IT and business services is taking a massive 10.2% hit this year

June 02, 2020 | Jamie SnowdonPhil Fersht

There's not much else we can say beyond the fact the impact of the Paradigm Shock on the IT and business industry is seismic.  Suddenly, the core value of services is to address what customers have to buy right now... and at prices they can afford.  This is a cut-throat market unlike anything we have seen before and the survivors are those who have the nerve, the cash, the luck, the immediate ability to support their clients and the strategic nouse to make quick moves to come out on top as the new business environment gradually unravels:

Forecast Assumptions

  • GDP impact from Q2 2020 is expected to be10-15% in all major Western European and North American markets. Economic recovery to pre-COVID levels is unlikely until the second half of 2021.
  • Business not as usual – with a significant amount of work being unable to complete due to local lockdowns and social distancing. Government bailouts will prevent some businesses from failing but will not be universally successful particularly with small businesses.
  • GDP / GVA forecast analysis for major sectors used as a starting point for forecast variation. Given that the economic impact is industry-sector led.
  • Previous major economic events used as a primary guide for impact due to COVID, particularly the long-term impact as the wider economy is impacted. In particular, the impact of the great recession on the IT & business services market.
  • Major decline in professional services new business, most signed agreements go ahead with a larger percentage of delays to existing work (40-50%).
  • Professional services impact is immediate (Q1/Q2) with a return to pre-COVID spend in 8-10 quarters.
  • Operational services impact is delayed – so won’t immediately hit revenues in Q1, but will gradually affect the market as deal signings slow significantly and are deferred to Q1 2022. We have seen deal volumes reduce by a half for Mar and April.
  • Revenue impacts in Q1 small, with the impact of deal signings and slowing discretionary spend, felt in Q2 and Q3.

The Bottom-line: Recessions do end, but this one is going to reshape the services industry more than anything we have ever experienced

We've ridden the traditional services model for 20 years and - let's be brutally honest - while we've had some awesome developments in areas like digital technology, cloud and automation, the underlying way services have been bought and sold hasn't fundamentally changed. Suddenly many clients facing huge survival challenges (such as in travel and manufacturing sectors), coupled with the downward pressure on pricing is sending large parts of the services industry into a tailspin. For those that don't have the cash reserves to weather this, and fail to reinvest in a plan to attack growth opportunities as the crisis subsides, the future is murky.  Customers will demand "as-a-service" offerings, sweetheart deals and all sorts of outcomes in the market that is to come... the old rule-book is being tossed and the emerging situation is putting unprecedented (there, I used the word) pressure on many service providers to survive.

As the lockdowns slowly ease and business returns to a point where big deals can be done, expect some significant M&A activity - and all sorts of "carve-out" deals to take place - as service providers fight to survive, exit or dominate.  We may even get a few surprise entrants into a market where there is no pre-written playbook.  This is where the brave, the smart and the lucky take control.

Posted in: Business Process Outsourcing (BPO)IT Outsourcing / IT Services

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Who'd have thought... Wipro went for Delaporte

May 29, 2020 | Phil Fersht

As we discussed just before this virus changed our world (see post), Wipro's next CEO appointment after Abid Neemuchwala had to be someone with teeth and a preparedness to be ruthless.  While I know the post upset a few people at Wipro, they clearly read the piece and its Board acted in a similar vein.  If anything, the current economic and health crisis may have even driven the board to look harder at a leader with discipline and financial acumen. They seem to have got one, who was ready to make the move.

Wipro goes for a strong operator to make tough decisions who is ready for the challenge

The Wipro board was clearly determined to bring in an outsider to make some changes to the company leadership team, organizational structure, and culture, even though there are some strong internal candidates such as Milan Rao and Rajan Kohli. The search was extensive, lasting several months, and the pandemic clearly slowed down the whole process. Moving for Delaporte, a dyed-in-the-wool Capgemini man with a strong operations and finance background shows Wipro is keen on playing it safe as the industry goes into a long cycle of volatility as we (eventually) emerge from the Covid crisis and deepening recession.

However, unlike the appointment of Salil Parekh at Infosys, another ex-Capgemini executive, we expect Delaporte to make some aggressive changes to the firm. He has a reputation within Capgemini for being a tough, ambitious leader and he was clearly very upset when he lost out in the CEO battle with Aiman Ezzat. His relatively quick move to Wipro shows he is determined to lead a major IT services business, even at a time when travel is challenging and the business climate highly uncertain.

It's time to break up old fiefdoms, re-energize the leadership talent and make up lost ground to some of the Tier 1 competitors

Delaporte now has a major challenge to break up some of the industry fiefdoms that have plagued Wipro over the years and bring in some new blood to reenergize the firm. He also has to embrace some of the firm's leadership talent, such as Rao, Kohli and Adlakha, to ensure they have fresh motivation and energy for the challenging times ahead. The extended time this search took leaves Wipro needing to play catch-up with the likes of Infosys, HCL and TCS, so Delaporte needs to move fast. He will also need to make some big decisions surrounding potential acquisitions as the industry goes through its biggest-ever shake-up.

The Bottom-line:  A surprise for many, but a leadership decision made with clear intent - and a lot of patience

While the decision to move on Delaporte is somewhat surprising, especially with his living in France and having a lower profile than other potential candidates like Omar Abbosh, it does indicate the determination of the Premji family and the Board to go for outside blood to make some tough changes to the firm.  Being the first non-Indian to lead the firm will be a major change to the firm's culture - especially when you consider only Cognizant opted for a non-Indian to lead their business (from the India-heritage majors).  But maybe... just maybe... this decision will prove to be a smart one for a company with a tremendous heritage and a family-owner who has given so much back to his country.

To conclude, Delaporte is core services and a proven tough leader in the space (and talk to anyone at Capgemini, he is highly respected). The only thing I worry about could be his French base, but it may actually strengthen Wipro's footprints in Europe (esp financial services). Plus he's a good M&A guy and oversaw perhaps the only successful services merger over the last decade: Capgemini + IGATE.

The more you look at this, the more it starts to look like a bold, shrewd appointment.  Give Thierry some time and we can revisit this decision with the lovely power of hindsight...

Posted in: Business Process Outsourcing (BPO)IT Outsourcing / IT Services

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Low-code or schmo-code? Don't monkey around with enhanced automation

May 17, 2020 | Cyrus SemmencePhil Fersht

HFS analyst Cyrus Semmence (pictured right) gives his view on low-code and enhanced automation

After many years of hearing the term "low-code", suddenly there is an urgency to understand how it can rapidly enhance automation capabilities as we watch the world spiral into madness. In my view, the right blend of low-code platform capability and RPA, alongside process orchestration tools, such as process discovery and mining, will provide the toolbox to create enhanced automation and a much more scalable digital infrastructure... in an increasingly volatile and geographically diverse market.  However, the watchword with RPA over the years has always been "low-code does not mean no-code" and you have to work with your tech folks who understand how all these systems and apps can fit together to achieve our goals (which is where it went wrong recently at the US Small Business Administration).  

So we decided to poke a few questions at HFS analyst and monkey lover Cyrus Semmence,

What is low-code, Cyrus?

Low code development platforms are platforms that allow the creation of automated workflows and software using visual and declarative statements instead of raw code to create the business or software logic.

However - in the hype to whet people’s appetite - some misconceptions about low code / no code need to be addressed, otherwise, in a few years' time, we'll be talking about the failure of low code.  The idea that skilled developers can be replaced by citizen developers is false.  You still need architects, solution designers, developers, testers, etc to build and deploy your whizzy new automation.  The reason is that low code brings to the table the advancement of true rapid application development (RAD) capabilities due to reduced effort and errors as multiple lines of code do not have to be manually keyed in, which is tedious and can be incredibly time-consuming and leave room for errors and bugs. Instead, the logic is created with drag-and-drop types of functionality.  To do this though, you still need people that know what they are doing, how to define the logic, create database schemas, understand the integration requirements with other systems, and to design around non-functional risks and requirements.  

Why low-code matters and why we need to care

The work environment has changed. What worked when we were all in the office together suddenly becomes much harder to do when we can’t easily pop over to another department and ask a question about something or shout across the desk. This slows down processes and highlights previously hidden problems. For companies that have realized their business processes are inefficient, hard to modify, and are only functioning because of human workarounds, low-code platforms offer a great solution.

Nowadays no senior manager is going to sign off on a bespoke software build project.  There is too much risk that some mud might stick to their reputation if it fails and with so many horror stories regarding software development projects who would blame them?  However, sometimes that is the right option.

It is true there are many commercial off the shelf software (COT) solutions that could be purchased and avoid the risk of building from scratch, but despite all the best intentions I doubt there are many large scale enterprise software deployments out there that were bought with the intention of keeping them off the shelf that has stayed that way. Instead, they have ended up being customized to the point there are extremely expensive to maintain and sometimes almost impossible to upgrade.

With low-code, you get the opportunity to automate your business processes in a way that exactly mirrors them, and you only build and pay for functionality you actually need, not all the extras that might sit their dormant with a COTS solution.

 Why will low-code platforms disrupt traditional software markets?

Once people start to get more comfortable with the concept then it’s likely the uptake of new purchases of CRM, ERP solutions will be impacted.  I can’t see large corporates suddenly throwing out SAP or Clarity straight away and replacing it with their own in house low-code version. For smaller organizations that might balk at the cost of SAP and just stick with their old order processing system and excel spreadsheets and make do with the problems, no-code could be the door opener to modernize a lot of their systems.  Combined with RPA where integration with the odd irreplaceable legacy system that doesn’t justify spending a fortune to replace, you have a great way to improve your business efficiency and ability to get to market faster.  For the larger enterprises adding a low-code platform to their toolbox means they can quickly roll out point solutions to solve business process problems at the fraction of the cost of re-engineering existing software.  In conjunction with a longer-term strategy, if planned properly they could be used to gradually phase out existing enterprise systems as a project instead of a major version upgrade on existing platforms.

How do we get started with low-code – do we need to have real experience in developing apps, or can we engage as business executives to get our IT people on the case?

The journey with low code must start with a highly skilled team.  If a salesperson is telling you it’s easy, ignore them.  Why do you need a highly skilled team on a platform that everyone claims is going to change the way we deploy software (and Gartner predicts by 2023 citizen developers will outnumber professional developers by 4 times)?  Because this is not going to happen. Software development is never easy and the last thing you want in your enterprise is a bunch of amateurs building your critical business systems.   So, if you don’t want to fail on the journey to replace legacy systems that don’t quite match your way of working and take a long time to change when your business does, give yourself the best chance of success by getting good people to develop for you.  Over time as you get comfortable with the platform you might consider devolving responsibility out to the business, but the risks in doing this must be carefully weighed up.

