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?
Posted in : IT Outsourcing / IT Services, Outsourcing Events
I totally vouch for this, Phil. One of the things I keep telling is that we are the solution bowl of the world .. you come to us and we would have a medicinal solution …
But essence of finding a problem is lost and that’s why your blog resonates so much to the fact that we have lost the art of going deeper within problems , doing r&d and then coming out with newer and more vibrant ideas.
Great insight Phil – and funny too!
While it’s tough to admit the Indian services industry is stagnating, they need to recognize this quickly and inject some urgency to keep on top of the market. Otherwise, as you rightly point out, firms from outside will quickly start stealing market share.
True problem is most of the NASSCOM leadership is old generation (from the time of cost arbitrage) and people who only worry about their cost base and pricing effect for the next year. What will happen in next 5 years…they don’t get bothered about it. RPA is still so BPOish for IT services. S
Phil- I found this very insightful. As usual, I enjoy your candor, directness, and dry humor.
Mark
NASSCOM is clearly failing to promote the true capabilities of India’s IT industry and is paying lip-service to the traditional firms, giving them the spotlight and failing its emerging tech ecosystem,
Andy
Phil,
The greatest service you can render is to not to attempt to prop up NASSCOM & the Indian IT industry. This space is desperately in need of some creative destruction. The situation is so bad that a dynast is apparently the most dynamic person in this conference.
…
Phil has this ability to pick the flaws but it’s also a case of the glass half full – global CEOs showed up we had excellent round tables to spur the entrepreneurial eco-system and a good time was had by all – let’s give NASSCOM some credit !
@Ganesh –
Thanks for your input (and I recall hosting a NASSCOM panel with you in 2009).
Firstly, it saddened me to write the post, but sometimes tough news is the only vehicle to get people to take notice and actually do something. And my issue is more with the overall complacent tone of the market leaders than the quality of the recent conference.
Secondly, the issue is not with the quality of Indian delivery and execution, it’s in the inability of the “traditionalists” to look beyond quarterly profits and articulate a long-term vision for the future of IT delivery. If we’re stuck with the message “our pricing models will continue to be awesome” that is opening up the opportunity for others to create the next disruption.
And the next disruption is truly about delivering an amalgamation of technologies and the talent to apply them; it’s about re-inventing how businesses operate, enabled by these new services platforms.
The Indian leaders need to deliver this new wave of services, not simply propagate the old model with fancier pricing and the loose use of fancy worlds like ‘digital’ and ‘AI’,
PF
Phil thanks for your response. In my current role providing growth advisory and digital acceleration advice to user and provider firms I am a little more sanguine about industry readiness and prospects.- I am finding the conversation within companies moving beyond technology to process reengineering data management and culture change. I am optimistic enough to believe the future continues to be shaped by the NASSCOM firms even if they don’t always share their narrative in this forum. But always appreciate your critical reviews and suggestions my friend !
Phil,
I am actually surprised that you were expecting something from Indian IT companies at all in terms of new business models after all these years. When was the last time anything new came from Indian IT Service provider industry beyond since cost arbitrage & global delivery models of past two decades ?
Do not see anything changing in next 5 years though, as none of the other countries you mentioned can scale up like India can and dethrone..Until something really threatening comes up to this sector, these uninspiring nasscoms will continue.
Cheers
Rao
Phil, I’ve met some of the most creative folks in the Indian IT industry and yet if you removed the cover of many proposals or a PPT, can you identify the company that wrote it? In some cases the only differentiator is the name of the company that submitted document. The content and solution look the same. High Quality, High Availability, Low Cost is found in most delivery organizations. How does the customer decide whom to buy from? The answer for many Indian IT firms is to write better proposals. Marv
@Marv – sadly that is also the result of the sourcing advisors making everything “standard”. noone dares deviate from the bland way of sounding like everyone else 😉
@Rao – The IT industry has never been as “unboring” as it is today. Making it “boring” is a crime… So much out there in terms of emerging technologies. Real success is seeing the disruption and making plans before it happens… Not wallowing in “boring” and loving on last quarter’s results,
PF
Agree Phil to large extent. I could not stay at the venue beyond 10 minutes besides attending a super badly managed press conference on day 2. Uninterested delegates, thin crowds, badly managed breakaways … and I noticed on big social / information LED screen in PFA spell Buisness in a topic announcement for Business
This is great feedback for NASSCOM, by Phil Fersht. Hope they take this in the right spirit and do something about their flagship event(s) and their approach to evangelizing the Indian IT industry to the world.
This doesn’t only apply to the Indian providers, but to Accenture, IBM, Cap, ATOS and all the rest. They have a legacy workforce with no plans on how to transform themselves much less their clients.
@Michael – Capgemini is making some interesting noises and its IGATE acquisition changed the game for the firm in the US; IBM has just made a massive investment in RedHat to turn its failing Watson strategy on its head and make a new play; Accenture has acquired 35 digital firms around the world to play in both advertising and IT (and there isn’t much left to acquire to take them on here). Yet to see much from Atos, but Syntel acquisition has real potential…. while all these strategies could eventially fail, at least they are putting their money where their mouth is and making a play… PF
All Indian Service Providers are selling their expertise in Digital Transformation and the latest trends in IT. Problem is that DT is more about human relationships and new ways of collaboration than technical skills. DT and agile collaboration requires being outspoken, critical, pro-active and other soft skills that most Indians don’t have because their hierarchical society and the way they are brought up, both within their families and schools, is contrary to these (new) developments.
