As you may have seen last week, we officially unveiled our data products at HfS, where we bring together the full gamet of demand and supply side data to share everything you ever needed to know about the big change agents impacting business operations. So who better to help support our new range of offerings that a veteran analyst with a broad knowledge across all services markets, who’s developed a solid reputation with the likes of Ovum and NelsonHall: Suvradeep Bhattacharjee.
In addition to being a true gent and an eloquent observer of the market, what also appeals is the fact he moved himself to our new HfS headquarters in Cambridge England (where his wife teaches HR practice at one of the local colleges), but he also comes from the great city of Calcutta, where you can actually visit man-eating tigers. My 8-year-old boy is begging me to take him, so I will need some local expertise to give me the lowdown….
Welcome, Suvradeep – it’s just terrific to be working with you at HfS! Can you share a little about your background and why you have chosen research and strategy as your career path?
I think, I am curious by nature. I am usually stimulated by new knowledge which is mostly esoteric by nature, in my experience. Also, I would like to know how this new knowledge affects the big picture. From software development to being my own boss for a while, then as an industry analyst, it is indeed a bit of serendipity as well, but research and strategy has become my natural career turf.
Why did you choose to join HfS… and why now?
Blinding optimism of the Silicon Valley in the corner of old and gentle England – I just couldn’t believe my luck when I discovered that HfS was moving its HQ to Cambridge, England. I have always admired the frankness and genuineness of thoughts opined by HfS. In particular, your blogs on outsourcing and automation, Phil, has breathed a lot of fresh air in a rigourous industry often lacking the big picture. Thanks for that, Phil. Finally, I am a lot quieter now but still a rebel. Joining a gang of rebels in HfS, isn’t it natural?
Where is the industry right now, Suvradeep? Are things really that different than they were five years ago?
The services industry is in a state of flux right now – we are in a transition to a world where we we do more for less! The twitching corpse of labour arbitrage is still looming large, while RPA and AI are promising a very different future, but right now it’s a scramble to balance both the new and the old model with a blended approach. Political developments across the world around outsourcing have become much more prominent with the rise of populism across many western political systems, and it has become nigh-on impossible to ignore the calls to curtail offshoring or nearshoring. As you have pointed out, Phil, the next five years will be transitory, but it’s the five after that which will be truly frightening!
So what can we expect to see from you at HfS… can you give us a little snippet of what you’re going to be working on?
I will manage the delivery of HfS contracts database, delivery of HfS buyers guides, and delivery of HfS PriceIndicator. Also, I will be working with the HfS analysts to utilize data around product areas more effectively and develop relationships across the industry to help support and promote these products. I will be aligning our data with our insight to really drive our view of the future, and am very excited to be working with Jamie Snowdon (Chief Data Officer) who has some great ideas for innovative data solutions for our clients.
And finally, is the analyst industry as exciting as it was 10 years’ ago?
I am tempted to say that the analyst industry is more exciting now as we are about to watch really big changes in the world around us! It’s a great time to be here. Change and uncertainly drive the need for clarity and insight, so where better to be than a firm like HfS?
Good to have you with the HfS family, Suvradeep… look forward to seeing our data products really make a difference in the analyst business!
“You guys really should evolve your lean capabilities into Design Thinking with your clients” was my conversation with Genpact’s innovation lead, Gianni Giacomelli (pictured), a year ago. “You should also do that with your research clients” was Gianni’s response. Exactly a year later, we open our Research ThinkTank in Cambridge England to perform said exercises with our clients, and Genpact announces the acquisition of Design Thinking specialist TandemSeven in Cambridge Massachussets.
Why is Design Thinking becoming so relevant to the middle-back office operations?
We see the emergence of Design Thinking as critical to help enterprises collapse these barriers between their front, middle and back offices – one of the core fundaments of achieving a true OneOffice framework. You really can’t be a digital organization if your operations are not supporting the front office in realtime, being able to respond to customer needs as and when they happen:
Design Thinking offers an approach for a diverse group of people to work together to identify and articulate a common problem, brainstorm ideas for addressing it, quickly prototype/wireframe/storyboard and test it, and continue to iterate on the idea as it takes shape into a proposed solution. A Design Thinking led approach to designing a Digital OneOffice framework moves the focus of the operations executive and service provider partner away from the process itself, and the internal, “what’s wrong inside of what we do” to “what do we actually want to achieve” (the business outcome), and what do we want people to feel and do naturally that will lead to further engagement and new—and different—results.
At HfS, we are finding that Design Thinking is actually changing the way many clients and service providers work, that there is a real complement between designers, consultants, engineers, and service delivery as organizations seek to bring the front, middle and back offices closer together to achieve common outcomes. Moreover, it’s vital that Design Thinking is firmly embedded as the method for ongoing engagement across all organizational stakeholders, as outcomes constantly evolve as markets evolve and business needs change.
