Monthly Archives: Jun 2019

Blue Prism buys Thoughtonomy. Clearly a great deal for…Thoughtonomy

June 20, 2019 | Miriam DeasySaurabh GuptaElena ChristopherPhil Fersht

Blue Prism yesterday announced the acquisition of Thoughtonomy, a SaaS-based integrated automation platform with Blue Prism RPA baked into its core. After six years and much flirting with potential suitors, Terry Walby’s Thoughtonomy successfully exits into the welcoming arms of Blue Prism. This was always the logical end-game for Terry's business, which he bootstrapped from day 1 and tirelessly pushed at the automation world. HFS was particularly inspired with the firm's work at the UK's National Health Service (NHS) (which you can read here). 

Essentially Thoughtonomy is RPA + cognitive capabilities + cloud. Net-net, Blue Prism is buying a cloud (SaaS) wrapper for its own product; arguably, it could have (and should have) built that itself, but decided instead to pay a tidy sum. However, this cloud wrapper puts Blue Prism in the ring with Automation Anywhere's V12 cloud product, which is drawing a lot of plaudits from enterprise users (our forthcoming Robotic Transformation Software Top Ten will reveal its performance across several hundred enterprises). More importantly, it increases Blue Prism’s attractiveness as an acquisition target itself by upgrading its cloud-readiness from “available cloud reference architecture” to a legitimate SaaS-based offering.  We touted Blue Prism as a potential target for IBM three years ago, and with a scalable cloud story and IBM/s major pivot around Cloud with its RedHat acquisition, surely this Cloud-ifying of Blue Prism makes the firm even more attractive to them.

Finding the synergies to justify the price tag – cloud with a potential side of cognitive capabilities, but the focus is too UK centric

Now, Blue Prism can contend with Automation Anywhere’s claim that “BotFarm is the first and only enterprise-grade platform for scaling bots on demand”. The midmarket can benefit from Blue Prism’s RPA technology, with very little setup cost or initial investment.  Mid size companies that considered automation out of their reach can enjoy the democratizing effects of cloud, avoiding the hassle of on prem infrastructure.

The shopping basket also contains Thoughtonomy’s gross assets, reported at 31 May 2018 as £5.6m and established relationships with Thoughtonomy’s big-name clients including NHS, AEGON, and Sony. Partner implementation and reseller arrangements are in place across many of the usual suspects in SI and consultancy such as Computacenter (from where Terry Walby moved to IPsoft before setting up Thoughtonomy).

Like Blue Prism, Thoughtonomy is UK based so there’s not much by way of additional footprint synergies to be realized. Blue Prism, therefore, will only be adding a limited new channel and will have to rely on its existing sales and delivery channel to make this acquisition pay off. The US market is where the bulk of new demand for automation solutions is surfacing, and Thoughtonomy isn't adding to Blue Prism's US team, which is under huge pressure from US-centric competitors with much larger pools of funding.

In HFS’ 2018 study of customer satisfaction with RPA, client ratings of Blue Prism and Thoughtonomy reveal some additional areas of complement – notably Thoughtonomy’s embedded intelligence (see Below). Blue Prism used some of the $130M it raised in January of 2019 to establish an AI lab to further the addition of cognitive capabilities to its product stack. Thoughtonomy now helps shorten R&D cycle time.  

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However, Thoughtonomy is small and not (yet) profitable and has never benefited from funding. For the twelve months to 30 April 2019, it reported revenues of £9.8m and an adjusted operating loss of £3.6m. It has suffered from the difficultly of being ahead of its time, offering a general purpose integrated automation tool as a service when most enterprises are still experimenting with RPA and other piecemeal automation solutions. Enterprises that have made the leap to integrated automation tend to be those that have both a clear digital transformation execution strategy and an informed perspective on which tools they need in their toolkit to achieve their objectives. Thoughtonomy offers a great integrated bundle, but, unless enterprises know what to do with it and what it helps them solve, it’s value will not be recognized. But, as we recently articulated in "RPA is Dead. Long Live Integrated Automation Platforms", this is where the market is headed, so the potential is there.  

Businesses and organizations ought to look beyond desktop automation to deeper integrated automation

It’s time for businesses of all sizes to begin their automation journey and going deeper is possible. As it’s cloud-based there’s no infrastructure capex, just the ongoing cloud opex. Furthermore, Thoughtonomy has, since its inception in 2013, had a strong view and vision on scaling its virtual workforce. Never intended as an attended or desktop solution, the plan was always to effect automation using Blue Prism’s RPA platform at a deeper level. Single automations can replace up to thousands of workers as opposed to the desktop automation route where automation is applied at the individual worker level and usually to tasks rather than processes or workflows.

Off-prem accessibility unquestionably matters, especially to the smaller business, what’s odd is that it’s not that difficult, time-consuming or expensive to build. However, with this acquisition, Blue Prism can now strike that off the list of things to do. Thoughtonomy currently has 54 employees, of which half are “dedicated to product-related activities”. Assuming the bulk of those are product development and not other ancillary product management or product marketing functions there is a team that has worked with Blue Prism’s platform in two ways that are of value:

  1. Putting a cloud wrapper together around the RPA platform
  2. Integrating it with AI services: Computer Vision, Natural Language Processing and Machine Learning

This technical knowledge is an important part of the value here, and it’s really hard in an acquisition to guarantee that talent below the C-suite stays in place post-acquisition, many leave and there’s not very much the acquiring company can do about it. With UiPath, Automation Anywhere and other key service providers all hunting aggressively for automation talent across both sales and technical areas, the merging entity will be vulnerable as they integrate the teams.

Consideration for the acquisition is mainly in shares - is this a brave gamble on both sides?

The payment terms of this deal comprise cash and ordinary shares. The initial cash payment of £12.5m on completion of the deal will be followed by a payment of £4.5m 18 months after completion. The remaining £63m is scheduled to be paid out at regular intervals up to two years post deal completion. The payment schedule for the deferred consideration for the acquisition includes a condition that Terry Walby and “relevant recipients” remain with Blue Prism.

With this purchase, Blue Prism is opening itself up to the scrutiny that goes with the process of acquisition at a point in time when it too is still loss-making, and its losses are deepening, increasing from £5.5m to £37.6m (IAS) in HY2019, despite revenues rising by a staggering 82% yoy. Presumably, Blue Prism must be confident of one of two things:

  1. Delighting the stock markets sufficiently to raise more capital - and hypergrowth is in its favor here or
  2. Being snapped up by a larger player that will ultimately pick up the tab

It would be more reassuring if Blue Prism had a clearer message and roadmap plotting out how this acquisition will help them grow and move into profit. But the share price drop suggests that the stock market is not yet impressed by this news.

The Bottom Line: Blue Prism’s end game is that it’s priming itself as an acquisition target; its market capitalization, currently in excess of £1b, is prohibitive for many would-be acquirers

The RPA landscape is at a peculiar point right now with three dominant players - Blue Prism Automation Anywhere, and UiPath  - each with skyrocketing valuations which presents a stark contrast to enterprise confusion and difficulties in scaling. More worryingly, interspersed among the success stories, many stories of abject disappointment are quietly told.

It sometimes looks as if the real product here is not necessarily RPA platforms, rather high growth companies striving to become unicorns, or to launch on the stock exchange or be bought for a tidy sum – and to be fair, if that’s what success looks like then Thoughtonomy has definitely made it. When the long tail of others outside the Big 3 in the RPA market is battling to get a strong foothold it’s difficult to compete for mindshare and revenues. Thoughtonomy was number four in HFS’s Top 10 RPA products 2018:

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One strategy is worth pursuing; whether it was intentional from the outset or not, Thoughtonomy made use of Blue Prism’s platform in a way that is now so useful to Blue Prism, it’s finally making this purchase.

And as for Blue Prism in the longer term, some of its founders have already cashed in portions of their holdings, revenues are rising, it’s still in hypergrowth, but loss-making. But the stock market has high expectations and the requirements of publishing results mean the current deepening of losses is highly visible. The same could well be happening elsewhere, but we can’t see published numbers and the market is dominated more by private equity financing, as opposed to rocketing enterprise spending on the software and services. The current land-grab is taking place with an apparent absence of profit considerations – are we really just seeing growth at any cost?

HFS has previously speculated as far back as 2016 that IBM would or should buy Blue Prism. IBM is in the habit of buying competitors that appear to pose a threat and/or can significantly enhance its go-to-market strategy. While a price tag in the billions, as opposed to millions, would deter many, the $34b Red Hat acquisition last year demonstrates that IBM has no fear of big numbers. Right now, Watson isn’t being talked about as much as in the past and IBM uses Blue Prism extensively in intelligent automation solutions – is IBM happy to use, resell and create solutions from Blue Prism eggs or would it rather own the whole Blue Prism chicken?

Posted in: Robotic Process AutomationArtificial IntelligenceRobotic Transformation Software

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She's bright and breezy... HFS hires Miriam Deasy!

June 18, 2019 | Phil Fersht

Miriam Deasy (see bio) joins HFS as Research Director, Integrated Automation 

Just when you thought this little analyst firm wouldn't dare add another rock star brain into our "Triple A" coverage (analytics, automation and AI) we've gone and done it again, adding Miriam Deasy to our global analyst team (based in UK) to cover integrated automation and AI platforms, alongside the likes of Elena Christopher, Reetika Fleming, Tapati Bandopadhyay, Melissa O'Brien, Saurabh Gupta, Ollie O'Donoghue and myself.  Miriam has develop a career across the world of technology and services with roles at EDS (HP) and Amdocs back in the day, before taking out time to raise two boys and a girl William (12), Kayleigh (10) and Darragh (9) before making her move to the analyst world with IT and telecoms firm Ovum three years' ago.

Miriam adds to our growing Irish contingent (from one to two), brings deep sense of wit and sarcasm, an appetite to call the raw truths over the marketing fluff... and a strong love of Prosecco and Pims... so let's hear more about this curious new addition to HFS:

Welcome, Miriam! Can you share a little about your background and why you have chosen research and strategy as your career path?

