Phil Fersht
CEO and Chief Analyst 
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Corporations and individuals must combine forces on this last mile to defeat COVID-19... let us protect each other to return to the lives we cherish
October 14, 2021 | Rohan KulkarniPhil Fersht

“Freedom” appears to be the current central theme of individuals who refuse to be vaccinated against COVID-19m as one of many reasons for refusing to be protected against the deadliest pandemic in over a hundred years. It is essential to recognize that many reasons for not getting vaccinated can be overcome by the enormous data we now have, with over 45% of the world’s population vaccinated with over 6 billion doses.

The data shows that the vaccine effectively prevents deaths and serious illness, the side effects are marginal compared to the effects of COVID-19, and it is the only way to get back to the normal we are desperately seeking to experience again. That translates into supporting all those on the front lines as well as evangelizing vaccinations.

Healthcare workers and teachers are not the villains here

Healthcare workers have gone from being heroes that we cheered at the Pandemic's peak to being threatened, ridiculed, and harassed in recent months. A school association (NSBA), representing locally-elected school board officials that oversee more than 50 million US public school students, has requested the FBI and President Biden to provide them with protection due to the increased threat levels to officials and teachers.

These threats are in response to healthcare workers and teachers encouraging vaccination or enforcing mask mandates, both intended to help protect individuals from contracting COVID-19. In a civil society, threats are a non-starter in any facet. To harass those who protect and cure us of diseases, to threaten those that educate our young minds is unacceptable and unfathomable.

Such behaviors could have profound implications when there is already a high turnover of healthcare workers, sometimes 100% attrition in a typical year, which could very quickly translate into a critical shortage. Our kids are performing below average compared to other OECD countries, and lacking teachers will make the US even less competitive than we are already headed.

We must balance vaccine mandates: If those who are providing services are vaccinated, then those receiving those services must also be vaccinated

The federal government has mandated vaccines to all its employees, as have many states and cities. Corporate America has taken its cue from that mandate to issue its corporate mandates for vaccinations. Many enterprises, including hospitals systems, are issuing ultimatums to their employees to be vaccinated or lose their employment.

The holistic effort to vaccinate vast populations either through free access or mandates appears to be effective with about 66% of the US population over the age of 12 being fully vaccinated and the delta variant on the retreat.

Freedom is a fair concept and must be equally dispensed. If those who are providing services are vaccinated, then those getting those services must also be vaccinated. That would be reasonable to ensure that everybody has a level of protection.

Protect our people to return to business as usual

The airline business has been returning to a level of normality given the strict protocols in place for testing and vaccination. Restaurants in certain cities are experiencing some “normal” due to protocols in place for vaccine evidence. Such examples are beginning to expand across the US and globally.

A critical driver of that return to normal has been the vaccine, which has been highly effective and will likely continue to improve on its efficacy with the boosters. This data is important to support the need for a wider proliferation of vaccines.  For example, recent data from the US shows that 50,000 “breakthrough” cases from the delta variant with vaccinated citizens only resulted in 59 actual hospitalizations. 

Consequently, corporations and small businesses must have the freedom to do what they need to protect their people. Keeping their employees safe is paramount, and if that means mandating vaccines or refusing services to those who are not vaccinated, so be it. This is the path to going back to being in business as usual and enjoying the fruits of freedom.

The bottom line: Freedom must be an equal opportunity right; if individuals choose not to get vaccinated or refuse to mask up because they do not want to surrender their freedom to a mandate, then they must accept not getting healthcare or education, or other services from establishments that have a vaccine or mask policy.

Nurses and teachers are two of our most trusted professions. If we vilify and threaten them how will the rest of the society fair? So, we are calling upon corporations, small businesses, and individuals to help enable healthcare workers and teachers to refuse services to individuals who are not vaccinated and refuse to do so. Healthcare workers must be allowed to refuse treatment in non-emergency conditions as should teachers be allowed to refuse to teach kids who will not be vaccinated or wear a mask in a public setting. In these unparalleled times, we must protect each other to return to the lives we cherish. That is the only way forward.

