Tax Collected at Source (TCS) on sale of goods Section 206C(1H) vs E-invoicing

India is a unique country where there is absolutely no coordination among various arms of Government. To take a simple example State Highways department lays roads and within one month Corporation team comes in and digs up the entire road to lay drainage pipes. Both these activities are budgeted by the respective divisions, tenders called and debated in the same council hall but no coordination whatsoever. This means we remain at the starting line or start and end up in shambles pretty soon. This is exactly what is happening with Direct and Indirect tax teams with TCS and e-invoicing. No coordination.

TCS under section 206C(1H) is being proposed to be levied by Government at the rate of 0.1% (0.075% due to Covid-19 till 31.3.21) on sale of goods under the pretext of collecting data for purposes of tracking transactions to ensure compliance with tax laws.   E-invoicing is proposed under GST laws to ensure tracking of transactions to be in compliance with tax laws.  TCS & e-invoicing will track the same data one through direct tax legislation and another through indirect tax legislation.   Is the intention of the Government to collect data or effectively use the data?  If objective is it to collect data then TCS and e-invoicing can co-exist but if the objective is for effective usage of data either one of the legislations should be scrapped most preferably TCS as it is more of a subordinate legislation having limited data scope whereas e-invoicing is a more broader scope legislation. 

Let us the industry be pragmatic and oppose TCS as its implementation will lead to unnecessary chaos for all practical purposes – charging an additional tax in the invoice (still debate is on whether to add GST for calculating TCS or not), collection from customers, depositing in customer PAN account, reconciling with 26AS (imagine companies having huge vendor base reconciling with 26AS will be a huge nightmare).   It may not be a surprise if a provision similar to 40(a)(ia) is also implemented for failure to collect and pay TCS creating more chaos in tax computation. 

Here I am reminded of the 3 “goods years” when we had the “Fringe Benefit Tax – FBT” which caused more pain than gain for both the industry and Government.    Similarly TCS will cause more pain than gain and it needs to be stopped ab-initio as it will create more work for business with little gain for them and creates one more spoke in much used phrase “ease of doing business”.

The "Diamond Share" & Corporate Governance

24th September 1599 marked start of a huge corporation called "East India Company" (EIC) to trade in South East Asia and India[1].  This company received Royal Charter on 31st December 1600 for trade.  Main motive of EIC is to maximise value / earnings to its shareholders.  This EIC achieved this mainly through ruthless means and slightest regard for corporate governance.  To achieve its objective of maximise earnings EIC maintained a huge army and seized power in India through bribes, wars, deceits, agreements, divide and rule strategy, puppet governments, ruthless implementation of tax laws and the like.  At one point in time 1/4th of Britain's income was generated by EIC and its shares were used as reserve currency, such was the power of this corporation.  Since 1750 there were quite a lot of pressure in Britain to reign in EIC but every time the company came out unscathed and none of its officers were convicted of any misdoing.  One who came close to be questioned was Warren Hastings but he too was acquitted after a 7 year trial. 

Let's now move to modern India and its corporates which are in line of fire for alleged scandals and corporate governance issue.  Listed below are an illustrative list.

1.    Satyam (2009)

2.    Saradha Group (2013)

3.    Ketan Praekh (2001)

4.    Speak Asia Scam (2011)

5.    Kingfisher (2014)

6.    Sahara (2010)

7.    PNB (2018)

8.    UTI (2008)

9.    Fortis Healthcare (2018)

10. Punjab and Maharashtra Cooperative Bank (2019)

11. IL&FS (2018)

Let me stop here as this list can go on.  What is common with the above list?  "Investigation is going on".  The persons allegedly involved in these scandals had very brief stints with law and now are free.  Reams of papers 'were prepared' 'are being prepared' and 'will be prepared' by investigating agencies (CBI, SFIO, IT etc) but still the result is unchanged "Investigation is going on".  When these investigations will end and when final orders will be passed is anyone's guess.