Incorporating Design Thinking Into business context for shared services and outsourcing
You can use Design Thinking to understand what’s really causing problems or issues or expenses, by better understanding what people are actually doing –or not—and feeling. What is their experience? And then working through ideas that may revise, or replace, or eliminate process; that may change what people are doing and how; and could use current technology better, or new technology. As one shared services executive told us, “we already know how to make something efficient [with Lean Six Sigma] and we required a new way of thinking in some specific areas.” Along these lines, we are not anticipating an end or replacement to Lean Six Sigma or “operational excellence” but adding a way of stepping outside the process to identify trouble spots and new solutions.–or not—and feeling. What is their experience? And then working through ideas that may revise, or replace, or eliminate process; that may change what people are doing and how; and could use current technology better, or new technology.
With Design Thinking you focus on understanding who is involved in whatever process or problem you are looking to address, and what are their expectations and needs (the “human” side)? And what is the industry and corporate context, the business outcomes to impact (the “business” side)? And what are the technology enablers? Then bringing it all together in a solution through a series of prototypes and tests. Sometimes the solution is a quick fix, like changing the day of the week or where a request from a consumer is directed in a system; and sometimes it will help you identify a new way of working or a new service or solution.
When HfS published the Design Thinking in the As-a-Service Economy Blueprint earlier this year, we looked at how service providers are working with clients to integrate person-centered design and experience in business operations through the use of design thinking expertise, methods, and tools. Genpact and clients shared with us how it’s bringing design thinking into the Lean Digital framework to combine with its heritage strengths in analytics and use of agile methods and artificial intelligence platform Rage Frameworks for innovation. However, Genpact lacked relevant design thinking tools and IP, breadth in capability, and experience. Until now, it relied primarily on partnerships with design firms and leveraging its delivery centers for developing prototypes.
Bottom-Line: TandemSeven’s capabilities will help Genpact break down barriers holding back rigid “process first” operational structures
In short, TandemSeven adds two key components to Genpact:
– Dynamic journey mapping tool and integrated principles: Challenges that we’ve heard with design-thinking innovation for services and operations include: moving from design to action, engaging stakeholders who were not in the original design activity, and measuring impact. TandemSeven’s UX360 is cloud-based journey mapping software that includes a set of templates to lay a foundation for custom journeys that can then be customized as needed and benchmarked for progress. Users can integrate with analytics and lifecycle management tools. It can also be shared for collaborative efforts, and we expect it can be used across organizations as individuals and teams enter and exit projects, keeping everyone on the same journey to the targeted outcome. In addition, TandemSeven emphasizes the need to tailor information in the map to business stakeholders and identify qualitative and quantitative metrics, such as customer satisfaction surveys and web analytics, and key performance indicators. Genpact will need to figure out how to integrate UX360 into its Lean Digital method and toolset and the implications of licensing and sharing to scale it over time. However, it does fill a critical gap here and provide something unique for the service provider.
– Design Thinking expertise: While Genpact launched a credible training effort internally over the past two years on Design Thinking methods and principles, it lacked depth of expertise and experience. TandemSeven adds designers, consultants, and technologists and a client list that ranges from the Fortune 500 to startups and includes public companies and private organizations, e.g, Humana, McDonald’s, Royal Bank of Canada, Pfizer, Southwest Airlines, and University of San Francisco. It is North America centric so it does leave much of the world “uncovered” in terms of local offices and expertise, but can tap into and partner with Genpact’s broad global delivery network.
Genpact is clear in its intent to integrate Design Thinking into its Lean Digital way of working, and orient itself 100% on “customer first” not “process first”. The UX360 tool and team of professionals it is bringing in through this acquisition is intended to help orient, design, and realize this vision by being an integral part of what Genpact has in place with its strengths in targeted industries (e.g., banking), process, analytics, and technology. This acquisition positions Genpact to work with clients in a more integrated fashion over time – with an human-centered reimagination of how to better use talent and technology together in “OneOffice” to create experiences and impact business outcomes.
We just love data at HfS – we built this company by surveying our terrific community over the last 10 years to keep on top of all the curious things enterprises do to stay competitive and profitable. And this year, we are literally surveying 3,000 billion dollar plus enterprises on their intentions and dynamics across the 5 critical change agents of our industry: automation, AI, analytics, blockchain, emerging digital business models, and global sourcing strategies.
While everything we do is based on data, we’ve not really packaged it all up in a way for our clients to digest it and use it most effectively for themselves. Until today.
We’ve set out our research agenda to bring reality to the research analyst world, dynamic engagement with our clients and our vision for the industry: our Analyst 2.0 model. Over the next 6 months, we will be adding more data products and enriching the existing ones, based on the wealth of information we have collected over the years:
1: Contracts Database
Launching in September 2017. As part of its ongoing research HfS has always collected and collated contract data across the different service lines it tracked. HfS Contracts Database gives subscribers access to this data, which provides up-to-date analysis of IT Services and Business Process Outsourcing contracts. This interactive tool allows users to search for specific contracts, view contract progression annually and by quarter, and view heat maps of specific deal categories by region.
