Monthly Archives

May 2016

Tech Mahindra Significantly Expands European BFSI Capabilities with Target Group Acquisition | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

On May 27, 2016, Tech Mahindra announced it is acquiring U.K.-based Target Group – a financial technology and business process-as-a-service (BPaaS) provider – for US$164 million. The acquisition will significantly expand Tech Mahindra’s BFSI (Banking, Financial Services, and Insurance) footprint in the U.K. and Europe, by adding more than 700 employees in the U.K. to its talent pool. Target Group will continue to operate as a stand-alone entity with full operational responsibility.

Estimated impact of target group on Tech Mahindra's FY2016 BFSI performance

Following is Everest Group’s take on how Tech Mahindra’s BFSI business will benefit from this acquisition:

1. Revenue growth: One of the key objectives stated by Tech Mahindra’s leadership for this acquisition is to drive BFSI revenue growth, which it wants to double by 2020. The Target Group acquisition is expected to increase Tech Mahindra’s BFSI revenue by over 20 percent in FY 2016. With over 70 percent of Target Group’s revenues coming from BPO and value added professional services, (the balance comes from its software business), this acquisition will more than double Tech Mahindra’s BFSI BPO revenues – to more than US$ 500 million – and the added BPaaS capabilities will help Tech Mahindra win larger integrated outsourcing deals.

2. New clients: Tech Mahindra will obtain access to Target Group’s 50+ BFSI clients, which include leading financial institutions such as Credit Suisse, Goldman Sachs, and Morgan Stanley, specialist lenders including Shawbrook, and mutual organizations such as Yorkshire Building Society. The client list also includes public sector companies such as DLVA in the U.K. Tech Mahindra can drive more value from existing Target Group clients by cross selling IT services to them.

3. BPaaS capabilities: Target Group is a BPaaS provider to financial services firms, and owns a platform and IP that automates complex and critical processing, servicing, and administration of loans, investments, and insurance. This is a key demand among BFSI clients, and will help Tech Mahindra win new contracts as clients increasingly adopt BPaaS.

4. Talent and professional services capabilities: The acquisition brings domain consultants to Tech Mahindra in areas including lending and insurance. The U.K. lending market is expanding and evolving, with the alternative finance market seeing growth due to financial technology players in areas such as P2P lending, and Target Group has proven capabilities to serve this market. For example, Ratesetter, a leading U.K.-based P2P lending provider, selected Target Group in April 2016 to provide standby servicing.

Everest Group believes this acquisition improves Tech Mahindra’s footprint in the European BFSI market, and reduces its dependence on North America. This is a step in the right direction. The augmentation of its BPaaS capabilities with Target Group’s platform/IP and BPO capabilities, coupled with its existing BPO and IT services offerings, create a compelling integrated offering for BFSI clients.

However, Tech Mahindra will need to address several challenges to fully benefit from this acquisition:

  • Aggressive sales pushes to drive synergy in Target Group’s accounts may lead to client frustration
  • Execution difficulties in taking Target Group’s proprietary solutions and platforms to other geographies
  • Ability to retain key Target Group domain experts
  • Offshoring work to its delivery centers in low cost locations to drive synergies from the acquisition

What’s your reaction to this acquisition?

 

GIC Rate Card Standardization: Drawbacks and Corrective Measures | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

At a broad level, there are two models of IT management services – outsourcing to a third-party service or having a Global In-house Center (GIC).

While third-party outsourcing engagements have standardized rate cards in place, GICs often forego them, instead, charging their parent companies by actuals plus a small percentage overhead fee. While that usually works smoothly for the parent company and GICs, a non-standard rate card structure causes multiple drawbacks.

A non-standard rate card structure could be due to a couple of reasons

  • Resource units are different than what is typically seen in the market. (For example, network pricing per site, which is typically charged per device.)
  • Pricing includes services/cost components that are not part of that resource unit. For example, in a recent rate card, we saw that network services cost were being included in the desktop pricing.

