Digital Points of View in the Nordics
Digital points of view from Cognizant's experts
Digital Points of View
From Cognizant's experts
Mihai Constandis on the impact of technology on business and consumer lifestyles
Digital transformation point of view
A new decade promises rapid transformation of the business-technology relationship
By Mihai Constandis, Director of Romania Communities, Cognizant Softvision
The past 40 years have brought massive transformation to how businesses interact with their customers, at ever more rapid rates of change. The new decade promises to be the most transformative yet. Read this article to discover:
- The impact the advent of the fourth industrial revolution is having on businesses and consumers
- The areas in which businesses are investing in order to seize the opportunities of this new era
- How Cognizant Softvision is partnering with clients to stay ahead of the curve and evolve the use of technology in their business
The impact that technology is having on our lives is becoming ever more visible. Over a span of 40 years, we’ve seen physical channels being replaced by web, mobile and video interfaces, human-assisted interactions replaced by intuitive apps and bots, and our decision-making capabilities increasingly supported by algorithms. These advances open tremendous opportunities to make advances in areas essential to how we live our lives, from everyday interactions such as banking, shopping and driving, through to how we are served in healthcare, agriculture and manufacturing.
IT is the enabler for this breadth of change. As we approach a new decade, an intricate web of devices and connections are generating data which provide exponential opportunities to learn new insights on ever-changing behaviours. The ability for businesses to continually retune and enhance their services is transforming the relationships they have with their customers.
“Businesses are transforming the relationships they have with their customers by continually retuning and enhancing their services.”
The fourth industrial revolution
The last major technology-driven transformation began mid-way through the last century, evolving from massive mainframe computers through to the emergence of the web and the vast spread of mobile devices with immense levels of processing power. The digital revolution is now evolving into a new paradigm marked by automation and rapid exchanges of data. Often termed Industry 4.0, this new era will see the pervasive use of cyber-physical systems, the Internet of Things, cloud and cognitive computing.
The emergence of the fourth industrial revolution is opening new opportunities for both consumers and businesses. Underpinned by AI and data analytics, businesses are able to take their products and services to new levels of sophistication. For the consumer, the expectation that the digital solutions they use will be personalized for their specific context and experience is quickly becoming the default.
With this new era comes the fusion between the business and technology domains. Businesses can no longer exist without technology. Digital is business and business is digital. They have to invest in digital technology if they are to succeed.
Digital is therefore becoming a more strategic investment. It’s no longer the preserve of the CIO and the IT department to decide which technology investments will serve the organisation’s business goals. Decisions on how data is processed, managed and translated into better customer outcomes involve business units that once would have had little input into technology matters. But now, with digital firmly a board-level topic, functions such as CEO, CFO and COO are becoming increasingly involved in making technology a differentiator for the business.
Why Cognizant Softvision?
Immersing technological change into corporate culture requires a partner with the depth of expertise on both where technology is going next and what impact this will have on consumer expectations. Cognizant Softvision has developed this depth of technology experience over a span of more than 20 years. We use this collective knowledge to deliver meaningful products for clients, supporting them to evolve their people, talent and expertise in line with technological change. Our business is centered on creating partnerships with our clients and founded on five fundamental elements:
- Communities: We embrace technology communities to develop self-evolving organisms driven by the passion of engineers. Giving these communities a home to connect, learn and work on customer projects enables us to always be ahead of the curve from a technology standpoint.
- Delivery methodology: We create cross-functional teams combining specialized skills such as web, mobile and back-end. These highly specialized individuals operate as a full stack team that’s able to understand project needs and deliver in a very efficient manner.
- KPIs to monitor performance: We deliver on a measurable set of metrics so that our clients can understand the quality, velocity, impact and autonomy of our project work.
- Studios: We work in small offices of people to create good energy, creativity and innovation, and bring this into the work we deliver for clients.
- Culture: The approach we bring to our client work embodies our Silicon Valley roots. This puts us in a position to build things, innovate and learn, with clear focus on the problem we’re trying to solve.
An example of the practical application of these principles is our work with a global cosmetics retailer that has 500 sites for multiple brands around the world. Held back by its monolithic legacy infrastructure, we re-architected its e-commerce system to deliver the massive advance in speed and scale its operations required. By leveraging talent from communities and combining it with that of our skilled engineers, we were able to deliver the project effectively and seize the opportunity afforded by rapid change in the client’s industry.