@Phil: Appreciate your candid thoughts on the Indian IT ecosystem. It will be a good exercise to introspect the reasons behind the lean show. Just writing my thoughts
1. Are there customers who still spend HUGE money on the ‘boring’ stuff and hence we okay for another year?
2. Is the existing ‘blockchain, ARVR, Intelligence’ limited to pockets of PoCs?
3. Is our large ecosystem creating a boring facade and is scared of disrupting traditional models? If ain’t broken, dont fix it??
4. As i wrote earlier, the immediate need is to think business impact solutions more than technology. Are we so obsessed towards technology and numbers more than creativity/imagination? Right/Left brain dichotomy?
Having said that there are small and mid cap companies who are providing exciting solutions to global customers. A new thought and collaboration paradigm has to evolve. Something that transcends business numbers, utilization and SLAs!!
@Phil, as always insightful and a call to arms. From my experience it is likely that many of the more disruptive Indian players were not invited or didn’t see value in attending unfortunately. I have found some very vibrant thinking across a number of vendors and indeed corporates and there is still much of the start-up culture that if harnessed properly can drive the next phase of India’s industry growth.
The traditional stalwarts do mainly seem to be converging on very similar offerings and trying to be jack’s of all trades rather than the fulcrum of digital transformation (sorry for being old skool) and orchestrating strategic alliances across tech, analytics, operating model change management players to provide real holistic and valuable solutions.
My .02 ..Having worked for 15+ years and bought from this model for 10 years i have seen the legacy Indian based model has been maxed out for years. Now its just overcapacity at scale. The history in economics of over concentration of skills/capital , overcapacity, density in geography is disruption and massive supplier dislocation. The evolution of a small industry of 100k (from tier 1-2-3 schools) people spread between maybe 50 companies to over 1000 offering the same thing with over 3-5+ million people (90% from Tier 3-6 schools) if 5 & 6 are even universities more like trade tech:)… The cost per seat has gone from $250-500 a mo. to $1-3k a mo. per seat to just run the operating model. The gaps are still massive. (lack of BA’s/LeanAgile at scale, only US focus or UK/Can/ANZ is considered diverse:). Nextgen tech or LOB driven value engineering ( you need BA’s for that), diversity in the leadership (75-90% of BU heads and their next 3 levels below are all Indian from India not from local markets) Lack of real female representation and in leadership at scale. Bloat, real true billing (no buffer, batch filler, utilization games) is about 65% across the top 10. Most large international competitors are in the high 70’s to low 80’s.Lack of real investment in their verticals much less the horizontals. If you look at Accenture the last 10 years they have bought more boutiques by 2x then the whole Indian space. Inability to hire domestic at scale and integrate from a People Model POV. The mashing of US college hires (who are often non-H1 South Asians) is the game to make the firms look more domestic. But there isn’t anything close the Big 4 hiring, people development in year 1, mentoring model. Back to lack of BA’s. Lack of executive development in leadership. Look at the non-indian Big 10 and their leadership development (exec MBA’s, custom top MBA programs for their exec development) and the Indian top 10 which combined don’t have a program that any of the top 10 non-indian have. There are 20 more issues like this. The nextgen of this model is going to be more global, balanced in delivery, much smaller in firm size, much more diverse, way more BA’s, LOB value engineering, automation, nextgen tech focus, more non-linear revenue/IP/SaaS, more small M&A boutiques, better execs, real year 1 people development, all Lean/Agile/SRE,
Phil,
Are you saying the event has become boring or has the industry itself become irrelevant, stagnant and obsolete (boring being a polite euphemism?) going about its way like a good journeyman, not even pretending to try a hand at innovation and change?
Sounds like you are saying the latter and you should know given the regular tracking you do of the marketplace, you probably speak to some one from the Indian IT firms on a daily/weekly basis for some reason or the other.
Complacency has set in, the industry is well and truly going down a vicious cycle of lower pricing, lower value and just lower everything to keep the game going – clock margins/report the profits and keep a holding pattern. If the Industry has kind of thrown in the towel, you should then probably also do a dip-stick check with customers then? Surely there would be a shift in perception (at the minimum) or worse (change in strategy, ex. captives, adopt effective automation and cloud, crowdsource need basis etc.)?
The big disruption may not be in the model. it may just be in the consequence of commoditization and plain fatigue that sets in with the general downward spiral. And then it all sort of gets to be overwhelming and things sort of fade out into the background. Eventually, the disruption then truly happens (some one really spins out a new model and makes it tick) and every one rushes there.
But the game was lost much before, it is late and nothing more can be done. At that point the industry event even stops pretending, you may not even cover it then.
Btw, some great comments by folks here. Lots of food for thought and a big picture to look at too for follow ups (about the global firms that adopted the Indian model copy cat, the culture aspect, the lack of alternatives, the lack of aggression, what next etc. etc.)
Regards,
Manish
Dear Phil,
I tend to agree on your feedback about this important NASSCOM event generating milder enthusiasm then it used to do 5-10 years back. The majority of industry people including me will keenly follow the NASSCOM announcements and compare them with our respective companies announced future strategies and business directions. This has lessened in recent years.
But at the same time let me add that IT employees and particularly new generation that we have in these services companies is often find burning proverbial midnight oil to acquire new skills on Blockchain, Machine Learning and IoT technologies.
The companies may have a reason of not going gung-ho on these new technologies as these disruptive technologies may potentially cannibalize their existing business in midst of Brexit, Trade war, Visa issues, Protectionism etc. why open another front might be the reason.
I would like to hear back on what you think about it.
Regards, Sanjay