Will the current crisis drive adoption? Will firms who embrace low-code be at a real competitive advantage?

The current crisis could well drive up adoption as flawed business processes need to be fixed rapidly and - to do that - you need a flexible platform you can mold into the image you wish to see, not the image the software vendor has for you.

Thanks for the practical tips, Cyrus - to finish, let's share the latest research on where enterprises intend to invest in this current "Paradigm Shock":  You may have a point that enhanced automation is very much top of mind for enterprises:

Click to Enlarge

Posted in: Intelligent AutomationArtificial Intelligence

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If Microsoft is buying Softomotive it’s not only beneficial to each party, but also for the RPA market

May 04, 2020 | Miriam DeasyElena ChristopherPhil Fersht

There’s a very strong rumor that Microsoft is in talks to buy Softomotive, unconfirmed by either party which didn’t stop Bloomberg running the story, and we’re happy to wonder what it might mean. There’s lots that’s promising – for Microsoft, for Softomotive and for the RPA category as a whole.  And most likely great timing in a market where rapid digitization is the calling card.

The smaller proven RPA vendors are more attractive acquisitions to fill functionality gaps

At the beginning of this year we cogitated that no one would buy any of the big three RPA vendors when we made 2020 predictions – then within weeks when Appian bought Jidoka we noted that smaller RPA vendors are still certainly likely acquisition targets. We even suspected UiPath was positioning itself to be acquired by MS last year but was clearly far too hefty an investment for Microsoft’s appetite as it eyed ticking the RPA box in its catalog of automation and AI solutions.  However, an acquisition of Softomotive, which could fetch a low nine-figure number, clearly shows MS is serious about adding this much-needed capability to address the space.

In 2018 Softomotive secured funding of $25m (Series A) and we reckon it’s not easy to get funding these days. Although Blue Prism managed to raise $125m to strengthen and protect its balance sheet and Kryon recently finalized a $40m Series C. We expect there are more acquisitions to come. So, we’re not that surprised, and we are hoping there is truth to this tale.

Microsoft has shown up to the RPA party late and it can easily buy its way in

Microsoft has been talking RPA all through the second half of 2019, in multiple earnings calls and announcing the Power Automate launch at Ignite. It recently launched its Power Automate version of RPA to general availability. HFS initial reactions laid out Power Automate (RPA) and its overall fit in Microsoft’s Power Platform. It is mainly what was Flow (close to IFTTT) with some UI screen scraping for the legacy green screens and the ability to record the various keystrokes or clicks. We saw attended automation as per UiPath and Automation Anywhere, but couldn’t help but question the unattended capability as per Blue Prism at that point and called out the need for catching up to RPA vendors’ level of capability.

Softomotive would give Microsoft both attended and unattended capabilities, a significant customer base and real credibility as an intelligent automation solution

What Microsoft could gain here with Softomotive (if this goes ahead) is an RPA veteran with roots in desktop automation, with a solid engineering approach and a decent set of both attended (WinAutomation) and unattended (ProcessRobot) capabilities. It has more than 9,000 customers worldwide and is a longstanding Microsoft partner. For more on HFS’s view of Softomotive and other RPA players see HFS Top10 RPA Products 2020.  Softomotive demonstrates sound thought leadership with its “People 1st Approach” and it made an interesting move last year with the launch of Robin, an open-source RPA language. At HFS, we liked the vision and concept of Robin very much but struggled to see how people (especially competitors) would be motivated or incentivized to play along, and it really needs lots and lots of developers playing along to be successful. Softomotive is hitting the jackpot here though and might find a lot more people throughout Microsoft’s extensive installed base readily incentivized to ensure portability and interoperability of RPA using Robin if it becomes part of the Microsoft empire. If Robin proves popular with that critical mass, competitors have little option but to follow.

Microsoft is well on its way to becoming a one-stop-shop for all enterprise software needs

So, there’s the hardware of course, but the real value of this acquisition would be embedding or connecting robust RPA into Microsoft’s many well-established software product families, from MS Office, Teams, SharePoint and Dynamics 365 for ERP, CRM etc. This is all subject to Softomotive’s technology being absorbed at a technical level into the Microsoft product family – not just in slideware. Microsoft Power Platform is not reliant on only MS software, other software will be in use at its customers’ organizations, so its running with a vast array of connectors (300+ at last count) to hook up to the many large enterprise platforms in common use. Considering how many RPA use cases start with or rely on a trigger like an email (with attachment) or an excel spreadsheet it’s easy to see why Microsoft has a vested interest in picking up the baton itself with RPA extending its value proposition, rather than letting third party vendors come in to carry the data along its process journey. What Softomotive could provide to Microsoft is more much needed connective tissue, to help business users with the complexity of business processes laden with process debt.

The bottom line: Microsoft is just one of many big fish menacingly circling the RPA space

Not only does this move validate the RPA category, it also threatens those who pioneered the category. Other independent software vendors (ISVs) are making moves too. Pega has its Infinity platform low-code, BPM, RPA combination fueled by the Openspan acquisition, SAP’s Intelligent Robotic Process Automation (IRPA) offering is based on a combo of previous internal efforts and its Contextor acquisition. Appian acquired Jidoka. Compelling pricing propositions for RPA as an add-on are visible. And these approaches, including Microsoft’s, are broad approaches supplementing the rigor of enterprise software platforms, low-code, BPM, AI and APIs with RPA.

What’s more, Google is tackling the intelligent part of intelligent automation to structure unstructured data with Document AI, in partnership with UiPath, Automation Anywhere and Appian amongst others. Given Google's intentions to deliver an array of functional and vertical solutions with partners and its technology stack we should anticipate that some of the pain points that RPA addresses will be targeted in these initiatives. And Salesforce is keeping its options open, with MuleSoft in hand already with an API led approach and Salesforce Ventures led Automation Anywhere’s Series B financing.

Other RPA vendors need to pay attention to the fact that while they have undoubtedly proven the market need for RPA, they have no guarantee of keeping hold of the market they created. Their best bet is proving that a third-party layer on top is superior to embedded and connected approaches, and we expect that RPA vendors will make a decent stab at articulating this throughout the rest of 2020.

Posted in: Robotic Process AutomationIntelligent AutomationArtificial Intelligence

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Pravin Rao will show us how... as he takes on the NASSCOM Chairmanship

May 02, 2020 | Phil FershtSarah Little

As changing winds prevail, few things impact an organization better than a consistent, selfless, and stable tone from the top. U.B. Pravin Rao (known as “UB” by his friends) has been the great constant at Infosys throughout his tenure, combining an understated demeanor with sheer tenacity to build, equip and continue pushing a 240,000-person entity into the future.

Notwithstanding corporate honors as Member of the Board and COO of Infosys, Pravin was well-tapped to serve NASSCOM as industry Chairman for the next year. Quite simply, he has the best of the industry at heart and a comprehensive competence to not only steady the sails through the COVID-19 storm, but to demonstrate rapid response in support of the industry and community at large. With his footing firmly set in the present and eyes fixed on the horizon, Pravin clearly sees an infinite future for NASSCOM and the Indian industry as a resilient, ever-relevant, and trusted partner for the global enterprise.  So now there is no live cricket to watch, we managed to drag him away from his Sudoku puzzles to share his intentions and vision for the Indian IT industry in his role as NASSCOM chairman.

Phil Fersht, CEO and Chief Analyst, HFS Research: Good afternoon to you, Pravin. It’s always good to catch up, I enjoy our conversations, and it was good to hear about your new role at NASSCOM. Before we get to that, can you just share a little bit about you, and how you ended up as COO for Infosys?

Pravin Rao, Chairman, NASSCOM: Good to talk to you as well. I am an electrical engineering graduate. from Bangalore University and joined Infosys in 1986. Actually, it was my first job, and this is my 34th year at Infosys. When I joined, we were less than 50 people, and today we are over 240,000 people, so obviously it’s been a great journey.

When I joined Infosys, it was a very small company, and obviously not very well known. I had just two motivations. One is that I didn’t enjoy my electrical engineering stint, and I wanted to get out of it. The second one… In those days and probably even today, for a lot of people in India - and particularly for youngsters - going abroad is always an opportunity, and that was one of my ambitions. In those days, I heard Infosys was sending people to the US, so that was the added motivation.

"In those days in India, if you joined the public sector then you were supposed to be set up for life, but I rejected those offers and joined Infosys. Many people thought I was crazy. I just wanted to see the world, and the rest is history"

Once I’d graduated, Phil, I had a couple of interesting jobs, one in the public sector. In those days, in India, if you joined the public sector, then you were supposed to be set up for life, but I rejected those offers and joined Infosys. Many people thought I was crazy. I just wanted to see the world, and the rest is history. I came from a technical background, I joined as a trainee, and I have played several roles. Since the beginning of 2000, I started heading some P&Ls  [Retail, CPG, Logistics and LifeSciences] with Infosys. In 2014, I was inducted to the Board of Infosys, and, at the same time, I was also elevated as COO, so I’ve been playing that role since then. For a brief period, I was named the Interim CEO before Salil’s appointment.

Phil: So tell us a bit about this role that you’ve been elected to as Chairman for NASSCOM. What does that entail, exactly?

Pravin: Phil, the Indian technology industry is one of the key contributors to India’s economy; it roughly contributes 8 to 9% of India’s GDP. This year, financial year 2020, the Indian IT industry will contribute roughly $190 billion US dollars in revenue, and it today employs about 4.3 million professionals directly. So it’s a sector with a diverse mix of companies: Indian companies, multinationals, global tech centers of international companies, start-ups, and so on, and NASSCOM is the industry body that is representing the sector.

It’s an honor and privilege, Phil, to represent the sector as Chairman, and a great opportunity for me to serve the industry. Within NASSCOM we have a leadership council, which consists of past Chairman, Chairman, Vice Chairman, and President, and this council is tasked with driving the NASSCOM vision and agenda.  From an individual perspective for me, it’s a 3-year commitment - one year as Chairman, Vice Chairman (served one year, last year), and after this year, one year as Past Chairman – it’s a 3-year commitment to the industry. Obviously it’s a part-time role, we have a President who runs the forum full time.  

