Advice from NTT’s digital transformation in the Asia Pacific region

Digital transformation is not so much a destination as a journey – one that many organizations are still navigating. As we make progress with our own digitalization at NTT, our success will be measured by the outcomes we create for our clients. That means reframing our mindsets, culture and technology, placing our clients at the center of our journey, and focusing on transformation in terms of market opportunities.

Our digital transformation is results-driven

Delivering results in a world where everything is interconnected is both a guiding principle for NTT and the approach we’re taking to our own digital transformation.

How we manage our interconnectivity and interdependencies to operate as one business across our regions determines our success. This can be measured only by the tangible benefits we deliver to our clients, our people and our organization.

In 2019, we created our organization from the merger of 31 companies and the simple ambition to better serve our clients in a changing technology market. And although our strategy is defined globally, its implementation comes to the fore in our regions.

The Asia Pacific (APAC) region is as diverse as it is broad. To implement our global NTT strategy in the APAC region, we focused on three core initiatives:

1. Operating company integration
2. Harmonization through data
3. Our Excellence Program for business processes

I’ll share some of the key concepts of and learnings from each of these, as some may well apply to your own organization or spark ideas and considerations for your own transformation journey.

1. Operating company integration

It’s a complex challenge to bring multiple disparate businesses together – not just in terms of technological alignment through a shared architecture, but also in terms of finding a balance between conflicting outcomes.

We had a ‘triangle of trade-offs’ to consider: legal and contractual innovations, tax implications and operational efficiency. Some of these were diametrically opposed to each other.

What was important to understand was the chain of implications when we prioritized one outcome over another. For example, some legal or contractual innovations delivered as part of the integration could have triggered a change in control with some parties.

As far as tax was concerned, the APAC region had to decide which business among the organizations coming together would become the primary legal entity, and what the tax implications of moving the assets to that entity would be. While it may make sense to move assets to one business to ensure greater operational efficiencies, there may also be significant tax implications in doing so.

As we progressed with the integration, our leadership team had to prioritize. We decided to minimize changes to our taxation structure and to the legal and contractual implications for our clients. However, this came at the expense of being able to improve operational efficiency within the business, at least in the short term. Our second imperative, data harmonization, was therefore critical in helping us achieve greater efficiency.

Another significant component of this first initiative was our people and culture. With so many organizations coming together across the APAC region, it was critical to find the correct balance in our leadership team. We had to make the transition as smooth as possible for our people.

We deliberately created a balanced regional leadership team that represented the major businesses that formed the new entity. And, although a company culture isn’t created overnight, the coming together of different types of businesses with different ways of doing things was carefully managed to ensure diversity of thought.

A balanced team must be able to listen to everybody. Inward reflection is critical, as we are all biased based on what we know and what we feel is more intuitive to follow. But spending more time trying to understand the things we don’t know helped to uncover the nuggets of gold that would become part of our new organization.

Our learnings and advice

• Ensure a balance of people across teams to get the most out of any integration.
• The caliber of our leaders and their alignment to our global strategy were critical to rolling out initiatives faster and with trust and confidence.
• Consider your priorities and balance them out. It’s not possible to have everything working from day one. There will be trade-offs, but ensure plans are in place to address those trade-offs.

2. Harmonization through data

Data is truly the source of competitive advantage. Data should not be considered a technical program: it’s fundamentally a core business program enabled through technology.

One of the critical enablers of a digital transformation program is a focus on becoming cleaner in the master data you hold and in your master-data governance – and this was a major change for us.  

Do this successfully and the impact will be felt across your entire organization – not just in terms of income, but also in client and employee experience and the closing of operational gaps, as we identified in our triangle of trade-offs.

We had to shift our traditional thinking about capabilities as people, process and technology to people plus process plus technology plus data.

Data is at the heart of our own transformation. Historically, change is typically viewed across three capabilities: people, process and technology. But in the new digital world, the paradigm has shifted. In our own transformation, data is viewed as the vital fourth cog in the client experience wheel.

To embrace this means considerable change management and a shift to a client-centric model. It’s about making sure that how our people work and how we use their skills aligns with what our clients need.

For example, our move to SAP S/4HANA environments was about ensuring the organization could harmonize the 31 affiliate companies and their legacy environments through an alignment centered on data. But where to start?

