Phil Fersht
 
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The Umph behind Humph: after 15 months in the Cognizant hotseat, Brian Humphries dives deep on the pace of change, the lessons learned... and much more
July 23, 2020 | Phil FershtSarah Little

Brian Humphries, CEO of Cognizant since April 1, 2019. In an interview with HFS CEO Phil Fersht, Brian moves beyond the business talk and straight to the deep end – the personal, the humble, the lessons learned – and the stakes set firmly in the ground.

 

I wrote a detailed business piece on Cognizant’s 2019 leadership change after losing its edge in the market: The Life of Brian: Prettying up a baby that’s got a bit ugly. One of our readers, Mike N, commented, “Don’t weep for Brian. I for one believe his hiring reflects the vision of a Cognizant and that he has the perfect timing and opportunity to shake up the old guard and culture. New day dawning!”

True indeed, but to now quote myself from the same piece, “When we’re asked what we think of the new CEO, our honest answer is we don’t know. He has, for all intents and purposes, kept a low profile externally, instead focusing his energies on extensive liposuction internally.”

I’ve managed to breach Brian’s low-pro firewall, finding a leader willing to engage beyond the business talk and go straight to the deep end – the personal, the humble, the lessons learned – as well as the stakes set firmly in the ground…  So, without further ado, let’s meet Brian:

Phil Fersht, CEO and Chief Analyst, HFS Research: Good afternoon, Brian. It’s great to get some time with you again today. I want to keep this conversation a bit more informal, and a little bit about you; not just about Cognizant; Did you ever expect to be doing this job today, when you set out, many years ago?

Brian Humphries, CEO, Cognizant: No, I did not. I’m from a relatively humble background, I would say, growing up in Ireland. I can’t say I started off wanting to be a CEO, Phil, because I probably didn’t have exposure to large MNCs until my early 20s. But I started working at a company called Digital Equipment Corporation, or DEC, which was acquired by Compaq and later acquired by HP.

So, for the first 18 years, I was there, and, subsequently, moved to Dell, became the President of the Enterprise Solutions Group there. I was most recently in Vodafone as the CEO of Vodafone Business, prior to joining Cognizant. So, I can’t say I’ve had a fully orchestrated career.

 

“I certainly made commitments along the way, in terms of moving internationally and throwing myself into the deep end of the swimming pool, more than once…”

 

I think, as the years went by, I had figured out paths of success. I certainly worked and invested in my career. I certainly made commitments along the way, in terms of moving internationally and throwing myself into the deep end of the swimming pool, more than once, to build out breadth and depth of experience. And along the way, you learn lessons.

And this is where, in a 25-year career, Phil, your ambition gets the better of you, and you realise through association with CEOs or other senior executives, that you have an appetite to not work for people anymore, but you actually have an appetite to lead. And that’s effectively what happened in my career over the years. Now, what I realised, becoming a CEO, is that now I have ten-plus bosses. I have a Board of Directors. So… it backfired. [Laughs]

Phil: [Laughs]. Right, right. So…

Brian: Fortunately, they are very supportive of everything I’m trying to do, so I’m one of the lucky CEOs.

Phil: [Laughs]. Well, that’s a good position to be in, compared to others, right? So what do you think it takes to lead a successful organisation in this industry? And, you know, maybe you could share a little bit about what you’ve learned in the first 15 months of this role?

 

“Look, it hasn’t been an easy start for me, let’s be honest.
…But I think we’re doing all the right things and the fruits of our labour are starting to show up…”


Brian: 
Look, it hasn’t been an easy start for me, let’s be honest. I inherited a quarter that was well below Wall Street expectations. I found out the news of that probably one hour into my first day at Cognizant. I’ve mostly been dealing with a lot of significant leadership changes, much of which I have initiated in our organisation, and then, of course, we had two exogenous events, with COVID-19 and ransomware. But I think we’re doing all the right things and the fruits of our labour are starting to show up, and I think Wall Street, and our employee base, will more and more give us credit for that.

Phil: And has your view changed about leadership since you’ve taken on this role?

Brian: I’m not sure that the principles I think about, in terms of leadership, have fundamentally changed. But certainly, I’ve learned valuable lessons along the way.

For what it’s worth, the principles that I have always adhered to, and I believe that I will continue to adhere to, relate to the importance of a purpose, of vision, of clarity of strategy, of having an operating structure where roles and responsibilities are truly, clearly defined, and accountability is defined within that; of having a culture that supports the focus on clients, and innovation, and collaboration – not just internally but with a partnership ecosystem. And then getting a leadership team around you that’s harmonious, where we pull in one direction. And, Phil, I know you’ve seen some of the changes I’ve made, in the last year, and will continue to make, across the company.

 

“Some of the things that I’ve been very focused on, in terms of leadership, are things like being a catalyst for change whilst being very respectful of the history and the pride of the company based on everything they have done.”

 

That said, joining Cognizant has been an incredible life experience for me, and the speed with which these events arise has been invaluable in terms of developing more as a leader. And this is somewhat unique for me, relative to my early leadership roles, in the sense that I’m the first non-founder CEO of the company, and I am also the first Caucasian CEO of the company. This is a company that’s had a remarkable track record, but, of course, in more recent years it wasn’t truly hitting its stride. So, some of the things that I’ve been very focused on, in terms of leadership, are things like being a catalyst for change whilst being very respectful of the history and the pride of the company based on everything they have done.

