Whitepaper

UNFOLDING DIGITAL TRANSFORMATION:

A PRACTITIONER’S VIEW
Leveraging Digital Transformation strategies

www.hexaware.com
Quick Read
Digital transformation is a process undertaken by organizations with the need to improve
customer experiences, product leadership and drive operational efficiency that channel business
success. Hexaware has classified three broad strategies for successful transformation based on
their experience: Inside-Out, Outside-In and All-in-One-Go. These strategies are driven by key
parameters like organization’s culture, business processes, end users and marketing.

In an Inside-Out strategy, that is majorly ¬engineered for medium to large scale organizations,
transformation starts with digital optimization of internal systems and processes and moves
organically towards customer experience. It aims at complete digital transformation to create a
long-lasting strategic impact. An Outside-In strategy aims at helping small to medium size
businesses or any enterprise that wants to deliver superior end customer experience.
Transformation starts with the front-end customer experience management, engagement touch
points and subsequently changes supporting systems, technologies, and processes. In
All-In-One-Go strategy, change across the entire spectrum starts in one go, targeting both the
external touch points and internal systems, simultaneously. This approach can usually help small
to medium businesses or functions who are challenged with survival because of the change in
market dynamics, consumer preferences and technology evolution.
Introduction
The process of digital transformation has been initiated by organizations realizing the need for redefining how they operate to improve
customer experience, product leadership and drive operational efficiency. The changing face of digital transformation has required
technology-focused organizations to re-invent themselves, drive customer adoption, while delivering efficient results.
Hexaware’s Digital Transformation Strategy helps customers in redefining their customer journey to deliver a superior customer
experience. At Hexaware, we understand Digital Transformation isn’t an end goal but a continuous ongoing process.
The white paper defines three different strategies for digitally transforming an organizations’ business - Inside-Out, Outside-In and
All-in-One-Go. Our experiences suggest that there are key parameters, which drive these strategies - organization culture, business
processes, end users and marketing. The paper will outline our perspective and experiences across these digital transformation strategies.

Realizing Digital
Digital Transformation is a key necessity for organizations to • Business Process: Legacy business operations, services and
restructure their business processes and disrupt traditional processes must be reengineered to accelerate digital
customer service models. James Bilefield, serial digital transformation. For instance, for a P&C Insurer, underwriting
entrepreneur and McKinsey advisor, highlighted that cultural process involves multiple recurring steps, documents and
change within the organization has been the most important and compliance, which has a potential to be automated enabling
difficult component to change. It is important for organizations to faster outcome and more transparency. This helps in reducing
adopt new technologies and rethink current business processes to cost and achieving operational efficiency.
keep pace with progress. • Marketing: 360-degree customer engagement across multiple
There are four key drivers for a successful digital transformation digital marketing channels is essential to ensure customer
journey: retention and acquisition while maintaining the marketing
budgets.

TRANSFORMATION STRATEGIES
Most Organizations have already initiated their digital
transformation journey and are at different levels of current
digital maturity. The digital transformation journey will vary based
on the current state, their business objectives and their vision for
the future business model.
Technology
Hexaware has classified three broad strategies for successful
Enablers
transformation based on their experience:
Analytics
Storage • Inside-Out Strategy: Transformation starts with digital
Enablers optimization of internal systems, processes, organizational
culture, technology landscape, employee experience and
eventually moving towards customer experience.
• Outside-In Strategy: Transformation starts with the front-end
customer experience management, engagement touch points
and subsequently change supporting systems, technologies,
and processes.
• All-in-One-Go Strategy: This strategy change across the entire
Figure 1: Digital Transformation Spectrum spectrum starts in one go, targeting both the external touch
points and internal systems, simultaneously.

• Organizational Culture: Culture plays a significant role for any INSIDE-OUT (I-O) Strategy
transformational journey to be successful. Culture change is I-O strategy is engineered for medium to large scale organizations
critically important to transformation. The most difficult that seek complete digital transformation of their business
component of a successful digital transformation is culture. processes, operations and services, to create a long-lasting
• User Experience: User experience is the key ingredient for any strategic impact where time and cost are not major constraints.
digital transformation. Design Thinking helps identify the The I-O phase is primarily concerned with transformation of the
current user journeys, allows us to identify critical path to core services and operational modalities of the organization. This
reimagine and improve the experience (Including for customers, is achieved by streamlining and simplifying the internal systems,
employees and partners). Examples of new experiences are leveraging big data, automating operations ecosystem and
delivering Omni-channel services like joining a meeting using a infusing scalability and flexibility at the heart of the business to
mobile device or making payments via a chat or mobile wallets successfully meet future demands of digitalization.

