Phil Fersht
 
CEO and Chief Analyst 
Learn more about Phil Fersht
The mid-cap service providers are killing it and LTI, Virtusa and Mphasis are setting the pace
April 09, 2019 | Phil FershtJamie SnowdonMartin GabrielSam Duncan

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

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

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

Click to Enlarge

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

Click to Enlarge

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

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

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

Click to enlarge

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

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

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

Quantum set to destroy blockchain by 2021
April 01, 2019 | Phil FershtJamie SnowdonOllie O’Donoghue

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

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

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

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

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

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

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

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

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

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

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

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

And of course... this was an:

Read More »

Will Infosys revitalize the mortgage processing market with ABN Amro’s Stater, or is this merely sweating a commodity asset?
March 30, 2019 | Phil FershtReetika FlemingSaurabh GuptaElena Christopher

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

Has Infosys finally gone all "sensible" on us?

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

Read More »

Re-platforming the Hyperconnected Enterprise: AI must be led by business operators, not IT traditionalists
March 23, 2019 | Phil FershtOllie O’DonoghueTapati Bandopadhyay

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

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

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

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

Click to Enlarge

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

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

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

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

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

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

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

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

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

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

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

Are call centers cool again? Teleperformance, Concentrix and SYKES lead the first Top Ten for customer engagement operations
March 16, 2019 | Phil FershtMelissa O'Brien

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

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

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

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

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

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

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

Click for detailed view

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

Read More »

Is the Big 3 RPA stranglehold about to be challenged? AntWorks patiently times its move
March 03, 2019 | Phil FershtElena Christopher

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

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

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

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

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

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

Click to Enlarge

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

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

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

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

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

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

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

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

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

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

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

We really do not have to be this boring!
February 27, 2019 | Phil Fersht

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

NASSCOM 2019: Has the Indian IT industry become… boring?
February 23, 2019 | Phil Fersht

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

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

My takeaways:

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

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

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

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

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

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

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

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

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

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

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

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

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

Everything you ever needed to know about Brexit but never dared to ask...
February 22, 2019 | Phil Fersht

Bathgate's Blue Prism: Delivering RPA in a very British way
February 16, 2019 | Phil Fersht

Bathgate.  Alastair Bathgate... Unshaken and stirring the pot, but doing it his way

Anyone who's known Blue Prism CEO and Co-Founder Alastair Bathgate over the years has seen a marked change in his executive presence, especially since the IPO two years ago.  While he still insists on driving his Volvo SUV, while his buddies are prancing around in fancy Aston Martins and Bentleys, he is a more assured and confident individual than the chap I first met seven years ago, when we first alerted the world to RPA.  Yes, he still has the same honest style and just tells you what he thinks, but there’s a certaswagger about him now – he sees the future of his firm and is hell-bent on taking it there.  And yes, if only he could use his wine pricing app for RPA, all his problems would be solved =)

In short, it's been a mildly frustrating couple of years for RPA’s early mover and market maker, Blue Prism… the firm was the first (and still only the first) pureplay RPA firm to go public, with every dollar spent being visible,  all staff moves closely scrutinized, and a CEO who’s had to divide his time between board meetings and investor days instead of harassing the conference circuit as aggressively as his rivals.

Meanwhile, while some of his competitors have been in stealth mode, raising all sorts of private investment and offering licensing models that appear (on the surface) a lot cheaper, while selling the “This is easy, this is no/low code, we can train you in weeks and get you a nice certificate to share with your friends on LinkedIn”.  This is what I personally detest about the software business… anyone can sell dreams, confuse executives too scared to ask critical questions like “how exactly does this work again?” especially when you have the lovely term “robotics” to excite greedy CFOs and CEOs eager to find new ways to increase margins.