Drawbacks of a non-standard rate card structure

  • Low visibility into spend by function/tower: Having a non-standard rate card structure does not allow visibility into IT services spend. For example, in the case mentioned above where desktop pricing included network services costs, the parent company would not have a true estimate of its spend on either desktop or network services.
  • Difficulty comparing with market and identifying optimization areas. Since the rate card structure is not aligned with the market, the parent company faces a significant challenge in comparing its spend across various IT functions with its peers. And obtaining even a top-level comparison with the market through an advisor becomes a comprehensive engagement.
  • The go-to-market process becomes tedious. This one has implications for both the GIC and the parent company:
    • GIC takes operations to the market: For example, one of our GIC clients wanted to take its services to the market for other clients. But, because its rate card was comprised mainly of non-standard resource units, it had no way to benchmark its pricing against the market. It engaged us to align its resource units to the market’s, estimate its pricing for market standard resource units, and then do a successful comparison. If the client had a standardized rate card in place, this entire tedious process could have been a short benchmarking exercise.
    • Parent company and GIC separate: In another instance, a GIC had separated from its parent company to set up operations as a third-party service provider, and the parent company wanted to compare its pricing with other providers. The ex-GIC’s rate card, although mostly standardized in terms of resource units, had non-standard services/cost components in its resource unit pricing. Due to this, what could have been a very straightforward process became a time-consuming and intricate assessment of the cost of each resource unit’s component/service inclusion in order to do a successful apples-to-apples comparison.

What are some simple ways to achieve better consistency?

In light of the above drawbacks, every company with a GIC should follow these three steps:

  • Standardize the rate card structure: They should have market-standard resource units and pricing metrics in the rate card.
  • Service inclusions alignment: They should ensure that billing is based on transparent and differentiated units, and that no service mix-up is happening.
  • Comprehensive review: They should review against market practices across GICs and third parties to ensure competitiveness.

These simple steps will unquestionably allow any parent company to have a better understanding of its spend breakdown and, hence, a better ability to identify optimization opportunities.

2016 GIC rate crd stnrd

 

What Does the CSC & HP Merger Mean for the Services Industry? | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Two of the three titans of the asset-intensive infrastructure services business are merging. What does this mean for the services industry?

Let’s start with why they’re merging. Clearly, the space that they occupy is a mature space. It has been undergoing tremendous competitive pressure from the Indian firms with their Remote Infrastructure Management (RIM or RIMO) offerings. After losing some initial share to the Indians, the three titans – CSC, HP and IBM – seem to have righted their ship. HP had a one percent increase in sales and IBM had a three percent increase in sales. So the space seems to have adjusted to be able to meet the Indian RIM challenge.

In addition to continuing to meet the RIMO challenge from India, the three firms dominating the space also face the issue of work migrating out of legacy into the cloud. I think we haven’t yet seen the effect of this migration hit the market in a significant way. But it’s coming.

So there are three competitive challenges causing this merger to happen:

  • Mature state of the market
  • Existing RIM challenge
  • Future challenge of cloud

It’s a win-win

Therefore, the merger makes sense. As in other mature industries, it makes sense to drive industry consolidation where a scale player can better manage the transition in a maturing market than individual players. This merger is straight from that playbook.

Therefore, the merger makes sense. As in other mature industries, it makes sense to drive industry consolidation where a scale player can better manage the It also makes a lot of sense for each entity. HP can divest itself of this mature space and focus on the faster-growing server and networking space. It frees Meg Whitman and the HPE franchise to focus their attention on the growth segment of the marketplace. So I think it’s a good play for that. It allows CSC to consolidate the infrastructure space and now positions them at the same scale as IBM with similar economies of scale and global reach. So I think both parties win. in a maturing market than individual players. This merger is straight from that playbook.

But it faces big challenges

The challenges for the leadership team under Mike Lawry are twofold:

  • Capturing synergies to achieve cost reduction
  • Making strategic investments in areas where the merged entity can grow

A significant challenge will be to achieve the cost reductions without affecting customer service and disrupting the customer base.

The merged entity is estimated to have $1 billion in synergies in year one – in other words, duplicate cost that can be eliminated. That’s about six percent of their cost base and seems like a reasonable going-in assumption. However, in this case I think it will be challenging, given that both CSC and HP are coming from having recently aggressively adjusted their cost bases to become competitive with the Indian challenge and therefore do not have large inefficiencies or fat that is available to cut without adversely affecting customer service. This will focus the synergy exercise on duplication of resources, which makes the billion-dollar target more difficult.