 

“I’m continuously trying to gauge how fast is too fast as a pace of change.”

 

I’m continuously trying to gauge how fast is too fast as a pace of change. My experience tells me, and when I speak with other CEOs, that invariably CEOs wish they had moved faster, not slower. For every CEO that wished they had moved slower, nine wished they had moved faster, but gauging that, implementing that, and contextualizing that to the organisation was really important. How to tap into the past as you’re thinking about everything that needs to change – that what is changing, what is good for the company, and what is good for the employees – is important, but also what doesn’t need to change. And, of course, figuring out which leaders still have a lot more to offer. Their context is, of course, very valuable, but making sure they still have the fire in their bellies to take it forward.

Then, of course, there is India. I’ve been exposed to India before, but Cognizant has a very proud attachment to India, with 200,000 employees based there, so it’s been important for me to really embrace India and to understand the culture more than ever before. And, for that reason, certainly pre-COVID, I was in India every seven to eight weeks for a week at a time.

 

“You know, there are lessons to be learned, and I can’t say there is any week that goes by that I don’t self-critique around a meeting that I could have conducted better, or a conversation I could’ve been more succinct in, or perhaps more motivational in, or perhaps be more searching…”

 

You know, there are lessons to be learned, and I can’t say there is any week that goes by that I don’t self-critique around a meeting that I could have conducted better, or a conversation I could’ve been more succinct in, or perhaps more motivational in, or perhaps be more searching, in my inquisitive nature, as I’m trying to conduct operational reviews, and client engagement reviews as well. But it’s all been good, and I feel more or less on track, notwithstanding everything.

Phil: Good. That’s good to hear. And looking at this lockdown we’ve been in, how has that treated you? What would you personally take away from the last three months of your life?

Brian: This is where the professional and private life of CEOs blur, because it is somewhat of a lifestyle, if you choose to become a CEO of a company; and you’re CEO of a company, yourself, Phil, so you know this. On a professional level, let’s just say it’s been an abrupt transition. Prior to COVID-19, I was travelling literally 90% of the time, and so we’re all now dealing with a massive new reality. And that new reality is very real for me, because naturally in the services industry, you’re dealing with COVID, not just in terms of the demand side of economics, but also the supply side, so the fulfilment side is very important.

 

“With 300,000 employees in the company, valued employees, talented employees – their health and wellbeing has always been top of mind for me.”

 

With 300,000 employees in the company, valued employees, talented employees – their health and wellbeing has always been top of mind for me. Those employees are also the intellectual horsepower of the company, and they are the people who do the projects, who do the coding, etc. So, as we started thinking about the demand side of COVID, by definition, the fulfilment side became very important, and enabling a work-from-home culture very rapidly was the first task we all had to deal with.

We had fortunately triggered business continuity very early in March, given what we had seen in the Philippines. As far as I’m concerned, our employees did a fantastic job; they conducted themselves very, very professionally, in what would’ve been very challenging conditions.

In the midst of all of this, on a personal level, I’ve found myself at home with my wife and two boys. And while it’s great to see them on a daily basis, between COVID and, in parallel, a ransomware attack, March and April are somewhat of a blur. Mornings blended into evenings, and nights, and weekends where they were one and the same as the normal work week. As I look back now, I think there were probably 60 days of seven-days-a-week working probably 15 to 18 hours a day.

The good things, as I think about it, are that we, as a company, rallied together. As a CEO, I always value the empowerment of the company. We have had the entrepreneurial spirit when needed, we’ve had structure when needed, we’ve helped our clients, and we’ve certainly invested heavily in society.

 

“What I have missed, what I would view as one of the bad things of COVID-19 on a personal level, is the human interaction that is afforded to you as a CEO. It’s one of the perks; you get to meet fascinating people in different walks of life and in different industries. I have missed that.”

 

On a personal level in the context of this, it’s been good to sleep in one bed for three months, as opposed to different hotel rooms every night, and good to see more of my family. And of course, it’s good not to be jetlagged for once in my life. The bad things, of course, come hand-in-glove with that, and impact on life and society will always remain top of mind, and the economy at large.

I do feel greatly for people running smaller companies, who may have very different liquidity patterns, and whose very livelihood could be taken away in this [environment]. But, on a personal level, I must admit, I haven’t missed flying. What I have missed, what I would view as one of the bad things of COVID-19 on a personal level, is the human interaction that is afforded to you as a CEO. It’s one of the perks; you get to meet fascinating people in different walks of life and in different industries. I have missed that. But, of course, we’re all getting used to Webex and Zoom.

Phil: Right. So, I mean, we’re at an interesting stage in second spikes of this disease, the economy is on a knife’s edge, supposedly. Meanwhile, Wall Street seems to be doing just fine, and tech is the star stock. Right? But how far do you think this is going to go, economically and socially, at the moment? As you look out, maybe a year, a bit beyond that, do you think this is going to hit us deeply, what is happening right now? Or do you still feel that it’s kind of unraveling, and it’s hard to tell?