Thanks, Phil... delighted to be joining HFS. My background is varied: a hybrid undergraduate degree in business and law at University College Dublin followed by a 2 year systems engineering graduate program that EDS (now DXC) ran.  The breadth of the three disciplines (business, law, IT) and a lot of learning along the way, underpinned a variety of interesting roles in tech and telecoms since.

I'm most interested in the intersection points between siloed areas and always interested in the choices, the "why" and bigger picture. I worked through a series of analyst roles in tech and telecoms (lots of telco billing): business analysis, technical analysis, market analysis - and some consulting, product marketing and strategy roles before becoming an industry analyst.

The vantage point that we as industry analysts enjoy is a tremendous privilege, getting to meet with the top thinkers, visionaries and strategists in our industry and synthesising across these perspectives, in conjunction with data, to form our own view of what makes sense today and, more importantly, going forward.

What are the areas and topics that you’re initially focusing on with your HFS analyst role?

Recently HFS famously established that RPA, as we once defined it, is “dead”, and evolving. The next stepping stone is integrated automation, integrating data flows beyond standalone RPA at the surface to deeper and/or broader integrated automation initiatives encompassing OCR and ML enabled image recognition (intelligent automation). Today, AI is visible as bolt on functionality as its emerging capabilities become enterprise ready. Simultaneously, and this is where I’ll be focusing, large enterprise platforms are embracing automation, integration, analytics and AI reducing drudge work and surfacing insights to decision makers and daily users. There are multiple paths being followed here, there are development initiatives underway in-house, partnerships and acquisitions are prevalent too.

What trends and developments are capturing your attention today in technology and business operations?

The pace of change is extraordinary right now. Irrespective of whether you view it through the lens of Industry 4.0, or as a bigger yielding of old power structures (capitalism) to new ones (sharing economies). Compute, processing, and storage are still getting cheaper and more accessible; knowledge becomes abundant and energy is headed that way too. The two fundamental and incontrovertible truths of this era are:  Marc Andreessens “software is eating the world” and Shosanna Zuboff’s “anything that can be automated will be automated”. If we accept these axioms absolutely, then every smart move that tech vendors make is toward automation. What we’ll see over the coming years is a series of steps that enable the transition from the legacy systems that run the world’s businesses laden with friction and full of gaps to highly automated platforms and interlinking ecosystems. There won’t be a single magic wand or silver bullet, large enterprises will have to manage their journeys step by step with an eye on the longer term. That's not just the easy, short-term quick fixes, and not just cost-cutting either, rather it's better ways of architecting, building, and integrating IT systems so that data flows more smoothly in, through and out of the system to support the customers, employees and partners that interact with the business.

Is the analyst industry much different now than when you were at on the vendor side a few years ago? What is changing in your opinion, Miriam?

I think what’s changed most is the quantity of information that we can all access and the increased sophistication of marketing machines within tech organisations. In the past people needed analysts to provide information that was otherwise scarce. Now, what’s more useful is a succinct viewpoint – less is more. The opinion layer on top of the facts is more crucial than ever. When there is so much information available, it’s trust in the information source that becomes the new differentiator - what vested interests are at play? What messages or narrative is being supported? This is where I feel HFS excels - no stranger to controversy and brave in asking hard questions (even of the hands that feed it!), but in a constructive way.

So, Miriam, what are you working on first for our clients

Looking at integrated automation platforms, I’m especially interested in the acquisitions, partnerships and developments affecting large enterprise software platforms that impact the Triple A Trifecta of automation, AI and analytics. It’s not just the purely technical aspects of these changes that matter, the holistic view extending across people and processes matters too as new business models emerge. The biggest impediment to change is people. So, I’m interested in SAP acquiring Contextor, and Salesforce acquiring Mulesoft, and more recently Tableau and what these acquisitions enable.  I’m also interested in marketplaces that support loosely coupled architectures and building block approaches to piecing together enterprise solutions with smooth integration points.

And, what do you do with your spare time (if you have any...)

I enjoy spending time with my family, we are London based, but make lots of trips to see extended family in Ireland (where I was born and bred) and Canada (my other half’s homeland). Our three children keep us busy; much of our time is spent on the side of rugby pitches, football pitches, gym classes and swimming pools, or trying to find fun (‘cause if you say it’s “fun” often enough…) ways to inject any form of maths into baking, gardening, shameless incentivization schemes and days out. We currently fight a constant battle for attention with Fortnite.I would like to see Epic Games gamify maths education.

Well there you have it... just the latest addition to a (surely unrivaled) analyst team in the world of balancing operations, services and emerging tech.  Welcome, Miriam!

Posted in: Robotic Process AutomationEnterprise Integration PlatformsArtificial Intelligence

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Wipro needs a bold and differentiated strategy to elevate its middling market position post-Premji

June 12, 2019 | Phil FershtJamie SnowdonSaurabh GuptaTapati Bandopadhyay

We all remember when Jack Nicklaus played his last Masters, and when Sir Alex Ferguson managed his last game for Manchester United. These guys were godfathers of their trades, not unlike Azim Premji has been for IT services, the man who oversaw a firm which diversified from diapers and vegetable oil into one of the largest IT services firms in the world. However, when they retired, they left a legacy that enabled many to follow in their footsteps (albeit noone has come close yet). Premji's legacy, which forever is written into the annals of IT services folklore, is still unfinished, which may be a good thing for his successors... there is still a lot of work to do to get Wipro to the place Premji always envisaged. 

The current market situation facing Wipro's leadership

To recap, Wipro’s Executive Chairman, Managing Director and philanthropic champion Azim Premji is retiring by end July. His son and Wipro’s Chief Strategy Officer, Rishad Premji will take over as the new executive chairman and its current CEO Abid Neemuchwala will become the new MD.

Azim Premji’s father founded Wipro in 1945, with Azim taking over in 1966 on his death. Azim led Wipro’s diversification into information technology in 1980. Today it has become one of the leading service providers in the industry and a big force within the India heritage IT service providers (lovingly called the TWITCH – TCS, Wipro, Infosys, Tech Mahindra, Cognizant, and HCL). However, Wipro has lost a bit of its cutting edge in the market. While its operating margins improved to 19.8% given the focus on the quality of revenues but overall revenue growth dropped to 2.8% YoY – the lowest growth rate of all the TWITCH service providers in 2018. It even lost its standing as the third biggest TWITCH supplier (albeit not permanently) last year to HCL.

We’ve assessed Wipro’s competitive positioning across execution, innovation, and customer experience across major markets (see summary below) and while it mostly performs commendably (ranked #5-#10 in most of our evaluations), it misses out on the Top 5 positioning in most areas of our assessment.

Only 3 of the large IT Services firms with revenues higher than US$5B grew at over 10% in calendar 2018: Accenture (14.8%), TCS (10.3%) and HCL (10.2%), this excludes Amazon Web Services. All of these have an excellent service delivery, but the stand out factor is the ability to differentiate and know themselves and their strengths – which means they market services effectively and to the right customers:

 

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We believe that the increased authority to the young and dynamic duo of Rishad and Abid to shape the overall business will be a boon to Wipro. Rishad has shown tremendous energy and passion for the business, especially with his recent development of Wipro Ventures, which is the most strategic innovation initiative for the firm. And Abid is a proven and seasoned leader. HFS continues to be impressed by his astuteness since his TCS days where he built a stellar BPO capability for the firm till just last year, where Abid was instrumental in getting Wipro’s largest ever engagement $1.6 billion multi-year TCV from Alight. 

The Bottom-Line: The “What” is clear, now Wipro need to focus on “why” and “how.” HFS recommends five focus areas for the newly appointed executive chairman Rishad and CEO and MD Abid

Rishad and Abid already have a strong base to drive an aggressive growth and differentiation strategy. Wipro is a respected brand, offers large scale services with 160,000 employees across the globe, and brings capabilities across emerging technologies to its clients. The “What” in terms of its 4 stated big bets (digital, cloud, cybersecurity, and engineering) makes sense but the “Why Wipro” and “How it will help clients” needs better articulation of value and Wipro’s unique point of view. Here are the five areas that Rishad and Abid should focus on:

  1. Competitive differentiation. Wipro needs to stand for something. Its recent financial results say that customers don’t understand what makes it different from all the other IT services firms – this lack of differentiation is not unique to Wipro and applies to several of its Indian-heritage competitors. If it is to thrive rather than survive, this needs to change.
  2. Digital capabilities. Wipro has seemed two-speed since the acquisition of DesignIT. It needs to integrate the whole firm around its digital message - this means building out its offer and making a splash with some strategic M&A and client acquisitions. Success in the digital long term means helping customers change their DNA – not just providing new IT. Wipro’s digital message needs to demonstrate it can help customers find new revenue streams, new business model and drive customer experience as well as harmonizing business silos (or the One Office).
  3. Change management. Digital is about enabling change – so to differentiate itself in the noisy and overcrowded digital space Wipro needs to focus on change management. It needs to demonstrate that it can manage complex change process that penetrates its clients the businesses and drives value beyond just digital adoption. Wipro’s narrative around “zero touch change” and agile cell teams is a good starting point, but it needs to embed change management in all its engagements. Rishad and Abid also have to change the internal culture and bring together all the business units and service lines to reduce internal frictions and improve internal collaboration.
  4. Fresh talent. Injecting fresh blood and energy into the firm's leadership, under the guidance of Abid will be important. Wipro has a credible track record of retraining ground staff as well leveraging the gig economy (courtesy of Topcoder) but needs to aggressively look at revitalizing its talent base, especially near to its clients. Service providers need to be able to draw on a broader range of skills – which means a richer mix of partnerships, on and offshore talent.
  5. Integrated go-to-market. Wipro has a broad suite of capabilities across emerging technologies (Wipro Holmes AI platform, Wipro cloud services, an end-to-end IoT portfolio, and robust blockchain offering) but to differentiate itself it needs to create an integrated go-to-market across all these capabilities that solve real business problems. The strategic focus has to be on what clients want to buy versus the capabilities that it is selling. Co-innovation with its strategic clients, partnership ecosystem, and aggressively leveraging start-ups (through Wipro Ventures) will need to be core components of how it approaches the market. As one of the best application service providers, it is in a good position to help modernize these clients application portfolio as part of an integrated suite of digital capabilities focused on delivering business value.

