Managing Risks in the Era of Digital Transformation

The ongoing digital revolution has compelled businesses to rethink their strategies for engaging customers and delivering value. The COVID-19 pandemic has further highlighted the significance of digital transformation for industries, businesses, and society at large. However, as organizations embrace this transformation, addressing risks beyond conventional ones is crucial. To effectively manage these risks, companies must adopt a proactive approach, identify potential threats, and develop mitigation strategies. Additionally, employees should be equipped with the necessary skills to navigate the changes and monitor the progress of digital transformation. In a recent discussion hosted by Sourav Majumdar, Editor of Business Today, the panelist consisting of Kaivalya V, Founder and CTO, Zepto, Siddharth Vishwanath, Partner- Risk Consulting  PwC India, and Shankar Viswanathan, CIO, Sundaram Clayton Limited, shared insights on preparing for and mitigating risks during digital transformation.

Understanding the Geopolitical Scenario:

The discussion began with Siddharth Vishwanath, Partner- Risk Consulting  PwC India, explaining the responses gathered from clients around risk in the current geopolitical scenario. He highlighted two key areas: supply chain risk and partnerships as organizations are concerned about potential sanctions on countries and the need to hedge against such risks. They are also cautious when entering into partnerships, ensuring they are not involved with entities associated with money laundering or sanctions.

Risk Management in Groceries Delivery Business:

Kaivalya V, Founder and CTO of Zepto, discussed the risks involved in their business, which focuses on delivering groceries and essentials. While supply chain risks exist, Kaivalya emphasized the significance of security and cybersecurity due to the massive amount of customer data involved. Zepto is investing in financial controls and governance to mitigate risks and ensure a successful outcome in the long run.

Cybersecurity as a Top Risk:

Shankar Viswanathan, CIO of Sundaram Clayton Limited, emphasized the importance of cybersecurity as one of the biggest risks faced by organizations. With state actors leveraging cyber threats and attacks becoming increasingly sophisticated, protecting critical infrastructure and intellectual property has become a constant and evolving battle. Shankar Viswanathan stressed the need for strong protection systems and continuous vigilance to combat cyber threats effectively.

Digital Transformation: Risks and Opportunities:

The discussion also touched upon the risks and opportunities associated with digital transformation. While digital transformation introduces new risks, it also provides opportunities for growth and competitive advantage. Shankar Viswanathan highlighted the need to embrace digital transformation but at the same time cautioned against overreliance on technology without implementing proper guardrails. Data-driven decision-making and predictive analytics through AI were identified as opportunities for businesses to improve their performance.

AI and People-centric Approach:

The conversation then turned to the role of AI in digital transformation. Kaivalya explained how Zepto's business heavily relies on AI and machine learning for forecasting, inventory planning, and personalized customer experiences. While AI presents opportunities, Siddharth emphasized the importance of testing and deploying AI in the right manner to mitigate biases. The discussion also touched upon the challenges of managing and securing vast amounts of data generated by AI systems.

Skill Development and Change Management:

The panelists discussed the importance of skill development and change management during digital transformation. Shankar emphasized the need to focus on interpreting AI-driven insights and ensuring employees can effectively use technology. He highlighted their investment in training programs, including cybersecurity hygiene, and collaboration with external experts to drive digital transformation successfully. Kaivalya shared examples of how Zepto leverages technology to address challenges faced by delivery partners and farmers, ensuring better safety and financial visibility for all stakeholders.

Conclusion:

As the discussion drew to a close, the experts acknowledged that Indian companies have made significant strides in their digital transformation journeys. While risks persist, organizations are taking proactive measures to manage them effectively. The discussion highlighted the importance of cybersecurity, AI deployment, skill development, and change management in achieving successful digital transformation outcomes. In an era of rapid technological advancements, companies must remain vigilant, adapt to change, and seize the opportunities presented by the digital landscape.