From a Chairman perspective, my immediate priority is obviously navigating around the COVID-19 situation, and ensuring minimum impact to all the stakeholders, to our clients, to our employees, and ensuring business continuity. In the long term, I hope, once we adjust to the new normal, we will focus on some of the work that NASSCOM has been doing, in terms of transforming the industry and making it relevant in the digital era. Obviously, after the current pandemic subsides, we should also gear up for the post-digital era, which is all about distributed ledger technology, artificial intelligence, AR, VR, quantum computing, and so on.

Phil: So this is probably the most critical juncture in the history of Indian technology, what’s been happening this year with the recent paradigm shock? How do you think you can support this, and respond to this, in your NASSCOM role? What sort of things are you really looking to do here?

Pravin: Yes Phil, these are challenging times for everyone, including the Indian technology industry; however, our industry has, time and again, proven its resilience in the past, and I’m very confident that this time, too, we will emerge stronger and wiser. And, as I said earlier, during this time, maintaining business continuity and keeping in mind the safety and wellbeing of the employees was the topmost priority for the industry. Our industry has been enabling work from home since the first week of March and has been shifting assets and configuring the internal networks to make this possible. Today, roughly 85 to 90% of the workforce has been enabled to work from home – it’s much higher on the IT services side, and on the BPM side, it’s slightly lower. A small percentage of staff is working from our office, typically on mission-critical applications and dealing with sensitive data. And, considering the size of the industry, $190 billion dollars, and the scale, a 4 million-person workforce, the speed at which we have achieved this, I think, is a very remarkable achievement. We are also in regular touch with our clients and going the extra mile to ensure minimal business and service disruption.

"Our industry has, time and again, proven its resilience in the past, and I’m very confident that this time, too, we will emerge stronger and wiser"

The industry has worked very closely with the government during this period, both the central government as well as the individual states. First and foremost, we got IT and IT-enabled services categorized as essential services. That cleared a lot of hurdles. Then we had a lot of policies around moving assets out of campuses and policies around taking calls from home, so we worked with the respective departments and got it enabled as well. We are also working with state governments in terms of enabling ease of people movement, transfer of assets. The industry has actually worked very closely. 

I think what is very heartening is that we have also come together in supporting the government in leveraging technology to fight COVID-19.

What’s more, Phil, I think what is very heartening is that we have also come together in supporting the government in leveraging technology to fight COVID-19. Each of our companies, individually, have been working both at the central and individual state levels, coming up with apps and other solutions. In addition, NASSCOM has created a taskforce with several companies together, working closely with the government in areas of containment, tracking, testing, and recovery. And, in fact, NASSCOM has also published a compendium of all the solutions that the Indian tech industry has put together to help various stakeholders in terms of dealing with this crisis.

Phil: So, as we look through the other side of this Paradign Shock, Pravin, do you think India will come out the other side unscathed? And do you see a different landscape emerging from this?

Pravin: I think, from a global perspective, the situation at this stage is pretty stark. There are still multiple scenarios being debated and discussed in terms of the global economy and the shape of the recovery. People are talking about V-shaped, U-shaped, L-shaped, and so on, and it’s very difficult to predict. Given the complexity and challenges which are unique to India, I think the government has done a good job so far, and the lockdown, as you are aware, has been now extended until May 3rd, although some activities will start opening up starting April 20th. For IT and IT-enabled services, wherever possible, the government has recommended up to 50% return to work. However, our industries will take a very phased approach. We want to be very responsible, so in the first few weeks, we expect only a maximum of 15 to 20% of the workforce back in the office, and it will actually take a few months before we get back to the old ways of working, probably close to 100% working in the office. From a country perspective, I think it’ll take about three, four months for things to stabilize.

The other aspect is that this industry is part of the global value chain, and any disruptions in that will have a ripple effect on both India and the Indian IT industry. Overall, I’ve seen forecasts talking about GDP being lowered by 1 to 2% than what it was forecast before the virus outbreak, and COVID-19 is obviously creating disruptions globally where businesses across countries and geographies are facing major demand-side challenges. For our industry, it will be impacted by the demand-side shifts as opposed to any supply-side issues, so from that perspective, I think that in the short to medium-term we will see some fall in demand, some of the discretionary spend being pushed out, and so on.

However, I believe that in the medium to long-term the industry will bounce back because as we get into a new normal, every enterprise will start looking at reimagining their ways of working. They’ll look at transforming talent and building resilience into their existing business models, and some changes will probably be permanent and be part of new normal, in these cases, technology and technology services will be very integral in all these models. Even today, technology is playing a huge role in enabling businesses to run remotely, and in the new normal this will be only amplified. So, in some sense, COVID-19 is a tipping point of the digital transformation of the workplace. The sudden shift to remote, digital work has the potential to accelerate digitally-enabled environments and workplace transformations.

So, I’m very confident that in the long-run, Indian technology industries and providers will be more relevant than ever to organizations globally. While what is short term, what is medium and long-term are difficult to predict, I think the industry will bounce back and will continue to be relevant.

Phil: We’ve obviously spoken a lot about the potential challenges this is going to cause and impacts on the economy, etc. What good things do you think are coming out of this? Do you think there’s going to be some positive behaviors, positive outcomes that we’re going to take away from this experience?

Pravin: Phil, I think the speed at which we have been able to ensure business continuity given our size and scale and enabling work from home, and without compromising on employee safety, for me that has been the most impressive one. And NASSCOM has worked closely with the government to enable this. That has been extremely positive.

Secondly, all the industry players….are coming together. I think sometimes adversity brings the best of you, and it’s been amazing how people have come together and shared best practices. And even, I talked earlier about some of the tech solutions that they have provided, working closely with the government, in terms of dealing with the COVID-19 crisis. So from that perspective, I’m very proud of the way the industry has come together to deal with the crisis. And some parts [of this] will become the new normal. In the past, I think clients were very reluctant to allow work from home; hopefully, this experience will help them look at it differently. If we are able to demonstrate productivity and good quality without compromising security, I think clients will get adjusted to this way of working, and that will also help the industry in the long run.

"Sometimes adversity brings out the best of you, and it’s been amazing how people have come together and shared best practices"

In terms of infrastructure side, the country has to improve telecom infrastructure, particularly the last mile connectivity, I think that many people still don’t have fiber connectivity, so that’s one area where I’m sure government and even the telecom providers will focus. And the second area reflects some of the policies, … the government has to make some changes to enable work from home [to be] more permanent. So these are some of the areas where probably we need to improve a lot, mostly from an infrastructure perspective but otherwise on the ability to do stuff and adjusting to the new model – those seem to be going on well.

Phil: How do you think this paradigm shock is going to impact the role of NASSCOM? What do you think its role should be, as things develop, Pravin?

Pravin: I think NASSCOM will continue to play a critical role, Phil, and more so than ever before. Right? Once the new normal happens, it’s important for NASSCOM to play a leading role, in terms of shaping the narrative around how the Indian technology industry was able to respond and with very minimal impact to the business continuity of clients. So, in some sense, NASSCOM has a crucial role in reaffirming India’s technology industry as a trusted partner for global enterprise. So that’s one role it will continue to play.

"NASSCOM has a crucial role in reaffirming India’s technology industry as a trusted partner for the global enterprise"

Secondly, as I said earlier, the Indian technology industry will continue to be relevant in the global context, post-crisis, so NASSCOM has to continue its role of policy advocacy with various governments, ensuring ease of doing business, articulating Indian tech and the technology industry contribution to the global economy and to creating jobs in the local economies. India technology industry is investing millions of dollars in these economies, how its increasing competitiveness of enterprises. So, these are some of the things which we are doing, and they are some things which we will continue to do.

The third aspect is that the skills gap that is there globally will continue, and so NASSCOM has to play a large role in terms of promoting skilling and reskilling, not only in India but globally as well. So that’s a role it can play, and it can bring the Indian technology industry expertise to that. And, in some sense, NASSCOM, NASSCOM in the future will be much more broad-based. It will probably represent companies across the industry. For instance, in India, when there’s been a debate on data privacy law, data strategy, and so on, the NASSCOM voice is heard. So that’s a role I think it can start playing there, and globally, as well. In some sense, every organization today is a tech organization, and NASSCOM can play a huge role in representing the technology industry voice.

"In some sense, every organization today is a tech organization, and NASSCOM can play a huge role in representing the technology industry voice"

My sense is that NASSCOM’s role will continue to be very crucial and as the Indian industry gets adjusted to the new normal - and we are very optimistic and positive about the future - NASSCOM will have a large role to play in that.

Phil: Good. Well, thanks for this, Pravin. I think there’s one final question I want to put to you. If we meet again in a year’s time when you’re finishing your tenure, what do you think we’ll be talking about?

Pravin: I hope, by then, COVID is done with, though sometimes I get scared when people are talking about two, three cycles of COVID, and things like that. But anyway, jokes apart, I hope at the end of one year, we will probably be talking about looking back at crisis how we dealt and we dealt with the crisis and how successful the Indian IT industry has been able to navigate around the situation, ensuring business continuity for our clients and proving our resilience. Hopefully, with COVID behind us, we’ll also be talking about how seamlessly we have adjusted to the new normal, and we’ll probably talk more positively around the growth prospects of financial year 2021, I think, at the end of this year.

Phil: Well, thanks very much for this time, Pravin. This was really insightful to hear your views, and how you’re going to tackle this. And it’s been very heart-warming to hear how the Indian community, in particular, has come together with the government to tackle this crisis so quickly, and I think you guys will all come out of this fairly unscathed, and actually, in a more robust place. I very much hope we’ll all be together, physically, in a few months at your big India Leadership Forum event in February, so I look forward to it very much.

Pravin: Of course, Phil, thanks a lot. I also hope that very soon this will be behind us, and I look forward to more positive conversations in the future. Stay safe.

Best wishes to you and your colleagues and family.

Phil: Yes, absolutely, Pravin. Same to you guys. Stay healthy. Stay sane! We’ll talk again very soon. Take care.

Posted in: IT Outsourcing / IT ServicesOutsourcing HerosPolicy and Regulations

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SBA: Please stop spanking bots

April 30, 2020 | Elena ChristopherMiriam DeasyPhil Fersht

What better to blame - when all goes wrong - than the evil robotic thing you just inserted into your system.  Many of you saw the recent article in ABA Banking Journal where they blamed RPA for the "burden on their processing system and diminishing of its capabilities".  We will discuss this debacle in a more detailed POV (stay tuned) but the crux of the issue here is a poorly run government IT function tinkering with software to try and process a mad scramble for many thousands of small business handouts from the recent Covid-19 stimulus package - and most likely in some weird virtual lockdown vacuum.  And it appears woefully understaffed. 

