, if you just Google digital transformation, you'll find hundreds and hundreds of documents, hundreds and hundreds whitepapers, articles on this particular subject. Now, as I mentioned, that in the digital transformation, the transformation is the most important. So when we talk about transformation, what does it mean? It means the world around us has transformed into a digital era. When I say that, we are nowadays connected to the digital world. We are having this podcast through the digital channels, we are using cell phones or the Internet is all around us. So this is the digital world which we are living in, though this is a digital, but that's becoming our reality. 

Now for the generation which we have seen the analog and the digital world, we see the difference of it. But for kids who have born in this particular age, the Wi Fi is only present for them. The mobile phone is only present for them. The streaming of the video is only present for them. So this is the generation which we are going to carry forward. So from that point of view, what we are talking about, we cannot continue with the legacy business models anymore. Be it anything. Okay. Say, for example, you're doing a shopping. If you don't have any ecommerce, you are not in the zone then. If you're talking about TV, if you are not on the OTT platforms like Netflix or Amazon Prime, you are not in that. So the social media has influences a lot about it, right, in each and every segment of it, you see social media playing an important role. 

So that's basically the digital world which we have. And this is where we will have to transform our business, which work we do into this new digital era. So that is basically the transformation which we are talking about. And that's what is the digital transformation. Again, I say in the digital transformation, the digital is just a small part. It’s just an enabler, the transformation is the most important part. 

Tim Butara: I love that definition. I think as you just pinpointed, I think it's something that most of us ignore. As you said, all of the articles, all of the info online about DT focuses on the digital part. But the main word in that phrase is actually transformation. And I also love the point about the older regeneration kind of experiencing this transformation more thoroughly because we were born and we started our lives in the analog world. And now we kind of transitioned into the digital. So yeah, really great points here to start off the episode. And my next question would be, why can this digitalization or digital transformation sometimes act as a double-edged sword? 

Rahul Bansode: Yeah, this is again a great question. Now, as I mentioned, we are talking about building, we are talking about moving away from the legacy business model and moving towards the new digital business model. So in that case, what I've seen is, as I mentioned, most people think about implementing new technologies, moving towards the cloud platform, moving towards data analytics, or developing your new website or mobile app and those things. But everything we are talking about, if you look at it from per se, it's not the transformation we are talking about. We are talking about the digital aspect of using new technology. 

But that's not the case. Basically, what we have to do is to, as I mentioned, we have to transform ourselves. So we have to change the status quo of moving away from our digital legacy to the new. We are talking about adapting new technology. Yes, technology does play an important role. So whatever old systems which we have, we'll definitely have to upgrade themselves so that they are able to equip with the new digital era. 

We are talking about new business models. Say, for example, the company is into a B 2B business to business kind of model for generations. In this new digital age, that company can think about moving toward B2C, which is like business to consumer, direct to an ecommerce or any other platform. So that's a transformation which we are talking about. If you look at the banking sector in this whole era, it has transformed itself into a greater, like the old way of going to a branch is for all your banking is now almost finished, I would say. Hardly we visit any bank. We do everything online. 

So from that concept, that's the transformation of the legacy business model we are talking about. We are talking about a company like Uber who has transformed, taken a very small industry which was never looked up by anybody from a digital point of view, the taxi or the cab services, and it has transformed itself into the new business model. We are talking about Spotify for music, we are talking about Airbnb for the hotels. 

So if you look at it, there is a very important transformation which is happening. And that's the most important thing. If we forget how to transform, we will always fail. The other thing is market cannibalization. When we talk about transformation, whatever we are doing, the products, the solutions, what we are doing, at some point of time, we will have to kill them. We will, even though, if our product is the best in the industry, we will have to kill it. And I can give you a few examples about it. If you see an iPhone, it is one of the best brands or the product which is selling. But every year Apple introduces a new one, and in a sense it actually kills the previous one. 

Even though it is a cash cow, it kills it. That's how the transformation. If you look at Microsoft, Microsoft Office is one of the tools or one of the Office productivity tools, which was leading across the world. That was a big cash cow for them. But still they killed the Office product and moved to Office 365, which is giving them double the revenue now. So in this and that market cannibalization is most important. People forget about it. 