2: HfS PriceIndicator™
HfS PriceIndicator™ has been part of HfS Research data tools for over 4 years now. The next 6 months we will start to include RPA and automation pricing.
HfS PriceIndicator™ is a real-time, research based price benchmarking service that provides clients an insight into current ITO and BPO pricing. Currently, PriceIndicator™ provides a biannual set of hourly FTE rate cards for ADM, F&A BPO, Insurance BPO and Healthcare Payor BPO.
3: Buyers’ Guides
HfS buyers’ guides provide an independent view of individual service providers across different service capabilities. Giving a summary of the organization’s strengths and weaknesses in addition to details in specific service categories.
The long-term plan will be to integrate these guides into the HfS Data website updating them whenever new financial data is available and when we publish new blueprints/vendor analysis – so they always deliver the most up-to-date content on each provider.
4: Quarterly Market Indices
HfS provides market size and forecast for the IT and business services market updated on a quarterly basis. This view of the industry provides a top-level view of service provider performance and uses this to predict market growth and performance within the main IT and business services markets.
5: Supplier Revenue Data
For the past 5 years, HfS has been tracking the IT and Business service supplier landscape collecting key financial data from the industry – creating models which are used to create our Top 25 IT services and our Top 50 BPO provider list. HfS is expanding these models to create revenue maps across key service lines, industry, and geography.
6: Direct Buyer Viewpoints
HfS regularly interviews buyers throughout the Global 2000 organizations, conducting 3,500 interviews over the course of the year. The Buyer Viewpoints opens up this data for additional analysis by industry, and across regions. So our subscribers can create their own views of the information for presentations and infographics, in addition to HfS own drive to make our data more accessible.
The bottom-line
The Analyst 2.0 model means making data more accessible, easier to digest and self-service – the analyst should not be a barrier to insight. HfS wants to enable our community with the right data to drive their own insights and their decision making – revolutionizing the way market data is used and consumed. At the same time letting our analysts do what they do best – drive thought leadership within the operations and IT services community.
What’s really happened to social media these days? What used to be a fun place to share untethered banter, humor, intellectual conversation and debate, perhaps be a little risqué, has degenerated into a stuffy medium for puffing up corporate brand mush, and regurgitating the same old bland insight we’re having pushed at us daily. Every corporate suit is now on there, lauding how amazing their company is… praising their clients and uttering meaningless, hollow words of adulation. In fact, many of the “senior” people on there have their marketing people even do their social for them… it’s not even them.
All of you know I do like to dabble a bit with Twitter, Facebook and LinkedIn to engage with people – both with people I like socially (Facebook) and industry contacts with whom I consider valuable to stay in regular touch (LinkedIn). I also have the luxury of being the boss, so no one can fire me 😉
Over the years, social has been terrific for communicating with people, sharing insights, opinions, research, news… it’s been fun, and it’s been personal. It keeps you connected with so many people that when you bump into folks at conferences etc., it feels like you spoke just the other day, rather than five years’ ago.
But, in recent months, it’s just become so polarized and stuffy. There are people using social only to promote themselves and their companies… the personality has drained from it. I find myself spending more time removing connections than adding new ones.
Case-in-point, I dared to post some (slightly dubious) research on LinkedIn the other day with a joke about how much analysts need to be wined and dined to get the best scatterplot grid placements. I didn’t even criticize the research, I just popped up the grid with a joke on the axes about boondoggles and posh dinners. Within about three hours of posting, I received some really snotty comments from the analyst firm in question berating me for daring to poke a little fun at one of its lovely magic grids. They were pretty nasty about it too. And then I got an aggressive note from a marketing guy in one of the suppliers (which was nicely positioned in said grid), complaining about my “unprofessionalism” for poking fun at a competitor.
So I took the offending post down – my intent was to generate some banter about the techniques suppliers use to get positioned well in these grids, not a bunch of nastiness from people who just seem so bloody paranoid these days.
To cap this all off, I then get a phone call from the boss of the marketing guy (who complained about my post) requesting me to put it back up as they were getting so much free publicity from it (20K+ eyeballs). You just can’t win at this, can you?
So where do we go with this?
Hone your network to people you get value from. If you find people offensive or not adding value to you, then just remove them, rather than create a nasty discussion thread
Get a sense of humor: arguments can be fun. If you disagree with someone, but the conversation is useful, then voice your disagreement about the topic and have a proper discussion… don’t just criticise and disappear. Use the forum to exchange views and ideas – you never know, some good may come of it. If we all just agreed with each other all the time, we’d never learn anything…
Drop the ego. These are networks where you agreed to exchange information with people, so be prepared to see things you have an opinion about. And be prepared to be criticized – that’s the whole purpose of this stuff. If you can’t handle a little professional debate, then stick to Facebook and the pictures of dogs and babies…
Be open to the fact that the opinions or research you put out may be flawed. We should be willing to learn from each other and accept some input, flattering or not. If you think I am smoking something, just tell me… and I’ll do the same with you. Challenging each other is the only way we learn and get better at what we do.
