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Overcapacity will be a major challenge for India Inc

Vinay Kamath | Updated on January 17, 2021

Add to cart: Demand is picking up, but supply planning remains a challenge   -  ISTOCK.COM

Accenture India’s Piyush Singh on the conundrum confronting companies in 2021

Piyush Singh believes the business model for many an organisation post the pandemic stands fundamentally altered. “Everybody is being dragged into digital,” says the Senior MD and Lead, India Market Unit, Accenture, “Those who make the right investments to reinvent will come out winners and those who drag their feet will lose. Trying to make analogue business processes work in digital will lead to greater inefficiencies than not having them.”

Singh uses customer experience as an analogy. The basic rule, he explains, is don’t offer one rather than offering it poorly. Take a low-cost airline versus a high-cost one. If the low-cost one doesn’t serve food, or its menu is not great, you’re not upset. But if a full-service airline serves bad food, you can be mighty upset.

As he emphasises, “In the digital world your comparison stakes are very high because those who are offering the experiences well are the digital natives. So, if you come into it kicking and screaming, and apply analogue process, you will fail.”

Emerging challenges

The pandemic-induced, irreversible behavioural shift towards digital consumption is posing new challenges even to digitally mature businesses. Singh cites the recent service outages by two major banks to illustrate this.

Companies need to invest in business capability that makes them agile in responding to fluctuating consumer demand and dynamic regulatory environment while increasing efficiency.

In 2021, Singh says, Indian firms will face a problem of supply planning because of overcapacity.

“We are happy there’s a revival of demand but there’s the problem of overcapacity.” Then, they face the paradox of capital investment as every manufacturing entity with excess capacity needs to conserve capital. But, on the other hand, they also have to invest to transform into a digital-led organisation.

The second aspect is that unlike, say, the West, India is a diverse society and the digital experience offered should be nuanced and tuned to changes in consumer behaviour, he says.

Thirdly — and this is a global phenomenon, he says — when organisations have gone through a period where there has been “detachment of human capital” from firms, business heads need to re-define their purpose of existence and ensure their human capital stays committed. “There is fatigue and this can be overcome only when people are told they have a meaningful impact on the lives of their customers and their families,” says Singh.

It’s a big task for organisations, as many people have suffered medical challenges; so, defining organisational purpose is important in times like these.

The way forward for businesses in the coming months is to first look where their consumer is headed and rely on data and analytics to rework parts of the business model and consumer proposition that have become irrelevant and which require investment. A lot of firms, he says, have said that they need to be tech-driven, which means the level of TQ or technology quotient will have to rise massively.

“The idea that a lot of the top-table people can say I’m not a tech person is not an option anymore. They all need the technology skills to be successful,” says Singh.

The other aspect which firms have to be cognisant of is that they are unlikely to get away without having a fully ‘elastic’ technology infrastructure. Take customer service: Do you have the ability to service them if your staff cannot come to office? Can you move to AI or cloud-based infrastructure, asks Singh.

Henceforth, these questions will be the norm and will require a technological change in organisations.

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Published on January 17, 2021
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