Brian: Well, I think it’s both. I think it will hit us, and I think it is still hard to tell, because I believe the dust is still settling, and this is happening against the backdrop of racial injustice that we saw in the US which is giving rise to a lot of dialogue across the world.

Specific to COVID-19, I review the data on the Johns Hopkins website every day, and it’s clear we’re not through this. We’re talking about some of the biggest economies in the world, like the United States, where levels are still extraordinarily high and increasing, albeit in different states of the US. But the US, as you know, is porous, so if it’s happening in one state, it’s very easy to spread and have another spike.

And I’ve been very surprised by the equities markets and how bullish they have been. We’re almost back now to Q4 2019 levels, despite the fact that in November/December of 2019, nobody was talking about COVID-19 and the massive impact it would have on society.

 

“We’ve actually been doing better than I anticipated in early May. It’s still somewhat unclear as to why. …Is the macroenvironment better than expected? To be determined. Are we out-executing the competition; are we more competitive? Is our increased client centricity paying dividends? We will see.”

 

So, I think this earnings cycle is going to tell a tale around the extent of the damage. People are fixated on whether it’s a U-shaped, or V-shaped, or W-shaped, or indeed an L-shaped recovery. I think it’s too early to tell; many companies have withdrawn guidance as well. I will say that, regardless of the environment, my goal as CEO of Cognizant is to refine our strategy, make investments, and out-execute the competition by delighting clients at every opportunity. That is both from the commercial engagement point of view, but also from a delivery point of view as well.

We’ve actually been doing better than I anticipated in early May. It’s still somewhat unclear as to why. We will watch the earnings cycle and really try to understand what is behind that. You know, there are many reasons, of course. Is the macroenvironment better than expected? To be determined. Are we outexecuting the competition; are we more competitive? Is our increased client centricity paying dividends? We will see.

Or are we simply fortunate that our exposure to clients, and industries, and geographies, is a little bit more serendipitous than, perhaps, others’? So whether it’s industry alignment, we have less than 13% of our business in retail, travel, and hospitality, consumer goods; that’s very different from others out there. We are heavily North America centric, as you know, 76%, and, of course, we’re focused on Global 2000 clients, for the most part, which tend to be more resilient and have stronger liquidity and balance sheets than others.

But, I must admit, in early May I was quite pessimistic, I remain convinced that 2020 will be a very, very challenging year. Markets that may have been growing 5 or 6% as an industry may now be declining 5, 6, or 7%, so somewhat of a 10-point swing relative to prior expectations. And I actually think, it’ll really get us into Q2 2021 before we start getting into easier compares again, because, let’s not forget, Q1 2020 was reasonably good for everybody, because COVID kicked in only in March.

Phil: So, an area we’ve been talking a lot about is that one of the better outcomes of what we’re going through is this drive to unleash people, to really think about the talent we have that’s our lifeblood. What’s your feeling? What’s your view as we look out at the next year or two, in terms of empowering your people? We see this cross-pollination of talent across business domains and IT domains more than ever before. How do you see that evolving? And I know you guys have been very vocal with your support for Black Lives Matter and some other social issues as well. How do you see the whole people side of this evolving in our industry?

 

“Look, I think you hit the nail on the head. People are the core of this business model.”

 

Brian: Look, I think you hit the nail on the head. People are the core of this business model. While we will always have tooling and automation, at the end of the day, this is a people business, and our intellectual property is largely in the hands of the people we’re able to attract and develop in the company. It’s quite interesting, because I’m a member of the Business Roundtable, and we’re having broader discussions around this. Historically, you go and attract the greatest people you can into your company, and then you develop them, then you train them, of course, you clarify their roles and responsibilities, you empower them, you reward them, and you motivate them. Sometimes some of that motivation is monetary, sometimes it’s technical, but you ultimately develop them, and reskill them, and get them ready to always be on the front foot, and expose them to clients and execs, etc.

 

“Are we over-spec’ing roles, and are we hiring based on a cookie-cutter profile? Or should we be hiring based upon attitude, and competency, and approach? And that’s something I’m, frankly, spending a lot more time thinking about.”

 

There’s a big discussion right now, in terms of looking at the average job description of companies. Are we over-spec’ing roles, and are we hiring based on a cookie-cutter profile? Or should we be hiring based upon attitude, and competency, and approach? And that’s something I’m, frankly, spending a lot more time thinking about. As Cognizant, we have three quarters of our revenue in North America, and two thirds of our employees in India. We have been one of these companies that has been, I would say, an incredible story for talent in India: to join a company, be developed, to rotate, ultimately, from a delivery role into a more market-facing role in North America or internationally, and, lo and behold, to ultimately get yourself through to the executive committee of the company.

 I’d like to think that that path will remain. But, Phil, in the same vein, there are many things that are happening in parallel. Part of my goal is to globalise Cognizant. That includes how we think about the brand, whether we are associated with Indian pure plays versus how we think about Deloitte or Accenture, globalisation of the leadership team, who we attract, who we retain, where they are located; and, of course, diversifying the revenue base.