We are excited to welcome Kate O’Neill, marketing guru, cultural strategist, and technology humanist, to keynote at our upcoming Chicago event. As HfS brings together the industry community to exchange ideas and experiences, Kate will be leading the discussion about how data and technology shape our experiences as humans. Kate will also be running a digital OneOffice breakout session with me.
Melissa O’Brien, Research Director, HfS: Kate, we are really excited to have you joining us next month in Chicago. Our attendees are curious– you describe yourself as a “tech humanist”– can you tell us what you mean by that?
Kate O’Neill, Founder, KO Insights: I mean that data and technology is increasingly shaping our experiences as humans, and with every technological advancement, with every innovation, I want to encourage us to think about the impact on humans and the human experience.
In my last book, for example, Pixels and Place, I examined the convergence of physical and digital space, and how that convergence fundamentally happens through human interactions. I’m now working on another book in the same spirit.
Melissa: Tell us about the next book.
Kate: It’s coming together around AI, predictive analytics, and other forms and components of automation, and, again, how those are and will shape our experiences as humans. The world has been changing toward this automated systemic society for some time now, and I’m examining what that will look like for us, from a human-centered bias, as it continues.
One of the key questions, of course, is around the future of work and the workplace, since there’s a lot of anticipation and anxiety about the impact there. We’ve traditionally derived a great deal of our sense of accomplishment and contribution — our sense of meaning, really — from our work, and as the nature and composition of jobs change, it’s important that we consider what that will look like.
The big question in all of this is how we make sure we are emphasizing humanity and creating value for ourselves — both for humanity and for profit.
Melissa: What do you think this will mean for businesses as increasingly intelligent automation start to transform our human experience?
Kate: Well, one of the recurring areas of focus in my work is the alignment between two forces: the insights that well-modeled, data-rich experiences can provide to business about human behaviors and motivations, and the integration of data and technology into business and organizational processes. People talk a lot about digital transformation, but this is what it means to me: keeping human experience at the center, but taking advantage of the gains and efficiencies that data and technologies have to offer.
In addition, business needs to be responsive to and mindful of what’s happening at the intersections of the physical world with the digital experience layer. Because for the most part, where those worlds meet, it happens through us: through human interactions and transactions. Our movement through the world, our purchases, our interactions online — all of these create a data trail that is compelling and rich with patterns businesses can mine for clues about how to sell to people more effectively. And machine learning will continue to improve on how to harness that data.
Which means, on one hand, there’s huge opportunity for business growth and acceleration, but there’s also this huge looming economic question mark about the accelerating impact of automation on the workforce, and how that will change the mechanics of employment and of income, and even the fundamentals of value. I expect that we’ll increasingly place a premium on human interactions — and those that feel like human interactions.
That’s a lot going on! And I think it’s a tremendous opportunity for businesses to step out ahead of the competitive set and really bring all these forces into alignment — the customer experience, the data model, the operational deployment of smart and automated technologies. To do that really takes a deep understanding of what the business offers at a fundamental level, and dimensionalizing that purpose throughout all of these other parts and processes.
Melissa: That certainly is a lot… and I know our summit attendees will be eager to have these discussions next month. What can the folks attending our Chicago summit plan to learn about in your session?
Kate: I want to encourage people to think about all kinds of data and emerging technology like automation, artificial intelligence, chatbots, connected devices, and so on as opportunities to deliver more meaningful human experiences at scale. We’ll talk about why and how that can work in practice. There will probably be one or two mentions of cats, too, but I haven’t figured out yet how or why.
Melissa: Presentations are always better with cats…. Thanks for thepreview, Kate! We are looking forward to your next book and hearing from you directly at the Chicago Summit.
Learn more about Kate’s session and the rest of the agenda for HfS’ Future of Operations Summit in Chicago (September 19-21).
Last week, we launched the Analyst 2.0 Model along with the HfS ThinkTank to revolutionize our industry. And today we unveil the new HfS 1-2-3-4 Research Agenda. The updated agenda serves the real needs of our clients. The tired legacy analyst model continues to only look at the past and lacks out-of-the-box, stimulating, and forward-looking thinking. We aim to turn this legacy Analyst 1.0 Model on its head, by delivering impactful knowledge and insights that will help our clients survive and succeed in the VUCA (Volatile, Uncertain, Complex, and Ambiguous) world that we all live in.
1: Research coverage across each element of the OneOffice™
HfS launched the OneOffice Framework in January 2017. Our industry is evolving to an era where there is only “OneOffice” that matters anymore, one that is focused on creating an impactful customer experience and intelligent operations to enable and support it. At HfS, we like to practice what we preach. We have aligned our research practices with the OneOffice with designated research leaders.