Infosys, TCS, Accenture, Wipro, and HCL helped BFS firms go from digital façade to OneOffice during the pandemic
October 12, 2021 | Elena ChristopherPhil Fersht

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The banking and financial services sector remains the largest market for IT and business process services and is generally regarded as one of the most aggressive in terms of emerging tech adoption. However, do not confuse the spend and the adoption with digital transformation. So much of what gets done in established banks and capital markets firms is all about care and feeding of some of the largest and most complex tech stacks and business processes in the world. As with the rest of the planet, the pandemic exposed the lack of digital

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ServiceNow and Celonis just threw down the Workflow Platform gauntlet. The darlings of IT and process workflow execution make their joint move...
October 06, 2021 | Tom ReunerReetika FlemingPhil Fersht

The new Celonis–ServiceNow partnership blends operationalizing data science with the capability to design workflows in the cloud.  We are witnessing a determined partnership between the leading IT Service Management vendor and the leading process execution platform. This is a true first in combining an IT-centric workflow mindset with an operations one.  This is where we combine IT orchestration with process modeling, mining, discovery and execution.  And even RPA.  The likes of SAP, Pega, Appian and UiPath will be feeling very nervous right now and surely have to make massive investments to keep pace with what we’ve just witnessed.

This is the boldest move yet to automate complex data with process intelligence

Against this background, Celonis’ strategic partnership with ServiceNow is a bold step that could reshape many IT and business operations discussions across major enterprises. The announcement spans initially a reseller agreement, a deeper integration of both platforms as well as a joint go-to-market.

Notably, ServiceNow is making a strategic investment into Celonis, and partners are expected to launch joint products as early as the first half of 2022. The strategic intent is to link Celonis’ data platform with ServiceNow’s workflow ecosystem to advance toward the broad execution

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Pounding though a Pandemic... LTI and Mphasis show why enteprise customers want the personal touch
October 05, 2021 | Phil Fersht

While most folks are obsessing with the performance of the IT mainstays over the past 18 months, spare a thought for two IT services businesses that not only entered Covid on a long growth cycle, they also readjusted quickly and carried on their growth stories even during the worst of 2020.  Just check out the quarterly revenue growth paths of LTI and Mphasis respectively:

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Why have LTI and Mphasis carried on their growth unphased?

Big enough to get to the table, small enough to keep client intimacy.  It's the oldest quote on the book for the mid-tier service providers, but couldn't be more true in today's market.  Enterprise clients want to feel they have the personal attention of the CEO and the leadership team when it comes to signing over their technology control.  Rewind 10-15 years, most enterprise CxOs had a direct line to Chandra (TCS), Shibu (Infosys), Jeya (Patni), Pramod (Genpact) or Frank (Cognizant).  Client leaders wanted to feel the personal touch from their services partner leaders, and they were usually personally involved in the scope and negotiations.  Today those same executives are most likely stuck with a client partner, who is literally horsetrading the rate card with them.  Enter the likes of Sanjay and Nitin, who spend most their time talking to their clients, reassuring them, convincing them, but most importantly are available to them.  

Flatter structures and visibility to leadership motivate staff.  Staff want more from their companies these days than a good stock plan and competitive salary - they want to know what their leadership stands for, and want to learn from them. With less bureaucracy and promotion cycles based on merit, not purely tenure, it motivates staff to see how to get ahead, and and having more access to their leadership. Nothing demotivates staff more than seeing weak managers stay in their positions year in, year out, while the rockstars leave, or are sacrificed.  I have even seen hierarchies in some services providers so rigid, you are instructed not to interact with people in the level beneath you.  Yes really...

Sustained profitability helps high performers to be financially rewarded and retained.  In a market where attrition is running at an all-time high, the smart players are identifying their talent engaging with clients and helping them execute and making salary increases to keep them.  Providers like LTI and MPhasis have kept their profit margins in the high-teens consistently over the Pandemic and are in good stead to reinvest in retaining key talent and attracting new blood from start-ups and larger service providers suffering from low morale.