'Refusing to get carried away' may have hurt Blue Prism in the short-term

Cutting to the chase, the Blue Prism team has stuck together for almost a couple of decades and has stayed true to its very British style of keeping the discussion realistic, refusing to get too carried away with the hype and the fantastical stories gripping many starry-eyed executives eager to slap RPA success on their CVs... not unlike the SAP and Oracle roll-outs of the 90s and Workday and Salesforce escapades of the last decade. 

Now it’s all about stitching the wonderful skills of building scripts, macros, document processing and screen scrapes with the emerging excitement of Machine Learning, Natural Language Processing, Augmented Reality and Computer Vision.  Yes, folks, you thought the hype-train of the past 30 years was bad, the one we’re venturing into is going to drive many of us completely nuts. 

It’s been pretty hard for Alastair Bathgate not to get irritated by the challenge of his highly-visible firm taking pot-shots from other firms, playing on the excitement this market is generating, promising enterprise clients dreams that will likely turn into nightmares when they set their expectations to achieve outcomes their staff simply do not have the skills to achieve – with a hodge-podge of processes far too messed up to fix, simply by slapping new software components over the top. 

However, Blue Prism’s low-hype, pragmatic approach could pay attractive dividends as the hype-phase dissipates and fresh investments are made in re-thinking the whole RPA/AI model

While his firm may not have been quite as successful as UiPath in forging lucrative partnerships with professional services firms and lacks some of the terrific messaging and vision of Automation Anywhere… while having to tackle a publicly-listed firm persona and widespread (unjustified) confusion over its pricing model, you have to credit Alastair, Dave Moss, Pat Geary and Martin Flood for sticking to their knitting and focusing on what they know best – keeping the conversational balanced and realistic and investing in the sales and technical talent they believe they need to keep developing their product.

It went unnoticed to many that Blue Prism recently landed a $130m investment round.  What excites me about this investment is the firm will actually get the money over the next two years and we can see exactly where it is going… on its product-specific developers in Manchester and an exciting new group of research in London, where 25 crack AI thinkers will be working hard to take Blue Prism’s solution into the place it needs to go. The firm already has a diverse group of 250 salespeople... now it can focus on the development areas that hold the key to who will ultimately will this automation arms race.

Upping its RDA game and expanding its presence in Japan are immediate needs that it needs to deliver

In addition, the firm is working hard to fill the gaps in its current solutions… while it prides itself of the back office unattended automation, if has suffered at the hands of AA and UiPath when it comes to very RDA-centric (Robotic Desktop Automation) engagements (what we call “unattended watched RPA”). 

Plans to release (in version 6.5) document processing capabilities to support end-to-end processing of document workflows which also acts as an OCR system to classify documents, extract key-value pairs and encode verification steps into the digitization process, could well propel the firms back to the front of the market as the reality of delivery exceed these dreams of great visions. In addition, Blue Prism plans to deliver full Japanese and simplified Chinese language capabilities with this new version release… essential add-ons as it plays catch-up to UiPath in this region.

The Bottom-Line:  The real work starts now as RPA evolves to become a key component of the AI tool kit

The stark reality we’re currently facing is getting ahead of market confusion to forge genuine learning journeys for ourselves, our careers and our companies.  At our AI-enabling Operations roundtable last week in New York, we all agreed that AI is Nascent, New, Hard … but it is, most certainly, Inevitable.

The most important clarity that most organizations have gained over the last several months is that AI is not some monolithic thing or a singular technology.  Instead, we’ve come to understand AI as a toolkit, or “a bucket of stuff” that enterprises can use to make their operations more intelligent; building blocks that include various elements of foundational AI moving across a spectrum toward more packaged solutions. 

The one common denominator among the executives was that they were all determinedly seeking to evolve their experiences from RPA to join the dots to the next steps of achieving enterprise-wide automation and AI capability… essentially integrating the tools and hatching a real plan to get it done.  This is where the likes of Blue Prism, Automation Anywhere, UiPath, Pega, Kofax, and AntWorks need to head next; building on the RPA digitization to create real solutions that go far beyond scripts and bots… solutions that can help re-invent the underlying institutional processes that have held back firms for years.