The Digital Front Office research explores customer engagement, design thinking, contact center, marketing and sales, as well as social, mobile, and interactive solutions.
The Digital Underbelly research focuses on desktop automation, robotic automation, and security.
Our coverage for Intelligent Digital Support Functions spans across IT services, Finance, Procurement, Supply Chain, Payroll, and Engineering services.
The Intelligent Digital Processes research explores advancements in artificial intelligence, smart analytics, blockchain, and IoT.
2: Voice of the Customer embedded in the Analyst 2.0 Model
In-sync with the Analyst 2.0 Model, we designed the new research agenda to help us become the leading Voice of the Customer. Our team of global analysts speaks to over 3000 stakeholders across the Global 2000, our industry summits provide us with an unmatched platform to interact with senior stakeholders, and our analysts publish real client stories. We’ve always mandated customer reference calls for every Blueprint report that we publish and with the new research agenda, we are taking this customer focus a notch higher. Some key initiatives:
Our recently published and upcoming IT-services research, based on a Global 2000 client-only survey that helps us get beyond the supplier marketing and sales spiel.
Similar survey(s) for mature horizontal business process areas as well as industry-specific offerings.
Our major Blueprint reports will now be accompanied by a summary of client conversations in the space to present aggregated patterns of how clients view market execution and innovation.
A unique buyer experience guide for the top RPA products, based solely on interviews with RPA clients.
3: Forward-looking research across three-time horizons
A key reason for clients to engage with us is the provocative nature of our research. We’re future looking, and unafraid to call a spade a spade. The new research agenda aims to arm our clients with the knowledge and insights across three-time horizons they need to navigate the future of operations:
Horizon 1 – Act-now: Mainstream topics in the market, such as Robotic Process Automation (RPA). Horizon 1 research is aimed to deliver practical insights into current market trends, supplier capabilities, as well as current client experience that will help institutionalize the concepts.
Horizon 2 – Watch-out: Emerging themes and topics that are likely to become mainstream in the next 1-2 years, such as Artificial Intelligence (AI). The objective is to help clients test value propositions and understand potential benefits and challenges in their industry.
Horizon 3 – Investigate: Areas that show tremendous potential but are still too nascent to predict adoption, such as blockchain. The purpose of covering such topics is to ensure a healthy dialog with key industry stakeholders to define these spaces, articulate challenges and support awareness.
4: Four-dimensional view of business operations
The future of business operations is not one-dimensional. To provide our clients with a completely holistic view of the market, we have a team of four-dimensional analysts who understand the market across four lenses in their area of specialty:
Dimension 1 – Change agents: Major change agents driving the industry including automation, artificial intelligence, blockchain, digital business models and smart analytics.
Dimension 2 – Business functions: Detailed coverage across Business Process Services (both back office and front office), IT Services, and engineering services.
Dimension 3 – Industry orientation: Business operations impact across 10+ industries including Banking & Insurance, Healthcare, Energy, Utilities, Manufacturing, Telecom, Retail, Travel & Hospitality, and Public Sector.
Dimension 4 – ThinkTank: Bringing together our collective knowledge and insights across change agents, business functions, and industries to think out-of-the-box and collaboratively solve real business issues.
Bottom-line: We are raising the bar, and we are revolutionizing the industry with our new HfS 1-2-3-4 Research Agenda.
There’s only one thing in our world that keeps Donald Trump off the headlines… of course… it’s good ol’ Infosys! Yes, folks, we actually seem to care more about who is attending these board meetings and squabbling about the cost of refueling the company jet, than the nuclear warheads currently pointed at Pyongyang.
Yes, people, the $10bn Bangalore-headquartered outfit is trumping Trump in the media… an exclusive on what Murthy had for breakfast is far more interesting these days than the handbag Ivanka just purchased. And the eighty-seventh article analyzing just why poor ol’ Vishal wasn’t quite leaping for joy every morning during his tenure, is clearly more impactful to our lives than the US government potentially shutting down, because Donald wants his wall built…
But there is a solution: Donald Trump can avoid impeachment, quit the Prez job and take the reigns at Infosys. Where better to make something great again, where he will hog the headlines more than anyone has… ever! Just think: Trump + Infosys… we will never need to read about anything else again. Ever.
Why this would be Donald’s dream job:
1) Build a wall around Electronic City to keep out the TCS and Wipro headhunters. Then rename it Trump City.
2) Repeal Murthycare without the need for any new ideas. Just get rid of it and think of something later.