Anuj Seth on why core modernization is necessary for digital enterprises
Core modernization point of view
Strengthen your core to unleash transformation potential
By Anuj Seth, Cloud and Infrastructure Services Practice Leader, Continental Europe
Businesses today need to do everything they can to become smarter in order to compete with startups and other new-age digital rivals. The first step to doing so is to address legacy systems and creaking workflows.
Read this article to discover:
- Practical ways to think about modernizing key systems
- Making a business case for change
- The importance of culture and change management
Today, all businesses need to be digital enterprises, able to compete against newer companies that are not locked in by aging systems. They need to automate wherever possible, accelerate time to market and make sales, pricing, supply chain or marketing changes on the fly, and they need to do all this in a secure manner. But the table stakes of being digital are modernizing core infrastructure and removing or re-engineering the legacy systems and workflows that impede change.
“Core modernization is essential for innovation. Businesses must get infrastructure and applications in shape for business transformation”
Approaches to core modernization
Core modernization involves updating IT platforms, applications, data and security to enable the delivery of digital services and experiences that make business more responsive and agile.
The cloud is an obvious deployment candidate in this context as it delivers advantages such as rapid deployment, elastic compute capacity, procurement simplicity, ubiquitous access and low upfront costs.
To create a business case for core modernization, CIOs will often build quantitative (based on costs and number of apps) and, increasingly, qualitative arguments for investment, pointing to areas such as business flexibility and IT adaptability. The CIO’s internal customers must be bought in, must be told how transformations are funded and must have a stake in the transformation ROI.
Unfortunately, most enterprises can’t change at the same pace as digital natives. First, they struggle to transform the legacy platforms that are home to valuable business logic and revenue-earning services. Second, they can become weighed down by existing vendor lock-in as well as complex contracts (covering software licensing, for example), inhibiting transformation. But modernization is essential for innovation and acceleration.
In core modernization, service providers such as Cognizant need to grasp the “as is” situation and why the IT environment has been built in a certain way, as well as the “to be” state and the linkage to business issues being addressed.
We modernize the core IT infrastructure by creating an actionable reference architecture that charts the course from “as is” to “to be”. We will help our customers transform their applications and infrastructure from a business-limiting state to a growth-enabling one.
Our cloud enablement approach and methodology deploys a cloud management platform and migrates the IT environment to support legacy and new applications. Our CMI choice framework below helps prioritize which applications can be transformed:
Contain, where the application can’t be modernized but still needs to be kept running.
Maintain, where the service is business-critical with a moderate to high level of change activities. These are good candidates for transformation efforts to extend the life of services, as well as reducing time to market and cost of maintenance.
Invest, where new, usually digital platforms will see a high level of activity and are the first candidates for migration to the new infrastructure platform.
These programmes are far from easy and many organizations fear downtime, change management or other issues affecting business-critical services. Companies have often attempted to modernize by migrating applications to the cloud using a “lift and shift” approach but haven’t been able to realize the full potential and benefits of cloud. Application-led modernization programmes designed on business needs, budgets, time windows and other factors have been more successful, but to undertake them requires a change of mindset.
Switching mindsets is a big part of the job, and change management is hugely important. But when it comes, success can be dramatic. A leading energy provider we worked with moved customer-facing products to a hybrid cloud infrastructure, leading to faster performance and the flexibility to add features and products more quickly. The new infrastructure also provided the development team with self-service catalog options and clear visibility over project costs that could then be shared with the business.
Ultimately, core modernization provides the underlying backbone for improved business. Every organization needs to think about how it can strengthen its core.
Manoj Mathew on the switch from selling products to selling services
Industry 4.0 points of view
Industry 4.0: Un-building your product into a service
By Manoj Mathew, Partner – Industry 4.0, Cognizant
Our lives have irrevocably changed, with greater flexibility, impermanence, unpredictability and responsibility. One can argue that the change has been driven by technology, communication, new social constructs or the democratization of information — but we are clearly not going back to the way things were. Read on to discover:
How new competition and lateral entrants are forcing incumbents to rethink what their product is
Why companies must improve time to market, and why building a smarter product requires designing a smarter revenue model
The importance of using data to inform product designs
We don’t buy half the things we used to; we subscribe to them. We don’t care about product longevity anymore; we care about upgrade paths. Neither do we worry about product reliability – if the product is backed by stellar service guarantees.