Savvy tuck-in investments and market moves. Mphasis continued to bolster its depth in largest industry, banking and financial services, with its Front2Back transformation methodology and NextOPs framework really bearing fruit during the Pandemic, while also venturing effectively into other industries, such as logistics.  The firm also added delivery depth in the UK, notably acquired Seattle-based digital design house Blink and significantly de-emphasized its reliance on DXC as a client.  LTI merged most of its cloud transformation under its Infinity umbrella mimicking Accenture’s Cloud First  and Infosys' Cobalt offerings, but at a lower price with a focus on outcome or risk-based pricing models. This bought their customer an extra ~20% of possible savings while the downturn driven by the Pandemic was underway. LTI also ramped up its CSP/Hyperscaler partnerships (mainly with AWS) at the right time and added some customers to their book through acquisition.

CEOs who can inspire and motivate their people. Simply-put, making themselves highly accessible to customers and staff has been huge in driving their respective businesses.  Moreover, showing longevity and loyalty to their brands has been a key factor with Nitin recently signing on for a further 5 years at the helm with majority investor Blackstone.

Bottom-line: Big is no longer brand-beautiful

The days where you never got fired for hiring IBM, or ensuring high performance being delivered with Accenture, are not as vogue as they used to be as service delivery levels off across providers and speed/execution take center stage.  Moreover, the top tier of service providers simply cannot afford to focus their A teams on smaller-scale deals that will not fit their high-pressured revenue models. The amount of new business becoming available to the likes of the LTI, Mphasis, Virtusa, Hexaware, Zensar et al is larger than ever and most of the Global 2000 opt for one to two primary global service providers and a couple of these nimble, energized mid-tier firms to keep everyone honest.

RPA's true value is helping enterprises function commercially in the virtual economy, connecting legacy with the cloud
September 26, 2021 | Phil FershtTom Reuner

New insights by HFS Research from FORTUNE 1000 leaders provide the context of how we have to reimagine the automation narrative. It is not about the myopic view of one bot for every employee or bold claims of progressing toward the autonomous enterprise. It's about delivering immediate outcomes by designing workflows that take the RPA value out of the back office, where most RPA has been buried, and aligns its capabilities with helping the immediate commercial needs for the enterprise.  The need to create immediate solutions with the digital hyperscaler platforms is now far greater than ERP suites, as that is where the hyperconnected business environment operates, as opposed to the traditional back office.

RPA impacts when it helps enterprises function effectively in new virtual customer and supplier environments

Over half of organizations are realizing that it requires rapid investments in process innovation to be effective in virtual environments. Before and during the pandemic, organizations that deployed RPA as a band-aid on badly designed or even broken processes were found badly wanting.  Firstly, scaling fragile processes with RPA fixes is a huge challenge - they are brittle, and usually results in perpetuating a legacy environment.  Secondly, RPA can have much more impact when it is deployed to bridge existing commercial systems with digital platforms that are essential for survival.

The RPA fraternity has reacted to this by accelerating tie ups with the Hyperscalers. The most recent example is Blue Prism (see news) who significantly expanded capabilities across the AWS ecosystem. However, what is urgently needed are proof points of how we are managing the new complexity of cloud native deployments. If applications or processes are running on containers, the interdependencies and consequently the reasons for failure increase exponentially.

As our current in-progress study of the automation focus of the FORTUNE 1000 is already revealing, the majority of automation investments enterprises are making are with the digital platform giants (75%).  Only half of them still keep faith in ERP, while even less are focused on workflow suites and the RPA platforms themselves.  Hence, hooking up with AWS is a masterstroke as it dominates so much of the commercial supply chain in the virtual economy:

The onus shifts from fluffy "strategy" to immediate need fulfillment 

Addressing immediate critical needs at the business and supply chain end is happening... when you get into the whole commerce space the needs are immediate.  Like how does a consumer products firm take data from legacy supply chain systems into an AWS environment... not the sort of thing you can solve overnight.  You literally can't operate seamlessly in the virtual economy if you don't have the tools to link the old with the new, and RPA must be part of the toolbox to make immediate impact with the suppliers and customers which are the lifeblood for survival in a world where supply chains are falling apart at the seams, customer needs are immediate and stitching together processes from the front to the back office is the only way to function in today's hyperconnected markets.  As this new data shows us, more than half of today's F1000 organizations are under intense pressure to implement new capabilities to take them into the future, as opposed to clinging on to the past:

Bottom-line:  Automation is not a strategy it's the native discipline to keep the wheels on as you rush to the future

Organizations are gearing up to drive fundamental operational change. To stay relevant in the virtual world, application and processes must be designed in and run on the cloud. This requires not only a broader ecosystem of cloud native capabilities but a new mindset and culture of running operations. It is literally about operationalizing the OneOffice by driving change that finally delivers on overcoming the organizational silos and experience-led outcomes. Yet, we can only get there by converging IT and business operations and by leveraging IT and business automation

We’ve now got to get our sh*t in the cloud, but our data’s still crap...
September 07, 2021 | Phil Fersht

So what's our new cloud guru Joel Martin, saying about the frantic rush to the cloud these past few months?  Let's just hear it from the horse's mouth...

Phil Fersht, CEO and Chief Analyst, HFS Research: Hey, Joel. So how should we be thinking about cloud today? What do you think has changed in the last couple of years, and how should we think about the market as it starts to evolve?

Joel Martin, Research Leader, Cloud Strategies, HFS Research: The cloud is the architecture people are building their businesses on. As we move to these virtualized economies, virtualized businesses, and virtualized experiences, inside and outside the organization, the cloud is the only way companies can scale up and scale down their ability to reach those customers and deliver services. They can’t do that within their private data centers. And that’s the biggest differentiation of using hybrid or public cloud, is that scale versus continuing to invest in in-house IT talent, resources, and tools.

The thing that has changed Phil, is the speed of the network. With fiber, 5G, and gigabit speeds working in the cloud feels like you are working on a device on a local network. The pure speed at which we can create, collaborate, and innovate with others, with systems, and with a growing number of AI solutions is truly mind-blowing. And it’s become so simple to use. People don’t have to be technology literate to create solutions others can benefit from ease-of-use at scale is really what we are benefiting from these days.

Phil: Okay. So tell me about the flow of workloads in the cloud. We hear about private cloud, we hear about public cloud, and then we hear about hybrid cloud. What do you think is going to be the ultimate outcome with these workflows, and how are people going to engage with the cloud in the future?

Joel: There are two things I’ll focus on. First, looking at HFS’s recent Pulse survey data, and which workloads are moving to those different cloud models paints a very interesting picture. As you look at that data, and it looks like a black hole. There’s no clear direction of how firms are preferring to deploy, develop, or adopt workloads. Instead, companies are moving their workloads to the Cloud because they have to move; remaining complacent is not an option

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Offshore has become Walmart... as Outsourcing becomes more like Amazon
September 05, 2021 | Phil Fersht

We're operating in a short-term period between the "world that was and the one we're emerging into"... there's some feel-good that we survived a pandemic, but the hard change, the very survival of companies' business models and peoples' careers starts now

And we can't get there without the help of partners to plug the skills and resource gaps that will help out businesses make this pivotal shift to survive in this Virtual Economy...

Services are increasingly about accessing skills that are not ubiquitous in a traditional offshore model

In the Virtual Economy, no one cares much about “offshore” as a strategy - it has become part of the fabric of managing a global operating model, where operations leaders just tap into whatever global resource they need to achieve their desired outcomes. This doesn’t mean that traditional “offshore” global delivery locations, such as India and the Philippines, are going bust overnight. But it does mean the playing field is leveling out as the need for emerging skills trumps the desire simply to reduce labor costs.

Our recent HFS Pulse Data of more than 800 major global enterprises is showing the focus on offshoring has sipped behind onshore, nearshore - and even most profoundly - agnostic-shore as enterprises look to realign their operating models:

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The Virtual Economy has shifted the operational emphasis to outsourcing partnerships

In fact, we've never seen a boom like this in demand for tech and business process services since the dot-com days.  What’s more, we believe the services market for the Virtual Economy

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Don’t let digital burn-out kill your career
August 31, 2021 | Phil Fersht

The days of everyone talking about the “new” culture of working from home are so over

This isn’t new, it’s the way we do business today across all industries and job functions where physical office visits are non-essential.  If it gets done over Zoom it stays on Zoom.  Most people travel for vacations and personal needs, not business anymore.  18 months in, and we’re not going back – we’re efficient, we’re intense, we get things done in a much faster, cheaper, and family-friendly manner. 