 

“For me, it’s also about how we distill ourselves down to be able to attract diverse [talent], and to be much more inclusive, as an organisation, around what is a leader in Cognizant, what does it take to be successful in Cognizant, and how do we think about attracting, developing, and retaining people.”

 

For me, it’s also about how we distill ourselves down to be able to attract diverse [talent], and to be much more inclusive, as an organisation, around what is a leader in Cognizant, what does it take to be successful in Cognizant, and how do we think about attracting, developing, and retaining people. What are the campuses, onshore, that complement our Indian offshore model? How do we think about diversity? And are we willing to impose more rules around that?

Our executive committee, as recently as last week, we formalised the notion – we are going to implement the Rooney Rule. The Rooney Rule will ensure that we have a diverse set of candidates for every single slate, and that starts with our Board of Directors. But it also starts with me, as the CEO, in terms of hiring a more diverse leadership team around me. So, we have a vision, and we have a notion of this. But a lot of this, ultimately, leads us to taking concrete steps to implement that vision.

Phil: Okay. Good. That was well explained. I very much appreciate what you are proactively doing in support of, I think, a very sensitive issue. To close out our conversation, I have to ask; where are you going to be, what are you planning to do, when Liverpool finally gets their chance to finish off the longest Premier League season of all time?

Brian: Well, maybe, Phil, I will go online and buy you a jersey so you don’t have to wear that Tottenham Hotspur jersey anymore that you seemingly cherish. [laughs] But…

Phil: [Laughs].

Brian: It seems like I’ll be here, watching it; albeit, I must admit, it’s not so enjoyable to watch football these days with empty stadiums and fake sound. I keep telling my kids that when I grew up, you were getting used to Liverpool winning every year, and it was almost a foregone conclusion. And now it’s been 30 years since the last victory, so I will certainly cherish it.

Phil: Brian, do you take any inspiration from Jurgen Klopp when you go about your job?  He's certainly has a certain style about him!

Brian: It’s hard not to like Jurgen Klopp. He lives and breathes football and taps into the club’s rich history - so there are some parallels to be drawn. What I like about him is his intensity, his attack mindset, his competitiveness, and his focus on building a team rather than a collection of individuals. I’m certainly aligned! And of course, we all, like him, have to laugh at times!

Phil: There you go! This has been a wonderful conversation, I’ll look forward to another one soon, but I really enjoyed the time today, Brian. I appreciate your time.

Brian: Phil, thanks. Good to see you.

There's no settling with Mike Ettling... he wants to win it all!
July 14, 2020 | Phil FershtSarah Little

 
Mike Ettling is looking to create a new trifecta by following Springbok’s 2019 World Cup win and Liverpool’s 2020 championship with a Unit4 ERP mid-market sweep.

Mike Ettling has a storied career in HR software and services and is looking to create a new trifecta following Springbok’s 2019 World Cup win and Liverpool’s 2020 championship with a Unit4 ERP mid-market sweep. Mike founded two of his own businesses, nurtured eight start-ups in the HCM technology sector, and led SAP SuccessFactors as President for four years. He also served as CEO of NorthgateArinso (when he spoke with us 10 years ago), one of the original HR outsourcing firms, which is now part of Alight. Speaking at the SuccessFactors 2017 Influencer Summit, Mike stated “no one will be logging into HR Systems in five years’ time.” As we rocket through an unprecedented 2020 towards the noted five-year mark, it’s time to check in on faceless ERP and discover the draw to Unit4’s “sizzle” and its people-centric ERP paradigm.

Phil Fersht, CEO and Chief Analyst, HFS Research: Good afternoon, Mike. It’s great to get connected again, after so many years. You’ve been a big legend on the whole HR software and services market, but now you’ve gone, full ERP on us. Can you give the lowdown to our audience about how you got started? Had you always planned on being a tech CEO?

Mike Ettling, Chief Executive Officer of Unit4: Interestingly, I stumbled into tech in an intriguing way. I did COBOL and Fortran at school – I still have my Daniel McCracken textbooks on Fortran and COBOL – but then I went down the path of business studies, became a chartered accountant, CPA, in two countries. When I started my life at what was then Peat Marwick, or KPMG, I very quickly got into the tech side. We were setting up this African Futures Exchange, and we designed the clearing system for futures trading, and then I started my own business at university, and it was all predicated on building a cool piece of tech to do something which people were doing manually. In those days, we were building stuff on PC networks, using Realia

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IBM just changed the automation game. Hello Extreme Automation
July 10, 2020 | Phil Fersht

The automation game just changed – and most of you barely noticed

It’s sometimes those low-profile moves that make the bigger impacts on markets, versus the big glamor ones.  Who would have thought Jurgen Klopp would end Liverpool’s 30-year wait for the English Premier League title when he quietly disappeared himself from Borussia Dortmund?  And who would have thought a smallish Brazilian RPA firm, WDG, could propel IBM into the first one-stop services and software automation shop for organizations.  This is in stark contrast to the Accenture Synops model, which is focused almost entirely on partnering with 3rd party software. Oh, this is going to be fun... the big services giants are back to duke out automation dominance in the middle of a pandemic.

