Fast Forward to 2016

For the last few years, Forrester has been espousing the idea that we are in the Age of the Customer in which the power has shifted from the enterprise to the end-customers. Today’s customers are much more informed. The information asymmetry, which allowed businesses to wield power when it came to pricing their products or services and determining the quality or location where they made offerings available, is no longer in their hands.

The age of the customer is a 20-year business cycle in which the most successful businesses will reinvent themselves to systematically understand and serve increasingly powerful customers.

Cloud’s getting bigger In the backdrop of the Age of the Customer, there are some specific trends that will impact the businesses operating in India. To begin with, delivering better customer experience will be the key focus of the enterprise in the coming year. In a recently published customer index report by Forrester, it was found that while credit card companies did well on delivering good customer experience, both online and offline retailers were in the race to the bottom of the ranking. In general, Indian brands did not fare well in delivering a great customer experience.

This is likely to change in 2016 as more firms are investing in hiring senior staff focused on improving customer experience. Brands such as Flipkart, Snapdeal or ICICI Bank have executive-level customer experience officers on their rolls now. This trend is going to intensify in the coming years.

With IBM and Amazon setting up data centers in India, the last of the arguments against the global cloud providers — latency and data residency — are gone. This leaves Indian players who own infrastructure with no competitive advantage over the global majors, who are far ahead in terms of scale and ease of service. They will either fail, or rethink their strategy. Forrester expects a major consolidation in the cloud-provider industry. More and more companies are going to adopt cloud for their business needs, even putting their core applications workload like ERP and financial systems on the public cloud. The erstwhile concerns of security and regulatory compliance will be mitigated.

Digital, digital, everywhere We will soon see Indian enterprises setting up distinct units, distant — physically and culturally — from their parents, to deliver on digital innovation that their firms need. The important thing to note is that these teams will be set up in IT hubs such as Bengaluru — far away from the headquarters in Mumbai or Delhi. The reasons attributed to such likely moves are manifold — the lack of availability of digital talent and keeping these innovation teams insulated from the prevalent culture of the organisations, to name a few.

According to Forrester’s research, under which it surveys tens of thousands of individuals for their buying behaviour, it is determined that in India, also, the web is starting to have an outsized influence on offline sales. It means that an increasing number of people are starting to research, explore, compare the products and services and their prices or the sellers themselves, before going through an offline buying process. This has tremendous implications on firms which are operating predominantly in an offline model. Thus Forrester predicts that firms, especially the ones operating in a business-to-consumer landscape such as retailers and banks, will speed up their investments in an omni-channel strategy.

India is likely to have 300 million smartphones by the end of 2016. With the coming ubiquity of the web, enterprises have little choice but to build the right digital experiences. However, digital requires a set of IT skills such as design, and a fast-paced culture inimical to how IT departments work. Across the world, decision making for digital applications is going out of IT’s hands and e-commerce, marketing and lines-of-business have built their own app development teams. It will happen to India as well, if CIOs don’t get digital right.

India will also see the beginning of disruptive, digital-only business models, particularly in financial services. CIOs will have to contend with mobile-only banks (similar to Simple in the US), automated wealth management (equivalent of Wealthfront in the US), and P2P lending. These start-ups will find a way to work within the confines of regulation.

There will be increasing spends on business technology, with CEOs taking direct interest in digital strategy.

Ashutosh Sharma is Vice-President & Research Director, Forrester India

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