Rishad and Abid have very large shoes to fill in with Azim Premji’s retirement, but it also represents a golden opportunity for Wipro to scale new heights. Rishad and Abid together bring the energy and a pulse on the changing market dynamics to transform the IT-services behemoth. We wish them and Wipro all the very best!

Posted in: IT Outsourcing / IT ServicesOutsourcing Heros

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When did you earn the right to stop learning new skills and abilities?

June 02, 2019 | Phil FershtOllie O’Donoghue

When you have to listen to literally hundreds of people a day spouting advice about reskilling, unlearning, change management, relearning etc., I am going to respond with “great, so what are you doing yourself to stay ahead of today’s digital environment and increase your value as a superstar worker?”  You may love to pontificate constantly weird definitions of digital transformation on twitter and harp on about today's digital talent needs, but do you truly practice what you preach?

Is it just me, or have we entered an environment where everyone loves to talk about change, but most aren't actually doing anything (themselves) about it?

I mean, if your accountant hadn’t bothered to brush up on the latest tax changes, or your personal trainer didn’t know how to use a Fitbit, you probably would seek to replace those relationships in your life.  So what gives IT professionals the right not to learn Python, or learn how to deploy data management / automation tools?  And what gives business executives the right not to learn how to use non-code analytics tools to help their decision-making, or social media products to help them communicate in the market?  And operations executives the right not to learn low-code automation and AI apps that can help them free up people-hours on work that adds no strategic value to the business?  And who told sales and marketing executives it was fine to ignore really learning the products / services they were selling because all they had to do was to follow a set of pre-defined processes to do their job effectively?

Why have so many of us become so complacent?

It just seems that the majority of workers today just think they need to learn to follow a few processes and that’s all they need to do to command a tasty salary and remain employed for years and years…. so few people actually realize that the whole nature of people value is changing for enterprises – they just love to do things the same old way they have always done them, and simply cannot be expected to learning anything new.  "We just don't have the talent in-house to do that" is the constant whine we hear from enterprises; and "our IT managers are project managers, not consultants" is what we hear from service providers.  Then why don't you train them?  Is our agonized response.  Why does everything have to stay paralyzed in this constant vacuum of sameness

Much depends on the approach our enterprises take to driving change

The biggest problem with enterprise operations today is the simple fact that most firms still run most of their processes exactly the same way as they did decades years ago, with the only “innovation” being models like offshore outsourcing and shared service centers, cloud and digital technologies enabling those same processes to be conducted steadily faster and cheaper.  However, fundamental changes have not been made to intrinsic business processes – most companies still operate with their major functions such as procurement, customer service, marketing, finance, HR and supply chain operating in individual silos, with IT operating as a non-strategic vehicle to maintain the status quo and keep the lights on.

As our Hyperconnected journey illustrates, many industries have now reached a place where they have maximized all their delivery methods for getting processes executed as efficiently and cheaply as possible.  They have tackled the early phases of digital impact by embracing interactive technologies to help them respond to their customer needs as those needs occur, whether electronic or voice.

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In short, most enterprises have been able to keep pace with each other without actually changing the underlying logic of processes.  Simply doing things the same old way has been enough for many, until a competitor comes along with an entirely unique way of servicing your customers to shrink your market share or take you out of the game completely. We are already in the OneOffice phase where wrapping the needs of our customers around our front-to-back office business processes is critical.  And you can't do that simply by adding more software and bot lisences to stitch together wonky systems and processes - you actually have to redesign how processes work so you can outthink your competitors.  Simply reacting to customer demand won't work these days, you have to be able to anticipate and think ahead, try to predict how their needs will change even before they do.  This means you need systems in place to mine information up and down your supply chains, B2B networks and understand today's geo-political environments - and you need smart people who can think creatively to drive these systems for you.

So why can’t you get away with avoiding learning new ways of doing your job?  Can’t you just find another legacy firm who’s desperate enough to hire you?

In many cases, the answer is still “yes”, especially while the economy is good.  You can still serve up some BS in interview and convince another firm that you are still special, that a few utterances of “digital” and “AI” may be enough to convince them you are of the “new age”.  Yes, you can spin your 2 hour online Blue Prism course learnings to convince them you can take your new firm on a special journey.   

But if you are looking closely at your LI network these days, you will notice that many people who are taking on these “new” jobs aren’t lasting very long in them.  We are living in an age where you can’t just get away with faking your skills and relying on a wafer-thin knowledge level... you need to really learn how to rewire business processes to compete with the best in your industry, and do that you have to drive change initiatives.  This means you need to make yourself emotionally intelligent and understand how emerging low-code/no-code technology tools can help you make these underlying changes to age-old processes.

Time to influence strategy: A Lack of resources we can handle, but a lack of vision and being tied down with short-termist strategies are much harder to push passed

It’s not much of a consolation to know it’s not all your fault that your professional value is in decline. A recent study conducted by the World Economic Forum, presented an unconvincing picture of barriers to change. The research is sound – with over 100 major firms providing insights within each major industry sector – but the excuses provided by executives for hitting roadblocks comes across as a little suspect. In the first graph, we can see that old chestnut of resource constraints rears its head as usual. Let’s be honest, we can’t keep whimpering about funds and resources when it comes to change efforts – executives always manage to find money when something new and shiny crops up (lock at the clamour for blockchain POCs a few years ago, and the more recent rabid adoption of AI without really knowing what it is). And if executives honestly think their biggest barrier to change is that they can’t buy their way through it, that tells us everything about their relative maturity in a rapidly changing business environment.

In reality, it’s this lack of maturity and understanding in senior management teams that’s the real barrier – and it’s one highlighted by 51% of leaders. Leaders simply don’t know where the change is coming from, and what direction they need to shepherd their teams. Package that with the likelihood that at root of their enterprise’s strategy is sits cultural short-termism – driven by short-tenured C-level and increasingly active shareholders looking to force returns in a low-interest economy. In a business environment like this, you simply can’t reply on your leadership team to have the answers – and provide you with the direction you need to keep adding value and collecting that pay cheque. So, you must take on that responsibility yourself – the future of the digital employee is one of perpetual learning and evolution.

All we can tell you, is in certain professions and industries, you’ll need to rouse yourselves from your professional slumber much sooner than others. In the graph below, we can see major crunch points in ICT and Financial services, for example, where a combination of resource constraints and an all-round pitiful understanding of disruption from executives mean your only professional direction can come from within.

The Bottom-Line: We have to get out of these silos and learn how to drive change initiatives and develop cross-functional skills

Let’s face it, change is coming, and it will keep coming. And we can’t rely on anyone but ourselves to find the right balance of skills and experience to keep adding value. We are lucky to live at a time where we have a multitude of established and emerging change agents at our disposal: global sourcing, Design Thinking, Robotic Transformation Software, AI, Analytics, IoT, blockchain among others. But, unfortunately, most of the discussions in the market end up becoming a comparative discussion versus an integrative discussion – man versus machine, offshore versus automation, RPA versus AI, consulting versus execution, and so on. These change agents must work together rather than operate in silos to solve real business problems.  

In Part II of this talent discussion, we will drill into the WEF skills data to align this with actionable steps we can all take to get us back on a cycle of ongoing learning and development:

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Posted in: Digital OneOfficeRobotic Process AutomationEnterprise Integration Platforms

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The Life of Brian: Prettying up a baby that's got a bit ugly

May 11, 2019 | Phil FershtJamie SnowdonOllie O’Donoghue

What has happened to the Indian-heritage IT service provider that stoked fear into every Accenture client partner?  “They think like we do” was the declaration one of Accenture’s leaders made at an analyst briefing in 2016.  Well, the slide from grace has been alarming, leading to the appointment of a new leader to stem the bleeding. 

However, when the problems cut this deep, you can’t just apply lipstick to the pig, you need to reconstruct the whole farm, or you can quickly find yourself in the zombie services category alongside the likes of Conduent and DXC, where finding any sort of direction and impetus would be a major accomplishment.

Yes, it could really get this bad, as Cognizant has posted its slowest revenue growth and worst dip in profit margins. Ever. A mere 5% annual revenue growth, when in its heyday it was posting well over 40% (and slipping below double digits was unthinkable until last year). Yes, declining revenue growth is one thing, but declining profit margins is when the panic button gets pressed.

Frank should have left when Elliott came along to poison the well

It’s clear to see why Francisco “Frank” De Souza, the poster boy CEO of the emerging power of the Indian IT Services industry, jumped ship (or more accurately was made to walk the plank a burnt out husk due to the unenviable pressure Elliott Management placed him under to keep the gravy train on the tracks and kick back billions to shareholders.)  If anything, Frank should have considered making a move in 2017 as Elliott started squeezing Cognizant’s margins at a time is needed to keep pace with Accenture’s aggressive digital investments.  He’d grown the firm to over $15bn by then and could have exited with a legacy no one could rival in the tech business. 

And in his place comes IT Services newbie Brian Humphries – well we’re sorry to say this Brian, but the baby you just adopted has got a bit ugly, and is screaming for attention. Let’s just look at the numbers– now we’re going to be generous and forgive Cognizant’s dip in margin, a likely result of a reclassifying activity to meet fresh regulations. But the sinking revenue growth is much harder to look past:

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In 2012, Cognizant invented the Digital concept before everyone else jumped on it.  They were that cool...

In a punishingly competitive market, it looks like Cognizant has started to lose traction. Back in the good old days, the firm could do little wrong by challenging Accenture’s strategy – driving a hard-digital bargain and bringing in design consultancies along with their pony-tailed nose-ringed jean wearing creatives.  In fact, Cognizant can genuinely lay claim to “inventing” digital with its 2012 “SMAC” stack philosophy, which was swiftly followed by Accenture’s 2013 re-branding the SMAC stack as “digital”.