In addition to improving margins through these cost-cutting exercises, the merged entity will have to make strategic bets to invest in critical market segments and industries that will allow it to grow and offset the ongoing challenge from the India-based RIM players as well as the workload migration out of legacy and into cloud.

Net-net

Net-net, I think this merger is good for CSC and HP. I also think it’s good for the industry in that the combined entity is better able to manage this transition than they would have individually. But substantial challenges remain for the combined entity to continue its cost reductions as well as invest in growth areas. Mike Lawry is an old hand with experience at this type of game and has had ample time to perfect his strategies from when he took over CSC. Now he has a bigger field to play on.

 

A Key Factor in the CIO’s Ability to Drive Change | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

I recently met with a major player in the Internet of Things (IoT) space, and the company is incredibly frustrated with how developments are evolving. They pointed out the promise of the IoT but said it’s not evolving much beyond the use case of predictive maintenance. It seems people are In Denial (ID). Why aren’t use cases and revenue opportunities in the IoT exploding? I believe the hindrance is the same as it is when trying to drive change through any new technology: the change is cross-functional.

The fact that it’s not evolving much beyond predictive maintenance types of use cases is frustrating to any CIO looking for the next big thing in technology-enabled competitive advantages.

Read more at CIO online.

471 Global Services Deals in Q1 Exceeds industry Expectations | Press Release

By | Press Releases

Webinar identifies “talent hotspots”– locations well positioned to lead in the delivery of digital services

Global outsourcing demand exceeded industry expectations in Q1 2016, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing. Most service providers reported sequential growth in revenue, and transaction activity increased significantly, with more new deals reported in Q1 than in any of the previous eight quarters.

Growth in the IT outsourcing market was a key contributor to the outsourcing industry’s strong performance in Q1, with banking, financial services and insurance (BFSI) and manufacturing, distribution and retail (MDR) verticals leading the way. Service delivery automation, an ongoing trend among service providers, is helping replace a substantial amount of human yields, resulting in significant cost savings for enterprises.

Everest Group presented these and other highlights of the global services market in Q1 2016 in a one-hour live webinar on May 12. The webinar, “Key Insight on Digital Service Delivery ‘Talent Hotspots’ PLUS Market Vista™ Q1 2016 Update,” featured Everest Group experts offering insights on the delivery locations that are positioned to become the “talent hotspots” for the delivery of digital services.

***Download the complimentary presentation and attend the webinar on demand.***  (Note: download requires free registration on Everest Group’s research site or log in using an existing account.)

“Service delivery automation continues to shape the industry, and we are beginning to see a clear demarcation of leading providers who have witnessed significantly greater impact on the revenue, cost and productivity,” said Salil Dani, vice president at Everest Group. “Best-in-class providers are reporting some remarkable milestones, such as a 24 percent reduction in net headcount addition, cost savings between US$100 to $300 million annually, and up to 50 percent improvement in productivity due to automation.”

Other Key Takeaways

  • The increase in demand continued to be led by the “traditional buyer geographies” of Europe and North America
  • GIC activity was high, with setups concentrated in Europe for buyers looking to leverage the nearshore proposition
  • Overall location activity also remained high with increased center setups in Latin America compared to previous quarters. Interestingly, India’s share in new center setups decreased for the first time in many years
  • Service delivery automation (SDA) adoption is leading to lower headcount addition by leading service providers, compared to 2015

Service Providers Face the End of Enterprise Infrastructure Function | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

In the new world we’re moving into, where we have a high degree of automation and hyper-scale data centers, cloud, SaaS and re-usage, why do companies even have an IT infrastructure function or department? As companies integrate their software-defined ops function with their software development function, creating DevOps, they no longer need an IT infrastructure department as we know it. Even legacy applications are highly automated and moving into co-located environments. It’s easy to imagine the service providers’ lament: “OMG – no infrastructure departments!”

In Silicon Valley and in any of the born-in-the-cloud environments, there already is no infrastructure layer. We’re definitely seeing an acceleration of cloud adoption in individual companies. And the cloud’s impact is evident in the services industry in terms of the slowdown of the infrastructure services deals, providers’ struggle for share, and explosive growth among the automation and cloud providers.

Implications for enterprises and service providers

In a world where software eats everything, cloud, SaaS and DevOps are accelerating; and the implications are quite profound.