10 reasons why IBM’s move will have such an extreme impact on the existing automation market

1. WDG adds proven attended desktop automation capability and has already displaced UiPath in a major organization. The technology provides a low code, cloud-based authoring experience for the business user to create bot scripts with a desktop recorder, without the need of IT. These scripts are executed by digital robots to complete tasks. Digital robots can run on-demand by the end-user or by an automated scheduler.  Arguably, WDG is on a par with Softomotive – acquired by Microsoft for considerably more money. What is clear is these RPA firms are offering pretty much the same functionality for the basic scripting and recording.

2. WDG is focused heavily on quality customer service ops and is great at integrating with chatbots, digital associates and other AI tools. Pre-Covid, most RPA was focused on low-risk back-office processes, especially in finance. Now customers are desperate to automate the customer-facing and revenue-generating processes and need tools proven to work in the environments.  Noone has a huge advantage in the CX automation space so this provides a greenfield opportunity for IBM. 

3. The WDG automation software sits under IBM Cognitive and Cloud giving it a broader playing field to compete with the likes of MSFT, Pega, Appian, and even ServiceNow. Arguably, this is the real play that excites IBM’s top brass. This is where the big dollars are and where IBM has powerful potential as the world’s largest IT services provider. Orchestratng processes and data in hybrid cloud environments is where IBM should be leading the market, and now it has plugged some holes to do it even better.

4. This is no desperate measure. IBM software made this investment after seven patient years observing the market. It was not a huge secret that IBM flirted with the concept of acquiring Blue Prism (and others) in recent times, and its software team also partnered with Automation Anywhere in 2017.  Of one thing you can be sure, IBM Software does not suffer fools these days and does exhaustive due diligence. They also have in-depth working knowledge of the major RPA products and know exactly what functionality they need to have a one-stop-shop capability.

5. IBM doesn’t want to acquire a huge installed base of messy RPA customers - it wants to create its own customer base bought into its own Extreme Automation vision. The last thing future-thinking services firms like IBM need is a plethora of unprofitable clients which have underpaid for too many bot licences and have little money left to spend on professional services to deploy them effectively. It makes more sense for IBM to go after clients willing to start afresh… and with over 90% of RPA clients struggling to get even 5 bots functional, the market is ripe to pick off many of the failed RPA implementations and move them to the emerging IBM automation platform.

6. Already demonstrated by MSFT and SAP, you don’t need to make insane investments to add RPA functionality. In short, why spend billions on the “Big 3” when you can get perfectly adequate functionality (and standout features) from the likes of Another Monday, AntWorks, Kryon, Jiffy.AI, WorkFusion etc?  The big guys did the diligence. Softomotive, Jidoka, WDG, Contextor were all small – but more than good enough to achieve automation goals.

7. IBM no longer has to hang onto the coattails of AA, Blue Prism or UiPath – the power is shifting. While most customers of the “Big 3” will not be ditching their investments anytime soon, IBM can enjoy the freedom to pitch its own automation platform twinned with its own service delivery and choose how to price in the way the clients wants to invest (such as as-a-service).  Being subjected to erratic pricing and some of the wacky marketing being purveyed by some RPA firms, where reality takes second place to hype, makes it hard for services partners to build a cohesive automation business.  This is why so many have backed away from the market.

8. IBM can leverage RPA as a loss-leader to win larger automation and AI business further down the line. IBM can afford to be brutal on price if it knows it will lead to selling more of its other wares. This will make life very difficult to the standalone RPA vendors desperate for whatever revenue they can scrape in the current abnormal market place. It may also be a smart play to win over disaffected customers who need a whole new direction to fast-track their automation journeys.

9. IBM services will still benefit from its partnerships with AA, Blue Prism and UiPath. They will have no choice but t play ball.  This is all about who controls the client in this environment.  Forget lovely partnerships in this post-covid economy - this is a cut throat battle to win the hearts and minds of the customers/

10. WDG' partnerships with Deloitte, Capgemini and Grant Thornton will be challenged, but won’t have a lot of choice but to play ball. WDG’s partners will be desperate not to lose their services business to IBM so will likely have to be very nice to IBM to keep their business with the WDG clients and make efforts to be “collaborative”.

Extreme times call for extreme measures

In a recent conversation with automation leadership at IBM, HFS shared our view that technology is really only 10% of digital transformation. The true heavy lifting is driving change with people, process and data to truly advance to integrated automation. We challenged IBM to showcase their approach to achieving automation at scale without overly relying on specific tools or services. The result is the following “extreme automation” model – showcasing our current anaemic automation reality on the left and the potential “extreme” future opportunity:

 

Source: IBM Automation / IBM Corporation 2020

The Bottom-line: The automation game is being elevated to low-code cloud-based automation platforms with strong capability to integrate across core customer and employee-facing processes. 

The rapidly evolving digital workplace is creating the "have-to-have" mindset and clients need service partners to drive rapid speed-to-outcome solutions, leveraging whatever technology tools can create an immediate impact that are easy to deploy. Complex partnerships, landgrabs and hyped marketing have faded into the memory of the pre-covid world. Clients need real hands-on help to rethink a much more concise - and often extreme - automation strategy, and then need to act fast to execute these plans.  Having a one-stop-shop where software firms and service providers are not fighting for attention, where one partner can help clients look at the bigger picture and devise a realistic, measurable plan is the new normal for automation.