 

But the market has moved on – away from automation point solutions and funky apps to fend off uberized rivals. It’s now about integrating capabilities and meeting clients with legitimate flexibility, a real willingness to find out what they want to buy, rather than keep pestering them

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Posted in: IT Outsourcing / IT Services

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15 initiatives UiPath and its competitors must take to prove they are serious about transformation

May 07, 2019 | Phil FershtSaurabh GuptaElena Christopher

We've been pretty vocal regarding the unfocused direction the industry which has called itself "RPA" has taken, and the obsession some of the firms are having with their self-declared valuations. So let's change the story from how much these firms actually believe they are worth to where they need to invest their funding to show they are serious about being part of a transformative industry.  

Don't get us wrong, in software world, it's common practice to get attention that your company is valuable and investors are falling over themselves to hurl money at it - this is common practice in markets that are very focused on selling to IT executives.  And we've seen far more ludicrous "valuations" than the 35x earnings ones the robotic software firms are claiming (just look at Blockchain and AI). 

So why aren't we seeing firms like UiPath shift the focus to the investments and changes they intend to make to propel a truly transformational value proposition with their products?  Especially where the prime target for growth is the business executive who is far less accustomed to a world where his/her suppliers are obsessed with how much they're worth, as opposed to how they can help you take your business through painful change.

It's critical now to shift the vision to reality of making these bot dreams come true

UiPath, more than its competitors, has always pushed the vision of democratized IT. Literally, RPA or a “bot for every worker” and not just a sanctioned crew of IT professionals (or even a sanctioned crew of enterprises) is a brilliant marketing gimmick. However, with UiPath’s hypergrowth and rapid-fire funding, the time has come to connect the dots between a folksy vision and how UiPath can truly enable the transformation of work.

As HFS recently articulated in our blog “RPA is dead. Long live integrated automation platforms”, RPA is being used to automate tasks and prop up legacy processes. Broad business transformation is decidedly lacking and arguably cannot be achieved without supporting tools like artificial intelligence and analytics as well as digital change management to address how change is driven, managed and perpetuated. The one perhaps notable shift in the change winds is the on the democratization front – RPA is being bought and consumed primarily by business units not central IT. However, as enterprises push towards integrated automation, with a higher order of technical complexity of tools and data challenges, IT once again becomes essential. Integrated automation may drive the ultimate democratization – the balance between IT and business operations.

Despite its growth and funding, UiPath is a very long way from achieving this vision

Our recent survey work with "power-users" of robotic software products (what we were calling RPA and RDA) clearly highlights the top three strengths and challenges of the UiPath solution (with sampled comments):

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The Bottom-line: To democratize technology and drive business transformation beyond task-oriented robotics activities, here are 15 key initiatives UiPath (or its competitors) must take on:

1. Must bring IT and business visions together as one integrated approach. Education must focus for technical and non-technical resources – into communities and educational institutions globally

2. Must shift focus to integrated automation – expansion of functionality beyond RPA/RDA to AI and smart analytics. Badging everything as RPA is definitionally incorrect and gives clients no roadmap to follow to advance beyond basic repetitive task, desktop and document automation

3. Must drive digital change management – help enterprises grapple with transformation with its services investments.  Relying purely on Big 4 advisors and service providers for change management will cost clients a fortune and drive many away.  This is a key area UiPath needs to take the lead on.

4. Must include unattended and attended processes (not just focus on attended)

5. The developer ecosystem must be expanded to extend functionality, libraries etc.  Commit to specific goals for how much of the UiPath codebase will be available on Github to build an industry solution skewed against technology-vendor lock-in

6. Demonstrate commitment to building a stronger QA team, and fully transparent local customer support and customer success teams to drive customers (as per the number 1 challenge outlined above)

7. Commit specific sums to meaningful partner relationships with leading service providers and consultants, including opensource partner technical support systems, events, education resources and people to help the industry grow

8. Commit to funding UiPath local academies (building on their online academies) especially in blighted neighborhoods near its biggest offices to bring young coders and potential customers together with UiPath employees for on the job real-world training

9. Must get focused on core business processes by industry, such as supply chain in manufacturing, core banking in BFS, underwriting in insurance, billing in telecom etc

10. Revisit its client engagement model to ensure it is best serving its customer base – its rapid growth in salespeople may expand capacity, but if sales lacks vision, then clients may not be well served (as per comments in our recent survey above)

11. Commits to drawing down technical debt (Every SW company has it, some more than others.  As illustrated above, our customer surveys point out which elements of the UiPath platform and solution are known to need immediate re-engineering and investment

12. Identify and subsidize hands-on automation industry experts and influencers whose independent thinking deserves funding and not just focus on checking boxes with legacy analysts.  The automation industry is being impacted by many unique stakeholders.

13. Kick off an enduring and sustainable initiative modeled after Salesforce's 1-1-1 program (of which the Notre Dame announcement by Daniel Dines was a great a start) 

14. Invest in cross-technology customer events that will expand overall value creation, for example partnering more aggressively with the likes of Salesforce, Microsoft, Amazon, Google etc.

15. Spearhead an Automation Industry Manifesto that shows a clear path for enterprise clients to progress from basic robotic task automation through to integrated automation and then to achieving genuine AI value

Posted in: Robotic Process AutomationEnterprise Integration PlatformsRobotic Transformation Software

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RPA is dead. Long live Integrated Automation Platforms

May 02, 2019 | Phil FershtSaurabh GuptaElena Christopher

The biggest problem with enterprise operations today is the simple fact that most firms still run most of their processes exactly the same way as they did 20/30/40 years ago, with the only “innovation” being models like offshore outsourcing and shared service centers, cloud and digital technologies enabling those same processes to be conducted steadily faster and cheaper.  However, fundamental changes have not been made to intrinsic business processes – most companies still operate with their major functions such as customer service, marketing, finance, HR and supply chain operating in individual silos, with IT operating as a non-strategic vehicle to maintain the status quo and keep the lights on.

Enter the concept of Robotic Process Automation (RPA), introduced to market in 2012 via a case study written by HFS and supported by Blue Prism, which promised to remove manual workarounds and headcount overload from inefficient business processes and BPO services.  However, despite offering clear technical capability and the real advantage of breathing life into legacy systems and processes, RPA hasn’t inspired enterprises to rewire their business processes – it’s really just helped them move data around the company faster and require less manual intervention.  In addition, most “RPA” engagements that have been signed are not for unattended processes, instead, most are attended robotic desktop automation (RDA) deployments. Attended RDA requires a loop of human and bot interplay to complete tasks.  These engagements are not the pure form of RPA that we invented – they are a motley crew of scripts and macros applying add band-aids to messy desktop applications and processes to maintain the same old way of doing things. Sure, there is usually a reduction in labor needs - but in fractional increments - which is rarely enough to justify entire headcount elimination. Crucially, the current plethora of “RPA” engagements have not resulted in any actual “transformation”. 

The major issue with RPA today is that it is automating piecemeal tasks.  It needs to be part of an integrated strategy

Real research data of close to 600 major global enterprise shows just how not-ready we are to declare any sort of robo-victory. In our recent survey of 590 G2000 leaders, only 13% of RPA adopters are currently scaled up and industrialized. Forget about leveraging RPA to curate end-to-end processes, most RPA adopters are still tinkering with small-scale projects and piecemeal tasks that comprise elements of broken processes.  Most firms are not even close to finding any sort enterprise-scale automation adoption.

RPA provides a terrific band-aid to fix current solutions; it helps to extend the life of legacy. But does not provide long-term answers. The handful of enterprises that have successfully scaled RPA across their organizations have three things in common:

  1. A unifying purpose for adopting automation,
  2. A broad and ongoing change management program to enable the shift to a hybrid workforce, and
  3. A Triple-A Trifecta toolkit that leverages RPA, various permutations of AI, and smart analytics in an integrated fashion.

So HFS is calling it as we see it. RPA is dead! Long live Integrated Automation. And by integrated we mean integrated technology, but also, and all importantly, we mean integration across people, process and technology supported by focused objectives and change management. Integrated Automation is how you transform your business and achieve an end-to-end Digital OneOffice.

Integrated Automation is not about RPA or AI or Analytics. It is RPA and AI and Analytics.

Business problems are not entirely solved by one stand-alone technology but by a combination of technologies. While only 11% of the enterprises are currently integrating solutions across the Triple-A Trifecta, there is emerging alignment. The supplier landscape is also starting to realize that clients will buy integrated solutions (see Exhibit 1) and examples below:

  • RPA products are seeking to underpin AI and data management capabilities. WorkFusion was arguably the first to combine RPA and AI with its “smart process automation” capability. Other subsequent examples include Automation Anywhere with its ML-infused IQBot, Blue Prism announced its AI Lab to develop proprietary RPA-ready AI elements, and AntWorks embeds computer vision and fractal science in its stack to enable the use of unstructured data. What these products having in common is their use of robotics to transform tasks, desktop apps and pieces of processes.  Hence, we need to refer to these "RPA" products as Robotic Transformation Software products which is a far more appropriate description.
  • AI and analytics focused products are starting to embrace Robotic Transformation Software, instead of undermining it. IPsoft launched 1RPA with a cognitive user interface. Xceptor’s data-led business rules and AI-based approach to automation leverage RPA to help extend its functionality. Arago is starting to go to the market where it can help orchestrate RPA capabilities within its platform.  
  • Enterprise software products are integrating the triple-A trifecta capabilities in their products. SAP Leonardo aspires to harness the emerging technologies across ML, analytics, Big Data, IoT, and blockchain in combination. It also acquired RPA software company Contextor (late 2018) similar to Pega when it acquired OpenSpan in 2016 adding RPA functionality to its customer engagement capabilities.
  • System Integrators are orchestrating the Triple-A Trifecta across multiple curated products. This typically combines some of their IP and service capabilities. Accenture launched SynOps in early 2019, offering a “human-machine operating engine.” Genpact’s Cora, a modular platform of digital technologies, similar to HFS’ Triple-A Trifecta, is designed to help enterprises scale digital transformation. IBM’s Automation Platform includes composable automation capabilities that orchestrate responses and alerts between Watson and Robotic Transformation Software solutions. KPMG’s IGNITE brings RPA, AI and analytics tools together with KPMG IP and services.

