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digital transformation: Industry leaders expect continued demand for digital transformation despite cost-cutting measures

Clients have not yet paused their digital transformation journeys and near-term demand is expected to continue, industry leaders said, despite a focus on cost-cutting and reprioritization of spending globally.

They were speaking at the Nasscom technology and leadership forum 2023 in Mumbai on Monday.

Global thought leaders and CXOs said the future will be increasingly driven by human and AI interactions, which will enable enterprise spending on technology.

Enterprises are working closely with service providers to build long-term solutions for supply chain visibility which become even more critical during an uncertain economic environment, Sriram Krishnasamy, the chief executive of FedEx Dataworks, said during a conversation with Krishnan Ramanujam, the chairperson of Nasscom.

“A physical-first company should also think about integrating a digital mindset but not implement technology for technology’s sake; identify the problem first, the tech will follow,” Krishnaswamy said.

Collaborating with service providers to improve and automate supply chain visibility is essential for businesses, he added.

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Long-term macroeconomic factors such as change in demographics, decarbonisation and reconfiguration of supply chain will result in additional technology spending, George Schindler, chief executive of Canada-based IT services firm CGI, said.“In the world, there are more people retiring than entering the workforce. So, automation is going to be required. This energy transition, decarbonisation is not just about big infrastructure plays like batteries or wind turbines, but a data infrastructure needs to be there. We are actually creating a lot of IP (intellectual property) to help our clients with that energy transition,” he said.

Schindler, in a virtual conversation with Nasscom’s senior vice president Sangeeta Gupta, pointed out that as per CGI’s in-person discussions and surveys of its 1,700 clients, only 25% of respondents globally were meeting the full extent of their expected digitization returns. The shortfall is due to cultural and not technological setbacks, he said.

Companies have to, while spending on digital transformation, continuously focus on building trust around these solutions, said Mihoko Matsubara, chief cybersecurity strategist, NTT Corporation.

“We cannot win the trust of our employees and customers without securing our digital infrastructure. Innovation cannot be done without good policy making processes,” Matsubara said.

Enterprise clients of technology companies need increasingly specialized solutions and there is a growing demand for an allied ecosystem to enable these solutions across sectors.

Even as demand for artificial intelligence solutions within the larger scope of digital transformation grows, it will not disrupt jobs, but change the way people work, said Steve Brown, founder of digital strategy company Possibility & Purpose LLC.

“People learned to use word processing software and spreadsheets. So, we are moving to an era now where we’re going to have to learn a whole new set of tools, if we want to be maximally productive in the workplace,” Brown said.

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