In short, APIs + humans + bots need to work within system parameters, or we're always going to have failures of scale like this one.  

RPA is a highly useful tool to support this environment, but please let's start deploying it as part of the overall tool-box 

As we’ve said of late, the digital workforce that wasn’t finally has its burning platform chance to shine. Since global lockdown commenced, we’ve been tracking, talking, and learning about the ways in which enterprises and their service and technology partners are using automation to help them function. One of the most prevalent use cases in recent weeks is in the banking and financial services sector where lenders are using automation, largely, RPA, to support loan processing for government-backed loans. RPA is helping lenders grapple with massive loan volumes and get them submitted quickly so loans can be approved and dispersed.

Insert monkey wrench.

The U.S. government’s Small Business Administration (SBA) application and approval portal was overwhelmed with demand as a second tranche of government funds were made available on April 27. The funds are intended to support loans for small and medium-sized businesses (administered via banks) as part of the Payroll Protection Program (PPP) during the Covid-19 pandemic. The SBA E-Tran system receives the loan applications and then the SBA processes and approves them. The system struggled to handle the new surge of applications coming through and repeatedly crashed. As of Tuesday, April 28, the SBA prohibited the use of RPA bots in the application process.

RPA fail, right? Not exactly. It is actually the overwhelming success of a blunt instrument.

The HFS team dug in and spoke with a variety of ecosystem players - banks, software companies, and service providers to get the straight scoop. We also reached out to the SBA, but they have not responded. We view this as a case of RPA being used as a blunt instrument allowing any bank that invested in RPA to automate loan application submissions. RPA very legitimately helped banks and lenders process scads of PPP loans. This presented two immediate issues:

  1. The SBA E-Tran system crashed – it was way overburdened with hundreds of thousands of loan applications.
  2. Banks with automation were potentially able to submit more loan applications than those without thus more effectively accessing a limited pool of stimulus funds.

The SBA responded in a super butt-covering mode with its "NO RPA!!" edict. It will still allow loans to be automatically processed through APIs. So now banks are scrambling to convert their RPA processes to API-led. And the SBA assigned one person. Yep, one person to field all requests for API access. We hope this poor beleaguered contact has some help, but banks have reported the API access option is “very slow”. To address the potential of access bias for those firms with automation – deemed to be the larger banks - the SBA designated an eight-hour window on April 29 for lenders with less than $1 billion in assets to submit loans.

Bottom line: This SBA debacle is why you need nuance and a toolbox approach to automation to get desired results.

It’s too easy to say RPA failed. It’s more complicated than that. Really RPA was a blunt instrument here – for its speed to solution and ability to swiftly process loan applications and it worked remarkably well. Too well. It swiftly overwhelmed SBA’s E-Tran system – which was doomed to be overwhelmed anyway by these unprecedented volumes in a short period of time. But RPA exacerbated it and potentially gave access advantage to automation-savvy firms. While access through SBA’s XML API may allow for more efficient loan submission rather than the RPA model of going through the user interface and clogging the narrow pipes, this did not have to be an ‘either or’ situation. APIs versus RPA is not the point. Automation always lives in an ecosystem with upstream and downstream impacts and these were not adequately addressed. A better approach would have been a toolbox approach that leveraged RPA for loan preparation and access into legacy systems in the lenders’ shops, APIs for submission and humans for oversight with some substantial volume throttling to give the SBA’s system half a chance at doing its job. Automation cannot live in a vacuum.

Posted in: Robotic Process AutomationIntelligent AutomationPolicy and Regulations

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Welcome Ram... he'll get you out of a jam

April 26, 2020 | Phil Fersht

For those of you who follow HFS closely, you'll know we have a small but extremely focused and competent analyst team in Bangalore. And if one region has shown all of us in the services industry how we can pivot fast to keep the wheels on IT delivery... it's India.  So we couldn't be more excited to add Ram Rajagopalan to the team who will lead many of our consulting studies in addition to getting stuck into our coverage of AI, IoT and supply chain.  And one thing I love about this guy... have can he smile with actually smiling?  Maybe he learned that during his time with IBM, Wipro and Genpact...

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

Thanks Phil! I am excited to be part of HFS.

I am a professional with 18 years of experience spanning across strategy consulting, market research, business development, and executive program management of initiatives. Most of my experience has revolved around consulting assignments for either opportunity growth or internal issue resolution. I have worked with hi-tech clients in banking, automotive, electronics, public sector, and instrumentation industries in Europe, North America, Japan, and India.  

I have always loved strategy consulting irrespective of the variety of roles that I have done in my career, and have been keen to get back into strategy and research after gaining experience in marketing and business development roles in the industry.  

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

Initially, I am focusing on the impact of COVID-19 on IT companies. This involves understanding how IT/ITES enterprises are responding to the COVID-19, and planning to counter COVID-19 in short to medium term. I will also be working on a consulting project on Automation. This will focus on the future of automation in the new normal situation.

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

I believe that companies will explore automation and security solutions. This is attributed to the adversity due to COVID-19. The large companies will look at an integrated approach to leveraging automation, artificial intelligence and analytics based on their client needs. Permutations and combinations of these activities will result in new use cases to serve the evolving needs of customers. This will take a while as the enterprises are focusing on their impending needs to sail through the stabilization phase of COVID-19 effectively.

How are the India-heritage IT service providers dealing with the current COVID-19 crisis, Ram?  Do you foresee some major issues with clients occurring as a result of moving so many staff into home-working situations?  And do you see this eventually returning to the same delivery model as before when all this is over... is will we see something different emerge?

We should look at this aspect by tiers of IT companies, end-user businesses and the types of services.  Clients in industries such as BFSI, government, and manufacturing will not want this situation forever. They would be keen to see their supplier side employees back in the onshore, offshore and nearshore centers. The nearshore focus might increase as clients would want to stay closer and adopt new ways of working with the suppliers. Secondly, the large companies have the advantage to convince their clients and get more of regular application development and maintenance work transitioned to them. Clients will have a lot to handle after the current situation. IT suppliers can help them by sharing their load in regular IT services. This may not be easy for mid-tier and small IT companies due to the typical challenges around cash flow management and scale of operations.

Secondly, “Work from Home” situation will depend on the level of trust established with the client and the lack of time-tested security solutions.

When the COVID-19 ends, the IT world will be business as usual. This does not mean that the companies will not carry the lessons learned from the current situation. The large and mid-tier companies will start in-house activities to improve the ways of working remotely. Large companies have already started looking at strengthening their security solutions either organically or inorganically. We will get to see Agile increasingly becoming mainstream across the majority of suppliers.

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

I watch cricket, specifically test cricket. I also love outdoor jogging, and reading books on a variety of subjects. One thing that I have been trying since my college days is to understand more about this world from a non-linear perspective than just feeling convinced with linear theories.

Well... certainly an interesting time to make a career change Ram... we eagerly await the result of our COVID-19 work and seeing your first pieces!

Posted in: Internet of ThingsSupply Chain ManagementArtificial Intelligence

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Don’t you wish you’d done more? The digital workforce that wasn’t finally has its burning platform chance to shine

April 18, 2020 | Phil FershtElena Christopher

Well, we can’t deny it was noisy, loaded with more hype than a Vegas heavyweight boxing match, and backed by more investment dollars than the GDP of a small country. Yes, folks, that was quite the automation ride we all recently experienced. And what a dogs' breakfast that all turned out to be...

Sadly, nearly nine out of ten enterprise adopters simply didn’t get past piecemeal projects, pilots, and lots of very drawn-out evaluations. In fact, most simply didn’t have a burning platform to do very much at all with it.  The lethargy to do anything more than hype up RPA at conferences with bullshit such as "a bot for every desktop" drove us to proclaim (quite correctly) that the RPA value proposition was dead.

However, if there’s ever been a time we needed a digital workforce to augment humans, it’s now as 54% of major enterprises we surveyed this month seek to increase their process automation investments.  Yes, people, there is a realization of the importance of process automation technologies to support these rapidly evolving digital workplaces, which is only superseded by the need to invest in cybersecurity:

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 As we all adjust to the new abnormal, this is finally the time for the digital workforce to shine

The COVID-19 global pandemic is challenging our fundamental ability to keep businesses across all industries up and running while ensuring employee safety, preserving employees’ livelihoods, and meeting customer needs. Massive portions of the global workforce are being told to work from home, creating the most widespread operational crisis in modern business history. These rapidly emerging, globally distributed, remote, virtual workforces are creating a huge need for effective automation and a digital workforce. Yes, folks, the burning platform has arrived, and it’s literally ablaze.

As the following data from a few months ago reminds us, we’ve seen far less scale of Triple-A Trifecta (automation, AI, and smart analytics) technologies than we’d like (and need). Despite having spent the better part of a decade investing in digital transformation and loads of slick emerging technologies, we missed the boat on addressing process debt and replacing moldy legacy systems. It is what it is at this point, as we have no time to lament what we should have done. Now it’s all hands on deck to leverage what we do have to help businesses function during the pandemic. The need of the moment is operational impact; thus, the implored imperative is to get creative and figure out how to quickly re-use and, more broadly, deploy your proven digital workforce assets.

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Learning to share during the pandemic—toilet paper, hand sanitizer, and automation assets

We’ve all seen unsavory images and headlines showcasing human nature at its self-centered worst—hoarding toilet paper, buying up 10 years’ worth of hand sanitizer (just in case!), and creating a dearth of surgical masks when healthcare professionals urgently need them. We need to remember how to share and be equitable despite the uncertainty. As we evaluate how enterprises built their automation programs over the past few years, we see loads of siloed activity—functional groups fending for themselves. On the one hand, there has been a notable surge of business operations leadership playing an active role in technology-led change. However, many of these siloed initiatives are those that have stalled or plateaued, stuck at low levels of task automation with little to no process change. The pandemic has presented an urgent need to break down enterprise silos and share proven digital workforce assets.

Operations leaders currently don’t have time to develop new digital workforce solutions. Anything that’s in the planning, pilot, or implementation stage is on indefinite hold while operational triage takes place. Enterprises need to take swift inventory of what they have amassed in terms of Triple-A Trifecta assets, determine cross-functional potential, and deploy them. This task-focused rollout is not fulfilling the grand vision of orderly enterprise digital transformation; it is being practical and opportunistic when we need it the most.  And practical and opportunistic is what is clearly on the minds of many enterprise leaders as they realize they should have paid a lot more attention to changing and automating processes to support real business needs.  But better late than never...