This brings in a similarity between centuries old EIC and modern business both of which work for maximizing their shareholder wealth with least regard to corporate governance and at the same time go scot free albeit some interventions by law enforcing agencies which never get conclusive.  We hear of multiple raids on corporates, politicians - how many of them finally ends up in conclusive court cases?  Yes there are arrests made then people are out on bail in a short period of time and nothing beyond this.   

This is what ails our system in India.  There is no definitive period in which investigations have to be completed there is no definitive period by which courts have to pronounce their judgements.  The case goes on as Robert Frost says "miles to go..". 

Let us move to the subject matter of this blog.  YES Bank - the "Diamond share". 

[2]Financial audited report of YES Bank for the financial year 2018-19 provided the below picture

  

[3]Q1, Q2 & Q3 results for 2019-20 provided the below picture

                                                                                    Rs. in crores

           

In 9 months’ time since publication of its results of March 2019 YES Bank had around 25% reduction in its Advances and Deposits.  There is significant increase in Gross NPA a whopping 486% and Net NPA which shot up a whopping 221%.   Gross NPA from an amount of Rs.7,882 crores in March 2019 increased to Rs.40,709 crores in December 2019.  This vitiates the estimate of Enforcement Directorate of around Rs.42,000 crores in NPA earlier in March 2020. 

Gross NPA - The jump of 486% in 9 months to Rs.40,709 crore!  What triggered this sudden spurt?  Did this happen all of a sudden now in 2 quarters as it is made up in the results?  Let us discuss below.

1.  When publishing its results for March 2016-17, YES bank revealed understatement of NPA by Rs.4,176 crores in the year 2015-16 (see below extract from 2016-17 financials). 

2.    The below note was added to the financials by YES bank to say action is being initiated to assure investors

3.  Within 6 months of publishing 2016-17 report wherein gross NPA was reported at Rs.2,018 crores as on 31.3.2017, Q2 report for 2017-18 was published and the following was reported which re-stated NPA to Rs.8,373 crores as on 31.3.2017.

4.    In short from the reported Rs.2,018 crores NPA was increased to a whopping Rs.8,373 crores, hence an under-reporting of Rs.6,355 crores of NPA in 2016-17 

5.    Now move to 2019.  NPA reported increased by a whopping Rs.32,827 crores or 486% in 9 months.  Unbelievable but true as per reporting of YES Bank. 

This systematic gross under-reporting of NPA (with multiple revisions on intervention by RBI) meant that all stake holders were shown an un-real picture while bank was going all out to lend to industries leading to deficiency in capital adequacy ratio.   Capital adequacy ratio which was at 16.3% on 30.9.2019 nosedived to 4.1% on 31.12.2019 (in 3 months monstrous fall)  breaching the norm set under Basel III forcing YES bank to seek additional capital infusion which did not materialise and hence re-structuring had to be done by Government using tax payers money and finances of a strong bank.  This nosedive was not sudden but due to systematic failure of the system perpetrated by undue growth of credit without adequate safeguards which ought to have been put in place.  This is not only to blame the system, but also the stakeholders who made it happen viz, management, credit rating agencies, auditors, government agencies who failed to spot the systematic rout at the inception stage and let it grow beyond proportions.  In short poor governance standards and its consequent divergence in NPA reporting brought about a big down fall of the bank.

In its report for Q2 2019-20 auditors had a clean unqualified report.  However in Q3 2019-20 (which was declared after moratorium was declared by RBI) there are a series of qualifications including doubt on “going concern concept” also (getting wiser after the event?).  The following are the main qualifications raised by auditors in Q3 report which relates to Uncertainty related to Going Concern due to

1. Q3 loss of Rs.18,560 crores and a total 9 month loss of Rs.19,046 crores
2. Decline in Banks deposit base
3. Increase in Non-Performing Asset (NPA)
4. Breach of mandatory Statutory Liquidity Ratio (SLR) & breach of mandatory Liquidity coverage Ratio (CLR) requirement – promoting a provision of Rs.86 crores in books of accounts toward penalty for this breach (wasteful expenditure)
5. Breach of mandated CET1 ratio which is at 0.6% in December 2019 as against mandated requirement of 7.375%

All the above 5 items did not surely happen in Q3 2019 but reported in Q3 2019 leading to serious doubts on corporate governance and reporting.

