Phil Fersht
 
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Time to get taught... by Delaporte
August 10, 2020 | Phil FershtSarah Little

Thierry Delaporte, the new CEO of Wipro Limited – accompanied by colleagues Milan Rao, Gurvinder Singh Sahni, and Laura Langdon – gives HFS the story behind the story as he sets sail with Wipro.

 

Strong operator... tough decisions... aggressive changes. That's a triptych summary from my recent post which drives into Wipro's bold appointment of industry titan Thierry Delaporte as CEO. The course now turns from firm to fluid with the story behind the story from Thierry himself – who guides us on his journey of navigating north stars, surprises, principles, and people. And breaking walls...

I once called for a ruthless CEO with teeth at the helm here, and while I stand by that reckoning, I do believe we've met the human in the middle of the sea change... 

Phil Fersht, CEO and Chief Analyst, HFS Research: Thanks very much, Thierry, for getting some time with us today; I know you’ve only been in the job, what is it, like, two or three weeks?

Thierry Delaporte, CEO, Wipro: Three weeks.

Phil: Three weeks! So, it would be great to hear a bit more… I learned a lot more about you, when you took the job, and the one thing I learned a lot was that you’re a very international person, you’ve lived in a lot of different countries and experienced a lot of different cultures – it would be great to hear a bit more about yourself, and where you came from, background, and then your career. Did you always intend to do a job like this? And was this your expectation, in recent years?

Thierry: Okay, sure. So, you’re right, … although my accent keeps reminding everyone I’m French, I’m probably one of the least French people you can find in France. I spent most of my life abroad. If you look at my career, 25 years, I’ve spent 21 years of those 25 years abroad. I lived in the UK; I lived in Switzerland, in Zurich, in Spain. I lived in Singapore and in Sydney, Australia. I lived in the US for 15 years, and, every time, my wife and my kids were with me, so four kids, a wife – incredibly resilient, as you can imagine, following every new adventure, with a lot of energy and passion.

And, frankly, you know, I was known at Capgemini as being one who’s really tried, pretty much, everything. I’ve been a finance person… Actually, I started as a member of the Internal Audit team for two years, and then moved as a CFO of subsidiaries in different continents, and then [moved on] to cover sales. I was the Head of Sales, at some point in time, for about a third of the group of Capgemini, which I’ve never seen a finance person becoming a salesperson [smiles], and then managing operations, in different places, or different businesses across the organization. So, I’ve been in consulting, I’ve been in outsourcing, and I’ve been in the apps world of Capgemini. And then, from that experience in operations, spent time in running a business in BFSI, before coming back to Paris to be Chief Operating Officer of the group.  This year, I completed 25 years with Cap Gemini. It was an amazing ride, but it also got me thinking that it was time to pursue new adventures outside the organization.

 

“One of the lessons I’ve learned in life, Phil, is that you must let life surprise you. The only thing you have to do is don’t miss opportunities.”

 

I don’t think you can ever say that you were born to be a CEO. One of the lessons I’ve learned in life, Phil, is that you must let life surprise you. The only thing you have to do is don’t miss opportunities. So opportunities will come, and many will surprise you, but just not saying no is a good enough decision to make, in order to not miss these opportunities that come. And so I try to apply this in my life.

Phil: Excellent. So, as you looked at opportunities, and you obviously saw what was happening with the economy and the pandemic, etc., and then the Wipro thing came up, did you immediately think, “Yes, that’s the one for me”? Or was it kind of a long, drawn-out thought process, on [moving] from Cap to Wipro. You were at one company for a very long time, and the cultural shift…. Was it an immediate decision, that you thought, “This is what I want?” Or did it take some time to cultivate with you?

 

 “So, I’m going to tell you in full transparency what happened.”

 

Thierry: So, I’m going to tell you in full transparency what happened, Phil. I made up my mind mid-Feb and informed the CEO and the Chairman of Capgemini.

 

“I had the plan to sail transatlantic, from Newport to Brittany, in May. So that was my plan. I had the boat, I was going to do it with a friend of mine…”


My immediate plan was to take a six-month sabbatical – I haven’t had a single day sabbatical since my career started, so this was going to be my “me time.” And I’m a sailor ­– I had the plan to sail transatlantic, from Newport to Brittany, in May. So that was my plan. I had the boat, I was going to do it with a friend of mine, and that was the plan that I had sold to my wife.

 

“But then, literally, days after I went on sabbatical, my phone started to ring.”