Tactical, practical task automation inspiration from the trenches

For those enterprises who have invested in Triple-A Trifecta technologies and have proven assets to work with and disseminate, here are what some of your compatriots are doing as part of their now and near-term strategies:

  • Cross-functional assets are king. Operations leadership from one global financial institution described deploying cross-functional AI platforms to new functions or similar functions in new departments for tasks such as document digitization, email management, and automated exception resolution. We are playing a leverage game at the moment—take the proven digital workforce assets you have and find ways to deploy them to a wider user base, generating leverage through repurposing.
  • Bots built with reusable code and accelerators. Reusable components are helping enterprises in a diverse array of sectors, including airlines, healthcare, financial services, and retail, deal with massive spikes in volumes of calls, emails, and forms. The replicated skills cover functionality such as reading, categorizing, routing, prioritizing, responding, and consolidating, and enterprises (or helpful service partners) can spin them up relatively quickly to address massive peaks and atypical working conditions. Here is a link to a public domain example from the NHS. There are also loads of downloadable assets available on various marketplaces to complement existing implementations, such as UiPath’s health-screening bot.
  • Donated resources. We’ve seen some examples of service providers and automation technology firms offering gratis access to their resources and technology to help those in need. We could use more of this! Accenture supported the NHS example above; Appian is offering complimentary access to its COVID-19 Response Management application for customers and any enterprise over 1,000 people, and Blue Prism just announced it would donate resources and digital workers to automate processes related to COVID-19.
  • Digital assets can remain on site. We’ve heard a few instances where remote workers are unable to access legacy systems off-site and are leveraging onsite bots to remotely manage access systems, enabling work to continue.
  • Cloud-based business process platforms with intelligent workflows. Many service providers have sizable operations centers in offshore, nearshore, and onshore locations. Aside from a lack of laptops, many service providers have been successful in allowing client-facing resources to work from home due to secure access to cloud-based business process platforms enabled by Triple-A Trifecta-enabled technologies. Resources are supporting functions such as finance and accounting, procurement and sourcing, and customer experience.
  • Leverage analytics and process mining to understand what’s working. Meanwhile, while you are more broadly disseminating your digital workforce, you can leverage analytics to help you quickly understand what’s working and what’s not so you can make informed choices about where to spend your time and effort. Tools such as workforce analytics, process mining, and predictive analytics are proving particularly helpful here for many enterprises.

The Bottom Line: This wasn't the digital workforce revolution we'd hoped for, but let’s harness what we can now and ensure we make re-invention happen post-pandemic

The global pandemic is making us realize just how reliant we still are on humans and antiquated processes and technology. Despite having spent the better part of a decade investing in "digital transformation" and loads of slick emerging technologies, we missed the boat on addressing process debt and replacing moldy legacy systems. Thus, here we are, knee-deep in the most widespread operational crisis in modern business history, and we’re being laid low by our unwillingness to change how we execute work.  Which has now come back to slap us in the fact with one very slippery wet kipper... and over half of you intend to do more with automation than any other tech investment bar cybersecurity. 

We're definitely not building the digital workforce revolution we thought we were, but now we have no choice but to digitize global digital workplaces and technologies such as process mining and RPA are crucial to support these transformations. But we need to leverage what we do have, so get to work and repurpose task automation and algorithms and other gems you may have cultivated. Remember to share and get creative across your enterprise and externally where needed. And, above all, when we start to have a line of sight to the other side of the pandemic, we must be resolute in changing. For real this time.

Posted in: Robotic Process AutomationIntelligent AutomationProcess Mining

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Digital Associates finally have their flaming platform

April 12, 2020 | Melissa O'BrienEmily CoatesPhil Fersht

Sometimes platforms smolder, sometimes they burn, and sometimes they even rage with flames... and one example that's genuinely flaming in this current paradigm shift is the world of chatbots and their more sophisticated cousins, Digital Associates.  With this urgent need to augment customer-facing services with the locking down of call centers and corporate offices across the world (or even just keep them functioning at all), to keep IT help desks operating, or even internal needs such as basic finance,  procurement HR and payroll services, the opportunity to have digital "workers" with whom to engage is in high, high demand.

Our analysts Melissa O'Brien and Emily Coates have released introduced our first Digital Associates top ten products report, which ranks and analyzes 13 of the leading tools on the market for creating these conversational tools we call digital associates.  

Melissa, which products have the capabilities to develop really effective digital associates, and quickly? 

Our recent report analyzed voice of the customer feedback on the most important elements of enterprise products and platforms for developing digital associates, from functionality to the ability to embed intelligence. The 13 software products we have included in this study highlight the vendors that play in the three most important ecosystems for digital associates: developer tools and platforms, enterprise products, and niche products:

I am assuming, in today’s environment, ease of deployment trumps intelligence?

At this moment, the most important element for digital associates is the ease of use and relative ability to get up and running quickly. Google’s Dialogflow scored at the top overall and also is #1 for ease of use and functionality.  Our VOC survey respondents indicated that the ease of implementation was a major strength for Dialogflow and its “out of the box” capabilities that are able to be quickly plugged into communication channels like Slack and Twitter.  Runners-up for ease of use were Conversable and IBM Watson, where pre-trained modules and solid UI make it easier for users to stand up the DA’s in shorter amounts of time.

The pandemic will drive adoption of digital associates in the short term, and enable a greater acceptance of them as communication tools as part of business strategy in the future

Since the outbreak, there have been a plethora of chatbots that stood up in varied use cases.   Perhaps the most felicitous ones we’ve seen have been the Coronavirus ‘self-checker’ bots created, which are actively in use in chat functions by major health organizations.  We’ve also heard of digital associates being deployed by HR departments to run through work from home ‘checklists’ with employees.  And as the rush to work from home begins to stabilize, we’ve also been hearing a lot more about customer-facing bots being deployed for contact deflection in customer service functions.

In the coming weeks and months, we’ll continue to see companies of all shapes and sizes rustle up some digital bandaids to throw on a very big wound.  At some point when the dust settles and a new normal emerges, companies will be re-assessing and designing everything from their customer engagement models to BCPs to internal processes.  And that’s when it will become clear that a digital-first approach is likely the easiest, most sustainable and least “disrupt-able” approach for many processes and communications.

And, it’s also the time that the ease of use for digital associates will become hygiene and digital associates tools will need to be agile and intelligent. This is where vendors’ investments in creating digital associates tools that can adapt quickly, learn and apply more advanced techniques like sentiment detection.  A standout in the innovation category is IPsoft, which ranked at the top across the board all innovation categories of embedding intelligence, scalability, and flexibility.  Dialogflow is well poised to rise to the challenge as well, with powerful abilities for modeling large and complex flows using intents and contexts.

The Bottom Line:  A ‘digital first’ approach could become the post-pandemic new normal.  The tools that are being quickly developed now need the potential to become more intelligent.

As companies start to move out of survival mode, we will start to see a much more strategic use of emerging technology.  People need to start thinking in new ways – not just about today’s problems at hand – but also about responding to future disruptive events in a way that uses important technological tools like digital associates in effective ways.

HFS Research premium subscribers click here to download your copy of the Digital Associates top ten products report

Posted in: HR StrategyDigital OneOfficeIntelligent Automation

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Leaders embracing an infinite mindset can flourish during these times

April 05, 2020 | Phil FershtSarah Little

As a leader, it’s so easy to obsess with operational functions of the business during times of disruption or distress - in this case, a global pandemic – that it can create knee-jerk, often short-term decisions that could inherently damage your long-term vision, your business’ culture and your raison d'être.  

Having lived and worked through four recessions, I personally understand the rapid change in leadership mindset that can occur when a firm goes from peacetime and growth to one of survival and all-out war.  According to author Simon Sinek, people look to leadership to serve and protect, to “set up their organizations to succeed beyond their lifetimes1.” But in the modern landscape, most organizations place an unbalanced focus on near-term results that may ultimately prove to be self-defeating, like casting aside your umbrella in a storm because you haven’t been getting wet. In short, business is no finite endeavor. This pandemic lays plain for all to see the game we are really playing.   

Finite vs. the Infinite: What is the Infinite Game?

A finite game is one with fixed rules, objectives and time horizons, the goal quite simply is to win1. But how do you “win” in business, or against a virus for that matter? Did Singapore “win”, or did they have strategic measures in place that allowed them to move through the disruption more smoothly? Is New York City “losing;” has Italy “lost”? Of course not – there is no metric or rule by which a city or country would lose to this disruptor. They can be battered, bruised, decimated even, but they will persist and stay in the game.

With no defined time horizon, no clearly-defined rules, and with players that may enter and exit at any time, the primary objective of an infinite game is quite simply to keep playing1. The goal for businesses, just like cities and countries, is to have the will and resources to stay in the game, through thick and thin.

Getting through the thick of it: running towards bad news

Forget about technology for the moment, bad news is the preeminent change agent. Even Winston Churchill espoused the transformative powers of bad news with his dictum, “never waste a good crisis.” Let us not be mistaken – we are in brutal times, and I would prefer not to have this type of bad news for anyone to run towards, but let us continue…   

“People take their cues from the leader, so if you’re okay with bad news, they’ll be okay, too. Good CEOs run toward the pain and the darkness; eventually, they even learn to enjoy it.”

~ What You Do is Who You Are, Ben Horowitz

In business, we have to open ourselves and our teams to embrace bad news to get ahead of it. From bad news, roadblocks are revealed and underlying issues come to light, many times sparking momentous shifts in approach and innovation. But it is the initial willingness to dive into discomfort that is the defining characteristic of personal leadership, it shows up “in all kinds of essential ways: making difficult decisions; taking responsibility for them; apologizing for mistakes.2

Welcoming bad news fosters resiliency and allows transparency to appear through a different lens. And with that, trust flourishes. According to Sinek in his 2019 book, The Infinite Game, “Trusting Teams, it turns out, are the healthiest and highest-performing kind of teams.” He continues, “Good leadership and Trusting Teams allow the people on those teams to do the best job they can do. The result is a culture of solving problems rather than putting Band-Aids on them1.”

So get going, start running.

Building trust, resiliency and culture through a bias for people and an “experience” architecture

There is much to be said about driving culture in an organization, and at the very core of culture, is human nature. People are hard-wired to feel that they are valued and are part of something bigger than themselves; that they are contributing to the core purpose, or “Just Cause1”, of the company.