IBM's super patient approach to filling these RPA holes in its portfolio could have just been perfectly timed to take this market in an entirely new direction.

Nagendra's agenda: His bullish outlook for the IT and business services industry
July 03, 2020 | Phil FershtSaurabh Gupta

Three serious dudes having a serious conversation –  Phil Fersht, Nagendra P. Bandaru, and Saurabh Gupta

The COVID-19 pandemic shock is possibly (and hopefully) the biggest disruption of our lifetime. This is the time when you need real leaders who can see the light and the end of the tunnel and work tirelessly to unleash their organizational potential. We recently caught up Nagendra P. Bandaru (Nag) to discuss the resilient nature of the IT services industry, his bullish outlook for Wipro, and his sage advice for enterprises to adapt to this pandemic shock. Nag has been a constant in the IT industry for more than 30 years. He is responsible for organically doubling Wipro’s BPM business in the last 4 years and currently manages 40% of Wipro’s revenues, from BPM services to cloud and infrastructure.  I have personally known Nag since 2006, when he was a feisty young sales and marketing leader helping develop Wipro's presence in the US during the year growth years of BPO and it's been great seeing him flourish into one of Wipro's key minds and personalities as he helps shape the business for this challenging future. 

So, Saurabh Gupta, and myself decided it was time to reconnect with Nag to hear more about his views on the current situation and where the industry needs to go to make it through troubled waters to flourish once more...

Phil Fersht, CEO and Chief Analyst, HFS Research: We’ve known each other for more than a decade, Nag, so maybe talk to us a little bit about your background and how you ended up running not just Wipro’s BPM business but other big parts of Wipro such as Cloud and Infrastructure Services. Maybe you could take us a bit back to your earlier days, how you got into this, and what you’re doing now?

Nagendra P. Bandaru, President – Digital Operations and Platforms & Cloud and Infrastructure Services, Wipro: First, thank you for setting up this conversation, Phil. It’s been great knowing you, especially since you have been part of nearly one third of my journey in this industry! The

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Surviving to win in this “Have-to-Have” Economy (Part I)
June 20, 2020 | Phil Fersht

Gone are the bells and the whistles.  Gone is the sugar-frosting… even that lovely cherry on the top.  Those are the things that only appeal when your organization’s core is not under threat… because addressing that critical core of the business is boring, it’s stressful, and it was not great for your career to expose what was truly dysfunctional in your organization.  Now all the frilly paraphernalia has been cast aside, and we have no choice but to focus 100% on that core.

Why we didn’t address the core and focused on nice-to-haves

Having to deal with critical issues like security, making processes flow and work better, helping train staff to stop doing things the same way they have for 30 years, addressing why your service providers never deliver any of the stuff they claim they do on their PPT slides, asking difficult questions why your firm spent millions on software they simply failed to deploy… those were the things we knew deep down we needed to do, but most the folks around us just didn’t care, and would have thrown us under the bus if we'd agitated for real change.  So we did the safe thing… pushed initiatives that promised some incredible future value as long as we threw around some cash and made everyone look good.  Plus, the steak dinners with decanted wine always helped… After a while, we just convinced ourselves what we were doing was critical even if our firm didn’t really have to have any of it.

Addressing the core of your business is the only thing to save yourself... and your business

We have absolutely zero choice but to address these two actions to survive and win our in today's environment:

  • Finding our “bottom” and devising a financial plan to survive the cross-winds of recession. As much as we can play with sexy terms like resilience, we cannot avoid the one reality of surviving what were are currently experiencing – having a decisive financial plan to survive.  Without it, we’ll continually panic and flounder and never be able to attack our markets with a game-plan to come out of this on top.
  • Finding that chink of light to guide our organization to the market leadership position we crave. Once we've achieved a financial plan to survive, we are now in a position to get focused on the services and products customers simply have to buy, because they have no choice, as their cores are under threat without them. That means focusing all our investments on making damned sure that happens.

The Bottom-line:  Identifying your customers’ have-to-haves is the only path to follow in this market, but only once they know what they are!

It’s one thing to identify what our current customers (or prospective customers) have to buy from us, but it’s another to make sure we are not wasting our valuable time and resources on those who haven’t yet worked out their plan to survive this market.  There are still many organizations out there who are still scrambling to fathom what is going on, holding out some hope for a magical imminent V-shaped bounce-back.  As lovely as that prospect is, holding out for that miracle will likely end in tears.  What’s more, you are also a terrible customer, as your firm is too nervous to invest in anything serious. 

So find your bottom, find your chink of light, then identify your customers who simply know they have to buy what you are selling.  It really is that simple.