In business, companies are now hard-pressed to re-imagine their core product (be it a car or a pump, or even a roll of toilet paper) as a platform – one on which they can build continuing relationships with customers, expand and create new revenue streams, and establish a lasting product value. It is no longer prudent for companies to drive differentiation on the basis of product specification or economies of scale because global market access, the rapidity of innovation and the access to Amazon-like business infrastructure at the click of a button have levelled the playing field.
We are already witnessing cataclysmic shifts in the automotive, materials and commodities and energy sectors.
“Product ‘smarts’ and analytics can no longer be restricted to continuous improvement. They need to be harnessed to transform entire models."
Take the automotive sector. For years now, pundits have been bemoaning the fact teenagers do not view vehicle ownership or even driving as something to look forward to. Electric technology has brought near parity between a $30,000 and a $1 million automobile. Both have respectable 0-60mph times and differentiation is now on the lines of cachet hitherto reserved for Swiss watchmakers or on the basis of mobility-as-a-service: any place, any time, any car.
An executive from a leading electric vehicle (EV) manufacturer dismissively referred to the automobile of tomorrow as an “electric motor with an API.” Gone are the days of complex mechanical design and careful combustion and transmission engineering; the vehicle of tomorrow will differentiate itself on software, service models and interactive experiences which sit between you, the consumer, and the piece of metal with four wheels.
Traditionally, manufacturers have followed a relatively fixed template for everything from sourcing to selling and supporting. Great efficiencies and leverage were achieved by standardization, bulk procurement commitments and squeezing material waste outside the supply chain.
Last year, Volkswagen announced the MEB (Modular Electric Matrix), which, in its own words, “jettisons all the ballast of a fossil age” by providing unparalleled architectural modularity. This allows any manufacturer to leverage a common platform to create uniquely different mobility experiences. Indeed, Ford has already signed up.
If millions of vehicles used a singular underlying architecture (and consumers were accepting of it), such a concept would demolish the OEM-Tier 1 supply-chain model to an even greater extent than how the PC-chip manufacturer space was rearranged by Microsoft Windows and Intel last century.
Tesla, after selling 300,000 cars in six short years without a dealership network, has destroyed any nuanced thinking of how a dealership should transform in the future world of mobility. Lynk & Co (the child prodigy of the Geely-Volvo house) sold 120,000 cars through 220 retail outlets, all the while claiming to be a “lifestyle brand.”
PON Holdings of the Netherlands, one of Europe’s largest automotive dealership chains, has pondered the future of the vehicle dealership. In a world where vehicles can be ordered on the internet, or when you can rack up an order for 200,000 cars without people even asking for a test-drive, what value does a dealership add?
PON Holdings dug deep into its legacy of automotive dealerships, storied bicycle brands and customer relationships cultivated over generations. It came up with Shuttel, a new mobility service which allows consumers access to everything from fuel pumps, to trains, to rental cars, to bikes, to parking for your private vehicle. In under two years, and with a ridiculously lean team of thinkers and doers, Shuttel now has over 150,000 subscribers, and VW is a major investor.
To stay ahead, it’s vital to develop a ‘Systems View’: does your product roadmap work in concert with your revenue strategy towards your customer? Does your sourcing or logistics strategy allow you to differentiate, or merely provide an adequate customer experience? Industry 4.0 is designing the product, its intended experience and its delivery model –
Cognizant helps customers understand the behavioural insights that inform how their business landscape is being disrupted, and then distil them into a reframed strategy. We also provide and deploy technology to build agility into operations, enhance supply chains and then validate agile processes across the company.
Anoop Sharma on the essential steps in managing data for business survival
AI and Analytics point of view
Look, no siloes! How to build a modern data platform
By Anoop Sharma, Practice Leader, AI and Analytics, Cognizant
Incomplete data sets that can’t be collated to get a full picture of opportunities or threats are the enemy of business. Only by having a holistic modern data platform can the full power of analytics be unleashed.