The last, but not the least. But I would say, like upgrading the skill sets of the employee. So we talk about transformation, but we don't upgrade the skill sets of the employees. They are the people who are actually going to do the-- if you don't upgrade it, then you are going to fall on your transformation. And that's the reason I would say that it's a double edged sword, we have to look at balance on both sides of it and how to carry it forward. 

Tim Butara: Yeah, I like that point about having to keep the balance. It's super important basically. And also the point about killing your best ideas. You know, we just said that it's about the transformation, not about the digital. And to me, that just seems like an inseparable part of transformation, being able to realize that you're doing better than the version of you from a day, a month, a year or ten years ago. Basically. 

Rahul Bansode: True. Yeah. 

Tim Butara: Okay. So we just established that it can be a double edged sword. So what are the main challenges of digital transformation that are typically faced by organizations that are contributing maybe to the lack of adoption of digitalization? 

Rahul Bansode: Right. So in my career, I have gone through or executed multiple digital transformation initiatives for my client or for my company and various things. Or I do speak about it or write about it. And based on that, what I felt is there are five challenges every organization will face for the digital transformation whenever they are taking the digital transformation. 

The first thing is to move away from the legacy business model. Again, I say legacy business model, like whatever you're doing, you don't have to stop it and start something new. But you have to gradually move away from that business model and move into a new one. Just for an example, if I talk to you about, let's say banking sector, which is, we all understand it. So if you talk about the banking sector, the banks give more importance, and nowadays also, banks give more importance to a branch. Branch based banking. Okay. 

Now at the same time, they give-- a lot of legacy big banks give less importance to the online banking. They call it add-on services. Right. So branch is the main thing. And your ATM or your online banking is an add-on services you're giving to the customer. Let's take a hypothetical situation. Something happens and the branch is not working for one day. What will happen? Will the customer panic? In most cases, in today’s world, no. Let's reverse the sum. If the online banking stops for one day or 1 hour, will the customer panic? The impact of customer getting panicked through an online banking is more now than the branch. The branches are already shut down on Sundays, so they are already closed on Sundays in most parts of the world. So business is not impacted. But on Sunday, if your online banking stops, the bank is going to get. 

So now if you look at this, the business has changed. It has moved in the digital world. So the digital banking is more important than your branch banking. And that's what I talk about changing from that. That's basically the mindset which we have. You talk about ecommerce, you talk about any business. That's the most important challenge that we have to agree, an organization will have to. 

The other thing is team silos, team silos. In a sense, the bigger the organization, team silos are there. There are various departments which are formed, and with the departments, there is a kind of a virtual boundaries between each department. The information sharing is always not that good, depending on the organization. But I'm talking about most of the legacy organizations. If there are two business units doing separate business or product, then it is always a competition between these two units. 

Let's take, for example, the old Microsoft. There was always a competition between the Office products and the Windows operating system, who is selling what, right. But both of them are part of the same organization. But if you look at history of Microsoft during Steve Ballmer, Steve Ballmer, that was the way, like Office 365 saying that we were cash cow and Windows Office product were saying that we were the cash cow and Windows operating system were saying, we were the cash cow for Microsoft and both of them fighting to get the major chunk of it. 

So that’s, I call it as a team silos. It's very difficult. We'll have to break through this. We spoke about the availability of skilled resources, understanding this digital era, understanding what is happening to your customers, to your products and the way we do business is very important. We cannot get that old mindset and continue the business. We need to upgrade that. So availability of that skill resource on the new, your team, your organization is a challenge, which is very important. You will have to invest in the skill resources. 

The other thing which I see is an organization needs to define a goal. Where do they want to be? Do they want to build a new product? Do they just want to upgrade their technology back-end systems? Do they want to just announce the skill sets of the employees or what do they want to do? That goal needs to be there, and we can speak further down the line how that goal can be set up. But that goal needs to be there so that it's a tangible target for an organization. Most people feel, most people again get wrapped around the word “digital”, put the technology first and that's where they are. So the goal is not there. 