3) Tweet incessantly about how much he hates Abid, Frank, Premji, Vishal, Meg, Ginni, Murthy…
4) Ban the Times of India and Livemint from all press briefings – only allowing in the new Trumposys Monthly magazine
5) Invest the whole $6bn warchest in Infosys Russia. Including a state-of-the-art Kremlin Lab that Putin can open personally
6) Put Sean Spicer in charge of the Artificial Intelligence strategy
7) Impose a travel ban on all robots to keep the FTE model intact
HfS’ Saurabh Gupta recently caught up with Brian Behlendorf (see bio), the Executive Director of Hyperledger at the Linux Foundation. Brian was a primary developer of the Apache Web Server – the most popular web server on the internet. He was a founding member of the Apache Software Foundation, the founding CTO of CollabNet, the CTO of the World Economic Forum, and the managing director at Mithril Capital Management LLC before heading Hyperledger. He is also a board member of the Mozilla Foundation since 2003 and the Electronic Frontier Foundation since 2013.
Two decades after developing the Apache HTTP server that played a key role in giving us the internet and the web, Brian is reimagining our world again with blockchain. We discussed a range of topics around the reality and practicality of blockchain for enterprises along with the one wish that he wants to come true.
Saurabh Gupta, Chief Strategy Officer, HfS Research: Brian, one of the stated goals for Hyperledger is to create enterprise grade frameworks and solutions. Why do you think enterprises should adopt blockchain?
Brian Behlendorf, the Executive Director of Hyperledger at the Linux Foundation: We have lots of transaction networks that, Saurabh, because of historical network choices, have resulted in many central actors who facilitate digital transactions like a hub in a hub-and-spoke network. And we have to proxy our trust to them – sometimes they do a noble job and charge a nominal rate, but there are times when these central actors charge unreasonable double-digit rates. Blockchain allows business models to become more equitable and agile by behaving more like the internet.
The cryptocurrency community has produced a lot of interesting technological advancements, and there are valid and worthy uses for them, but the majority of the enterprise market is looking for a consortium approach – one that still sees a representative organization to set the rules of a market, but where the market operates more directly peer-to-peer and distributed, rather than all transactions going through that central party. These consortia can upgrade the rules from time to time with the consent of the market, , and help define and enforce a set of legally binding agreements to cover situations that the technology does not cover.
As an example, an organization like SWIFT can reinvent their current offerings as distributed ledgers, to not only optimize the product (reduce turnaround time from 3 days to 5 mins) but also make them more accountable to their member backs. Essentially, they become referees on a football field, instead of the quarterback.
It’s not just financial markets; we can re-invent claims processing with distributed ledgers and smart contracts to make it is less bureaucratic. We can share patient records with strong audit and access control. There are use cases across healthcare, supply chain provenance, and many industries. These may sound like disparate use cases, but it’s similar to how TCP/IP transformed the world in the 1990s….who thought that an online bookstore would become the most valuable company 20 years later, but it did.
Saurabh: Why should enterprises look at Hyperledger? There are so many different permissioned and permissionless frameworks out there, so what is the elevator pitch?
Brian: As new technology develops, there is a call for standards. Participants want to focus on time and effort and investment to build solutions versus worrying about the framework. This is the rationale for open standards. There has been a linear progression from open standards to open source software. While financial firms are behind the curve, if they want to get behind this idea you need everyone else to adopt it…and that requires open source.
That is why we are pulling together the most exciting portfolio with a multi-lateral developer and vendor community. As a result, clients don’t just have to go to IBM; they can reach out to Accenture or Wipro or frankly hundreds of other startups and still get the same basic technical architecture. It’s similar to the benefits that Linux brought to the world of operating systems.
Saurabh: We recently saw the release of Hyperledger Fabric 1.0 (see blog) and even wrote our perspective on it. So what, Brian, should we expect going forward from Hyperledger?
Brian:Hyperledger Fabric version 1.0 is not the end but the beginning. We are already working on version 1.1 which is a logical progression from 1.0. We will also launch Hyperledger Sawtooth version 1.0 and possibly some others in the near future.
We are also starting to see a lot of collaboration between projects. For example, Hyperledger Sawtooth and Hyperledger Burrow are working together to run the Ethereum Virtual Machine (EVM). This kind of mixability is what we are working on all our projects. Over time they converge to tell the full story that is built under the same umbrella with the same legal framework.
Saurabh: So what’s your advice to enterprises regarding when to consider blockchain and when not to?
Brian:With every use case for distributed ledger technology, there is always a question whether it could be cheaper to do it as a centralized architecture. And the answer is yes! BUT: then you enable a central actor, and that is what markets want to get away from. The first question enterprises should ask is around how are they doing things now, and are the bottlenecks due to centralization? If you are paying a 1% fee or less, and the centralized actor is well managed and doesn’t also compete with its market members, then possibly blockchain is not the answer in the short-term. But if not, then you should go to your stakeholders and participate in a blockchain solution. I believe that every such scenario will go towards blockchain, but that is a 20-year vision. Right now we should be looking at the low hanging fruits.