 

But then, literally, days after I went on sabbatical, my phone started to ring. And it’s very interesting, and more of a surprise, because there was no announcement of me leaving. It was just being on sabbatical, that, actually, the industry knew it rapidly. I was starting to get calls on opportunities. And I knew that if I was going, it was for something I wanted to do. And I was not in a hurry. I really wanted to make the right choice.

 

“And I knew that if I was going, it was for something I wanted to do. And I was not in a hurry. I really wanted to make the right choice.”

 

I’ve known Wipro for twenty plus years. As I said to the team several times, I’ve been competing with Wipro many times. I won often – I lost often, as well. And so, I’ve really learned to respect tremendously this brand, the people, and the success of this company. I still remember the time when Wipro was still a rather small company, but growing every year at an exceptional pace.

 

“I don’t know any other company that has such a sense of purpose, where it’s not only about delivering the numbers… The fact that this is a company where 67% of its profit is going to philanthropic activities is very much talking to my view of what capitalism should be.”

 

Then I had conversations with Founder Chairman Mr. Azim Premji and Chairman Rishad Premji. This is when I felt this is a unique company, because I don’t know any other company that has such a sense of purpose, where it’s not only about delivering the numbers – it has a much broader ambition. The fact that this is a company where 67% of its profit is going to philanthropic activities is very much talking to my view of what capitalism should be.

 

“And then I felt, ‘Okay, this is an incredible company.’”

 

So I went and met both of them… actually, I started with three hours with Rishad, and it was really an outstanding, natural, easy connection between us, and then I met Azim Premji, and then several members of the board. And then I felt, “Okay, this is an incredible company.”

 

“And so, with humility, I would say I’m convinced – I’m seriously convinced – that there is a good match, and that we have a wonderful page to write. And so then, the decision was made – everything based on principles.”

 

I feel that the challenges that this company has, I can really have an impact. And so, with humility, I would say I’m convinced – I’m seriously convinced – that there is a good match, and that we have a wonderful page to write. And so then, the decision was made ­– everything based on principles. It’s people, of principles agreeing on things, and I think we were very aligned, culturally very aligned, on many, many different fronts.

Then I started to engage with the team before July 6, which is the official day one. I met all the members of the Executive Committee, I spent hours with Rishad, and engaging with Saurabh (President and CHRO) connecting on many different fronts, so that, you know, when I actually started, on day one, I was immediately hitting the ground. The Executive Committee has 17 people. By the time I officially joined, I knew all of them and what they did. So, it was a really great start.

Phil: And obviously at an interesting time, Thierry. I’m getting tired, talking about the shock and the change. I think what’s happened has happened – now we’re in a new world, and we just have to play by different rules and expectations. Obviously, digital has gone from being aspirational to something that is suddenly forced upon us. And we have a very different economy; one that’s not going to change any time soon. So, does this level the playing field? And is this an opportunity for Wipro to get ahead of the market? Do you feel that everybody has kind of a clean slate? Or do you think this is just going to be a very challenging time, and we just need to hunker down and see through the next year or two?

Thierry: So, there’s no doubt that we are at a moment of our history where you cannot imagine that what we’ve been through, over the last five months, will have no implications. I believe that what we’ve learned over the last five months is that, in a context where you are suddenly not able to connect physically with people every day, that there is a need to connect always more; connect more with your clients, connect more with your employees. In the context where, basically, it’s no longer about going and visiting, but connecting.

 

“The dimension of trust is more important than ever, and I am convinced that one of the implications of this crisis, going forward, is that the length of relationship will matter more than ever.”

 

The dimension of trust is more important than ever, and I am convinced that one of the implications of this crisis, going forward, is that the length of relationship will matter more than ever. So I think, more than jumping from one partner to another for 3% of savings, I think our clients will value more than ever the value of commitment and long-term partnership. I think it’s true for our employees, as well.

I think that we’ve also seen that companies that have not moved fast enough in their digital agenda have been struggling, and I think they didn’t expect to have such a brutal event confronting their own strategy. I think the reality is that there will be an acceleration of the rotation of the offerings, of the rotation to digitally transform organisations across industries.

So, yes, it’s going to change things for us, because what it means is that your legacy offerings, I would say, the more traditional offerings of the past, are going to shrink even faster. You need to accelerate your rotation to the new, because this is where the investments are going to happen. So, I absolutely agree that, yes, I feel that in arriving at this point in time, I have an incredible opportunity to reset the stage, somehow, for our business, and make some bets.