For enterprises: Within five years, most enterprises won’t have an IT infrastructure department. As speed becomes the new currency, it’s just a matter of when, not if. Enterprises will need to replace the IT infrastructure function with a small, reconfigured standards-and-compliance group. That sounds radical, but leading companies and agile companies are doing it.

For service providers: There is a huge book of business that is now starting to run off, although the run-off is currently disguised by late outsourcing adopters. How do you replace a book of business running off? Or can you replace it? And if you replace it with hyper-scale cloud and automation tools, doesn’t that suggest that a different provider/vendor mix will likely be the new winners?

The services industry shivers as it contemplates its future.

Tales of Horror: Workshop Edition | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Workshops are common in the global services industry, for all purposes from solutioning to product/service updates to team building and more. But depending on how they’re run, they can be exciting or dreadful, valuable or time wasters.

In our 20+ years of workshop facilitation, we’ve seen some “interesting” things. Here are our top tips on how to ensure your next workshops are successful – or not.

“I’m not sure who needs to be there, so let’s invite everyone.”

We’ve all heard the phrase “the more the merrier.” But whoever said it wasn’t talking about workshops. Even multi-day workshops always seem tight for time, so you need to be targeted on who you’re inviting.

  • The big bosses: We’ve seen two types of head honchos at workshops.
    • Those who don’t want to participate at all in the workshops because they’re too busy doing “boss stuff” (aka cigars, scotch, and riding in helicopters)
    • Those who show up and take over the show (I’m the smartest, listen to me!)

Although it’s important to have execs present at workshops, their presence should be limited to an overview and conclusion. They need to understand what’s happening, but still be distant enough to let their project managers be involved, since they’re the ones who are responsible for the outcomes.

  • The SMEs: It’s always tough when you’re an SME relied on for niche information. On one hand, if you leave the office to attend a workshop, something for which you’re accountable could go wrong. On the other hand, you need to be at the workshop on the off chance a question is directed to you. For this reason, we recommend having a smaller core group of SMEs present during the workshop, and having a balance group on standby to answer questions as required.
  • The scary consultants: Since I work for a consulting firm, I can’t knock consultants in general. But there’s also a time and a place for everything. Having an external consulting firm facilitate workshops can be a huge benefit in terms of coordinating suppliers, questions, and time, but their presence should be just that.  When you allow an external consulting group to ask questions on your behalf and take over your responsibilities, you’re reducing the participation of your own staff. Let us facilitate and prod, but your team must remain very involved.

“This is an important subject, so let’s block everyone’s calendar and see how it goes.”

No matter how long you decide your workshop will run, it’ll never be enough. You’ll always have participants asking for more presentation time. But the workshop needs to follow a strict outline, or you risk giving undue benefit to one participant over another.

  • Busy, busy, busy: When booking the workshop, don’t just block out 9 hours. Separate the day incredibly clearly by section, participants, time, and goals. By having different groups of people in different sessions, you keep the teams engaged for their part, and ensure you don’t go over their time.
  • Thanks, we can read: Workshops are for conversations and back-and-forth discussions, not sitting back and listening to PowerPoint presentations. If there are parts of a workshop that need less dialogue, get the presenter to submit the material by email for participants’ advance reading, and free up the actual presentation time for more fruitful conversation.
  • Breaks are for breaks and for breaks: Breaks should be scheduled, and used just for that. Letting people present during breaks in order to get more time is not helpful or fair to the people in the room. You’re asking your team to participate, and put their phones and laptops away, with an understanding that they’ll get time during breaks to catch up on business. By taking away their breaks, they’ll be distracted, and irritated, during the sessions.

“Workshop done! Let’s grab a drink.”

Follow-up afterwards is just as important as the workshop itself. It’s critical to have someone tracking actions, questions, and follow-up activities post-workshop to close off any open items.

  • I was supposed to do what?: It sounds obvious, but you’d be surprised how often actions aren’t tracked properly. When an action is assigned during a workshop, it must be tracked with an action, date, and responsible party, at a minimum. At the end of the day, all actions should be read out or distributed (depending on the volume) to ensure all parties know and understand their marching orders.
  • And then what happens?: Suppliers are humans too, (most of them), and too often they’re kept in the dark. If your workshop includes suppliers, having a clear timeline of the game plan coming out of meeting will help ease their frustration, and reduce the number of phone calls you get from them on weekends asking the same questions. Build a calendar with anticipated dates so suppliers can see when you’re planning the next round of workshops, follow up calls, individual sessions, etc.
  • I give you an “A” for effort: Workshop evaluations are always important, and not just on a potential solution but also on the process, participation, and ways to make the next one better. Make sure you capture and relay concerns and positive feedback to both the facilitators and the presenters to help them meet your expectations.