Turning to stock market, data on beta of YES Bank stock is as below, which shows the volatility it underwent and shocks it undertook.  It is expected beta will continue to be high as uncertainty still continues.

Conclusion

Corporate Governance is an important subject in classrooms and all major financial courses run a separate paper on this subject.  But when it comes to application of this a lot is let to be desired mainly due to greed of making a quick fortune.  Over the years scandals have been part and parcel of corporates and India has a very poor track record in bringing to book perpetrators of these scandals and giving them adequate punishments so that there will be a serious deterrent for others.  Our laws and safe-guarders of law which include investigators and courts should put in their 100% to ensure that the perpetrators of scandals do not go scot free after initial arrests and being in limelight for about 6 months and then go into oblivion.  We need to have fast track courts to investigate corporate frauds and conviction should be made within 1 or 2 years at the maximum.  This will bring in corporate governance and belief in system for investors who are the ones at the receiving end finally. 

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[1] Reference – Anarchy by William Dalrymple

[2] Audited Financial Report YES Bank 2018-19

[3] Audited / Unaudited Quarterly Financial results of YES Bank

Budget 2020 & Dividend Distribution Tax – New Challenges

A brief visit on history shows that DDT was introduced in 1997, removed in 2002 only to be re-introduced in 2003 till it is now slated to be removed in 2020.  DDT was mandated under section 115O.  There are 2 major reasons why DDT is proposed to be removed.

First, as expected on persistent demand from non-resident investors Dividend Distribution Tax (DDT) has been abolished from the financial year 2020-21.  The DDT which was approximately 20.56% (15% + Surcharge & Cess) was a major concern for non-resident investors.  Also as DDT is a tax obligation of the distributing company (i.e. it is not in the nature of TDS), such DDT is not available as a credit to the non-resident shareholder in his country and hence not eligible for refund of this tax.  Now under the new regulations Indian companies paying dividend to non-resident investors need to comply withholding tax provisions albeit at a lower rate as prescribed under the respective country treaty.   The treaty rates are beneficial to non-resident investors and it is usually between 10% to 15% in most of the cases.  This move is intended to attract foreign investments as non-residents have lower tax rates in virtue of tax treaties. 

Second, to avoid a flat rate on the distributed profits across the board irrespective of the marginal rate at which the recipient is otherwise taxed DDT is slated to be removed.  Now with the incidence of tax passing on to shareholders they will have to discharge their tax liability depending on their income slabs.  This brings in more equity among tax payers.

The below are the challenges on removing DDT.

