Digital transformation trends and opportunities in Sri Lanka

13 January 2021 Consultancy.asia 5 min. read

Asian management consultancy MTI Consulting has released the 2021 edition of its ‘Digital Transformation in Sri Lanka’ report. Based on the views of CxOs of leading corporates in the country, the report outlines the key digital transformation trends and opportunities in the country. A round-up of the main findings.

Key trends

Leaders believe there are four key trends driving the digital transformation agenda in in Sri Lanka:

Changing consumer behaviour
The way how Sri Lankans purchase and consume products, services and information has been going through tremendous changes even before the pandemic, which was evident with the meteoric growth of social media and e-commerce.

However, the pandemic had accelerated the consumer’s digital adoption both as a medium of communication and purchase.

Due to the surge in online orders, leaders in consumer goods and retail are busy ensuring relevant systems are in place to facilitate online purchasing, payments and delivery with ease by integrating with different partners such as banks and logistics companies.

New ways of working
Covid-19 pandemic transformed how companies operate due to mandatory lock-downs, social distancing rules and working from home norms.

While most organisations have built robust systems to operate in this new environment, this has at the same time created several challenges such as allowing access to centralized ERP, ensuring secure authentication and access, and network connectivity issues.

Ensuring employee engagement and productivity in a virtual working environment is another challenge that CxOs identified.

Changing nature of competition
Competition in the digital age is entirely different from what companies have seen before, due to the rise of start-ups and unconventional players entering and disrupting the incumbent scene.

In the banking sector for instance, the entry of telecom companies can become a competitive threat that has “not been experienced before”, according to one leader interviewed by MTI Consulting.

Emerging digital technologies
Digital leaders told MTI Consulting that several emerging digital technologies are driving digital transformation, including: Cloud, Mobility, Data Science and Big Data, Artificial Intelligence, Machine Learning, Internet of Things, Robotics Process Automation, Cyber Security and Industry 4.0.

However, four specific technologies are broadly considered as essential by the study’s participants:

Cloud – Cloud transformation was identified as a key priority and many companies who had already invested in comprehensive ERP systems are now planning to transition in to cloud based ERP systems, driven by the increasing flexibility and cost efficiencies it promises to generate.

Mobile – Due to growing smart phone penetration in the country, many corporates are attempting to deliver exceptional mobile experiences to their consumers. This range from m-commerce, targeted mobile advertising, mobile wallets and touchless airport kiosks that can be accessed via mobile phone QR codes.

RPA – Robotic Process Automation has been widely used by many organisations in Sri Lanka to automate certain manufacturing processes in factory environments, from apparel to consumer goods and personal care. Also, some companies have employed RPA to transform their back-office operations.

Analytics – Both analytics and big data analytics are used by Sri Lankan companies to analyze and predict consumer behaviors.

Key opportunities

Arising from the trends, leaders in Sri Lanka identified five key digital transformation opportunities that companies can capitalize on:

Personalization and differentiation
The availability of big data and advanced analytical capabilities offers Sri Lankan companies the ability to deliver personalized offerings to their customers while also supporting in differentiating their value proposition from their competitors.

Providing one example of the benefits, a CIO of a diversified conglomerate outlined how integrated data has the ability to offer the group a 360-degree view of their customers as they can integrate customer data via multiple industries like banking, insurance and retail.

Digital channels
Many Sri Lankan companies have started offering an omni-channel experience to their customers via a hybrid of physical and digital channels.

Take the banking sector as an example. Opening and operating a new physical branch comes with significant overhead which increases the bank’s cost to income ratio. As digital finance disruptors like telco’s and start-ups can operate more cost effectively at a much larger scale, banks need to develop digital channels (mobile apps, wallets) to reach mass scale of customers.

Digital marketing
Many leaders have identified that the advancements of digital marketing present many new opportunities for Sri Lankan companies. This includes reaching out to customers via multiple internet and social media channels, running hypertargeted personalized campaigns, and engaging with customers and prospects via rich content.

Reinvent business models
Digital technologies enable companies to reinvent their business models through new sources of value creation, revenue generation and the use of wide eco-systems.

For example, in the media and telecom domains, over-the-top technology operators (such as Netflix) have bypassed cable TV providers to bring content to users. However, as a response to this, cable TV and telecom companies have started collaborating with them.

Also, leaders highlighted cross-industry collaboration between companies in domains like banking, insurance, technology and telecom to offer joint solutions and creating value across the entire ecosystem.

Agility
The global pandemic has made the world further unpredictable and uncertain. To navigate through these difficult times, leaders emphasized that Sri Lankan companies should be agile and nimble in the way they conduct their business.

For example, technology and telecom companies in Sri Lanka have been running agile at scale programs even before the pandemic and had converted traditional waterfall projects into agile sprints, which has already generated tangible business results.