A recent study of service provider staff in India showed that 90% do not want to go back to an in-office culture, with staff getting 10-20 hours a week back from their nightmare commutes; in the UK staff are furious about being forced to commute to work and in the US conferences are being canceled en masse and most offices are virtually empty, despite staff having the option to go to work.  Of course, when the pandemic eventually fades there will be more conferences and physical meet-ups, but the days of many people traveling and commuting regularly for their jobs are over.

As our Pulse Data of 800 major organizations shows, 40% of workers are going to be home-based for the foreseeable future:

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People just don’t want to put their career before their lifestyle anymore... and we have to adapt

We are in serious danger of our careers becoming subdued and de-emphasized in the current climate.  While I am one of the first people to laud the increased focus on family commitments and having a pragmatic approach to the highs and lows of our professional lives, I am seeing clouds of demotivation gathering and sapping much of the passion and excitement out of our industry.  You only need to see the pathetic levels of enthusiasm for digital conferences, webinars, thought leadership right across the industry to realize that many people are just not as engaged with their jobs as they used to be.

I love the fact that so many employers are giving their staff “mental health breaks” (such as Nike recently following similar initiatives from the likes of LinkedIn, Bumble, Mozilla, and Hootsuite).  We’ve even been giving a few Fridays off for staff at HFS to allow them to take long weekend breaks.  However, we won’t be very effective businesses if we grant our staff 6+ weeks of PTO each year! 

In short, mental health at work is a massive issue, and something employees need to tackle head-on.  Employers can offer as much support as they can, with time off, counseling, good management, and good resources, however, there comes a point where staff have to figure out how to keep themselves motivated.  Let's be honest, we're living in a world where your work experience runs the risk of becoming yet another digital channel to fit alongside Facebook, Netflix, Instagram, and whatever else consumes your digital time these days.

The Bottom-line: 10 ways we can re-motivate our careers

  1. Prioritize non-Zoom time to focus yourself.  At HFS we have “no meetings Wednesdays” where we insist staff use the time to get their written / cerebral work done without the constant distraction of video meetings.  It’s impossible to execute well on your work when you don’t have chunks of time to focus your thoughts.  We used to use plane time/hotel time a lot for this type of work… not we need to carve it out.  If your employer won’t sanction a no-meeting day, then create one for yourself and block off you calendar.  If there is push-back, you should seriously question the mentality of your leaders and whether this is a company adapting to the virtual economy.
  2. Embrace change and explore new roles with your leadership.  Many people are discovering/developing new skills in the virtual economy – things they thought they were bad at, they are improving dramatically at.  The fear of change is dissipating from so many, and the ideas of trying new things are so important today.   Careers can go stale and this environment may have accelerated your sell-by date for doing a certain activity, and it’s time to freshen it up.  So talk to your bosses and your mentors… have a look at jobs going in other firms.  It’s time to embrace change and put yourself in a position to do new things that could energize you and refocus your skills.
  3. Meet fellow workers and clients local to you.  Nothing is more energizing than merely seeing faces familiar to you from 18 months ago… just do it.  And don’t sit in an offering staring at PowerPoint, go to lunch or dinner.  Start enjoying meeting folks local to you where there is little stress, and the time investment is minimal.
  4. Orient your work effectively around your family commitments.  It’s been a hard time for so many Moms (and Dads) taking care of our families, and some have been amazing at finding the time to become more focused, efficient, and flexible to get work done.  The nice-to-five is over folks and we need to find times like late evenings / early mornings where we can deliver.  The key is to make sure your employer gets this and judges you on outcomes… not simply that you were online during “office hours” every day.
  5. Spread meetings out over longer periods.  The lockdown intensity of packing your calendar with 10 back-to-back Zoom meetings all day have to end.  You will burn-out and become a jabbering idiot.  It’s OK to book meetings 3-4 weeks out, and you must create mental breaks for yourself during the day.  We aren’t robots and if we don’t manage our time better we will start to become them.
  6. Keep learning new things.  There probably hasn’t been a more critical time to stay ahead of market developments, new business models, new technologies etc.  You must find time to read and network.., the only two ways you will keep learning.
  7. Keep networking and stop making virtual excuses.  The excuses of “I can’t develop relationships over video calls” are done.  If you can’t, then you’re toast.  Find time to keep in touch with key people and also to get to know new folks who can help you. 
  8. Get a decent webcam.  If your laptop camera sucks then buy a webcam.  You can get one for $25 on Amazon for chrissakes.  And get rid of the up-nostril view… please.
  9. Keep exercising and keep healthy.  Sit on a yoga-ball all day… buy a Peloton.  The days of lockdown are over and you don’t have excuses for the expanded girth, the excessive booze consumption, or whatever bad things you do to keep yourself amused.  Poor physical health eventually means poor mental health and your employer giving you mental health breaks won’t cut it forever.
  10. Reevaluate your own goals and stop living off past glories. I know so many people clinging onto their past work glories, which may never return in this very different work culture.  Trying to cling on to an inflated salary is not a strategy - it's potentially asking for trouble down the road if you're failing to innovate your capabilities and value to your organization. The cost of living has changed for many of us - we don't need two cars in the family, we save a lot on commuting and eating out... on all sorts of things.  So why not evaluate what you want to do with your career, the type of organization you want to work for, and whether you can afford to rationalize short-term earnings to chase future opportunities for yourself?  