1. This new tax regime puts the resident investor at a disadvantageous position as the highest tax rate may be as high as 42.74% for individuals and 34.94% for resident companies on dividends received as against DDT of 20.56% currently.   Representations have been forwarded to finance ministry to tax dividends separately (something similar to the removed section 115BBDA) at the rate of 10% for dividend amounts upto Rs.10 lakhs and at 20% for dividend amounts above Rs.10 lakhs per annum.   
2. The new DDT regime proposes to introduce section 80M to avoid cascading effect on dividend tax.  A company which has multiple layers viz subsidiaries can set off dividend income from their Indian subsidiaries and also from Indian companies, Section 80M provides relief from cascading effect on all dividends received from domestic companies.  However if a company receives dividends from foreign companies section 80M does not provide set off relief and this dividend received is not set off against dividend income in hands of recipient.   
   ‘80M. (1) Where the gross total income of a domestic company in any previous year includes any income by way of dividends from any other domestic company, there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of such domestic company, a deduction of an amount equal to so much of the amount of income by way of dividends received from such other domestic company as does not exceed the amount of dividend distributed by the first mentioned domestic company on or before the due date.
3. Reading section 80M provision is available only when tax is paid under normal provisions of the Income Tax Act.  If a company is paying tax under section 115JB (Book Profit - MAT) then section 80M cannot be applied.  This needs an amendment to the section 115JB and section 80M
4. Buy back of shares under section 115QA has an effective tax of 23.29%.  For individual persons receiving tax highest rate of tax will be 42.74%.  This in effect means for this category of shareholders buyback of shares offers a lower rate and there are chances of more share buyback than dividend for domestic companies for the years after April 2020.
5. Transitional provision.  A company has 14 days for disbursal of dividend from the date of declaration of dividend.  There is confusion as to if dividend is declared in last week of March 2020 and actual payment is effected in April 2020 will there be double tax – in March DDT and in April individual tax?  Clarification is required from Government on this subject.
6. Section 194 has been amended by finance Act 2020 to enable TDS @ 10% to be deducted for dividends exceeding Rs.5,000 per year
7. Amendment to Section 115A provides that a non-resident should file return in India if his dividend income has been subject to TDS which is less that the rate prescribed under Chapter XVII-B.  In practice most of the non-resident entities will be covered under a treaty and will have a rate lower than the one provided in Chapter XVII-B.  In short most of the non-residents will be mandated to file income tax returns in India for dividend income and also would be required to file form 3CEB

A Quick look at Mutual Fund dividends

A new section 194K is introduced in budget 2020 to provide that any person responsible for paying to a resident any income in respect of units of a Mutual Fund will deduct income-tax (TDS) there on at the rate of 10% if the amount exceeds Rs.5,000 per annum.  This 194K has cast a doubt on investors’ minds, whether only dividends will be subject to 10% TDS or also capital gains arising out of mutual fund withdrawals are subject to TDS.   A suitable clarification is expected from Government on this soon. 

Conclusion

Removal of DDT is a welcome step for the industry albeit for some promoter held entities whose promoters will be required to pay tax at a higher rate.  Government has to come out with clear answers / guidelines to remove all concerns of industry relating to the points mentioned above to bring in high level of clarity and seamless implementation of this change.

Understanding Digital Transformation & Adapting to it

1.0 Introduction and some examples of Digital Transformation

Industry 4.0 and Digital Transformation (DX) are the buzz words in modern corporates of today.  Corporates are in race today to digitalise their operations to bring about a paradigm shift in their style of working leading to profitability and customer satisfaction.   Most corporates are using DX to achieve (among others)

Technical superiority, Research & Development, New product launch, Innovation in multifaceted areas viz: product, process & people, Customer satisfaction, Complaint Management, Product performance, Productivity, Preventive Maintenance, Logistics, Inventory Management, Cash Management, Seamless flow of process within the organization, Legal Compliance, Fraud avoidance & Optimal usage of all resources

Before we get into the nuances of DX let us understand why business need DX.  A business is driven mainly by (among other things)

Products, Technology (R&D, Manufacturing, Services), Marketing capabilities, Customer acceptance, Price points, Competition offers

To this we should add digital transformation as this is one of the catalyst for change in an organization.  In modern business changes are quite complex as it can cost a huge amount of resources both financial and non-financial.  DX provides vision, data, information, method, options, route, process, flexibility, efficiency, technique, speed, accuracy, precautions, safety, risk analysis & improved quality for bringing about this change at the same time optimizing usage of financial and non-financial resources

To bring in more clarity let us discuss some six examples of DX

Automation of Production Process – Distributed Control System (DCS) are used especially in large industries to automate production process.   This brings in efficiency, ease of operation, safety & fast processing.  DCS is in vogue for many decades now and their efficiency is being constantly improved by providers of DCS solutions depending on industry requirements.   