Saurabh: There are lots of pilots and PoCs around blockchain, Brian, but rarely do they go live. What needs to happen for blockchain to become a reality for enterprises?
Brian: What we need to do is build confidence in technology leadership that blockchain technology can scale up to performance levels that enterprise requires. We have established a Hyperledger Performance Working Group which is a cross-project initiative to build a repository of test scripts, develop benchmarking tools, etc. to help IT leaders understand what the tune-able attributes are. A lot of Fabric 1.0 enhancements were around guaranteeing performance and improving DevOps such as assigning different roles to different nodes that are different from standard blockchain architecture but helps improve some latency factors.
There is a recognition to make it real, and we are putting a lot of effort into it. Projects like Hyperledger Cello (as-a-service deployment model) and Hyperledger Composer (collaboration tool) are also enabling adoption.
Saurabh:And finally, Brian, what’s your one wish for blockchain if you could make it come true
Brian:By an order of magnitude, more developers – a thousand more developers that are one year further down the learning curve. I talk to many companies on participation formalities, but the thing that I want them to contribute is developer resources to write code…I am not compensated by revenue targets, success for me is becoming the reference standard for distributed ledger technologies.
Once dubbed the “Indian Accenture”, being the Indian heritage outsourcer with the high-end reputation, the firm now finds itself enduring, perhaps, the most difficult period of its history – and it could be poised to get a hell of a lot worse.
Vishal Sikka brought energy, fresh ideas, hope… and a Silicon Valley mindset to its leadership when he came aboard amidst his Design Thinking and jeans-to-work attitude just three years ago. However, all Sikka’s energetic ideas and innovations have been largely forgotten over the past year, as the public spat with Founder Narayana Murthy gathered irritating momentum and completely slammed the brakes on the momentum Sikka had sparked. Sikka had woken Infosys up to its potential and the Founders were more obsessed with his use of the corporate jet than making the acquisitions the firm needs to be competitive.
From the poster boys for innovative offshoring, epitomized in Thomas Friedman’s seminal “The World is Flat” through to the constant public interventions in corporate affairs by Murthy, Infosys has had a bumpy ride over the last decade of its short history. And to magnify its issues, all of Murthy’s interventions have been played out in public, with the Indian press the grateful recipient of endless reams of news fodder being provided by this corporate soap opera.
Vishal Sikka’s resignation grinds to a halt this public transition from the Founders’ generation to becoming a “normal” corporate company. Without a doubt, this episode will find its way into economics textbooks for future students to learn the lessons in strategy, corporate governance and beyond. However, at least decisive action has been taken, and Murthy and his founders can try and restore a stability that ends this public drama. This is just a bad time to go through such a strategic leadership nightmare, when competition is at its most severe, with too many suppliers chasing too few contracts and margins under extreme pressure. This is especially troubling when you consider Sikka has kept the revenue and profitability ship progressing well, maintaining profit margins close to 25% and revenue growth over 5%, even at a time when the industry growth is flat and political stances towards offshoring are heated, with several US deals being awarded to “Western” suppliers:
So what are the lessons that can be learned from all this?
Murthy is the dominant father figure of Infosys and he has made that very clear with his actions. As founding CEO, he is synonymous with the early success, the culture, but more crucially, with the decision-making at Infosys. When SD Shibulal, another of the founders, took over it was difficult for him to step out of Murthy’s shadow. Shibulal’s “Infosys 3.0” strategy was designed to address the over-dependence on the US market (see interview) and rebalance the portfolio by building out IP-based platforms, namely the EdgeVerve portfolio. But he took also the bold step to sign the first Intelligent Automation partnership with IPsoft at the time. Yet, the sales engine continued to stutter which remained the dominant feature of Infosys recent history.
This provides the background to the stage on which Vishal stepped, when he was appointed CEO in June 2014 (see post). Vishal was not only the first “outsider” but more importantly not part of the Founders’ generation to take over the reins at Infosys. Being Indian, yet working in California with a strong product background from his time at SAP he ticked a lot of the boxes in order to return Infosys to its erstwhile glory as the beacon for innovation that Thomas Friedman had so eloquently and prominently described. Vishal’s strategy focused on aligning Infosys around automation and AI to re-emphasize the heritage in innovation and Design Thinking, but also to boost the balance sheet as the industry is going through the secular shift towards non-linear growth and outcome based offerings. This was underpinned by an influx of executives from SAP meant, in particular, to help drive the platform and product business.
However, the narratives around automation and AI were never succinctly explained and, more importantly, not driven consistently through the organizations. For instance, the teams at EdgeVerve were waiting for guidance from the teams at Mana and vice versa. Without consistent narratives, it was difficult for the sales teams to leverage those capabilities in client discussions. Similarly, Mana was announced with great fanfare as the answer to all automation challenges. What Mana actually is, is a compelling analytics engine. It took another Confluence (Infosys’ main customer event) this year to finally launch a holistic automation framework called Nia. But at this year’s Confluence, Vishal appeared to HfS as being despondent and at times disconnected leaving us to speculate that he might resign or be pushed to step aside. Yet, when he did at this conference an AI tutorial, he appeared to have his old sparkle back. Innovation and discussions with thought-leaders seem to be his passion. And his passion offered something different to an often guarded corporate world.