Cyber Ralph serving up some sparkle for HFS
August 29, 2021 | Phil Fersht


We're thrilled to let you all know that HFS is blessed with the presence of Ralph Aboujaoude Diaz (see bio) as Practice Leader for Cybersecurity strategies with a keen eye on Horizon 3 technologies.

Ralph has expensive experience as a risk management consultant for PwC and EY before leading Core Tech for Life Sciences giant GSK.  Many of you will know Ralph from his extensive LinkedIn humor and his flirtation/obsession/hatred of RPA.  He is based in London and spends time when he can with family in Lebanon... and now he's an analyst!  So let's find out a bit more about what makes Ralph tick...

Welcome to HFS, Ralph!  So what gets you up in the morning? 

Hi Phil! Personal life: my 2 kids (a 6-year-old boy that is driving me crazy these days and a 3-year-old girl that only loves her daddy). I love my wife by the way!

Professionally: Believing in the work I do but more importantly enjoying what I'm doing. You need to work with “Meraki” (a Greek word to describe doing something with passion and creativity).

You've been a Big-4 consultant and an enterprise tech leader... why become an analyst now?  And why with HFS?

I have been lucky and grateful to work with brilliant minds and I never stopped learning along the way. Without all these great leaders and mentors, I will not be where I am today! However, the only thing that I always missed is the inability to speak my mind. I am a proud non-conformist and not a big fan of political correctness. But always pragmatic and respectful.Transitioning to the analyst world is for me the natural evolution of my professional career. I will finally be able to utilize all the hard/soft skills that I have acquired during the past 15+ years but saying things my way. I want to provide direct, unfiltered, and actionable insights. But in a funny way too as I firmly believe that conveying a serious and honest message in a humorous way is much more impactful.

Why and I joining HFS Research? Because HFS is just like me, and I love that. Working with the iconic Phil and a diverse team of talented, bold, and friendly people is what gets me up in the morning.

And why do you think you'll bring something a little different to the analyst industry?  What will you be writing about?  What is it you care about?

The little different thing that I will bring to the analyst industry is quite simple: no previous analyst experience! I have spent more than 10+ years running large-scale tech-enabled security transformation projects. My last 5+ years on the buyer side have been focused on embedding and sustaining processes post-transformation, which in all honesty, is the most difficult part of the journey. So, the little different thing that I will hopefully bring is that mixed experience from the seller/buyer side, allowing me to understand what really matters for enterprises and position the right products/ services. My research agenda will be focused on Cybersecurity and Horizon 3 technologies (with an initial focus on 5G and Quantum Computing).