We considered the impact our data could have in the short, medium and long term.

Our long-term view of data is that we treat it like our crown jewel. And while it won’t necessarily bring the business any returns within 12 months (more likely, it will bring pain!), it will uncover the nuggets of gold across the organization that will have significant and fundamental long-term effects on our business and the direction in which we are heading.

When we consider data in the medium term, we seek to simplify and standardize data across the region, in all APAC countries – all of which have different ERP systems.

Finally, in the short term, it’s about understanding how data can be an asset and generate tangible benefits for you immediately – such as cost savings.

And while all three outcomes are desirable, they’re not achievable in unison. We must consider our triangle of trade-offs again. Data as a short-term asset was the ultimate guide initially, almost inverse to what is naturally intuitive: that the business will benefit from understanding how data can drive insights and innovations.

For example, APAC was the first region globally to place our people on Salesforce. As a market-led function, our power lies in our go-to-market strategy. We needed control and visibility of our opportunities around the funnel. Thus, getting everyone on Salesforce in just a few months helped drive and maintain our go-to-market cadence and fueled our pipeline to ensure we didn’t miss a beat with our clients. Once that was complete, we moved to the global instance of Salesforce within months.

Once this initial stage was complete, our SAP S/4HANA journey began with the decision to get to the reporting level of harmonization, implementing central finance globally. We kept underlying enterprise resource planning (ERP) systems in place, feeding into a globally harmonized view and enabling the standardization of accounts.

From there, we brought the reporting layer into central finance, activating several finance modules, before decommissioning multiple ERP systems and removing duplication across businesses. This led to benefits such as cost savings and greater operational efficiency.

Learnings and advice

• Data programs are not something technology teams can manage alone. This must be done jointly with the business, as the conversations are interwoven and require joint decision-making.
• Be clear on the standard of quality that’s acceptable within the operational parameters of time and money. What is non-negotiable and what are you prepared to forgo to achieve your goals?
• Acknowledge when you don’t know something and bring in the experts. It’s best to buy in the expertise rather than fumble.
• Try to anticipate which areas of your business will be hardest hit by the changes and ensure you have enough capacity to manage this.

3. Our Excellence Program for business processes

As technology innovation cycles shorten, many organizations have accelerated their own digital transformation. Our own business was no exception. We needed to innovate and develop to remain relevant and competitive. This included improving both the end-to-end service we provide to our clients and the efficiency of our internal processes.

As part of our digital transformation, we initiated a global Excellence Program supported by best-in-class business-process service partners. We introduced operational efficiencies in select back-office functions. This was particularly relevant for us in APAC, where two shared service centers are located. We maintained efficient, controlled processes and became more agile, innovative and sustainable.

This also meant we could focus on our core business: taking a services-led approach to creating differentiation and efficiencies while optimizing our clients’ IT environments, leading to better business outcomes. Additionally, it allowed us to keep investing in our people and innovating across our IT services and infrastructure, networks, cloud and edge, all elements that enable us to help our clients with their own digital transformation.

Learnings and advice

• Speed and quality of delivery is always a balance. Do you run through the pain to get to where you need to faster? Or do you spend more time on preparing and focusing on quality to understand what the organization needs to look like? There’s no right or wrong answer. It depends on your priorities.
• In APAC specifically, more time was spent on the design of the future operating model, but this had to be done in line with the global strategy.
• Have a solid communications plan and give leaders plenty of time to prepare. Once they’re on board, the rest of the business follows. If you invest plenty of time in planning and quality, you are more likely to succeed.
• Finally, consider the context of your operating environment. We began this phase of the transformation during the COVID-19 pandemic, which, while not ideal for knowledge transfer, was something we simply had to deal with. Make decisions based on what and how you see things.

APAC has been at the forefront of ensuring a successful transformation. As our journey continues, staying aligned to our global goals and initiatives is critical, but catering for our regional nuances and needs is just as important. Ultimately, we must always ask ourselves: have we made it easier, faster, simpler and smarter for our clients to engage us? Only then will we know if we have truly succeeded.

Jan Wuppermann is the Chief Digital Officer, Asia Pacific, at NTT.