For example, you want to move into an ecommerce platform, that's your goal, then all your activities and everything will move in that direction. Right. So that is one thing we should, and in all of others, we need to change the culture of an organization. That's another piece which we fail to understand. Because if you look at the culture of an organization, we cannot see it. We cannot feel it. We cannot touch it. But it's omnipresent in your office environment. It gets developed over a period of time. It gets developed based on your leadership style, based on how you care about your employees, how you care about the customers and those kind of activities. 

So that's basically the culture we are talking about, right. And in a legacy business model, if you have to move towards the later, you'll have to change the culture of that organization. Let me give you an example of Amazon. If you look at Amazon, one of the principles is they are very, very focused on customer. For them, customer is is everything, everybody else goes behind it. So even Jeff Bezos is not ahead of customer, customer is there, no matter how small or big that customer. So the whole organization is based on the principle of customer service. Now, that is what I talk about the culture of the organization, upgrading your culture in the digital world. 

So these are some of the challenges which I can repeat again. It starts with the legacy business model. Then breaking the team silos is very, very important. Availability of the skills resources is another thing which is very important. You don't find it within your organization, and defining a goal. What you want to do from an organization, that is important. And last but not the least, the culture is important. 

Tim Butara: And who in the organization, who are the people who need to be leading digital transformation efforts to make or to help the organization best navigate and overcome these challenges? 

Rahul Bansode: This is a huge debatable subject. And this question was asked to me during one of my interviews, job interviews. And I feel, this is my thought process. Normally-- let me put our perspective around it first. So normally when we talk about digital, again, the digital word plays an important role, and in most cases, the CIO or the CTO is taking the lead. Okay. Or the organizations have a digital officer, chief digital officer or something of that sort, and that person is taking the lead. Again, the word digital comes into picture. 

In my thought process, if you want to transform your organization, there is only one person who can do it. And that’s the CEO of the organization. The CEO of the organization is supposed to lead this initiative. If you put it on the hand of a chief digital officer or a CIO or a CTO, it becomes only their initiative. It becomes an initiative of a chiefdigital officer to take it further. It becomes an initiative of a CIO or a CTO to transform. The others very reluctantly participate in it. That's the fact of life. They will always say, oh, that's an IT initiative. We will try to help whatever we can do. But we have all our workload. That is a common thing, you'll see. 

But if you, if this initiative is led by a CEO, this becomes an organization’s initiative. And you will see everybody contributing to that. And for that reason, I've always said that this should be led by it, because again, we are talking about changing the culture of the organization. We are talking about creating a new business model. We are talking about upgrading the skills. We are talking about defining a goal for, a new goal for an organization. Now, if that has to happen, there's only one person who can change it. And that's a CEO. 

And let me give you an example. If you look at, again, I'll give you an example of Microsoft, the Microsoft before Steve Ballmer and the Microsoft in Satya Nadella era. Right. Once Satya Nadella took-- Microsoft was in very, very bad shape. Everybody knows about it. It has lost the market on the cloud. It has, it was nowhere in the cloud. It has lost the market on the mobile front; Apple and Google had taken or Android had taken over the market. Right. It was losing on the operating system. Also it was losing the Office product. There is always a competition. Right. 

And from a development tool wise, there was so many other development tools are available. So it was losing ground of all of them. Here comes Satya Nadella and in his first memo to the employees say that we are going to be an organization which is going to be focused on cloud-first strategy. That is a vision which Satya Nadella put for Microsoft. Look what happens three years down the line. You top out Windows 10. It is highly integrated with Azure. They develop the Azure cloud platform, which is number two in the world right now. 

Your Windows operating system is hooked to Azure. Office was changed to Office 365, which runs on again on Azure platform. So if you look at your Xbox, if you look at any single product, everything is integrated towards Azure now. And within last eight, nine years, if you see Microsoft, the way they have grown in all sectors, if you look at it, why it happened? Because the person who was leading was the CEO who was leading that effort. There was no departments or anybody leading that effort, that person had a vision, that person was leading it on. And we see the success. And that's why I say it definitely has to be led by the CEO of the organization. 