Product Life Span / Product Study – Chips / Microprocessors / components are being installed in commercial vehicles to study their tolerance limits to load, speed, road conditions, weather conditions etc.  This provides valuable data on utilization of these equipment’s, behavior of its components and provides vital information for future product innovations

Preventive Maintenance – Chips / microprocessors / components are installed into machineries even machineries like huge furnaces which operate on very high temperatures.  These chips provide vital data on the machines and its efficiency providing vital statistics on when the machine should be stopped for maintenance so as to enable the organisation to optimize stoppage time and plan well in advance for maintenance

Logistics – Bar Coding / RFID are used extensively for movement of materials internally and externally for an organisation.  This brings in accuracy, speed and efficient movement of materials with least efforts.   Techniques on RFID are getting advanced day by day bringing in more efficiencies

Distribution - Software like Sales Force help automating the entire supply chain.  Ordering online, checking product availability online, fixing prices online, tracking orders etc.  This links the entire supply chain of wholesalers, distributors, retailers, warehouse operators, truck operators and the organization in one straight line offering seamless flow of quick and accurate information

Finance – Connecting financial ERP of the organization to bank systems through automated programs automate the vast flow of customer inflow and vendor outflow of funds.  This brings in efficiency in accounting and also brings in an information flow which leads to large scale audit trail which brings in actions for mitigating risks and brings in controls to avoid frauds

2.0 Taming Digital Transformation (DX)

I am a firm believer that “DX should follow business” and not the other way round.  DX should be a well-trained “dog” (may be called “smart dog”!) who ensures that his master derives happiness in seeing him do things which the master would like and at the same time do not overshoot maintenance & operating costs making DX economically unviable. 

DX is definitely an enabler for growth.  DX will be expensive, calls for a paradigm shift and it involves major decisive decisions to be taken by senior management.  Once it is achieved it can bring in higher customer satisfaction, higher revenue, bigger savings in costs, improve processes, decrease times spent and more importantly brings down risk of fraud and thereby having a better internal control.

What needs to be done (Do’s) for a good DX

• Right, digital-savvy leaders
• Build capabilities for the workforce of the future
• Empower people to work in new ways (change management)
• Ensure IT processes are robust without any major issues that can cause disruptions or expensive replacements
• Ensure IT security is in place
• DX process should be reliable and sustainable.  This needs to be ensured
• Clear communication on changes across the organisation

What should be avoided (Dont’s) for a good DX

• Commencing without having a clear idea about benefits - Unclear benefits
• Excessive investments – too much than needed is burning of cash
• Unclear / lack of understanding of relevant legal issues
• Avoid areas where privacy breach possibilities are high

Mckinsey in its global survey on digital transformations finds that 80% of the organisations have taken a step towards DX, but only around 1/3^rd of these organisations succeed at improving a company’s performance and sustaining those gains.   So complicated is the move towards DX care should be taken not to lose vital resources.  The key to DX as per Mckinsey are categorised into 5 categories : Leadership, capacity building, empowering workers, upgrading tools and communication.   These 5 categories when successfully managed will lead to taming of DX successfully.

3.0 Some Statistics on Digital Transformation

In January 2020 International Data Group Inc. (IDG) a leading media, events and Research Company came out with a CIO’s 19^th annual “State of the CIO” survey.   Some of the major finding of this survey are

• CIO’s move towards a Strategic role (DX being one of their key objective)
• 89% of the CIO’s say that they are more involved in leading digital transformation initiatives
• The top 3 priorities of CIO’s are (a) Leading digital business / transformation initiatives (b) Data & IT security and (c) Strengthen IT and business collaboration skills
• 78% of head of IT’s say that they are communicating with the Board of Directors more than ever before
• Data / business Analytics remains on Centre Stage as Number 1 technology initiative for the coming year for CIO’s
• IT heads have confirmed that the growth of digital business initiatives is driving the need for Information Technology (IT) and Operational Technology (OT) convergence.  
• The drivers for this IT & OT convergence are (a) Digital Business initiatives (b) data analytics initiative (c) New Product Development (d) Need to accelerate time to market and (e) Industrial IoT.