“When hard times strike (and hard times always strike), in companies with a bias for [people], the people are much more likely to rally together to protect each other, the company, the resources and their leaders. Not because they are told to, but because they choose to. This is what happens when the will of the people is strong.”

~ The Infinite Game, Simon Sinek

It is no wonder we are seeing employee experience a critical component to success within the enterprise today from two different consideration sets – the heart and the mind.

At the heart of the impetus is the foundation of trust, enablement, and partnership that truly fulfills not just the Way people work but the Why.  When people are given responsible freedom and provided with the support to flourish, when they can work within a trusting team – safe to express ideas, ask for help and be open to learning – people will put forth the will to give their all. Likewise, the business reciprocates and fosters the relationship, their environment and their growth.

The mind on the other hand is the model linking customers to the core of the business – its purpose for the services and products it provides - which is essentially service-oriented, i.e. customer-centric.  The Digital OneOffice is the "experience" architecture, bringing customers and employees together into a unified state where supporting customers and anticipating their needs is native to the entire organization. At its core, OneOffice is about making customer, employee and partner experiences the centerpiece of the strategy, playing host to the new duality between who is servicing the customer and who is the customer:

Service is the tie that binds the heart and mind. Teams who are connected to the company, its leadership, its customers and each other are far more likely to come together for the greater good in the face of adversity and hardship. “The same things that help the company survive and thrive during good times help make the company strong and resilient in hard times.1

Beware the “imposter cause” as your point of purpose

According to Sinek, finite-minded companies espouse what he considers to be an “imposter cause,” confusing growth, arbitrary metrics, or successful products and services with a strong company, which may very well become obsolete. They understand customers change, but safeguard resources and existing operating models in the face of disruption. These elements can be particularly true in the enterprise technology arena, where deep resources and services are modeled around two interconnected enterprises – the client and the service provider itself.

Just Cause

 

Imposter Cause

Directs the business model, with products and services advancing the cause. Its attributes are durable, resilient, timeless, beneficial and idealistic.

 

Examples

Whole Foods: Our Purpose is to Nourish People and the Planet

 

Netflix: We want to entertain the world. If we succeed, there is more laughter, more empathy, and more joy. (Netflix > Culture)

 

 

Business model is directed by existing resources or the relevance of current products and services

 

Examples

Garmin: We will be the global leader in every market we serve, and our products will be sought after for their compelling design, superior quality, and best value.

 

Vizio: To deliver high performance, smarter products with the latest innovations at significant savings that we can pass along to our consumers.

We are riding the massive new wave of outsourcing transformation – changing the way services are delivered. Who can guide us through the new abnormal? Who is prepared for the future?

An infinite mindset is crucial to current and long-term success. As noted by TCS’ Rajesh Gopinath in my recent “…In the flesh” interview, “The formula that has worked, and which will continue to work, is this unrelenting focus on the customer and unwavering belief in our own talent. The waves will keep changing, but you need to define yourself as surfing the current wave. And, as the wave changes, you’ve got to keep on readjusting yourself. But the value proposition is unwavering in its focus; it’s to make technology work for our customers.”

Partnering in this space is critical for the current wave and those to come. Even as the pace of digital-first has vastly accelerated, we are in a journey - not a race. In today’s environment, enterprises and provider partners need to stay tuned to the vision, look at business continuity in a virtual model and then apply the technologies that can best advance the organization through the turbulence and beyond. “An inifinite-minded leader does not simply want to build a company that can weather change but one that can be transformed by it.1

The Bottom-line: Transformation finally has its flaming platform. The phoenix has arrived.

Did you ever think your enterprise could move to a 100% work-from-home environment with less than three weeks’ notice? This crisis is forcing businesses to flex – vastly accelerating the digital-first environment, dramatically cutting redundancies and improving processes at scale. There is a massive amount of change happening, and out of change comes real transformation. After years and years of complacency due to the relentless growth (and papering over the cracks of 2008), all of today’s organizations now finally have a burning platform to change how they operate globally.  In fact, the platform is positively on fire!

Within the chaos of transformation, even a highly disruptive one, the core is steady and still; it is what you ultimately serve through your work - the direct connection between the business, what it purposefully provides, and its customers. An infinite mindset in business is essentially customer-centric, it’s your model, resources and processes that will shift in response to the environment. Technology, quite simply, is the great enabler.

As borders close and cities continue to shelter in place, the alarming and far-reaching impacts from this pandemic can ultimately be seen as a unifying event. If our goal is truly to stay in the game, then let go of what needs to go, embrace the brutal, protect and empower your people and restructure the new normal with laser-focus on the Cause and your customers – all of them. “Disruption is not going away anytime soon, that’s not going to change. How leaders respond to it, however, can.1

Pictured: HFS CEO Phil Fersht with The Infinite Game author Simon Sinek, circa 2017

References

1 The Infinite Game, Simon Sinek

2 How Great Leaders Deliver Bad News, Erika Anderson (Forbes)

Posted in: HR StrategyDigital OneOfficeCustomer Experience Management

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Sorry Folks...

April 01, 2020 | Phil FershtReetika Fleming

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Coronavirus cruelly exposes the fragility of the offshore outsourcing industry: Will clients trust all their eggs in one basket again when this is over?

March 22, 2020 | Phil FershtOllie O’Donoghue

The outsourcing industry is fast-becoming be the first vital piece of the global economy to come under the microscope as nations, businesses, and societies try to build a blueprint for what the post-coronavirus economy may look like.

India and Russia, in particular, are now being widely seen to have the slowest response to the coronavirus pandemic across all the major economies, and the situation is forecasted to worsen rapidly in the coming days and weeks - perhaps at the most alarming scale of all the current major global economies.

In addition, the current curfew (just announced) in India is going to have serious and immediate consequences for the smooth delivery of IT and business process work conducted for both overseas and local clients. Many IT support staff are poorly equipped to support work-at-home staff, not owning laptops, often living in unsuitable accommodation for work, and often with poor internet / wireless connectivity.

In short, like our governments and healthcare systems, the offshore outsourcing industry just wasn't prepared for this.  All the warnings were ignored and now some very sick chickens are coming home to roost...

We're running out of global locations to source service delivery, while work-at-home measures are proving woefully inadequate for offshore IT service provision

In short, the global industry is quickly screeching to a halt as a consequence of this pandemic. Most of the leading service providers have been instilling "safe distancing" in their centers, increasing onsite medical facilities and sanitary measures. However, with the death rate spiraling massively in Italy (almost 800 per day and rising) and US and UK expected to accelerate significantly because of their slow response to locking down public gatherings, workplaces and travel, the increased curfew measures just announced in India render these efforts from services firms pretty much moot.

In short, all global businesses are being significantly disrupted because of major restrictions mandating employees to work at home, and not having sufficient resources in India is going to exacerbate the situation for supporting critical IT delivery. Global enterprises may be forced to source local service providers to plug critical gaps, such as security monitoring, disaster recovery etc. which is going to put a strain on their budgets and my least to some major contract disputes (although many of the IT service contractors should be protected by Force Majeure provisions). In addition, service providers with strong delivery resources in locations such as Russia, which is resisting a lockdown, may take on additional business at this time, though most nations with strong IT delivery, such as Poland and Ukraine, are already in lockdown situations. The Philippines is also seemingly open for business, which is keeping the lights on for delivering a lot of voice-based services, but we expect them to shut down their centers soon with Duterte discussing emergency measures with the Philippines Congress on 23rd March.

Finally, the robustness of outsourcing will be tested to its maximum.  And - most likely - well beyond its maximum 

Discussing the issue with multiple executives in leading offshore IT Services firms paints a telling picture of how broad and painstakingly detailed business continuity plans are now. And, by inference, how woefully inadequately designed they were for a situation of this magnitude. Executives are telling us they have never seen such widespread implementations of business continuity in their multi-decade long careers. For their clients, while more measures from key offshore locations are understandable and, frankly should be applauded given their laissez-faire approach thus far, could still not come at a worse time. Outsourced service desks are already overwhelmed as they move to support huge volumes of end-users trying to access systems remotely and, in some instances, using technology stacks with which they have no training or familiarity. While it's not clear how the curfew will impact these engagements, one possible outcome is enterprises - out of desperation - start to develop and stand-up their own in-house capabilities to handle the glut in core IT work.

In terms of outsourced customer support, leading call center firms are showcasing their ability to shift a lot of work to their WAHA (Work at Home Agents) if the need arises, and most are still able to utilize their large Philippines centers because of Duterte's confusing attempts at a lockdown. However, we will only witness the true reliability of whether WAHA can actually deliver at a massive scale, when these workplaces are finally locked down... which is surely coming very soon.  In addition, after more than a decade of hype surrounding crowdsourcing, we will finally witness whether that can really do more than plug a few gaps for occasional developer needs.

The Bottom Line: Will enterprises still have an appetite to keep outsourcing when this is all over, or are those days fading fast?

Should this become widespread - we may emerge from this situation with a very different outsourcing landscape and a reluctance from enterprises to put all their eggs in one basket again - in-line with broader comments about de-globalizing supply chains. In short, the outsourcing industry may be the first vital piece of the global economy to come under the microscope as nations, businesses, and societies try to build a blueprint for what the post-coronavirus economy may look like.

Keeping enterprise clients' critical support services functioning is becoming the biggest challenge ever facing India's IT industry as it tackles this exacerbating health crisis. Provisioning laptops to essential IT staff, ensuring internet infrastructure is functioning under the strain while enforcing staff takes the necessary self-distancing and hygiene precautions are the critical functions of service provider management at this time. They have to operate on an immediate short-term footing to keep the lights on for enterprise clients, and with a medium-term focus on surviving the next few weeks with the right emergency provisions in place to keep staff healthy and a financial fallback to keep the wheels on the track as we go through these very painful motions. Whether governments will be bailing out outsourcing firms and laid off contract staff is very fuzzy right now, and the concern is whether there is an outsourcing industry to save after all this is over - even if there are some emergency financial relief measures in the interim.

Posted in: Business Process Outsourcing (BPO)IT Outsourcing / IT ServicesPolicy and Regulations

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In times like these you need to pivot your business model... now!