Tim Butara: Yeah. Because basically, if it's done by any of the departmental leads that will just contribute to siloing and kind of heighten the silos, because everybody, as you mentioned previously, it will be the project of that department. And there would be immediately this maybe subconscious or conscious sense of competition, and it just it's not sustainable, probably. 

Rahul Bansode: Yeah. And you'll see, like if it is led by an IT or somebody, if you're talking about customer. So if you're talking about finance, if you're talking about marketing and you see these units saying that this is a right initiative, we will try to support whatever we can. We already have a huge amount of workload and backlog of work. So we'll try to.Tthat's a statement you will see across various departments. So the moment you put a CEO into it, we will do it. That's how it changes the perspective, because the organization is moving in the direction everybody will contribute there. 

Tim Butara: Yeah. That's a great point. A great add-on. Okay. So taking into account all that we've discussed so far on today's episode, would you say that digital transformation is a threat or is it an opportunity? 

Rahul Bansode: This is a nice one. Definitely, if you look at it, most people, most legacy businesses. And this is again my thoughts. Most organizations, legacy organizations think it as a threat, that newcomers are coming into your business model and trying to take away your revenue. They’re trying to take over your customer. Okay. Most of them don’t think about it. The moment you think about, a threat is already a negative term, and you kind of go on the backfoot. You already lost the battle there, right? What you try to do is just make makeshift changes in your business model and trying to survive. You're trying to survive in this particular goal. 

And if you look at most of the failed organizations, they try to survive in this particular era, at least in the US. I can see there are big organizations which failed, for example, Toys“R”Us, they failed. Then Sports Authority is another retail chain which failed. The whole food was bought over by Amazon. Again, it's a failure on the whole food side of it. We know story of Nokia getting failure to Apple because of Apple's dominance in the smartphone error. So most of these organizations take it as a threat and they are not able to innovate themselves into the new. And if you look at it, what we have spoken about it, changing your business model, changing the silos and those kind of, it all resonates there. 

Now let's take it on the other side of it. If you think it as an opportunity, opportunity is already a positive term, right, you will always see what you can do best. And in that particular sense, you are already one step further. You will try to see how you can think of a new business model and how to give a best experience to your customer. You start thinking about those things. 

So if you look at the most of the fintechs, right, new business models are coming. Like, for example, in the US, we have a trading platform called as Robinhood. Probably you might have heard of it, right. What they came up with was zero trading fees platform. Now, whenever we do any shares trading or funds trading, you always have fear, not fear, I would say. But you always have the apprehension whenever we do the transaction because we have to pay these brokerage fees or the commission to these intermediaries. Right. Here comes Robinhood who changes the whole thing. They say commission free. That's it. 

What that happens? Wouldn't this be possible for all the legacy organizations to do? Yes, it would have, but because it was a cash cow that commission, they never talked about it. Right. But now because of the newcomers, they are also doing this, because the customer is going there, right. This is how you have to start thinking what is happening in the digital taking it as an opportunity. 

Another example I can give you is about Covid; it has impacted every single person on this planet. Right. Let me take a very simple example of a roadside restaurant which has nothing to do with the digital world or technology or anything. Okay. For this restaurant and business. During the Covid, people were not moving. I'm talking about the 2020 March till April, May, June period where all the streets were shut down, all the transportation was shut down. People are not moving. People were in the house. Right. And we saw that the restaurant industry was dying because people are not there on the streets together. 

Now. In this era, there are a lot of restaurants which actually move towards delivery only services. They are selling restaurants or close to the kitchen was open just for delivery purpose. How was the delivery done? The delivery was going to UberEats or Grubhub. I'm talking about the US. I'm just talking about the US because I know about it. There could be similar kind of deliver service in Europe and in India, everywhere. So they were using these tools. Now, if you look at it, that's changing to the new digital model, you're still serving food, but in a very different way and they were trying to survive it. 