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Integrated Automation is not just about Technology. It is Technology + People + Process.

The real point of Integrated Automation is actually to move beyond the tools. Yes, the Triple-A Trifecta offers more functionality, but it still does not work unless you change your business, your people, your processes.  Integrated automation is the effective melding of technology,

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Posted in: Cognitive ComputingRobotic Process AutomationIntelligent Automation

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Why is UiPath obsessed with this "Funding Arms-Race" when it should be focused on scaling its clients?

May 01, 2019 | Phil Fersht

 At the HFS Summit this week, we asked 200 enterprises if they cared about automation software vendors bragging about self-inflated valuations.  Not a single person did.

The robotic transformation software industry has three problems right now:

i) Defining itself;

ii) Scaling Bots and being Transformational;

iii) Obsessing with this "Funding Arms-Race"... so let's dig in

1) Defining itself correctly... "RPA" is not correct. Most of "RPA" in its current form is incorrectly defined, and this market is dying if it doesn't have a radical overhaul. Only a small portion of "RPA" it is actually “process automation” - most of it is desktop apps, screen scrapes and doc management. RPA in current form is incorrectly labeled and the way forward is to integrate these tools. When we introduced the term RPA in 2012 (with Blue Prism) the focus was on unassisted automation, it was self-triggered (bots pass tasks to humans) and centered on increased process efficiency. Only a small portion of "RPA" today is actually “process automation". Most “RPA” engagements today are not for unattended processes - they are attended desktop automation deployments, a loop of human and bot interplay to complete tasks (not processes). These engagements are not the pure form of RPA that we envisioned back in 2012 – they are a motley crew of scripts and macros applying band-aids to messy desktop applications and processes to maintain the same old way of doing things. We need to refer to these "RPA" products as Robotic Transformation Software products which is a far more appropriate description. Now if these firms cannot partner with their clients and the services ecosystem to support transformative automation as part of an integrated automation platform, this market balloon will burst as dramatically as it got inflated...

2) Scaling bots and finding a transformation story versus a "fixing legacy" one.  The more these robo tools can be used by clients - not only to do things better and more automatically - but also to help re-wire their operations, then we have lift-off to something fr more strategic than merely getting crappy tasks working better and moving data round the company better. If you just work on steady-state fixes without focusing on the real changes needed, we will see many firms stuck in legacy purgatory, unable to switch out bots in the future. Sure, there is usually a reduction in labor needs - but in fractional increments - which is rarely enough to justify entire headcount elimination. Crucially, the current plethora of “RPA” engagements has not resulted in any actual “transformation”. 

As our global study of 590 leaders of Intelligent Automation initiatives, supported by KPMG reveals, barely more than one-in-ten enterprises has reached a place of industrialized scale with RPA - and the word from so many clients is loud and clear that they need help:

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This struggle to get to a point beyond pilot exercises and project-based experimentation could prove to be a serious point of failure for the whole industry.  There needs to be a much stronger melding of enterprises with implementation and consulting capability to fix these issues.  Just like we realized that throwing bodies at a problem does not solve the problem, we need to recognize that merely hurling software at business process will not drive transformation. The real genius lies in understanding what to use when and how. The software also needs to come with support and services. Otherwise, we’re just selling more snake oil and magic. 

3. End this "Funding Arms-Race" obsession nonsense.  Now.  While Automation Anywhere was busy with its Imagine conference in London, on 20th March, "news" about UiPath's self-proclaimed valuation, based on its much-discussed future Series D funding round, was conveniently released the day before, claiming the $3 billion touted last year was now a whopping $7 billion.  It was also widely rumored that UiPath was pushing to announce their Series D during Automation Anywhere's New York event last week.  Here are some snippets from the Business Insider news publication, which was also picked up by Tech Crunch:

So what, pray tell, is the point in all this?

UiPath is putting the whole automation industry under unnecessary pressure. If the UiPath Series D round has yet to be signed, these antics could be placing the negotiating power into the hands of the investors, who can clearly see UiPath's management is obsessed with embarrassing its hated rivals as opposed to focusing on the first 2 items discussed above.  Fortunately for UiPath, they have officially secured Series D this week, but these antics and obsession with fictitious valuations do the industry no favors and put incredible pressures on the automation software companies and enterprise to deliver genuine scale and results on months when the reality is this integrated automation journey will take years.

UiPath is creating the perception that this whole industry is after a short-term cash bonanza.  Our automation industry cares about making these solutions work, and this ridiculous noise about inflated funding isn't adding any value anywhere - this valuation noise only makes most people think these software firms are obsessed with a quick IPO or a quick sale, as opposed to a true long-term journey that will help enterprises enter the hyper-connected age.  I can guarantee you all - right now - that none of today's enterprise operations leaders are basing their robotic software selections off these crazy media-fuelled "valuations".  It is also an entirely separate debate about why robotic software firms with revenues under $200m can claim 35x valuations... stay tuned for that.

I can only hope UiPath CEO Daniel Dines' classy announcement (in Paris) to contribute 1m Euros towards the reconstruction of Notre Dame is an about-turn in this behavior.

Posted in: Intelligent AutomationRobotic Transformation Software

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Forget Brexit...Immerse yourself into the Hyper-Connected Economy at the HFS European Summit

April 24, 2019 | Phil Fersht

 

Date: April 30th, 2019

Venue: Chartered Accountants Hall, 1 Moorgate Place, London

Topic: The Hyper-Connected Economy... How do we immerse ourselves in it?

Key Message:  Until we get Brexit sorted, what else should we do to kill the time?

Info on the superstar line-up and how to apply: click here

 

Posted in: Digital OneOfficeSourcing Change ManagementEnterprise Integration Platforms

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RPA is still dead. We talked, you all listened... now smell the integrated automation roses

April 21, 2019 | Phil Fersht

Well, you can't beat a good headline, and you really can't beat it when 50,000 people read the "RPA is dead. Long live Integrated Automation Platforms" blog article in just 48 hours, spending a whopping average of 6.5 minutes actually reading it. Yes, most of you made it further than the headline! 

For those of you familiar with google analytics, I thought I would take the unique step of actually sharing some readership stats from our blog this week, just to show you how the extent of impact our plea to the industry is having to "wake up to enterprise integration and stop festering in obscure RPA":

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So where do we all go from here?

RPA as a term just doesn't make sense anymore, but these terrific brands will thrive as Robotic Transformation Software. We re-badge RPA as Robotic Transformation Software (RTS) because that’s what it is (or what aspires to be). Only a small portion of "RPA" is actually “process automation”... most of it is desktop apps, screen scrapes and document management fixes.  Most “RPA” engagements that have been signed are not for unattended processes, instead, most are attended robotic desktop automation (RDA) deployments. Attended RDA requires a loop of human and bot interplay to complete tasks. These engagements are not the pure form of RPA that we invented back in 2012 – they are a motley crew of scripts and macros applying band-aids to messy desktop applications and processes to maintain the same old way of doing things.  

Integrated Automation Platforms are the Holy Automation Grail (HAG*) if we can make it there.  Automation ultimately needs to support transformation, not legacy. The more these RTS tools can be leveraged by clients - not only to do things better and more automatically - but also to help them re-wire their operations to achieve their outcomes, then we have lift-off.  These tools also need to make enterprises more agile - if you just work on steady-state fixes without focusing on how to make real changes down the road, we will see many enterprises stuck in legacy purgatory, unable to switch out bots in the future. 

*HAG is not an official acronym, I just made it up.  Peace out robo-warriors ✌

Posted in: Robotic Process AutomationEnterprise Integration PlatformsArtificial Intelligence

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Fishing for digital dominance... meet Brian

April 11, 2019 | Phil FershtMelissa O'Brien

Brian Whipple, CEO Accenture Interactive, describes the evolution of the world’s premier experience agency

The term “digital” has become overused, diluted and - in many ways - rendered useless.  After all in 2019, what ISN’T digital, and what’s the point in distinguishing? We have instead moved to a world that’s comprised of integrated and immersive experiences – as consumers, or as patients, as employees, etc – experiences that shape our buying habits and our quality of life. The recent announcement of Accenture's acquisition Droga5 has raised the stakes of creating immersive customer experiences to a whole new level (read our POV here). 

Companies that are really seeking to align themselves to experiences need to break down their silos and better understand what their customers want... and really execute on that.  We caught up with Brian Whipple, Accenture Interactive’s CEO (and recent winner of an HFS Disruptive Award), to learn how his firm’s massive acquisition appetite has helped build a company embracing an entirely new philosophy, helping its clients align to customer needs in the post-digital world.  Accenture is integrating technology, design, commerce and content to help clients develop “living” experiences that meet customer needs today and are ready to evolve in the future – requiring a wide breadth of talent, expertise and even cultures within cultures to deliver on those experiences.  The bits and pieces that have come together at Accenture Interactive over the last several years, most recently with Droga5, are all adding up to Accenture’s mission to “create the greatest customer experiences on the planet for our clients.”

Phil Fersht, CEO and Chief Analyst, HFS Research: Can you talk to us a little bit about how digital came to be, and how Accenture Interactive came in to the space? Because you were really the first of the service providers to coin the "Digital" phrase, and really put it together, industrialize it, etc. Could you give us a brief history about how it came to be, how it got started, and what the original philosophy was, and how that may have changed in the last five or six years?