These research finding (statistics) brings into focus the importance given by organisations to Digital Transformation and their keenness to adopt DX.   In 2018 IDG came out with another interesting finding that 47% of CIO’s report to the CEO compared to 41% in 2008.  CIO’s who are pivotal for digital transformation are getting a prime place in the organization to lead DX and bring about a change.

Research findings assert the fact that companies go in for Digital Transformation in a large scale and the CIO who is the technical leader for DX get more and more prominence in the hierarchy.  I have also found instance of large corporates Managing Directors personally supervising recruitments of CIO, so critical being this role perceived.

4.0 Technologies of Digital Transformation

The current wave of Digital transformation relies heavily on Cloud Computing, Artificial Intelligence, the Internet of Things (IoT), Mobile Internet Technologies, Robotics, Additive manufacturing, Big Data & Data Analytics and Cyber Security.     

Though Cloud computing is not a new technology it is quite a valuable tool for business considering it versatility, cost benefits and competitive advantage.  I am sure atleast 3/4^th of all businesses will be using cloud computing in one form or the other to meet their DX needs.  Cloud computing is an efficient tool for both small and big business house. 

Artificial Intelligence (AI) though an expensive tool compared to cloud computing its results have helped organisations cut down their costs and reap multiple benefits.  There are reports which suggest that around 30% of the business are adopting AI to some extent or the other in their day to day operations improving efficiency of operations. 

Internet of Things (IoT) talks about interconnecting devices to have a seamless flow of information and thereby improve / provide customer support.   In practical world multiple devices are installed and each capture certain specific information, IoT technology interconnects these devices to help provide a full service to customers.  

Mobile Internet Technologies are evolving rapidly over the years and its uses are varied & becoming quite diverse  Mobile technology has improved from a single devise used for phone call and messaging into a multi-tasking devised used for example for GPS navigation, internet browsing, gaming, instant communication tools, video conferencing etc.   With move towards 5G technology mobile internet will have a more prominent place in DX.  New technologies are rapidly being developed using mobile technologies and is being adopted by organisations in a big way.

Robotics as an expanding technology capable of improving business outcomes is highly popular. Robotic Process Automation (RPA) has the capacity to support digital transformation. Many businesses are looking for ways in which they can bring this kind of change to their business functions, particularly to ensure they are using cutting edge technology.  Robotics in science especially medicinal science is a very useful tool.  In commercial & legal parlance Robotics is used for example to process a vendor payment by capturing all details on an invoice automatically and processing this information for creating liability, processing payments, recording tax liability under GST, income tax and other relevant legislations in one simultaneous process thereby simplifying and improving speed of operations.  Robotics are game changers for DX if used effectively.  They can be quite complex to handle and process and are very expensive.  They consume high resources and if used judiciously will bring in huge returns for the organisations. 

Additive manufacturing (AM) enables digital transformation.  The primary applications of additive fabrication are design, modeling, fit and function prototyping, and direct part production. Around the world, AM is changing the way organizations design and manufacture products. When used correctly, it can save impressive amounts of time and money. Companies maintain that AM has helped trim weeks, even months, of design, prototyping, and manufacturing time, while avoiding costly errors and enhancing product quality.  Additive Manufacturing significantly compresses this design cycle. For the time it takes to make one iteration using traditional practices, 19 iterations can be completed with 3D printing. That is a significant speed gain over traditional manufacturing methods and hence AM enables DX

In DX, extracting data is one challenge and equally important challenge is to channelize this data in a readable format and make effective usage of this data.  Big data & Data Analytics comes into play here.  Data is extremely useful for business but many do not know how to go about interpreting or analyzing such large amounts of information.  Today, there are plenty of digital tools businesses can use to analyze internal and external data to bring about meaningful results. 