March 20, 2020 | Phil FershtTom Quigley

Posted in: Absolutely Meaningless Comedy

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Quarantine... there is no choice

March 20, 2020 | Phil Fersht

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Covid-19: Learn to live and work with it... Fast

March 15, 2020 | Phil Fersht

Firstly, we are not going to shut ourselves at home and lose our minds for the next few weeks.  This is the first time we are experiencing a truly global pandemic and we’re all learning what the hell to do.  However, rather than staring into a paralyzed abyss of a suspended reality of virtual conference calls, binge-watching the entire five seasons of the Wire (again) and watching your son’s best friend’s mom forbid them sharing Pokémon cards, take a deep breath.  This thing is not going to ruin our lives.  We just can’t let it.

Getting from abnormal to normal... quickly

The next 3-4 weeks we’ll figure out what’s going on.  Firstly, we just don’t have all the data points yet.  We don’t know how many people will get infected, and the speed that this will move – but it’s getting clearer everyday.  In 3-4 weeks, we’ll all have much better data on the longevity of this thing, and how to manage ourselves accordingly for our families and our jobs.

We must quickly find our steady-living-state where 'abnormal is normal'. Once we have a clearer picture, and we’re all taking sensible measures of self-distancing and avoiding risky gatherings, we can start planning our life again.  We’ll know many people with whom we can meet, the houses we can visit, have small gatherings with colleagues we all know are observing sensible routines, even clients we can visit with in non-crowded sanitized offices, meeting rooms for hire which are Covid-19 compliant – or even each other’s houses, if the relationship is that good.  We won’t be hopping on planes for a few weeks, but we can make the most of our social and professional networks around us.

Its time to get to work rapidly framing our new future, or we could quickly get left behind. Economies are changing, and most clients’ needs are radically changing with it.  Business models that may have worked just a couple of weeks ago may already be dead in the water.  Emerging technologies such as effective automation suites and the need to redesign processes will be more needed by companies more than ever.  The hyperscale cloud will be the platform where global business is done.  Turmoil forces change, and the current maelstrom will create rapid opportunities for some, and significant challenges for many caught in the headwinds.  Keeping right on top of this is critical, and having research, advice and validation to support quick decisions has never been so critical.

This may not be going away anytime soon, so we just have to learn how to live with this.  When reading what the experts in viruses are researching, it’s pretty clear that things thing will probably dissipate in warmer weather, but is highly likely to return again in the winter.  In fact, it may just become a really nasty strain of flu that comes back in phases – and many of us will become immune because we had a strain of it, while there will also be preventative drugs and (touch-wood) a “Covid-19 shot” we can take that will negate our catching this.

We’ll emerge into a more virtual, hygiene-conscious world, and I really hope we’ll all be wiser for the experience as the whole value equation of society changes for the better

I’d be very surprised if this comes and goes in several weeks and we never hear from it again.  It will take weeks to dissipate, there’ll be recurrences in various geographies, and there’ll be constant speculation about new strains emerging.  Yes, this is a huge pain in the backside.  But it’s here and will likely lurk around our lives and society for much longer than we expect.  However, it has raised awareness of core hygiene issues so many people always ignored, and it has made the issue of fake news and lack of real, credible data the most critical issue today. It is also forcing many countries to address their woefully underfunded health systems and may even create a new value system where critical issues like climate change become more important political issues than merely the growth of the stock market.

The Bottom-line: it’s time to face up to this new normality… and we hope a new societal value equation

We’ll be back on planes eventually and grandstanding the next awesome technology innovations at conferences.  But I hope we’ll all emerge a little more humble, human and socially conscious than we once were. 

However, what we can’t do is wallow in paranoia, fear and allow ourselves to get sucked into a vortex of negativity.  The stock market will most likely get hammered, we’ll tackle a difficult recession and many people will likely lose their jobs.  However, our global economy will recover and we’ll find prosperity again.  Let’s just hope it’s a world where we care more for our people, our health, our education, and our planet.

Posted in: Policy and Regulations

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Tackling Coronavirus.. The good ol' UK playbook works everytime

March 12, 2020 | Phil FershtOllie O’Donoghue

Posted in: Absolutely Meaningless ComedyPolicy and Regulations

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Coronavirus: Why You Must Act Now

March 11, 2020 | Phil Fersht

Highly-respected writer Tomas Pueyo conducts a bone-chilling analysis on the speed of Coronavirus spread if we don't act now.  Just observing the cases in China show how rapidly the virus stopped spreading as soon as it was locked down.  These were his conclusions:

Let's examine some of the data highlights from his research - all based on real-time data being reported in the virus spread.  Firstly, see how quickly the number of cases in Hubei Province declines once the government implemented its lockdown:

Click to Enlarge

Pueyo goes on to perform some data modeling to show how sensitive every single day can be when implementing social distancing:

Click to Enlarge

The Bottom-Line:  Social distancing policies reduce the exponential spread to the most vulnerable

In short, we need to buy time to make sure the elderly and young people do not catch this.  The data from Taiwan already shows how effective social distancing and travel restrictions can be if implemented immediately as the country currently has the lowest incidence rate per capita.  The broad data set from Hubei clearly tells us that, although the government acted late, its impact on decreasing the spread was massive.

While most businesses in our industry must be commended for enforcing swift travel restrictions and events cancellations, the same cannot be said for many governments which seem to be adopting more of a "wait and see" policy. Will we regret not acting swiftly enough?  Only time will tell...

Posted in: Policy and Regulations

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Meet Rajesh... in the flesh

March 09, 2020 | Phil FershtSarah Little

 

When the legendary Chandra moved on from his TCS leadership role three years ago, his successor had a very big pair of shoes to fill to lead, not only India's most valuable company, but also to sustain its position as a truly global IT services heavyweight that could rival the likes of Accenture and IBM on any deal.  Step up Rajesh Gopinathan, a quiet unassuming man who had focused on designing the internal workings of the firm for 16 years away from the spotlight.

So when presented with the rare opportunity to get time with Rajesh at the recent NASSCOM event in Mumbai, we couldn't resist grabbing the chance to get him to share some of his views with the HFS audience... no scripting, just straight from the heart. Within his words you’ll find his formula for success, key areas of focus, commitment to people, ability to engender both transformation and regeneration, all while maintaining a commitment to make technology work for its customers.... enjoy.

Phil Fersht, CEO HFS Research: Good afternoon, Rajesh. It would be great just to hear a little bit about you and your role at TCS, and how you’ve evolved in the company. Maybe you could just give us a little bit about your background, where you started out and whether you ever expected to be doing this job that you’re doing today?

Rajesh Gopinathan, CEO TCS: That’s an easy one, the last part of it. No. [Laughs]. I am an engineer by education; I did an MBA and then joined the Tata Group, and, pretty much, that’s been where I have been throughout. But I moved around within the group, worked in a few of the operating companies, and then the last 20 years have been with TCS. And, in fact, as is the culture in TCS, I have moved across multiple areas, so I’ve been in operations, I’ve been in sales, then I was in finance, and finally ended up in this current role. When I joined the company, we were less than $400 - 500 million, so it’s been a phenomenal journey.

The good news is all of us have worked together right from the beginning, so none of us quite knew what the future held, but it’s always been run by aspiration, you know? We saw the possibility, and we knew that this is something that can be attacked systematically, going after it one after the other. That’s the biggest part of TCS. Right? That we have all grown together, and different people are in different roles throughout. …It’s a unique company, to that extent; I don’t think, of this size and scale, there are too many around.

Phil: We talk a lot with clients about what got them here and the journey they came on for the last ten years to today. So, as you look at where you’ve come from, and where the company’s going, do you think the same formula is going to work for the next five years, that worked in the last five? Or do you think things are changing radically?

Rajesh: There are formulas that have worked for the last ten years which will continue to work in the future, and there are formulas that have worked which will not. The formula that has worked, and which will continue to work, is this unrelenting focus on the customer, and unwavering belief in our own talent. As long as you stay very close to the customer, don’t get too coy, or too ahead of trying to think that you know what’s better for the customer. Stay very close to the customer, stay relevant and be in cadence with them, one step, two steps ahead. I keep characterizing our business in this way, that, if you think of a product company, a product company, by definition, needs to be ten steps ahead of the customer. They need to reimagine what the future is. They need to think about the possibilities, and they need to take a bet on where the future will be. I would say a more management consulting-oriented company needs to be five steps ahead. It needs to have answers and frameworks for when a customer starts to think about things. A technology services company needs to be a couple of steps ahead of the customer. It should be ready to be able to provide the customer with a trusted place where they can experiment with the things that they want to experiment with.

These are three different business models, and you need to be clear in your head which business model you are operating with. So we have been very, very focused. It’s like surfing the wave. The waves will keep changing, but you need to define yourself as surfing the current wave. And, as the wave changes, you’ve got to keep on readjusting yourself. But the value proposition is unwavering in its focus; it’s to make technology work for our customers. 

Phil: Rajesh, do you think there’s a distinct shift happening, from technology change to culture change, to business change?

Rajesh: That’s an interesting way of putting that question, Phil. From a technology perspective, there was a period of massive heterogeneity, and now it’s coalescing, which has been the nature of technology. It keeps getting compressed; therefore, we need to equip ourselves to be able to deal with it again and again. So the way we think about it is, every time we hire a kid out of college we believe that the person will have a 30-year-plus career with us. So, with the speed that we are going, you are going to see three, four, five, eight cycles.

We have to be able to make sure that we can get our talent through each of those cycles. How do we build both the culture for that, as well as the infrastructure and the systems? That is the focus, so we massively invest in training. This last time around, we have taken a very fundamental relook at our training infrastructure. We have always been leaders on training, but we have built up a training infrastructure which was optimized for the last generation - large training campuses, classroom training, a course curriculum, three-month training, three-week training, those kinds of areas. About five years back, we started relooking at it. We said, “How do we break this up and align it to the current learning culture which is more tool based?” So massive changes. We broke down the course content, which was more aligned for this kind of push training, to be more pull-based. We changed our learning management system. We were on an off-the-shelf product; we threw it out and rebuilt our own training management system, completely reimagined it, gamified it and integrated that with our social platform internally, called Knome, that’s similarly gamified.

We changed the infrastructure. It’s a cloud-first, mobile-first approach, it’s available, on the fly, anywhere.  So across, you know, seven, eight different dimensions of learning, we completely changed it, and scaled it massively. We’re talking around 300,000 people being trained in 12, 18 months. So massive changes. So, it’s not just culture; you’ve got to back it with infrastructure and with the systems to be able to do it. 