Brian: Sure. There are three distinct phases to date, for Accenture Interactive. The original philosophy was that the world needed digital diagnostic tools that work in the arena of digital marketing; things like online campaign optimizers, A/B testing it, “I’m going to present offer A, with this creative treatment online, and I’ll test it against offer B,” or, “I’ll move it on a placement

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Posted in: Digital TransformationDigital OneOfficeCustomer Experience Management

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The mid-cap service providers are killing it and LTI, Virtusa and Mphasis are setting the pace

April 09, 2019 | Phil FershtJamie SnowdonMartin GabrielSam Duncan

These are unique times for IT services - at the big-ticket end of the spectrum you have the mega-scale and competitive-cost propositions of the tier 1s vying for greater wallet share within their enterprise clients, while at the other, we have specific technical needs that warrant a lot of close attention that grabs the focus of the "mid-caps", which are much more flexible and can operate at smaller scale, while turning an attractive profit. 

The mid-caps are catering to the "build" needs of enterprises where the Tier 1s often struggle to deliver top talent

I recall just a couple of years ago how many of the big boys arrogantly called time on the smaller providers, but the exact opposite is transpiring; many clients are less brand obsessed as they once were and are more focused on accessing the skills they need with the attention they deserve.  Why settle for a B- team, when you can get a B+ team that's going to go the extra mile and work with you to figure out how to deliver complex requirements?  And the numbers, simply, do not lie:

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 All these providers, with the exception of Luxoft, grew their employee base and 7 out of the leading 10 grew revenues by double-digits 2017-2018:

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The mid-caps can rely on dynamic personalities to win deals

Remember the good ol' hyper-growth days of IT services where the likes of Chandra (TCS), Frank (Cognizant), Nandan (Infosys) and Shiv (HCL) would fly around the world to close deals? Well, those days are long-gone as the top tier providers are simply too large and clients know they can't just pick up the phone to scream at the CEO anymore.

However, they can still do that with most of these mid-caps. We conveniently forget that services is still largely about people and that personal touch from the top is still what most clients really want. One such eye-catching success story has been that of Mphasis, where the impact of CEO Nitin Rakesh (read the interview here) has been nothing short of remarkable:

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Bottom-Line: The success of the mid-caps was not in the script... new rules of services are being written

In the last few years, Capgemini acquired IGATE and Atos acquired Syntel. In both cases, the company being acquired was the leading mid-cap on the market, and both provided some crucial resources for European-centric service providers lacking strong Indian delivery capability.  However, what transpired since has been the door opening for the next tranche to step up up - notably LTI, Virtusa and Mphasis - all of whom have blown past $1billion. While LTI and Mindtree are embroiled in a less-than-friendly merger and Luxoft has already been bolted into the DXC empire, it would be of little surprise if any of the successful ones in this list are snapped up in the coming months as enterprises grapple with their needs for close attention to their creaking IT infrastructures and the dire need to develop agile capabilities, take better advantage of automation and AI tools... and find more sophisticated help to sort out their cloud messes.  And as the latest ones are picked off, it's simply the time for the next wave to step into the void... firms like Zensar, NIIT and Hexaware are routinely discussed these days as strong providers in their own right, and are also potentially attractive acquisition targets, provided the fit is right(despite decades of heritage).  

These are the new rules of the services game... because the simple fact is that there are no rules and we're all writing new ones as the need for rapid, personalized IT salvation becomes more and more a critical part of the C-Suite agenda.

Posted in: IT Outsourcing / IT ServicesIT InfrastructureM&A

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Quantum set to destroy blockchain by 2021

April 01, 2019 | Phil FershtJamie SnowdonOllie O’Donoghue

For all you blockchain aficionados, you'd better get quantum-savvy asap, or you'll find yourself having to re-skill yourself to do something relevant

This article will discuss some aspects of quantum computing, but - don't worry - we're not going to detail out all of the different uses in one initial education. It’s not going to describe the workings of quantum and we shall avoid using words like qubits as much as possible, we won’t mention quantum supremacy or the theory of quantum entanglement. If you want to know about these things, buy an undergraduate quantum physics textbook and then explore a decent quantum computing book like “Quantum Computing: A Gentle Introduction” by Eleanor Rieffel and Wolfgang Polak. Which we are lead to believe is only gentle to those with a good undergraduate understanding of maths and physics. Although in a review, Physics Today described it as a masterpiece.  But for you blockchain followers, we're sure you can quickly redefine your talktrack to wax lyrical about Quantum for your next Ted Talk.

The difference between quantum and traditional computing is at an eye-wateringly fundamental level. And this requires the knowledge we mention above to have a fighting chance to understand what it is. But is something every business leader needs to at least know about, even if it is just to be able to ignore with confidence. This is because quantum computing is potentially a disruptor with as big an impact as digital computing. And it is not an exaggeration that it can be used to simulate the very fabric of the universe.

The development of a practical quantum computer could have dire consequences for traditional encryption

However, the question still remains: Is practical quantum computing still just a theory, or an impractical experiment with any stable use decades away? Or is it potentially just around the corner poised to disrupt the very core of encryption technologies? Particularly given the (not passing) resemblance to other over-hyped transformative technologies like nuclear fusion and room temperature superconductors. All dreamt up in the golden age after the second world war and without a tangible end-point, with the seemingly constant promise of a miraculous breakthrough in spite of massive investment. Which seems particularly relevant given that current quantum computers need superconductors, and the insane supercooling that currently goes with them, to operate. Making them, to many, expensive, impractical flights of fancy; fuelled by journalist research hyperbole.

So, with that said, is that all you need to know? Your job is just to laugh in the face of any minion that utters the phrase “maybe we should invest in some quantum?” Unfortunately, it is not that simple. The trouble is no one really knows the actual timeframe, even John Preskill, the Richard P. Feynman Professor of Theoretical Physics at CalTech, can’t give you a firm time-frame. With predictions ranging from single to multiple decades and the current wave of “noisy” quantum experiments unlikely to have much practical use. However, this uncertainty needs to be weighed against the serious risk. The development of a practical or at least partially practical quantum computer could have dire consequences for traditional encryption.

The first algorithm set to run using a quantum computer could have seismic, rapid implications

Part of the excitement around the prospect of Quantum computing is the first real application – the first algorithm set to run using a quantum computer could solve the mathematical factoring equation very quickly. This can be used to break existing methods of encryption like RSA and ECC rapidly. So any organizations that use encryption technology need to understand that there is a potential weakness in current systems, which will need to be replaced or strengthened when practical quantum is available.

And recent experiments from Google and IBM have started to erode confidence in the long term predictions and have started to bring forward the prediction from decades to years. With both these firms recent experiments showing that quantum is starting to conform to Moores law. Which, if true, means we will have Crypto breaking quantum in 2 years rather than 20.

 As quickly as 2021, HFS researchers believe we could see a quantum computer capable of breaking RSA encryption of 256 Bits – which would have serious implications for blockchain, given this is the level of encryption currently used. According to HFS academy analyst Duncan Matthews-Moore, "If we don't get a handle on the potential speed of quantum soon, we could see the billions of dollars that have gone into blockchain become as quickly wasted as the vast sums Brexit is costing the UK economy."

Bottom Line – Quantum is the one to watch, particularly if you have any ambitions around blockchain.

Forget RPA, forget AI, forget cloud, forget disruptive mortgage processing - and especially forget blockchain.  Because if quantum can delivery real algos, everything tech that happened before is going to be disrupted like Betamax, like CB radio, like Sonic the Hedgehog.

And of course... this was an:

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Posted in: Digital TransformationBlockchain

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Will Infosys revitalize the mortgage processing market with ABN Amro’s Stater, or is this merely sweating a commodity asset?

March 30, 2019 | Phil FershtReetika FlemingSaurabh GuptaElena Christopher

Infosys has just announced a joint venture with ABN Amro for mortgage administration services, where it will acquire a 75% stake in Stater N.V., a wholly owned subsidiary of ABN AMRO Bank N.V., that offers mortgage services across the value chain including origination, servicing and collections. The transaction is valued at $143.53 million and is Salil Parekh's second acquisitive move in Europe since his appointment as CEO a year ago. Clearly, bolstering its European presence is a big deal for INFY in 2019, gaining more "zero distance" impact with European clients, adding more innovation centers, and strengthening its local footprint and brand across Europe. 

Has Infosys finally gone all "sensible" on us?

Mortgage processing is one of the most commodotized 3rd party banking offerings, where services are heavily outsourced to offshore locations, the technology platforms are mature and robust, with a lot of focus on eliminating manual processes over the last 5-10 years.  In addition, all the major banks have been signed up. So is this the new Infosys?  Making moves

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Posted in: Business Process Outsourcing (BPO)Financial Services Sourcing StrategiesM&A

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Re-platforming the Hyperconnected Enterprise: AI must be led by business operators, not IT traditionalists

March 23, 2019 | Phil FershtOllie O’DonoghueTapati Bandopadhyay

If I have to listen to another technologist promoting “AI as a key component of the CIO’s agenda”, I am going to start getting a little irked… AI is not another app that can be installed and rolled out like a Workday, SAP or a ServiceNow.  I even had to listen to an IT executive asking me whether he should “leave AI in the hands of SAP as part of their S4 upgrade”.  Not only that, I noticed a well-known analyst firm promoting a webcast last week advising “CIOs how to rollout RPA”.

Re-platforming the enterprise is all about crafting the anticipatory organization

The whole purpose of AI in the enterprise is to have business operations running as autonomously and intelligently as possible, which means we need to build enabling IT infrastructure that supports the business process logic and design.  People are talking about “re-platforming the enterprise”… this is really about redesigning IT to support the business needs, to help the business respond to customer needs as soon they occur, and have the intelligence to anticipate the needs of their customers before its competitors can.  

Enterprises need to be as hyperconnected and as autonomous as possible within their business environments if they want to pinpoint where disruption is coming from, where to disrupt and how to keep reinventing themselves in an unforgiving world when we no longer have time to rest on our laurels:

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The problem for IT is that AI doesn’t come packaged in a nice box with an instruction guide

I’m sorry to be mildly offensive here, but AI and automation are only effective when they are designed to solve process and business problems, not check another box on the CIO’s resume. While it is important to keep the IT team in the communication loop so that it is ready to provide the right infrastructure and technology stacks required for operationalizing AI solutions, the steering wheel of any business application of AI must be in the hands of the businesses. Smart businesses  know their key pain areas and can identify the most relevant and feasible business cases. They own the data, they know the context, and how a process should run when it is augmented with appropriate AI techniques.  