In Part II we’ll get into what customers have-to-have.  You know you have to read it =)

By golly... it's Cyber Ollie
June 15, 2020 | Phil FershtOllie O’Donoghue

Definitely no Dinosaur Whisperer... Ollie O'Donogue (bio) is inspiring HFS' Cybersecurity and Security Services Research 

We've become one huge hyperconnected digital environment - it's as simple as that.  We're all anywhere employees, where we connect invisibly into both our personal and business digital environments.  In fact, we're all anywhere people where we're seamlessly hopping from work, virtual classrooms, social calls, shopping, music sites... you name it, this is our world - and will be until the Internet melts down. Just imagine if Covid had hit 15 years ago?  We'd be in much more serious trouble...

To this end, HFS has made a major pivot of our research over the past few weeks to inspire this new abnormal world, and - as part of this pivot - have focused our lead IT services guru ("veterans" need to be over 40...) to broaden his deep experience in cloud, agile, and service management to take the lead role with our coverage of cybersecurity and security services.  So let's hear a bit more from Ollie O'Donoghue and how he intends to place HFS at the forefront of security service analyst coverage:

Ollie,  please explain to us why has cybersecurity only now really emerging as the number 1 area for concern and investment in this climate? 

Cybersecurity has always been a big topic of conversation in the boardroom – especially when regulators started upping the fines and tightening up loopholes. But for years there's been a sense of inevitability about the whole thing. A couple of years ago, I worked on a study tracking cybersecurity trends, and it was clear executives viewed securing the enterprise as an unassailable task. And sadly, there's a bitter truth to that feeling which is; "we're a big enterprise, and the hackers will find their way in somehow, and if they don't, one of our team will leave an unsanctioned USB stick on a train, or click on a link in an email offering untold riches." And with that wedged into the back of a lot of executive's minds, it's easy to see why cybersecurity never really got the attention it deserved.

And let's face it, to most business leads looking to roll out some cool tech, their security colleagues are just fun-sponges, with their risk assessments and cautions. And while cybersecurity and the role of the CISO have slowly pushed its way into corporate culture, it's only really now since Covid-19 came along that the cyber-killjoys are under the spotlight. Businesses across the globe have banked on a couple of things in the past, centralized systems are easier and cheaper to guard, or at the very least are tough enough to hack that it's a suitable deterrent for all but determined hackers. And people coming into the office are somewhat less likely to do something silly on corporate machines. Both theories are now somewhat irrelevant. Corporate tech estates now sprawl across thousands of home offices, and outside of being pestered on zoom, employees are far freer to use technology as they see fit than they ever have been before, for better and for worse.

Business leaders know that this is going to be a significant problem to solve – and some firms are already licking their wounds as malevolent forces exploit a vast surface area, much of which lay undefended in any real sense. A few of the beleaguered CISO's I've spoken to over the

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The world changed.. then it really changed
June 13, 2020 | Phil Fersht

Welcome Sarah T... she likes R&B and has a PhD... in Virology
June 06, 2020 | Phil Fersht

Sarah Thomas is Chief Strategy Officer at HFS (Click for bio)

While this current economy is forcing so many of us to hunker down, hold our nerve and prepare to emerge strongly when growth and confidence returns, it also creates an amazing opportunity to add talent and capability we may never have considered when the world was a very different place.  Sarah Thomas and I have enjoyed a great working relationship over the years - she was always an avid consumer of my research when I worked at Everest and Gartner (AMR) and when I founded HFS in 2010 (as a virtual research boutique) she helped bring Accenture on as one of our first clients.  Fast forward 10 years and HFS is making a rapid pivot back to our virtual roots - and with a massive global community to boot.  So what better timing than to bring onboard a super-talented strategist and marketer (with a doctorate in virology) who truly understands the culture of HFS and how to help mastermind our digital push to help us emerge from the current crisis as the leading digital analyst firm covering IT and business services and the technification of business operations.

Before we get to all the work stuff, Sarah, can you share a little bit about yourself….your background, what gets you up in the morning?

So the short answer is that I have had a long and very happy career at Accenture that started in consulting in the Andersen Consulting era, grew into Marketing and involved a minor detour in the early years as a research scientist, working for Novartis where I completed my PhD in Virology. I didn’t have the normal career path for a CMO or head of Industry Analyst Relations but who knew that fast forward to 2020, all my worlds would collide with the Covid-19 pandemic and impact on everyone’s life and business.

In terms of what gets me up in the morning – in addition to a strong double espresso and 90s R’n’B on the radio, it’s the joy of learning something new. I like to always be challenging myself so aside from my new role at HFS Research, I am currently also honing my social media savvy, brushing up the German language skills I had when I lived in Vienna during my PhD and learning to ballroom dance with my very good friend Strictly pro, Robin Windsor.  At the weekend, the one thing that gets me up and out at the crack of dawn is the chance to go sailing. Being by the sea (preferably in the Caribbean!), or on the water is my happy place.

And how did you find yourself at Accenture for such a long tranche of your career?  Was it what you intended after studying science? How did you end up in marketing and strategy roles? What were the highlights?