We like all this an opportunity they took? Yes. Most of them took that opportunity. Those who didn’t, what they had to do, they had to shut down their restaurant business, and that's what happened. Those who are able to move into this particular thing, they also right. So that's how you have to take it as an opportunity. It's an opportunity because we are talking about changing those things. The other, as we talk about it. Right. We are talking about changing the business model. The other thing is engaging on the digital frontier. We can think about engaging on the social media platform, right. 

No matter how small or big an organization is, right. I do remember if I visit a small store or small, even a barber shop, and if I say thanks, you have an excellent service, you have given me excellent service. Then barber shop also says, can you post a review on Google for me? That will help me a lot. So he's not asking me if I say thank you to him for his service. He asked me, can you post to Google because that is going to be a better service, that is going to give you more customers. Right. 

You're talking about a very simple thing, utilizing the social media platform. We talk about modernizing your legacy business model. We also briefly talk about using new tools and technology, technology does play a definite part in this transformation. So you have to use the latest technology and build new products. So that's how I see that it's an opportunity. It's definitely an opportunity. We just have to make a commitment towards it. 

Tim Butara: Well, hopefully, what happened with COVID and how it has affected digitalization and digital transformation, hopefully this will help more and more even legacy organizations view it as an opportunity rather than as a threat because they won't really have another choice, right? 

Rahul Bansode: There's no other choice. 

Tim Butara: And if I remember correctly, Rahul, you also speak about the topics that we've covered today in your recently released book, Digital Roadmap. Could you tell us a few words about that? Specifically, what would you say are the most important points from the book for the people listening right now who are maybe struggling with succeeding in the digital world? 

Rahul Bansode: Yes. So I'll be publishing a book. The title of the book is Digital Roadmap. Hopefully within the next two to three weeks this will be published on Amazon platform as I'll be self publishing it. This is my first book, and I started writing this during the COVID thing. We were at home and I wanted to do something. And this is when I thought, why not write a book? So it was a challenge for me. I took that challenge and completed it. 

So it's basically, Digital Roadmap talks about how to transform your organization from a legacy business model to a digital world. In this, I don't give a framework or anything of that sort because I don't believe in that, but it gives you guidance, like what needs to be done work. And it talks about the challenges, it talks about the opportunity. It gives a lot of information with respect to the various examples, I would say, of how organized I have failed and how do we transform itself. 

It talks about how to define your milestones to achieve this digital transformation and why it is important. It talks about building the transformation strategy and who is going to drive those initiatives. At the and it talks about two aspects of it, which is like from a transformation perspective, I found that there are two levels of roadmaps which you can define. One is a foundational, which is you have to do it. There is no alternative to that. And the other is an aspirational one which is like you can think about moving in that direction. 

So on the foundational you're talking about the omnichannel experience, cloud, user experience, those kind of things. The aspiration as we are talking about the subscription business model or data analytics or API, how to use the API services, those kind of things. So it's basically defining your roadmap. What I feel is every organization is unique, there cannot be a staple framework which we can use for all the organizations. Each and every organization will have to build their own roadmap. And this book basically talks about it. 

Tim Butara: Okay. Awesome. I think this book should be available shortly after this episode goes live or right around that time. So we may even include a link to the book or if you have one now send it to me and I'll include it when I'm publishing the episode. 

Rahul Bansode: Sure, perfect. 

Tim Butara: Well, and that's all for my questions. Thanks for a great conversation, Rahul. Excited about the book. Excited about this episode going live. Just before we finish. If our listeners wanted to reach out to you or learn more about you, where would you send them to? Where can they do that? 

Rahul Bansode: I am very much active on the LinkedIn platform, so that's the best place you can reach out to me. It's Rahul hyphen Bansode, so you can reach out to me over there. 

Tim Butara: Okay. Awesome. Thanks again, Rahul, this has been a great episode, a great conversation. 

Rahul Bansode: Thanks a lot, Tim, for having me. I really enjoyed talking to you. Those were very nice questions. 

Tim Butara: Likewise. And to our listeners, that's all for this episode, have a great day, everyone and stay safe. 

Outro:
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