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 I-O Transformation Strategy:
Systems of
Engagement
• Is suitable for medium-to-large scale enterprises
Self Service Portal • Starts with core business processes and systems
• Is expensive and time consuming at beginning

Business Processes and Services Key Business Stakeholders

Process Optimization Workflows

Leadership CIO/CTO Consultants

API and Service Management

Co-Sourced Functional Technical
API Economy Enterprise Service Bus Technical Leaders Architects

Managed
Vendors
System of Record and Insights Services

Customer Data Enterprise Data Contextual Data Business Analytics

I-O approach requires close collaboration between the strategic and
Figure 2: Inside-Out Strategy technology functions. Given the complexity and scope of decision
making involved, it should be spearheaded by CIO or CTO of an
Approach organization who can work with experienced functional and
I-O transformation strategy places high demands on time, cost technology consultants to create the strategic landscape and
and most importantly people expertise to create a foundation on implementation framework.
which all the subsequent transformation stages rest. A structure
Moving downstream will require close involvement from SMEs of
with number of independent business departments could further
each system that have potential for digitalization to do an impact
make this strategy more involved. However, the results are in
analysis of the systems transformed. Practice and function heads,
tandem with efforts and time involved.
product managers, senior technical architects and technology
Case Example experts would need to lend their vision to achieve the desired
transformation state. Identifying all the stakeholders early in the
For a Global Analytical Company, Hexaware transformed its core
transformation journey and broadly outlining their roles and
business processes achieving operation excellence and business
responsibilities can significantly make the transition hassle free. As
agility
a best practice, its recommended to create a community or change
An international leading global analytical company providing management group of all the stakeholders to regularly update on
ratings, research, risk and policy advisory services wished to the issues, challenges and progress.
transform their core business processes around responsible for
managing their rating system. The digital transformation initiative Effort vs Outcome and Complexity vs Time
was undertaken with an objective to reduce the steps involved in
the overall rating process. A complete BPR (Business Process
Re-engineering) exercise was undertaken including workflow
automation and integration of multiple systems. The rating system
transformation, an intuitive portal was designed and developed to
help the external customers i.e. consultants manage the entire
rating process along with real-time status update.

Application of Inside-out Approach

Post the internal core modernization, transformation continues to
happen radially outwards, where subsequent technologies and
platforms are identified, integrated and streamlined. Since the
foundational systems are digitally primed, the effort and Figure 3: Complexity Graph for Inside-Out strategy
complexity decline significantly, and the frequency of outcomes
improves. Processes and systems continue to evolve until the The complexity graph for I-O strategy shows correlation between
organization’s external and internal interfaces and systems get effort index and outcome index. The initial stages of transformation,
transformed. when complexity is high, involve maximum effort and resource
In today’s times, all businesses desire scalability and agility to investment, without apparently showing any measurable result for
accommodate any changes with minimal impact. By leveraging the some time. The zone of transition marks the phase when outcomes
building blocks of digitalization like service platforms, advanced become visible while efforts begin a slide down. Its’ important to
analytics, cloud, API economy and smart devices, companies can note that ‘zone of transition’ has a sliding nature, appearing at
accomplish economies of scale and, increase life cycle of their different time for different organizations based on scope and
assets and stay competitive. approach of transformation.