For many firms, the day they implemented their first ERP was akin to pouring cement into their enterprise

The reality is the ERP system of the last 3 decades is no longer the system of record for ambitious, hyperconnected enterprises. It is a rigid suite of standard processes that keep when wheels on a legacy operation.  The emerging system of record is the data lake itself, when the business leaders have the ability to extract the data they need to make the right decisions, or have systems that can start to help make intelligent decisions for them.

My colleague, Tapati, has been doing some terrific work that looks at the interplay between business and IT with these emerging AI-driven environments and points to 10 prescriptive activities business leaders and IT leaders need to agree on, and put into effect, if they can genuinely develop AI capability that takes them into this hyperconnected state:

The 10 AI activities the business teams must lead to ensure AI success 

  1. Prioritize use cases from AI technology availability. The business team must prioritize AI business use cases from the initially identified list of potential AI application opportunities. The team must demonstrate its process knowledge and desired end-state scenario to help the IT team to ensure effective project coordination and outcome-setting. Using external consultants at this phase can be very effective to ensure the best business/technology fit.
  2. Develop the AI Business case: The most critical step, where the business team must set initial benchmarks, define pre- and post-process improvement metrics, and estimate target benchmarks.
  3. AI feasibility analysis and specification development: Business teams must solicit help from IT teams for their expertise with items such as technical feasibility analysis, infrastructure requirement specifications, and technology stack selection. Other areas are technology cost estimation, deployment, and production release, 
  4. AI Technology cost estimation: Developing estimates for the cost of technology stacks and solution deployment efforts must be the purview of business teams, but it requires significant and detailed input from the IT team.
  5. AI Data preparation and identification: Business teams must ensures success by identifying and preparing the data for training algorithms and building models. The team must solicit assistance from analytics and data warehousing teams.
  6. Coordinate with partners: During design phase of the target process model, the business team should must provide input to implementation partners (both internally and with their consultant/services partner) regarding ontology of the problem domain, the existing process models and rules. Teaming here with IT is essential, but the business team must define and communicate the business and process needs effectively. 
  7. AI Testing: The business team must lead testing the models against the project goals during the early POC and pilot phases
  8. Manage effective AI feedback loops: To make use cases fir for production release, the business team must provide detailed, regular feedback on the accuracy and performance. Again, they need  to work with implementation partners, which may be internal teams from an AI CoE or external partners.
  9. AI Training: The business team must be responsible for budgeting, planning and executing the training for large AI user teams, encompassing all of the staffing resources, external consultant costs, processes and task owners that are involved in the implemented use case.
  10. AI Deployment: Deployment doesn’t end once the use case is in production. The business team must continuously monitor the model’s outcomes, maintenance, and updates during the inferencing phase, and if the problem context changes with new rules or data, the team needs to add new dimensions and models and create new clusters. Users may also require retraining, especially as processes may change over time. There will also be the need to monitor change management issues, potential legal issues with data privacy / staffing impacts etc.

The Bottom-line:  AI is a business issue that must be directed and managed by business executives, supported by technology experts.  CIOs who ignore this will fail

The business team should seek help from IT in terms of infrastructure and tech stack needs, but it needs to own and run the AI projects because it owns the data, context, processes, and rules and understands the pain points.

CIOs will face an existential fight if they don't start genuinely enabling the business. The world where IT was all about mitigating outages and avoiding risk is being replaced by one that demands speed, agility, and a genuine understanding of the business.

Being tech-savvy isn't enough anymore… just knowing where to build a data center is pointless if you don't know what the rest of the business has planned. And this IT obsession of continually trying to upgrade ERP solutions, when most business units these days can handle it. That's the pitfall of the old traditional IT approach - we have to make sure we never get cemented in like that again.

Posted in: Digital OneOfficeIntelligent Automation

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Are call centers cool again? Teleperformance, Concentrix and SYKES lead the first Top Ten for customer engagement operations

March 16, 2019 | Phil FershtMelissa O'Brien

Ever since IBM sold off its Daksh business to Concentrix in 2013, "call center" has been something of a dirty word to traditional service providers and software aficionados alike. 

Since then, traditional IT services have flatlined as the focus has shifted to digital solutions, where the customer is front and center to emerging interactive ("digital") technologies. Having that ability to lead the customer front line and support those customer needs with real-time speed and intelligence is core to business operations.... and service partners which can deliver this has never been so crucial.  So are call center providers back in vogue, or is this merely a blip as we transition to a world where we don't need many human beings anymore?

The contact center operations (BPO) services industry is growing at 4% globally, despite razor-thin margins and intense competition. So, why do pundits declare the call center on the brink of implosion into a piece of software, while the stagnant IT services market escapes criticism for perpetuating a “people-centric” model? While contact center BPO growth is hardly setting the world on fire, it’s been steady over the last several years, even though the majority of contact centers worldwide are still in-house. The fact that there’s still a $65 billion market for outsourcing this work begs the question why these investments are simply going away. Contact center leaders like Teleperformance and Concentrix have recently made sizeable investments in bolstering service delivery (acquiring Intelenet and Convergys, respectively), reflecting the relative importance of this market segment. The recent development in which SYKES acquired Symphony demonstrates the optimism that automation can grow, not cannibalize, the contact center business. The latter, in particular, signals a promise that contact centers can use RPA expertise to scale and complement traditional contact center services business as they pivot to become more strategic providers.

Other large business services firms are gravitating into the customer engagement market, sensing an opportunity to disrupt deals with a hybrid intelligent automation/global talent approach. Most of the Indian-heritage IT services firms with strong BPO delivery arms are gravitating back to contact centers, as they see the potential for aligning intelligent automation and cognitive assistant solutions with their global base of talent for supporting their enterprise customers. Some examples of this are with the likes of Tech Mahindra in telecoms and Infosys with order management. Cognizant, Wipro, and HCL - for example - are also competing for call center work. BPO firms that have been more focused on non-customer centric areas are gravitating aggressively back into the market, such as WNS, EXL, Hexaware, and Genpact. Even IBM has recently flirted with a few opportunities, despite selling its call center business, and we even cam close to featuring Accenture in our new Top Ten, but the firm was very adamant that is did everything but the contact center piece.

Contact centers are ripe for a renaissance, and automation is a big piece of this transformation. The common retort that a contact center with automation is an oxymoron is false. Perhaps it’s our legacy view of contact centers and automation that is oxymoronic—and it’s time to let go of that legacy. When “digital” is ultimately about new ways of doing things, the contact center is in a more precarious and important position than ever. The contact center for companies that want to stay competitive in a hyper-connected economy must learn how to embrace intelligent engagement, using the key change agent of automation to become a strategic hub that empowers both customer service professionals and the customers they support.

Enterprises must navigate the changing of the guard for intelligent customer experience services

There is a changing of the guard happening, as HFS analyst Melissa O'Brien analyzes in her new report Top 10 Front Office Customer Engagement Services, 2019.

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As the dust settles on our latest Top Ten, an assessment of the Customer Engagement Operations market, we’ve been fielding lots of questions about what this ranking means from a competitive standpoint.  Our final top ten chart was chock full of what you might consider to be the usual contact center suspects, but also sprinkled with some interesting up-and-comers, as well as familiar names that aren’t necessarily known for competing in this space --  the intelligent customer engagement services that are evolving out of the contact center. The

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Posted in: Contact Center and Omni-ChannelDigital OneOfficeCustomer Experience Management

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Is the Big 3 RPA stranglehold about to be challenged? AntWorks patiently times its move

March 03, 2019 | Phil FershtElena Christopher

RPA has passed its peaky hype and we're now staring into reality for the first time in 6 years. And it's a messy picture.... the market has largely bought into three software tools and tens of thousands of people have invested a significant amount of their time training themselves on them. 

However, beyond scripts and bots and dreams of digital workers scaling up rapidly to provide reams of value, most enterprises are fast coming to the realization that they need an actual process automation platform capability that ingests their data, visualizes it, machine learns it, contextualizes it and finally automates it.  Essentially, the whole lifecycle of data components needs to be integrated into a single platform in order to take maximum advantage out of automating processes through scripts, bots and APIs.

AntWorks comes out of the closet to make its integrated automation play, taking the fight to the Big 3

Fresh off a series A round of funding with SBI Investment Co in July 2018, AntWorks has come out of the 2019 gate ready to up their profile and expand their enterprise footprint for their brand of intelligent automation. And why not choose the lovely island of the Maldives to press home its vision for its Process Automation Platform that integrates data ingestion, visualization, machine vision and RPA...

Having tracked the product for several years, and also researching the lions share of early adopters of automation products, AntWorks' machine vision is an outstanding product, and Fractal math has significant advantages over Bayesian. Visiting with the core team just last week, having them show how it can extract text from images within images is something that can provide a huge edge in the market as users wise up to what they really need to integrate data. One of their use cases involves taking a picture of a coupon flyer to find out intel on what products are being promoted, special packaging, size, flavors, dates of promo etc.. They can tell you, for example, how many ounces are on a Pringles can in an image on an image on an image (label on a can in coupon on a page of coupons).

Yes, this really is slick stuff, and last year 350 users of automation products show how AntWorks is stacking up when it comes to embedded intelligence:

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Five things enterprises evaluating intelligent integrated automation platforms should know about AntWorks

While HFS has been tracking AntWorks since early 2017, this was its first "official" analyst briefing. We took away a variety of facts as well as future direction and strategy points. Here are the five things we learned that we consider relevant to enterprises evaluating intelligent automation tech and partners:

1) Its platform offers up integrated intelligent automation – AntWork’s ANTstein platform consists of modular components including “cognitive machine reading (CMR)” sort of a computer vision meets machine learning-based smart OCR, RPA , and a smart analytics components. While these are available piecemeal, they are designed to work together. The primary client entry point today is with its CMR module. So rather than adding AI to RPA, AntWorks adds RPA to AI. HFS created our Triple-A Trifecta framework (eg: RPA, AI, and smart analytics) to make the point that you can start anywhere with intelligent automation, but our research shows most firms start with RPA and then can struggle with scale. Clients that start with CMR are tackling unstructured data which can then help unlock greater functionality with RPA downstream. ANTstein offers a path to integration which can enable end-to-end work flows and the potential for the coveted scaling of IA. AntWorks is launching its new version of ANTstein, Square, imminently.

