Digital transformation will add close to $154 billion to India's GDP by 2021 and increase the growth rate by one percent annually, software giant Microsoft said on Wednesday. According to a joint report by Microsoft and IDC Asia/Pacific, in 2017, about four percent of India's GDP was derived from digital products and services created directly through the use of digital technologies such as mobility, Cloud, Internet of Things (IoT) and Artificial Intelligence (AI). "India is clearly on the fast-track towards digital transformation. Within the next four years, it is estimated that nearly 60 percent of India's GDP will have a strong connection to the digital transformation trends," Anant Maheshwari, President, Microsoft India, told reporters here.
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"Organisations are increasingly deploying emerging technologies such as AI that will accelerate digital transformation led growth even further," Maheshwari added. The survey took into account 1,560 business decision makers in mid and large-sized organisations across 15 economies in the region. According to the survey, organisations are seeing significant and tangible improvements from their digital transformation efforts across these benefits in the range of 11-14 percent.
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"Business leaders expect to see more than 40 percent improvements in those key areas by 2020, with the biggest jump expected in productivity, customer advocacy as well as profit margins," the report said. Digital transformation has increased productivity, customer advocacy, cost reduction, revenue from new products and services as well as the profit margin for the enterprises. "These benefits will also improve by at least 40 percent in the next three years, with the biggest jump expected in productivity, customer advocacy as well as profit margin," the survey noted.
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The study indicated that while 90 percent of organisations in India are in the middle of their digital transformation journey, only 7 percent in the entire region can be classified as "Leaders". "Leaders" are experiencing double the benefits of "Followers" and these improvements will be more pronounced by 2020. Almost half of "Leaders" (48 percent) will have a full digital transformation strategy in place.
Emerging technologies such as AI (including cognitive services and robotics) and IoT are areas where "Leaders" are investing in. Besides these emerging technologies, "Leaders" are also more interested in investing in big data analytics to mine data for actionable insights than others. "Organisations need to invest in building their ecosystem, from employees to customers, to partners, across their value chain by gaining new insights through new data sources, and incorporating digitization in their products and services," said Anil Bhansali, Managing Director, Microsoft India (R&D).
"The pace of digital transformation is accelerating, and IDC expects that by 2021, at least 60 percent of India's GDP will be derived from digital products and services," added Daniel-Zoe Jimenez, Research Director Digital Transformation Practice Lead, IDC Asia/Pacific.
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