Undoubtedly, current clients will have questions about where this leaves them. Not only was the firm’s latest CEO the driving force behind the firms shift to analytics, automation, and AI, but Vishal’s appointment also saw the CEO’s office take personal responsibility for key clients in a bid to strengthen relationships and develop and solidify revenues from current client engagements. The whole corporate strategy will change dramatically, should the new incumbent come in with different ideas, and in the process likely shake and disrupt progress to solidify client relationships.
The Bottom-line: Re-igniting the sales and marketing engine is critical
Infosys has to reignite the sales and marketing engine and prove it has genuine distinctiveness when competing with the likes of Accenture, Cognizant, TCS, HCL and Wipro. Clients need to know what Infosys stands for, and why they should pay the top dollars to invest in this company, when there is so much intense competition making more impressive noises at present. While Vishal Sikka hit the ground running with a whole suite of ideas and innovations, these have largely dissipated over the past year amidst the public infighting. Without consistent financial performances, all the innovations will more or less evaporate and Infy will be left battling it out for low-margin transactional IT contracts. Infosys 4.0 (or whatever it ends up being called) needs a new dynamic CEO, it needs an aggressive sales leader, and a CMO that can articulate what the company is trying to do next and what it stands for. Merely parroting the insufferable fluff about digital and outcomes will not work – Infosys needs to lead India’s innovation, not merely to make up the numbers.
On the positive side, any incoming CEO will have a strong set of assets to build on, which have enjoyed significant investment. First and foremost, Infosys analytics and data management prowess, strong products including Finnacle as well as many automation assets integrated into the Nia framework. There has also been solid investments in its US delivery, most notably in Indianapolis and Texas. However, Vishal’s resignation is likely to complete the power shift back to Bangalore. Many of the California-based executives will either jump ship or be pushed out very quickly. The crucial question though is whether the group of Founders will continue to interfere in public or whether they finally take a back seat and demonstrate confidence in any incoming CEO and his executive team. If the latter is not being addressed, any new king will wear very old clothes.
I was recently given the lowdown on how amazing ServiceNow is becoming with the “integration of Watson and Chatbots into its core platform”. Sounds terrific, but does this added functionality really deliver huge value to customers when we examine the realities of their current business models? I would argue our industry has become so carried away with the promise of technologies we barely comprehend, we have taken our eyes off the real prize: working with customers to help them be more effective. We’ve got to stop selling the Ferrari, when their Volkswagen will comfortably get them where they need to be with the help of a routine service inspection.
I increasingly believe today’s “post-digital” market is much, much more about aligning services to customer business models than selling software with lots of bells and whistles – there are so many tools on the market that have 10-50x the functionality customers today really need with their current business models. Whether Ignio has more bells than Holmes or Nia, or whether anyone truly understands Watson’s capabilities, the key here is which suppliers can work with their customers’ business models to drive better automated processes, introduce more self-learning capabilities and smart analytics that can truly improve their businesses.
Net-net – we must look at everything through the customer lens:
1) Why should I care about ServiceNow? 2) What can I truly do with ServiceNow that can improve my speed to market, my customer engagement, my OneOffice experience? 3) Can ServiceNow really make me a smarter, more analytical operation, based on the people I have on staff and within my service partners?
Just adding software isn’t the answer, it’s about really understanding your desired business model and crafting the operations to sustain and support it. The service providers who invest in staff, that can really align business models to new tech, will win; software firms that can train those winning services firms to do that will win.
This is why Watson is failing to meet IBM’s lofty expectations – they’re selling solutions to clients that simply do not have the skills or experience to understand how to improve their current biz models with cognitive.
The Bottom-line: It’s time to invest in real consultative talent… or go home
Net-net – the biggest issue today is that these are solutions trying to find business problems, as opposed to clients having business problems who are looking to find tech solutions to get smarter. This should be about SOLVING existing problems first… Sadly, most of the problems today are too focused on people elimination that may not be feasible or financially viable.
The services industry needs to evolve to higher value consulting…. educating clients on the true business value of investing in solutions. But unless suppliers invest in themselves first to understand their clients’ real business needs, the ROI of investments like ServiceNow will never be realized. It’s time to invest in real consultative talent… or go home.
Launching in September 2017. As part of its ongoing research HfS has always collected and collated contract data across the different service lines it tracked. HfS Contracts Database gives subscribers access to this data, which provides up-to-date analysis of IT Services and Business Process Outsourcing contracts. This interactive tool allows users to search for specific contracts, view contract progression annually and by quarter, and view heat maps of specific deal categories by region.