I am not pretentious enough to say that I will be covering the entire cybersecurity spectrum. My research agenda will concentrate on 6 topics that matter, on real problems that cybersecurity professionals and enterprises, in general, are currently facing. I will be talking about the role and challenges of the CISO, how to reduce the cybersecurity skill gap, how to secure the cloud environment, how to govern identity and access management, how to augment the capabilities of cybersecurity professionals with intelligent automation, and last but not least how to respond to security incidents in this Hyperconnected world.

I will not disclose more for now…

I love Tech and I will be also writing about Horizon 3 Technologies. Exploring and understanding how potentially disruptive technologies could transform existing business models in the next 5/10/15 years. I am very excited about that!

You got a huge following in social media when you dabbled in RPA before you made a hasty exit from the space... can you share what you were doing, what you learned, and where you see that market going in this environment?

Back in 2018, RPA was one of the hot topics that the Office of CEO at my previous employer was keen to explore. I was initially tasked to build the business case and drive the vendor selection process. I then led the design and deployment of a global RPA program across all Business Units (including the implementation of a global Automation Centre of Excellence and enablement of regional scalable Automation Deliver Hubs).

I have learned one very important thing: RPA is just a great tool in the wider automation toolbox that serves very well a specific business case (UI integration). However, RPA is, by nature, a brittle technology. In order to truly scale and operationalize RPA, enterprises need to invest a significant amount of time and resources. Without any doubt, RPA can help organizations rejuvenate their substantial legacy landscape by injecting much-needed automation. But rejuvenating does not mean modernizing. Rejuvenating does not mean transforming. Putting RPA at the center of the digital transformation is like trying to win a gunfight using a knife.

The RPA market is here to stay. As we can see now, ISVs have started to enter the RPA space by acquiring niche RPA vendors. The objective is straightforward: extend their integration capabilities and ultimately offer a holistic framework to customers. The big 3 RPA players are actively transforming their existing offering to include more integration, analytics and AI capabilities. But will this be sustainable and affordable in the long run?

So, finally, what do you think we'll be talking about in a year?  Can many of today's enterprises survive if they don't change their legacy habits?

We will be talking much more about “Enterprise Process Orchestration”. There is an urgent to unify and manage the increasing number of individual tasks, managed by humans and non-human identities, into an end-to-end process that can be easily visualized, monitored and recalibrated. The concept has been floating around in the last few years, but I feel that organizations are now ready to embark on ambitious projects and not just targeted pilots. And I use the word “enterprise” because the platforms that will support such macro-orchestration will be robust, secured and scalable.

Welcome to HFS Ralph - I can see you are already pushing our some insights =)

Accenture, Capgemini, Cognizant, Infosys, HCL, TCS and Wipro adapting to the Virtual Economy; Atos, IBM and Tech M flat; DXC trends downwards
August 26, 2021 | Phil Fersht

We've never seen a boom in demand for tech and business process services since the dot-com days (hopefully some of you can still remember those when we texted on flip-phones with 12 keys and thought it was cool to put an "e" in front of everything we did).  However, we believe the services market for the virtual economy is only just ramping up, and this is merely the hors d-oeuvre before the real feasting starts...

What is driving this new phase of growth in IT services?

1) A frantic race to the cloud to function in this virtual economy;

2) A worrying shortage of available 'digitally fluent' talent to support both complex and mainstream IT transitions;

3) A high confidence in the outsourcing model as enterprises choose flexibility in unpredictable markets;

4) Aggression from many service providers to win more of the Global 2000 IT pie.  We're in a 'landgrab market';

5) Many firms using this virtual economy to make the shift from legacy shared services to outsourcing models;

6) The German market, along with other European regions, rapidly scaling up their service provider relationships.

So which of the major providers are taking advantage of this?