2) Its machine learning engine leverages fractal data science rather than neural – While the sciences are different, why it matters to enterprises is that you can train some business process algorithms faster as there are finite sets of patterns and outcomes in many business processes. Fractal science tends to work best with a finite set of outcomes, rather than infinite, where neural would be more appropriate.

3) Innate process and verticalization depth – AntWorks’ leadership team came from the BPO industry (eg: Infosys BPO, WNS, Capita, Mphasis BPO), where deep understanding of business processes is essential. This deep process knowledge in the areas being automated by enterprises today is largely lacking from most AI and RPA software companies. AntWorks is applying this process focus to develop domain-specific use cases for horizontals like finance and accounting and HR and more notably industry-specific use cases like title search in mortgage or claims processing in insurance. The service provider community has really been bridging the gap between intelligent automation software and domain knowledge to create end-to-end workflows. AntWorks’ domain use cases bridge its full stack and demonstrate the potential of integrated IA.  

4) RPA innovation – While AntWorks missed the first wave of RPA, it is working to offer RPA product improvements in areas clients are grappling with such as bot productivity to ensure its relevancy. Its forthcoming Square release of ANTstein is purported to enable dynamic reallocation of idle bots and multi-tenancy of multiple bots on one machine. One of their clients in attendance at the event indicated this would be a major resource saver.

5) Bot cloning – As many enterprises have already invested in one or more of the leading RPA software players, AntWorks needs a value proposition beyond follow the leader RPA. An interesting concept they are working on is “bot cloning” – essentially replicating existing bots and porting them over to their platform. Given its current focus on unlocking unstructured data for enterprises as their lead selling point, this may create a logical bridge to RPA as long as it works. As enterprises increasingly focus on outcomes rather than the enabling technology, this may create some conversion opportunities as enterprises look for ease of integration to enable end-to-end workflows.

Bottom line: AntWorks offers a path to integrated intelligent automation, provided enterprises embrace its full stack. One more large round of funding and it will be a real force 

Go global with its platform play. AntWorks, fuelled by funding and early client success, is making a major push to take its product to market globally. While its full stack platform offers enterprises a tangible path to integrated intelligent automation, the reality is that today they are best known for their cognitive machine reading capabilities. AntWorks needs to continue to focus on its domain expertise which has the greatest potential to showcase end-to-end workflows that work across its stack – essentially showing intelligent automation in action (the Triple-A Trifecta). Currently, there are a lot of piecemeal IA tools in the market that requires custom integration to tie them together to enable straight-through processing of automated workflows. As enterprises grow weary of having to continually piece together the components that enable intelligent automation, the focus on tools will become more about what delivers the best results and can scale. AntWorks’ investment in people and expanded geographic footprint will help take the message to a broader range of prospects outside its core client case in Asia Pacific. Additionally, the firm needs work on its global channel strategy. A solid network of partners, particularly strong service partners who understand the tech and value proposition, can help AntWorks reach a broader range of prospects. 

Secure more investment funds to fight for a limited supply of talent. What's needed next is a significant second round of funding, not dissimilar to those being ingested by UiPath, Automation Anywhere and more recently Blue Prism.  The sales team, under the experienced leadership of Bill Schrank, need added firepower, and AntWorks needs to prove its RPA story aggressively... how can they truly bring it all together and negate the need for enterprises to purchase expensive RPA licenses when ANTstein provides it all for them in a one-stop solution?  And finding the talent is tough as the Big 3 currently soak up any semi-decent professional with a pulse capable of understanding and communicating the value of integrated automation.

Combat "RPA fatigue" to re-energize a weary and frustrated market.  Too many enterprises have been oversold the same old story of no-code and the fact this is supposed to be "easy".  So Ash and his crew need to make the case that clients of AA, BP and Ui can jump ship without losing face.  In addition, weary service providers and advisors need to be convinced to put similar resources into AntWorks that they already have into the others.

Posted in: Analytics and Big DataRobotic Process AutomationIntelligent Automation

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We really do not have to be this boring!

February 27, 2019 | Phil Fersht

The future is so exciting, we need to focus on our disruptive talent to make it all happen... just like the Blue-footed Booby!

Posted in: Confusing Outsourcing Information

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NASSCOM 2019: Has the Indian IT industry become… boring?

February 23, 2019 | Phil Fersht

I just couldn’t resist the annual pilgrimage to Mumbai to experience the Indian IT elite’s gathering, in the case my concerns that the offshore-centric IT service delivery industry was getting complacent were misplaced.  Sadly, they were not.

It has been two years since the NASSCOM leadership forum of sell-side IT execs was held in Mumbai (after a pretty disastrous diversion in Hyderabad last year), so it was pretty obvious that attendance was clearly down, compared to two years’ ago.  Am sure numbers will be reported otherwise, but it was pretty easy to navigate the entire venue without having to resort to the traditional scrimmage position to hack through the usual sea of people.

My takeaways:

The atmosphere was “relaxed”.  Seriously.  The traditional urgency has somehow dissipated to this bizarre - almost chilled-out - mindset from most of the people there.  “Aren’t you guys worried about Brexit or this Chinese/US trade war escalating.  Surely that could really hurt Indian service delivery?”.  Most people just shrugged.  No-one seems to care that much anymore… everything is just fine, and, I hate to say it…. BORING.

Digital as a term is done.  Yes, even in India.  After the last few years of digital overdosing, the only time the word is now uttered is when an Indian provider exec explains that “half their revenues are now digital”. 

“AI” is the new Digital.  And absolutely no one can define it.  Great.  Hurry up Quantum…

Service providers fell into two camps:  inspiring and downright awful.  Yes, we literally hammered our way through 30 meetings and I can honestly report that about a third were truly inspired conversations… the other two-thirds were dull as dishwater.  Some came to us with a precise vision and focus, others literally had nothing to say beyond “we’re doing OK”. There was nothing in between.

There is a depressing lack of service delivery disruption.  All the execs wanted to pitch was their amazing new pricing models that incorporated some RPA and some type of “outcome” pricing.  Few were pushing their ability to disrupt actual service delivery with a next-generation talent development strategy. Few were talking about how they were helping clients with innovative role development, with change management programs, with co-investment plans, with the re-platforming of IT for their clients.  And no-one was talking about investments in cognitive assistants and blockchain… it was all about dumb RPA bots and new-fangled pricing models that helped them win deals. Who is advising these people?  Don’t they – at least - talk to decent analysts anymore to tune up their messages?

Where were the CEOs?  We got visits from Salil Parekh (Infosys), C.P. Gurnani (Tech Mahindra) and mid-cap CEOs Keshav Murugesh (WNS) and Nitin Rakesh (Mphasis).  In addition, we were treated to Accenture’s CTO Paul Daugherty, which was welcome… and Capgemini’s Thierry Delaporte, co-COO (and potentially the next CEO) did manage to make the trip. However… Cognizant, HCL, Genpact and TCS all failed to serve up any C-Suite royalty. 

Isn’t this supposed to be India’s premier IT event?  And what about IBM and DXC, two of the largest IT employers in the country?  I don’t think a single leadership soul from those giants made the effort.  Not to mention Deloitte, EY, PwC… all huge beneficiaries of Indian IT talent.  Where were they?

Where were the RPA dignitaries?  Considering RPA was pretty much the most discussed topic this week, apart from AntWorks co-founder Govind Sandhu and a rumored sighting of Automation Anywhere’s Mihir Shukla, they all gave this conference a wide berth.  Considering the Indian IT service provider channel probably represents the largest growth opportunity for the RPAs, this was a huge miss from them.  And from NASSCOM for not inviting them along.

What happened to the analysts?  Aside from single individuals from Gartner and Forrester, only a handful of lower tiers analysts were seen parked in the meeting lounge desperately trying to pitch their wares to Indian marketing folks (pretending to be excited by them). Even the HFS trends session was thrust into an obscure breakout room that ended up with wall-to-wall standing and disappointed people being turned away.  When I mentioned to some NASSCOM folks that it “may have been wiser to stick us on the main stage”, the response was “We’re truly sorry, but we have to be careful not to upset the other analysts”.  As if anyone would have cared… there were hardly any there in any case… and when did the feisty Indian IT monster of yesterday worry about upsetting a few people?

Thank god for Rishad!  The one truly bright shining light was the effervescent Rishad Premji gracing the halls, bouncing around on stage, talking to everyone he could, even having beers with his buddies in the hotel bar.  Someone with a vision, oodles of passion… saving the day for a tired old show that badly needs a facelift.  I must apologize to my friends at Wipro, but can you just let this guy run for PM?

The Bottom-line: It’s time to change the Indian IT record… or this industry will be disrupted by… something else

I can recall all the way back to my first NASSCOM invitation in 2002… this was THE event of the year, back then.  Anyone in IT services who meant anything just had to be there. This thing literally used to be Davos for global IT.  Now it appears to be descending into a microcosm of an Indian IT industry bordered on complacency… content to make quarterly numbers and little else. 

Having spent time, in recent months, at industry events in the US and emerging European locations, something is going wrong in India. Is Indian IT losing its luster?  Has it settled for what is has… losing its ambition to keep disrupting the world of technology, like it did so magnificently between 1995 and 2015?  Will we see IT services firms headquartered outside of India creating the next big shift, leveraging more talent from emerging locations such as Ukraine, Poland, Russia, South America and China… and lessening their reliance on India? 

Posted in: IT Outsourcing / IT ServicesOutsourcing Events

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Everything you ever needed to know about Brexit but never dared to ask...

February 22, 2019 | Phil Fersht

Posted in: Policy and Regulations

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