GST is a moment to grow by delivering digital experiences
The countdown to GST rollout has begun. The government, enterprises, regulators and consumers are gearing up to handle the tax implications of “one-country one-market structure”. A lot has already been written about how enterprises can prepare for GST. However, in my opinion, GST is not just a financial reform, but a broader business reform. It hasthe potential to relook at how enterprises conduct their business in India going forward.
With GST, enterprises have an opportunity to revamp systems, go beyond the physical constraints of supply chain, and focus on what matters the most for any business – Customer Experience!. It doesn’t just stop there. With delinking of physical footprint from the direct tax implications, enterprises can use this opportunity to move beyond physical structures, ‘Go Digital’ and provide digital experiences.
But first, why Digital?
Digital is the normin today’s era as consumers respond more when they have better Digital experiences. A recent study conducted by SAP concludes that a great “Digital Experience”directly correlates with customer loyalty and advocacy.
Per the outcomes of the study, consumers that are delighted with a brand’s digitalexperience are almost 10 times more likely to remain loyal than those dissatisfied with it. On top of that, consumers ‘delighted’ with digital experience of a brand were significantly more likely to recommend the brand, to the tune of positive77%, versus a negative 60% for dissatisfied experience. A poor digital experience these days cause more harm to a brand thanjust a lost sale. A negative word of mouth in digital spreads faster and wider, resulting in ‘switching economy’. A successful Digital Experience strategy lends enterprises the ability to serve customer needs through personalization.
What’s GST got to do with Digital Experience?
GST has much wider impact on the way enterpriseswill conduct business in India. It is change from “Physical to Digital”.As enterprises take steps to comply with the GST regime, must use new agile models of sourcing, delivery through better supply chain.
Freed up working capital.The other big benefit of GST is to free up working capital. A recent study from CARE’s ratings concluded that GST could help to reduce logistics costs by up to 20% from current levels. These potential savings can help the enterprises to build a digital footprint instead of the traditional route of investing in new offices for a bigger physical footprint.
Level Playing Field.One of the direct implications of GST that I foresee is the level-playing field that GST provides for enterprises of all sizes. Imagine what Indian Premier League (IPL) did to Indian Cricket. Today we see players from across the world getting uniform exposure on a globally competitive platform. Similarly, GST unifies and simplifies tax structures across all Indian states, ensures enterprises of reduced barriers to entry and allows the ability to compete equally.
Bigger play for SMEs. For small and mid-market enterprises (SMEs) that are usually more cash-strapped, there ispotential to save and reinvest in growth and redefine the business prospects.
Personalization and real-time pricing strategy. More information allows enterprises to use sophisticated analytics tools, offer personalized experiences to a diversified base of customers that opens up opportunities for pricing strategies to be more real-time and tailored for various business segments.
As businesses take steps to adapt to new GST regime, it is an opportunity to ‘go digital’ and redefine the business processes.