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OUTSIDE-IN (O-I) Strategy Application of Inside-out Approach
Outside-In approach unfolds through ‘need-based’ transition. At the
The O-I strategy focuses on changing the landscape of systems of
completion of subsequent stages of transformation, only those
interactions and engagements of an end consumer as the priority.
platforms and processes need to be transformed that correspond
As a transformation strategy, it would appeal to small to medium
with engagement channels and thus relevant in the scope. For
size businesses or any enterprise that wants to deliver superior
example, if your consumer-engagement functions are not impacted
end customer experience. It is relatively easy to implement,
by way your enterprise relationship management system functions,
involves less cost, and the results are promptly visible. O-I
then Outside-In strategy would not require their transformation.
strategy broadly consists of creating a digital experience platform
with omni channel customer engagement (mobile and websites, On the plus side, it obviates the necessity of changing all the
social channels), vendor and partner interfaces (mobile apps, constituent systems, expediting the journey and handing out quick
contact portals, service centers), and employee interface portals results for the organization. The down-side is that some of the
(intranet). legacy or non-mainstream systems would remain un-touched during
transition process, making them difficult and expensive to integrate
Systems of Engagement with digital economy should the need arise.
Self Service Omni-channel Search Engine Personalization &
Portal Experience Optimization Targeting O-I Transformation Strategy:
• Is suitable for medium to small businesses or functions
Business Processes and Services • Focuses on customer engagement ecosystem
Business Process
Re-engineering
Business Rules
Engine
Process
Optimization Digitization • Provides quick results at lower costs

Key Business Stakeholders

API and Service Management
Integration
Leadership CMO Consultants

System of Record and Insights

Co-Sourced Partners/ Function
Business Vendors Heads

Contextual Customer
Data Data
Co-Sourced
Technical Architects
Figure 4: Outside-In Strategy Technical

Approach
Marketing and sales leadership are the key stakeholders, supported
The O-I strategy can start with re-design of user interfaces to
by digital and technology leadership to implement outside-in
make web/mobile navigation user friendly and intuitive. Another
approach. Involvement of CMO (Chief Marketing Officer) /CDO
change-point could be introducing new channels of interaction for
(Chief Digital officer) / Transformation Director would be required
customer services like web and social chat operations. None of
at the strategic and planning level. Depending on the scope of
these changes require a significant cost or time, and yet provide
transformation, partner and vendor teams can also be involved to
fast measurable results that can range from increased net
map out their roles and functions.
promoter score, improved sales from online channels, and better
market insights thereby impacting the overall profitability of the
Effort vs Outcome and Complexity vs Time
business.

Case Example Outside-In: Complexity, Effort and Time, Rate of Outcomes

For a leading UK-based water utility player Hexaware helped

hem improve their Customer Satisfaction Index by Omni Channel
Customer Engagement while reducing their Opex
A water supply and treatment utility company based out of the
UK initiated a Digital Transformation program taking its customer Outcomes
touchpoints as the central piece. The broad objective was to
increase the overall SIM (Service Incentive Mechanism) score and Effort
to bring down the operational cost around servicing customers by Trip at Z.o.I
reducing the direct contact of customers with the company via
Time
mediums like call, emails etc. The company planned to revamp its
existing customer service channels by introducing technology Figure 5: Outside- In Strategy
trends like Bots (Voice and Chat), Virtual Assistance like Alexa,
Google Assistant along with having an omnichannel experience
for its customers by providing self-service responsive portal with
real time alerts.
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The complexity graph for O-I strategy shows correlation between AiOG Transformation Strategy:
the effort index and outcome index. As we can observe from the • Is suitable for small to medium businesses or functions
graph, outcomes are proportional to efforts almost from beginning
of transformation. They sharply rise for a while, creating a false • Focuses on the entire landscape
impression of optimization or zone of instability where some • Provides continuous flow of results
organizations decide to stop their transformation in Z.o.I (Zone of
Instability), in a false sense of having achieved their objectives. For a leading UK based retailer, Hexaware helped transform the
This leads to a drop in outcomes (represented by dotted lines), as existing business model to stay competitive
central systems are yet to be digitally primed and the higher rate
Hexaware enabled a UK based retail chain in their digital
of outcomes cannot be sustained on the longer run.
transformation journey by sectioning the entire business process
stack functionality wise with each stack having its own end-to-end
ALL-IN-ONE-GO (AiOG) STRATEGY
module which were later switched together to deliver a complete
All-in-One-Go transformation strategy focuses on changing the business model. These vertical business processes included
external engagement touchpoints, internal business processes, Self-Service Portals, Marketing automation and Analytics & Insights.
infrastructure systems and technology landscapes simultaneously.
Before we move further, let’s understand as to why organizations
Key Business Stakeholders
engage for such a resource intensive strategy.
In our previous discussions while elaborating the other strategies -
I-O and O-I strategies, we focused on businesses and functions Leadership CXO Consultants
that needed directional and specific course of digitization. An
implicit assumption was that these businesses had temporal Co-Sourced Technical Function
latitudes to methodically go about achieving digital transformation Business Architects Heads
of their business. However, there are times when a business is
challenged with survival because of the change in market Co-Sourced
Vendors/Partners
dynamics, consumer preferences and technology evolution. Under Technical
those circumstances, changing any discrete aspects of business is
effectively futile due to overall non-compatibility of business
model. This calls for an all-out heads-down and bottoms-up The entire C-suite executives are involved, supported by digital and
trans-over to practically re-establish business model once again. technology leadership to implement AiOG strategy. Involvement of
CIO, CTO, CDO and CMO would be essential at the strategic and
Systems of Engagement
planning level. Depending on the scope of transformation, partner
and vendor teams will also be involved to map out their roles and
Self Service Omni-channel Search Engine Personalization &
Portal Experience Optimization Targeting

