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Priti Ambani, Director of New Business and Innovation TCS ANZ, explores the undeniable importance of businesses’ digital core in the wake of COVID-19.

Posted: April 2021

While digital transformation has accelerated over the past decade, for most businesses it has been slow and gradual, driven by external and internal pressures but not scheduled to take place over a specific timeline. However, the sudden global shutdown left businesses struggling to accelerate the transformation of their inner foundations. Companies cannot thrive without a digital core, says Priti Ambani, Director of New      Business and Innovation, TCS ANZ.

The biggest innovation drivers within organisations were differentiation, customer centricity and efficiency. Business continuity or resilience to rapid disruption did not normally figure in strategic C-level discussions. The pandemic has led to a shifting landscape and much deeper conversations around delivering value through the same innovation drivers – differentiation, customer centricity and efficiency. Responding to uncertainty, unplanned and unforeseeable circumstances has shed new light on what truly enables innovation at pace and scale.

Moreover, resilience and innovation are intertwined. Though seemingly obvious now, this was not evident before the pandemic. Organisations were busy looking outwards – setting up innovation labs and accelerators, focusing on human-centric design and design thinking, bringing outside-in perspective, opening up silos within organisations and collaborating with external ecosystems. But when these ideas moved inwards for assimilation and implementation, they died a slow death, dampening enthusiasm and buy-in across organisations. Looking inwards into the core has become a necessity and now we will begin to see impactful innovation. Why impactful? Because now the core can help manage the paradoxes of innovation.

Organisations in the pursuit of innovation surely focus on the people and the environment that makes innovation only natural. The best ideas can truly come from anywhere. But creativity and innovation are messy – they need discipline, management, and rigour to test and learn – all enabled by more than just competent people. This is where a strong digital core comes into focus that ultimately helps turn the best ideas into actionable insights.

Experimentation to innovate needs a business ecosystem where ideas can be validated and deployed or culled quickly. The ability to leverage modular and flexible technological infrastructure to create a resilient core is critical to lowering response and reaction times.

What is a digital core?

A digital core is the cross-function foundation of a business's entire infrastructure. This technology infrastructure spans all business units and operations from marketing to sales. All business units are built from one source. From this foundation, each business sector can attach unique modules or solutions, similar to building blocks.

Why are businesses moving to a digital core model?

A digital core eliminates soiled processes, duplicate systems, ineffective technology spend and creates the foundation for collaborative innovation. A transparent digital ecosystem allows businesses to track successful programs and quickly implement them across business functions for companies facing extraordinary market volatility. In a world where agility can mean the difference between failure and success, a digital core is crucial.

With the COVID-19 digital revolution happening overnight, businesses that had previously implemented a digital core found that they could quickly adapt their processes, ensuring minimal disruption to employees and customers. Companies that had delayed moving from legacy systems or had only invested in soiled transformation projects found that they could not make the rapid shift needed.

In a world where business as usual doesn't exist, a business' heart must reflect its environment. A business that doesn't adapt will find that resilience, growth, and innovation become even more challenging to achieve.

What role does the digital core play in innovation?

New innovative ideas from customers, vendors, the community and employees can be found throughout the business ecosystem. The hiccup that most businesses encounter with implementing or testing these ideas is legacy, limited or complicated infrastructure or systems with a high technological debt does not offer businesses the ability to evolve without high risks.

Legacy or soiled systems that make testing new solutions, structures or complicated processes are the biggest hurdles for innovation. For a business that cannot execute an innovative idea, it begs the eternal question – what’s the point?

In a world where innovation is essential to business success, it’s no longer a matter of choice – it’s vital to embrace innovative architectures that can support innovation rather than hinder it.

How have Australian and New Zealand businesses fared?

Along with the rest of the world, Australian and New Zealand businesses have been heavily impacted by the pandemic. However, the recent lessening of restrictions and 'almost' being back to most industries' normal functioning has meant that local businesses haven't been under the continued pressure to innovate.

Nevertheless, to ensure that businesses have the flexibility, resilience and capacity to respond to ongoing market volatility, companies must prioritise a digital core. Without switching to a digital core, businesses cannot innovate and evolve; superficial business changes will provide only short-term benefits.

By leveraging digital technologies, employee skills and new ways of thinking, our DNA can reflect the dynamic new world we're working in.