Businesses across sectors have realized that they must
use digital channels to engage with their key stakeholders to remain relevant and drive the conversation forward. The challenges for them include the loss of control over customer relationships, increased competition, threat of commoditization, and the need to engage digitally with suppliers, partners and employees in addition to customers.
In fact, India is set for a “digitization revolution” which, in turn, would fuel the growth of the Internet of Things (IoT). IoT is bridging the physical, digital, cyber and virtual worlds and this requires extensive information processing capabilities. IoT applications are gradually moving from vertical, single-purpose solutions to multipurpose and collaborative applications interacting across organizations in different industry verticals. IoT itself, fuelled by the advancement of digital technologies, is dramatically changing the way companies engage in business activities and how people interact with their environment. The disruptive nature of IoT means we need to access the requirements for its future deployment across the digital value chain in various industries and application areas.
Reinventing IoT to cater to digitization requires far-reaching changes—from talent sourcing to building appropriate “high speed” broadband infrastructure. Fortunately, companies can adopt an approach that delivers results quickly while still reshaping IoT for the long term. This approach will also require focusing on business areas such as online commerce and customer relationship management.
With the explosion of data, the role of information technology is shifting from that of an enabler to a strategic partner. The digital wave, in this backdrop, is turning out to be a disruptor in multiple industry verticals.
Among other things, IoT has made the mode of payments so easy that there is no direct access to the customer at the time of purchase. The process—where customers can pay their bills through any of the multiple acquirers via multiple banks and points of sale terminals to the merchant/brand—is possible with help of IoT. For a country such as India, digitization coupled with IoT could be a real game changer.
As digitization takes centre stage, Indian banks have plans up their sleeve for the years ahead. Banks so far have been the backbone of the country as they can drive or push the country’s gross domestic product. Indian banking is set to become the fifth largest by 2020, according to a joint report by consulting firm KPMG and the Confederation of Indian Industry. The year 2016 was an upheaval, as banks battled demonetization and a debit card breach that affected close to three million accounts. And the times ahead too won’t provide any relief, as the pressure to leverage digital while ensuring safety keeps on increasing. Fortunately, IoT can help banks not only counter security threats but also transition to an increasingly digital era with the possibilities of multiple devices that can enable digital transactions.
It is not only the banks that are impacted by digitization but every sector of the economy is transforming itself from being cash-based to using the Internet as the growing means of payment. Take, for example, the transport logistics sector in India: 80% of this sector is unorganized with heavy dependence on cash transactions and under-invoicing impacting government revenues.
With the focus on digitization, this sector would also need to embrace digital and IoT technologies to cut costs and reduce cash transactions. In other sectors, too, as device proliferation continues, the usage of IoT is set to grow by leaps and bounds in the coming years.
Ashish Gulati is country head of Telit India.