Read this article to discover:
- Why it’s so important for businesses to get full value from data
- How data lakes are key to centralizing information assets
- The first steps to take to make data work for you
Today, it’s widely recognized that the way companies collect, integrate, analyze and visualize data is a huge ingredient in their success. But, across sectors, there remains a high degree of variability in data management capabilities. Having an outdated legacy data asset landscape will slow down any organization that is trying to do more with data, or moving towards taking advantage of emerging technologies such as AI.
“Only if we unify data on a single scale-out platform can one get enriched insights and implement intelligent and automated processes to drive in-the-moment decisions.”
Many businesses are looking to accelerate time to market, create more targeted marketing, reduce churn and gain a deeper understanding of customers and trends. To do this, they must first modernize their data assets and pool them in central data lakes, creating repeatable processes and avoiding data siloes wherever possible, to gain data insights that are as clear and accurate as possible. Only if we bring data together can we ask one question and get one answer.
Many businesses don’t know where to start to get their data sets ready for analysis. So the usual approach is to agree on a blueprint, do some foundational work, such as modernizing and standardizing data, and create a data lake. The next stage will be to develop a minimum viable product that can go into production and act as the basis for an improved product when feedback has been given.
Other companies may be mature in their data management landscapes, and already have a data lake – but still need to work out how to use those assets to solve business problems and create solutions that can be industrialized and made consistent.
Whatever their stage of data maturity, we advise clients to adopt a human-centric approach, where usability design is at the heart of the solution. We also encourage them to apply AI at each step to augment and enhance every aspect of business, and to move towards a modern and adaptive data platform that will support any future need or use case.
Iterative approaches, where companies engage in siloed projects without considering dependencies or security, can also cause problems.
We helped a bank to bring together data on customers’ mobile transactions and website activity history to support personalized real-time marketing promotions. Once the bank saw that working, it wanted to use this data lake for another use case, anti-money laundering. The use cases were then expanded to more business units and what had been data siloes involving expensive, error-prone processes, are now accurate and standardized, and can be used widely.
Many businesses still struggle to create modern data platforms and don’t know where to start or how to re-engineer what they currently have. But those that don’t make use of data will struggle to compete, make bad decisions based on bad or non-existent data, so the time to modernize and build a data platform is now. To move forward, it’s vital to invest in creating a single, accurate source of data in the form of a data lake – and from there, organisations can begin a wide array of data-driven initiatives to find new efficiencies and revenue streams.
Benny Walløe on the importance of modernizing to accelerate
Core modernization point of view
You need to modernize to move faster
By Benny Walløe, Senior Director, Cloud and Infrastructure Services, Cognizant
Technology-enabled disruption and a changing competitive landscape mean that traditional companies need to modernize their core systems and infrastructure in order not to be left behind.
Read this article to discover:
- How fast-moving market entrants are changing the dynamics of every vertical
- Why core modernization will change the ability of incumbents to compete
- The different approaches firms are taking to the modernizing agenda
In every sector we are seeing major disruption where new market entrants, some arriving from other sectors, are providing new and attractive models. For example, look at the popularity of Apple Pay, which has 383 million users, or consider how the retail sector is being reimagined by new online brands, from ASOS and boohoo to Amazon.
Agile, innovative companies are bringing new competition, many coming from fast-moving sectors such as technology. To compete, the traditional companies in the sector need to modernize, and cast off systems and processes that impede their ability to move quickly.
“Modernizing while 'keeping the lights on for legacy’ is the ideal path for most companies.”
Organizations looking to adapt need to think differently about how they do business. It’s vital for them to modernize their ERP systems, re-engineer logistics processes and create new e-commerce platforms. And some are doing this faster than others.
These changes also vary between sectors. In consumer goods, businesses are becoming more analytical and agile around pricing and stock management. In the public sector, organizations are looking to be more efficient by digitizing services and processes: for example, using videoconferencing to replace face-to-face meetings.
There are also sustainability and environmental considerations. Large data centers can have big carbon footprints so organizations need to think about how they can be more efficient in their use of IT resources.
Keep business needs in mind
The collapse of the world’s oldest travel agency Thomas Cook shows what happens when firms don’t modernize fast enough. Thinking holistically about modernizing the core operations of organizations is a strategic and transformational consideration, so C-suite executives should be involved.