Cyber Security is key to DX.  Data & IT Security are one of the prime functions of the CIO.  Cyber security breaches across organisations have become common place as our reliance on data and inter connectivity increases.  Developing strong resilience to withstand cyberattacks is very vital.  It is estimated that Indian cyber security market in India is $ 1.97 billion in 2019 and is expected to move to $ 3.05 billion in 2022 (CAGR 15.6%).   This significant growth in cyber security market is mainly driven by digital growth in India.  DX is driving cyber security market.

5.0 Innovation and Digital Transformation

Innovation is a key input for DX.   DX is all about moving from existing methods to a more innovative and progressive method to bring about more customer satisfaction and thereby more profits for the organisation.   DX is just not bringing about new technology it is about bringing in a change in the organization.  These changes are necessary for the organization to address the changing business environment.  Innovation helps to address & identify these changes.   

6.0 Leadership and Digital Transformation

Right & digitally savvy leaders are key for DX.   Leadership is very essential for DX.  DX needs support from top management as it brings in big changes in process, people and resources used.  Leaders implementing DX should have clear vision and thought about the project and should be forward-thinking and should be adept at risk taking.   Leaders implementing DX should have good people skills to bring the team around to accepting DX.   Leaders should have the Vision, Skills, resources, action plan to bring about DX, they should also be prepared to incentivize the team members who are part of DX so that DX can be implemented as per plan and within time schedules.

7.0 Process of Digital Transformation

For the DX process to be right Organisation’s need to have the below

Right Technology: DX will be successful only if the company identify and use the right technology.  Technology should be appropriate in technical, financial, size & requirement of the business.  

Right Plan: Organisation’s should know what to change and how to transform their business.  Vague ideas will lead to chaos

Right fix: Organisation’s at times go for quick fixes.  This will not work.  Leaders should step in and guide organisation towards a successful transformation

The following are the key steps for DX

1. Identify areas requiring change using DX. 
2. Align with top management and ensure support is 100% along with all resources
3. Draw up a detailed plan for DX in collaborating with the team identified to implement DX
4. Select the appropriate technology and vendor to implement DX
5. Communicate with the team members affected by the change and align them with the process of change
6. Discuss the outcome of DX in detail and how to handle data output and put it to effective use
7. Extensively test the change before adopting it
8.  Incentivise team involved in DX to ensure that they adopt its course after implementation
9. If this has a customer / vendor or a third part touch point please communicate well in advance and have their concurrence in place.
10. Training for team members to adopt DX is vital

8.0 CS Profession and DX

Our CS Profession is not immune to DX and is adopting DX in a big way both voluntarily and compulsion by legislation.   Latest change, government of India is looking to implement “SPICe+” form replacing the existing “SPICe” form.  DX changes will continue to come in from Government and from Business, we need to adopt quickly to these changes.  We CS profession should understand the fact that we are part of business enabling business to comply with regulations and at the same time ensuring that they have minimum hindrance in their objectives.  To meet this CS profession should adopt to technology quickly and help business meet its legal compliances with minimal effort and concentrate on their business objectives.

My advice to fellow CS professionals, be aware of DX changes happening around us.  Have regular interactions with industry to understand the dynamics of DX.  At times DX need to go in for legal compliance eg : Video Conferencing of meetings, digitalisation of records etc.  These legal compliances should be identified and complied with as per legislations.  

Conclusion

DX is a way of life forward for organisations.  Changes are rapid in modern business world adoption of DX is becoming almost mandatory.  Not only business, service providers also need to adopt DX to survive and carry on successful business models.  DX increase speed of business response, improves productivity, improves data security, increases decision making speed as data availability is more and more reliable.