functions.
Business Processes and Services
Business Process Workflows
Business Rules Process Effort vs Outcome and Complexity vs Time
Re-engineering Engine Optimization Digitization

API and Service Management

API Economy Integration Enterprise Service Bus

System of Record and Insights

Customer Data Enterprise Data Contextual Data Business Analytics

Figure 6: All in One-Go Strategy

Approach
For most businesses, transformation starts simultaneously for all
the comprising components like back-end applications, interim
Figure 7: All in One-Go Strategy
processes, systems of record, front-end portals, etc. This is
especially impactful for archaic IT systems, where the end All in One-Go graph depicts a relatively linear relationship between
objective is to deliver a new business model. effort and outcomes. Results show apparent early on, and they
Alternate approach to AiOG strategy is the Paris-London Tunnel unfold continuously at each stage of digital transformation. Also, as
method. Instead of churning the entire pot, external interfaces it can be observed from the graph this strategy holds true primarily
and internal systems are separately identified, and worked upon for systems and businesses where the overall complexity is
simultaneously. The second approach is best for companies where significantly low.
it is expected to deliver a faster considerable amount of work
needs to be done and they cannot afford to lose time, but they
are also encumbered with intricately enmeshed processes at
multiple operational levels.
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 HEXAWARE ON YOUR JOURNEY TO DIGITAL TRANSFORMATION
At Hexaware, we believe the world has gone digital and so have businesses, which strive us to provide a seamless customer experience
across different customer touch points. From focusing on customer-centricity to being customer-driven, businesses have realized the
need of Digital Transformation to realign their objectives to uncover opportunities and drive growth. However, eventually the success
lies in the approach undertaken and methodologies followed, ensuring the existing business model evolve into a more robust, agile, and
stable model. At Hexaware, we are continuously striving to help our clients evolve their business models, optimize processes,
transform customer experience and enable automation through adoption of latest cutting-edge technology.

Authors

Abhinav Prakash Harpreet Singh

Practice Lead, Social Analytics and
Digital Solutions Architect
Digital Marketing

Anushka Gulati
Business Transformation Manager

About Hexaware
Hexaware is the fastest growing next-generation provider of IT, BPO and consulting services. Our focus lies on taking a leadership position in helping our clients
attain customer intimacy as their competitive advantage. Our digital offerings have helped our clients achieve operational excellence and customer delight. We
are now on a journey of metamorphosing the experiences of our customer’s customers by leveraging our industry-leading delivery and execution model, built
around the strategy— ‘Automate Everything, Cloudify Everything, Transform Customer Experiences.’

We serve customers in Banking, Financial Services, Capital Markets, Healthcare, Insurance, Manufacturing, Retail, Education, Telecom, Travel, Transportation
and Logistics. We deliver highly evolved services in Rapid Application prototyping, development and deployment; Build, Migrate and Run cloud solutions;
Automation-based Application support; Enterprise Solutions for digitizing the back-office; Customer Experience Transformation; Business Intelligence &
Analytics; Digital Assurance (Testing); Infrastructure Management Services; and Business Process Services.

Hexaware services customers in over two dozen languages, from every major time zone and every major regulatory zone. Our goal is to be the first IT services
company in the world to have a 50% digital workforce.

Learn more about Hexaware at http://www.hexaware.com

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Certain statements in this press release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from
those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense
competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time
frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our
ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Hexaware has made strategic investments, withdrawal of governmental
fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry.

www.hexaware.com | marketing@hexaware.com
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