 

“I am a great believer in strong partnership. I have built my success, over the last years, in focusing on a few strong partnerships, and it has paid off multiple times. And so, I’m convinced that it will be even more important in this new world.”

 

We are going to make some bets, I cannot tell you which ones, you know, this is what I’m working on right now, to define where I want to make the bets. I believe we will see efforts, or focus, on simplifications.

We will see focus on rationalisation, on consolidation, to build bigger partnerships. I am a great believer in strong partnership. I have built my success, over the last years, in focusing on a few strong partnerships, and it has paid off multiple times. And so, I’m convinced that it will be even more important in this new world.

Last, you know, looking at the market, but also looking at our employees… when I look at our employees, this is our asset. Right? This is what makes us different. It’s very weird, to start with, because I have no clue how long I will have to wait before I can actually physically meet people from Wipro. You know? They might wonder if I’m a real person, or if I’m just a hologram [laughs].

 

“I think connecting with our people will be my obsession for the next weeks. One of the beauties with Teams or these tools, is that you can actually break a lot of the hierarchy. Everyone on the screen is equal sized, and there’s no one ahead with people standing in the back. It also breaks a lot of the walls; walls between one office and another, or a business unit and another, or a language and another. And so, it’s wonderful, because you really can now drive a lot more alignment. So, I will use this new world to the benefit.”

 

I think connecting with our people will be my obsession for the next weeks. One of the beauties, with Teams or these tools, is that you can actually break a lot of the hierarchy. Everyone on the screen is equal sized, and there’s no one ahead with people standing in the back. It also breaks a lot of the walls; walls between one office and another, or a business unit and another, or a language and another. And so it’s wonderful, because you really can now drive a lot more alignment. So, I will use this new world to the benefit. It will never be the same, I think.

You will never be able to ask your employees to be at the office five days a week, if this is not what they want. But I think, equally, it will not be a time where, everyone is working from home every day, because you will miss a lot, in terms of connection, in terms of engagement. But I think it’s going to be a world that requires fluidity and agility; which is fine, I’m very comfortable in this environment.

Phil: Yes. And, to me, a new CEO within three weeks? This wouldn’t have happened, if we were back in the analogue days, right? It would’ve taken probably six months or something. [Laughs].

Thierry: [Laughs].

Phil: So...

Thierry: Phil, today… Today, I have spoken to six clients.

Phil: Wow =)

Thierry: And since day one, I have spoken to 35 clients already. 35 clients. When I say spoken, it’s basically I have met 35 clients. And, you know, I’m just increasing the speed. I’m engaging more than ever. If I had to jump on a plane for the meetings I have had today, it would have taken me more than a week because of the different locations.

Phil: And if I could tell you how our business as a research company has changed, it’s beyond belief, in terms of the speed we can get things done, the extra time our analysts have, because they’re not traveling all the time to deliver work. And the closeness we’re getting with our clients. This was terrifying for a couple of months, Thierry, and then we realized we have to move everything we have onto a digital setting. But once you get ahead of this, and embrace it, and realize this is how we do business, the benefits are just astounding and surprising. And I’ve been reading and hearing about entire transitions now being done on Teams. I mean, you can do a hell of a lot now that you didn’t realize you were capable of, without physically being with people.

Thierry: I absolutely agree.

Phil: …this is a huge, huge gamechanger in how we operate.

Thierry: Agreed, Phil.

Phil: Right. So I’ve got one last question, then. If you could have one wish for the industry, in the next couple of years, what would that be? 

 

“…the beauty of our industry is that our assets are our people – our enabler is technology.”

 

Thierry: One wish for the industry. Continue to maintain the balance between technology and people. So I think, you know, the beauty of our industry is that our assets are our people – our enabler is technology. And my wish is that we continue along this line, and we don’t take it for granted, or we don’t go in a world where technology replaces talent and people, because I think we would take the wrong direction.

Phil: Very good. That was excellent, Thierry, I really appreciated the time… and I know our audience will when they read this.

You’ve got to start with the customer experience and work backwards to the technology
August 08, 2020 | Phil Fersht

I don't think any singular statement better described the world of technology in the last three decades:

"You’ve got to start with the customer experience and work backward to the technology. You can’t start with the technology then try to figure out where to sell it." 

-- Steve Jobs 1997

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

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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 =)

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.