People are inherently open to change.  There’s a saying that we use: There’s a flood. And as floodwater started going up, all the people got on top of a building. And there was a very god-fearing person. So, as the floodwater rose, a boat came along. A lot of people there jumped down and got into the boat, but this guy said, “No, no, God is going to save me,” and waited. The floodwater increased. Then a raft came along, quite a few people were on the raft. They said, “Come on, jump; we’ll take you along.” Most people left. The man said, “No, God is going to save me.” The floodwater kept on rising. A log came around, with four or five people hanging on to it. They said, “Jump. We’ll go together to safety.” “No. God will save me.” Finally, the floodwaters got to him; he drowned. He goes to heaven and says, “I was such a god-fearing person, and how come, god, you didn’t save me?” God said, “I sent you three saviors that you didn’t use.”

The individual has an onus to change. And the organization has a commitment to make sure that it won’t sink. But that jump has to be done by the individual. So that’s the culture that we’re building internally, that change is inevitable, but it is something that we as the business will facilitate, and there is a lot of emphasis on retraining.

 Many organizations, Phil, when they think about talent, it is something that is going to come from outside, they create a sense of fear internally. We have a very supportive culture, and it gives us the ability to regenerate internally, which puts us in a unique position because we can then retain knowledge, and acquire the new knowledge. Knowledge is not something to be used and thrown away. It is to be invested in. Our retention rates are the highest in the industry - that’s our biggest competitive advantage. We are almost 10 percentage points ahead of the competition on retention, and that’s where our advantage comes from. We are very focused on that. 

Phil: If you had one wish – from God – to change the services industry for the better (beyond salvation from floodwaters), what would that wish be?

Rajesh: Slow it down a little bit, [Laughs] and give a bit of breathing space. 

I think that’s about it. But, to some extent, it’s self-correcting. Unlike consumer tech, enterprise tech needs to work in the context of what exists. And new technology comes, by definition, not from the people who understand how to make it work. So, before technology gets permeated inside an enterprise, there is a real physical lag, and that is the period of time that you have to scale it up. And the fact is that, if it is not scaled up, enterprises cannot use it. You can’t just infinitely change technology at an enterprise level the way it happens in the consumer [space]. At least that’s the belief that I have. 

We need to find what that sweet spot is. But we will, we can - we can afford to change faster than what we are changing today. We are not in a situation like processors or memory where you are constantly on a collapsing timeline. I do believe that we have some physical boundaries that we can rely on. 

Phil: Well, thank you very much, Rajesh. It was wonderful to hear from you for the first time here. Am sure our readers will be very excited!

Posted in: IT Outsourcing / IT ServicesDigital OneOfficeOutsourcing Heros

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Covid-19: Opinions are like assholes, everyone has one...but listen to the qualified one (weekend rant)

March 08, 2020 | Ollie O’DonoghuePhil Fersht

First of all, we are not epidemiologists, healthcare professionals or medical experts. Sadly, in our industry right now, this important distinction is moving into a grey area as everyone chimes in with their opinion.

Opinions are like assholes, everyone has one... especially when you can back them up with fake data

This post is a disillusioned response to the materials, opinions, and general wonderings now prolific on social media from people who, like us, don’t know anything outside of what their favorite newspaper columnist or news channel is telling them. If you want genuine medical advice about Coronavirus/Covid-19, please consult your local medical experts and healthcare practitioners – you won’t find much use in the musings of the technology analyst community, regardless of how passionately they pepper their opinions over social media.

As an employer where the health and safety of our employees, clients, families, and friends are paramount, we have been just as glued to the rapidly changing and seemingly unpredictable

Read More »

Posted in: Policy and Regulations

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Welcome to the New Abnormal, where this post-corona business environment will never be quite the same

March 03, 2020 | Phil Fersht

Well, what a difference a few weeks make!  Our business environment had never become so social, so connected, so personal, so networked... Life had become a logistical quandary of constant air travel, hotels, conferences, meetings, workshops.  Just doing one's day job and spending time with one's family was becoming a huge challenge for so many. Then suddenly it's all changed overnight. Wow.

Welcome to the New Abnormal everyone...

As of March 3, 2020, over 90,000 cases of COVID-19 have been confirmed worldwide across 73 countries, with over 3,200 deaths. With over 100 cases now confirmed in the United States, including cases of undocumented origin, the virus is now spreading faster outside of China for the first time.

With the WHO, the CDC and various key government health bodies making it clear that this novel virus is “highly likely” to spread worldwide, we are now entering unchartered territory. While the current death rate seems to be hovering around 2%, indicating that while highly contagious it is not highly deadly, it is unclear how this virus will behave once it has a widespread stronghold in the community.

We have never before seen a respiratory pathogen that is capable of community transmission, but which can also be contained with the right measures. The unprecedented measures China put in place, albeit later than optimal, has helped curb the spread and taught us all the advantages and the perils of locking down entire cities or regions. Last week was a clear example of how emotions were guiding the stock market, as panic about manufacturing slowdown, fears of global recession and the unknown path COVID 19 will take, really set in. World leaders are trying to straddle the line between the strict safety measures that would halt spread, and not bringing entire economies to a halt.

Without clear guidelines, companies are trying to find their own balance between keeping their employees safe and not bringing their businesses to a standstill. Here at HFS, we are thinking of the same issues and are trying to find our own balance. In doing so, we wanted to share our thoughts on how we can all move forward in ways that protect both our businesses and our staff and without panic.

Make this a Quarter of “Hunkering Down”. Unlike after Sept 11, 2001 or even the 2009 H1N1 pandemic, we are technologically poised to create a new virtual business environment. We have the technology to empower our employees to work locally or even remotely, as well as the ability to do very tech savvy virtual meetings. Strategy sessions, client visits, internal meetings – these are all things that can be temporarily moved to a virtual setting if and when needed, limiting travel to essential travel only. Without clear travel guidelines, this technology will allow businesses to let their employees choose which travel they are and are not comfortable undertaking.

It was estimated today that during the peak of COVID-19, an estimated 1/5th of all UK workers could be off sick at the same time. Allowing flexible virtual working environments by empowering employees with the technology they need to do it will undoubtedly help reduce the numbers off sick and help keep companies stable.

Discuss openly with clients and business partners what they are comfortable with. While some companies have strict new travel policies that have just kicked in, issuing a wave of what will be the new abnormal, for others it may be business as usual unless directed by governments to do otherwise. Discuss openly with clients and business partners their comfort level to travel and attend meetings/conferences and share your own polices. Make it very clear that in this new environment, most if not all work can be done virtually.

Discuss openly with your employees what they are comfortable with.  Some of your staff will be gung-ho to risk the virus while others will be nervous to travel on business, especially internationally.  Firstly fully understand your liability here - you may have to cover hotel expenses if staff are help for screening/quarantine periods (and some screening costs alone are in the thousands).  Once you are comfortable with your exposure as an employer then you can work sensibly with your staff to make sure everyone is comfortable.  In the coming weeks, everyone will be accepting of staff who just do not want to travel and those firms who are simply not willing to risk their staff hopping on planes. This is part of the new normal folks!

Invest in getting far more hands-on with the technology needed for this new environment. Companies must ensure that all employees have adequate access they need for teleconferencing and video conferencing capabilities. Make sure you have the tools in place match the need will be critical, as suddenly everyone's going to have a lot more time on their hands behind their desks, so we need to use video far more than we were, get much more comfortable using sharing apps such as Microsoft Teams, Slack, Google Hangouts, Apple Facetime, Skype etc.  In short, the culture of doing business is changing dramatically from the physical to the digital, and we have to get used to it fast.  We've yearned for digital for so long, now we have to use it!

Keep up to date on information. From reliable sources like WHO, CDC, or government health agencies only. Not passing on misinformation will be critical to ensure that this virus does not become worse for our minds than our bodies.

Unfortunately, it is not all up to us as companies or individuals. As more world leaders try to straddle the balance between keeping economies going and keeping their country’s safe, concerns have crept in. In addition, it is unclear the path this virus will take and therefore uncertain if the emergency response will be enough at the peak of the pandemic. It is HFS’ opinion that all countries need to prepare.

Learn from the example set by China. While much data points to an initial Chinese cover-up in early December, it cannot be argued that China’s move to lockdown Hubei Province hasn’t helped stem the tide. Despite the great risk to their own economy and the global economy as a whole, China acted in a manner that has bought other countries time to prepare for likely spread. Global leaders must now be ready to do the same kinds of school and government office closures if needed.

Prepare for worst-case scenarios and nothing less. Over-preparedness has never harmed anyone. Ever. It’s been annoying and it’s been frustrating but it never hurt anyone. Governments must adopt this philosophy and put plans in place to prepare for possible office closures, school closures and travel freezes as well as the need for medicine, ventilators, doctors, hospitable beds, etc.

Make widespread testing available and accurate. After returning to Miami in January from a work trip in China, Osmel Martinez Azcue was developing flu-like symptoms, just as coronavirus was taking over the country he had visited. Recognizing the seriousness, he felt like the responsible thing to do was check himself into one of Miami's largest hospitals. The hospital staff followed the proper protocols, took the necessary precautions, and put Azcue in a closed-off room. Fortunately, blood analysis found that he simply had the flu.

Mr. Azcue was rewarded for his diligence with thousands of dollars worth of medical bills. If governments are going to fight this via as much containment as possible, this cannot happen. People cannot avoid testing because they are afraid of the cost of finding out. What would happen when the coronavirus outbreak spreads in the United States if Americans avoid seeking medical care because they're concerned about bills they can't afford? It would be catastrophic in terms of containing the virus, devastating to the economy and even more crucial, critically dangerous for those who may become ill. Testing should be made available for all so we can all work together to contain and mitigate the risks facing the global community right now.

The Bottom-Line:  Life just changed but at least we can finally become Digital with how we do business

When we polled 355 enterprise leaders across the global 2000, the shift to digital from physical / face-to-face ranked number one as their primary business pressure.  Well now they're going to be forced to make these pressures come true:

So - right now - it feels as if the whole fabric of our industry is being ripped apart all around us - and in some ways it is.  However, this forces us to brave up to the world around us in a way we never envisaged... 

Less travel = more family time and staff time.  For me, personally, this is revolutionary.  I was hopping from country to country like it was just normal ...and this has made me take stock.  Fortunately, I have spent so much face time with my clients, industry friends, and colleagues that I am sure we can survive for a while on videos and phone calls.  I can also spend more time with my family who saw me as little as much of my team!

This will pass, but it may instill some better work and life habits... more time behind a desk means I can call all those people I have neglected, write more research pieces, think deeper about the future and where everything is going.

Peace out friends, we'll get through this one =)

Posted in: Policy and Regulations

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