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Accenture has performed quite the pivot since the pandemic rocked up, de-emphasizing themselves as an advertising firm and reinforcing their prowess in cloud and IT services.  Capgemini has raced on since its acquisition of Altran and making some long-overdue leadership changes internally, which has reflected in a strong uptick in performance that actually saw the French firm sneak above TCS last quarter.  Cognizant has quietly picked up its performance after taking a write-down of its Samlink Finnish nightmare in Q4 last year and has bedded in several new leaders right across the organization.  After a challenging pandemic that included a ransomware attack, the firm is finding some stability to support this renewed growth curve.

While IBM sold-off of its commodity services business lines, it is still struggling to post any significant growth, but at least this is a major improvement from its difficult years where the firm posted declines for several years.  The business is stable, its focus on retaining and growing complex engagements is bearing fruit, but there seems to be an eternal conflict from its leadership on whether IBM's long-term future lies in services or software. With the future of services tied intrinsically to the intersections across SaaS solutions and the services to enable them, IBM needs to forge a clearer path for itself and the role it wants to play.

TCS' performance going into the pandemic was lackluster, after being the market's most consistent, aggressive and dominant Indian-heritage performer - and by some margin - for several years. The firm seems to be ingesting these last few years of heavy growth, but struggling to pivot as quickly as some of its competitors in this market, where responding to demanding clients and aggressively investing in new engagements are the watchwords. There was a time when TCS could win any large IT services deal in the world if it wanted to... those days seem to be from a different era in this environment.  However, the TCS rebound is strong since last year and the "Walmart of IT services" definitely seems to be finding it feet again in this virtual economy.

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When comparing the growth over the pandemic itself, comparing Q2 2020 performance with Q2 2021, the two standout performers, in terms of revenue growth, are Wipro and Infosys.  The first year of Thierry Delaporte at Wipro couldn't have gone more smoothly, where much of the old guard were jettisoned in quick-time to make way for a host of new leaders from within the firm and externally.  In addition, a restructuring of the firm around geographical locations seems to be paying dividends, despite some challenges, and the major acquisition of financial services consultant Capco has really improved the perception of the firm and encouraged several enterprise clients to increase their investments.

Infosys simply sailed into the pandemic after a series of impressive quarters and has continued unabated.  It has a reputation for delivery reliability and has demonstrated real stability in leadership and focus.  Moreover, investments in locations such as Germany and Ireland have helped pivot Infosys as the leading Indian-heritage provider from a perception standpoint. Pre-pandemic investments in its onshore US locations have also paid dividends as the firm continues its impressive growth across both IT services and BPM (BPO) lines.  Infosys is arguably the leading Indian-heritage provider at present, giving the likes of Accenture and Deloitte and real run for their money on major deals.

HCL has continued to command a strong presence as an infrastructure and engineering-focused IT heavyweight, but hasn't been quite as impressive with its performance over the past year, compared to its rise to prominence over the five years prior.  Tech Mahindra has struggled greatly to command a market position and communicate to the industry where the firm's direction is pointed, but its performance is at least stable and 2021 has been a better year for the firm from a financial standpoint. Atos promised a lot leading into the pandemic but seems to be drifting somewhat, as it continues to lose ground to the Indian heritage providers and hasn't done much with its expensive acquisition of Syntel.  Moreover, its weak US presence continues to plague the firm, not helped by a failed takeover attempt of the industry's performer struggling the most:  DCX.  As for DXC? The firm continues to struggle to find any sort of foothold to stem the bleeding... maybe Atos needs to take a second bite at the apple when the stock prices level off...

The Bottom-line: The Pandemic has changed the IT service provider landscape quite significantly... and it'll change even more as the Virtual Economy takes hold

Just observing the world of services providers over the past 18 months, we've witnessed a dramatic sea change in which firms are driving the market, and which ones are losing steam. Am pretty certain we'll see yet more movements occur in the coming months and some firms come back more aggressively, while others get stuck ingesting their recent wins.  I also expect to see consolidation as the impressive wave of mid-tiers continue to snap at the heels of the majors - and the dearth of talent will force inevitable mergers between service providers.  The services market for the virtual economy is only just ramping up, this is merely the hors d-oeuvre before the real feasting starts!