Modernization can take several forms, depending on the needs of the business – especially as organizations seek to avoid sustain day-to-day operations in a world of increasingly 24/7 service. Some firms will adopt a ‘lift-and-shift’ mentality, moving workloads from on-premises to cloud, for example. Others will decide to re-engineer underlying business processes for a broader, long-term impact.
Once organizations have the foundation for data-powered processes, they can launch ambitious projects: for example, Cognizant recently worked with a shipping company in Norway to use AI and the Internet of Things to find smarter routes and implement more secure cargo management.
‘Modernizing while keeping the lights on for legacy’ is the ideal path for most companies as they pave the way to a future model without interrupting normal operations. Either way, modernization can’t be put off. Even if organizations don’t have access to cash, they need to raise the necessary funds to revamp systems and infrastructure. Fail to do that and it really might be too late to change.
Cognizant has an end-to-end capability that can take companies from ‘as is’ to a desirable state in a direct or phased way that suits clients. If a business needs to create cash by reducing headcount and operational costs, we can help them do that. The true power of Cognizant is that we can adapt to any business situation, operate locally and globally at huge scale, manage change and become a long-term partner, according to each business’ needs.
Sachin Mhatre on the new face of Swedish banking
Banking and financial services point of view
Swedish banks must act fast to beat the fintechs
By Sachin Mhatre, Client Partner, Cognizant
Changing consumer tastes and new, agile fintech competitors are transforming the banking landscape. To protect their turf, Swedish banks have to put an immediate focus on transforming their legacy platforms to deliver an agile and contextual omnichannel customer experience. Read this article to discover:
- How Swedish banks need to compete with new entrants
- The challenges posed by a changing regulatory landscape
- How infrastructure and process flexibility will help
Today banks are under pressure to guard market share, now that their dominance is no longer protected by high market entry barriers or the need for expensive - banking infrastructure to serve client needs. Swedish banks are no exception. The banking customer is changing, as millennials and digitally-savvy consumers expect banking services to be delivered in a different way – without the need to go to a branch, take a token and wait, or write a cheque. In short, the new customers want a digital banking experience.
New players are also disrupting the way banks work. For example the market has opened to fintechs such as Klarna, which provides an end-to-end view of loans, seamless Know Your Customer processes and quick communications. Against this background, it’s important that large incumbent banks improve their flexibility, and accelerate time to market for new products and services.
Swedish banks do excel against European peers in some ways, for example having more advanced user identity authentication and cash-free capabilities. But they can still do more to improve the customer experience. The focus on digital investments remains very siloed – for example, there is little linkage between banks’ mobile apps and websites. Digital investments need an omnichannel ROI metric: the customer experience still has some way to go, and established banks are yet to achieve a fully-fledged, seamless omnichannel experience. One of the biggest barriers to all of this is that these banks have large investments in legacy technology and processes which make it hard to move swiftly.
“The focus on digital investments remains very siloed – for example, there is little linkage between banks’ mobile apps and websites. Digital investments need an omnichannel ROI metric!”
Banks need new thinking to digital transformation, and partners that recognise the limits of legacy and know the path to transformation are vital. To keep up with the competition, banks need to work with partners who can help them to move fast and manage change, who understand how to facilitate omnichannel experiences, with local know-how as well as global development centers that accelerate projects while keeping costs manageable. It’s about generating new ideas then actioning them in minimal viable products or MVPs.
Quite rightly, there has been a lot of attention paid to the way that banking and financial services are changing as new brands enter the market with a focus on mobility and usability. Yet changes to the regulatory landscape are just as important.
For most Nordic banks, compliance is one of the biggest drivers, covering anti-money laundering, regulatory reporting and new regulations. This impacts profitability and requires investment in technologies and processes. It’s crucial for banks to ensure any new process comply with current regulations, and can be adapted rapidly to any new rules in the future.
Swedish banks need time to phase out legacy investments and bring in new technologies that let them better compete against rivals, as well as taking the steps towards compliance that are the table stakes of banking. Legacy practices and platforms often hold them back from rapid change. But these banks must act now – because fintechs don’t have this legacy anchor.