When I joined Andersen Consulting as was, it was my wild card job application. I fully expected to have a scientific career and growing up I actually wanted to be a pathologist – until my aunt who was a doctor at the time, pointed out it wasn’t as glamorous as on TV and that I’d actually spend my life in scrubs, green wellies and working in the basement of hospitals – oh and probably never get a boyfriend! I didn’t expect to love the consulting world quite so much. I spent my early consulting career working for a series of financial services clients before leaving the company to return to science and complete my PhD with Novartis at their research institute in Vienna, Austria. After a post-doctoral fellowship in London, and a stint at the UK Medical Research Council I missed the pace of business life and returned to what soon became Accenture, in a Marketing and Communication role. I know that is not a natural transition of topic or role, but I convinced them I would be great at bringing my left-side logical thinking to bear alongside my creative flair. I definitely had one of the more unusual career histories and combination of experience but I like to think that brought something unique to my role.

I never intended to stay for so long and certainly not for 20+ years, but the advantage of such a large and diverse company is that there is room to move and grow. I was lucky during those early years to have some great mentors and champions in the business, who remain friends today and as their careers grew, so did mine. My career pivot point really came when Mike Salvino took leadership of Accenture’s BPO business. I was CMO for that business for the duration of Mike’s tenure as CEO, working closely alongside him and a number of other leaders who shaped the industry and am extremely proud of the business we built. We were a young, dynamic leadership team who were all invested in growing the business and in each others’ success. We are all still close now; It was a special moment in time. As a team I think we did a great job of not only growing and repositioning the business in the market, but also changing the meaning of what a business process service provider could be for their clients and also for their people.

One of the things I loved about my time at Accenture was working with so many fantastic people. One of my favorite projects was working with a team from all around the world and parts of the business, including many of the companies we had acquired who brought their unique and specialist skill sets to the table, to redefine and rebrand our consulting methodology. It was a unique project and we ended up feeling like an extended family.  

So what from your vast experience do you think you can apply to the services and tech industry now you are on the “light side”.

Well I hope that my experience as a CMO and head of Industry Analyst Relations for such a key industry player will help HFS Research continue to hone and evolve their offerings, and how they work with their key clients to be even more relevant and effective – and I hope that I can bring my experience to bear for the benefit of all my former peers in client organizations. In my first week in role, I have already had a number of interesting and energizing conversations with CMOs and CEOs of client organizations. Its good to be able to learn from and challenge each other.

And why did you choose HFS, Sarah?  How do you think you can drive things forward for the firm, especially with your many years of experience working with all the leading analyst firms?

HFS is known for having a distinctive voice in the market – for being provocative and for challenging the status quo. As a marketer and someone who likes to be working in “the new”, I want to work with the “disruptor” who is shaking up the industry. Having sat in the client and service provider seat I believe I bring a unique perspective to the team. I am naturally someone who thinks laterally and “connects the dots, so I hope I can bring some fresh thinking and challenge the HFS team to be even more agile and responsive with their insights and research, and to shine a light on those providers and clients across the industry who are really driving value and pushing the industry forward.

How do you see the analyst industry changing, especially with the current economic uncertainty? And what needs to change…and what will change in your view?

The pace of change in the industry really demands an analyst firm can that be agile and responsive to the market.  Nobody can wait six to nine months for insight and a category report to be published any more – the world will likely have pivoted on its axis in that time.  To be relevant you need to be quick to market.

I also think that while a robust and relevant research portfolio remain the foundation of any analyst firm going forward, there is huge value in tapping their strategic talent on a project basis too. I see that as being a service area that will be increasingly in demand. Clients can extend their own strategy team on a project or an opportunity or tap a broad set of experts in a more “think tank” environment for strategic advisory, bespoke research or a competitive landscape. Its deep subject matter expertise, on the topics they need, when they need it.

And how do you see the services industry playing out over the next couple of years? Are we truly entering “crunch time” where only the fittest survive?

Absolutely. To come back to my science background, this is business natural selection in action. Experience tells us though that such circumstances forces people to focus, to spend smarter and to really think strategically about who they are and what their strengths are. It’s going to be a tough for a while yet, but it will be those who are able to adapt quickly, take decisive action as necessary and innovate, who will not only survive but thrive.

From a marketing perspective what is interesting for me right now is the refocus on brand. I speak to my fellow B2B marketers across a broad set of industries on a regular basis and everyone is grappling with the same challenges – how to do the same or more, with less resource, how to engage with clients and recruits virtually but still make the experience one that delights – that delivers on content and builds knowledge and relationships. Customers in both the B2B and B2C world are looking at the organizations that they do business with or buy from with a critical eye – how are they responding? How are they taking care of their people and communities? And are thy the organizations they want to do business with going forward? Brand, culture and purpose have never been more relevant.

So if you have one wish to change our industry for the better…what would that be?

As a marketer through and through, I need to spin it a little. I have two wishes but they both come under the umbrella theme of Leadership, so I’ll count that as one. Firstly, we know that diversity in teams leads to greater innovation and yet when you look at most organizational leadership teams in our industry they are anything but. I’d like to see more women in the big jobs and running the P&L. The talent is there – they just need to be given the opportunity.

And I hope that coming out of this period we will see more authentic leaders. Yes, effective leaders who drive business results, but also those who have vision, empathy and who lead by truly inspiring their teams to deliver for their clients.

Thanks so much for your time, Sarah, and we’re excited to see you make some waves from the analyst side of the fence.

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.

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...