Do you have any workshop horror stories to share with our readers? My last tales-of-horror entry on SOWs may provide some inspiration. If you have any other topics you’d be interested in reading about, don’t be shy; we can all use a humorous break!

Stephen Chen and Matthew Strickler Join Everest Group, Expand Global Consulting Team | Press Release

By | Press Releases

Former Concentra, Salesforce executives bring wealth of experience in developing IT strategies that drive cost optimization, revenue growth and business transformation.

Everest Group—a consulting and research firm that has served 120 Fortune 500 companies and a total of 1,230 enterprises around the world in the past three years alone—today announced the addition of two seasoned professionals to its team. Stephen Chen, formerly chief of staff for the CIO at Concentra, and Matthew Strickler, who previously served as director of transformation consulting at Salesforce, have joined Everest Group as associate partners.

Everest Group CEO and founder Peter Bendor-Samuel said these additions to the consulting team reflect Everest Group’s growth and commitment to delivering results for its global clients. “Our clients throughout the world rely on Everest Group’s global consulting practice to deliver impactful services,” said Bendor-Samuel. “That requires a team of highly experienced professionals who have a track record of shaping profitable, market competitive and transformational business strategies. Stephen Chen and Matthew Strickler bring that uncommon expertise to Everest Group.”

Chen, based in Dallas, brings 20 years of extensive industry and consulting experience to Everest Group. He specializes in corporate restructuring and optimizing SG&A (selling, general and administrative) expenses. His consulting expertise includes IT strategy, business transformations—including IT organization redesigns, service delivery and IT process improvements—and outsourcing.

During his tenure at Concentra, Chen oversaw an US$80 million annual IT budgeting and planning process. He developed and implemented an enterprise portfolio management function designed to align business strategy with strategic initiatives and govern the enterprise portfolio. Chen also assessed Concentra’s IT functional maturity, implementing changes to improve delivery effectiveness and business portfolio alignment. Prior to that, Chen served as a principal in Booz & Company’s IT strategy group, where he spent eight years serving in client delivery and practice leadership roles. His engagements concentrated on IT strategies and functional optimizations, with a focus on health payors and financial services. Prior to Booz, he held various functional roles in supply chain management with Shell Oil Company.

Strickler, also based in Dallas, specializes in spearheading change across client organizations, driving operational improvements with a bottom-line impact, and identifying and assessing investment opportunities. With more than 20 years of global experience spanning multiple industries, his expertise includes helping businesses in the technology sector identify growth and profit opportunities, scale their organizations, and transform their sales capabilities

While at Salesforce, Strickler served a lead role in developing strategic offerings to drive customer-centric transformation. He also developed a more robust and integrated annual planning capability that resulted in significant increases in revenue, headcount, and contribution margin. Prior to that, Strickler served as senior director of operations and strategy of the cloud services business at Hewlett Packard, where he played a key role driving progress for a new web services business model and scaling the organization from inception to private beta launch. Previously, Strickler spent six years at the Boston Consulting Group advising senior executives on growth strategies, assessing merger and investment opportunities, post-merger integration and transformational business models.

Legacy Technology = Technology that Worked, and It’s Time We Showed Some Respect | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

The common theme in all my market conversations around digital disruption with enterprises, technology vendors, and system integrators is the word “legacy.” But, no one is clearly defining what a legacy technology is. Is it three years old, or three decades old? One that entails costly support, one with diminishing skills, one that is proprietary?

Technology can become legacy only when it has worked well, and still serves some purpose. Indeed, as true legacy technologies helped make businesses what they are today, they deserve some overdue respect. Of course, on the flip side, many technologies that should have been decommissioned lingered on not because they served well but because switching was costly and risky.

Legacy technologies continue to run the most mission critical workloads in enterprises. However, times are changing fast. Moore’s chasm is reversing, and enterprises are now chasing startups, or incubating internally, to lead technology-driven business transformation and disruption. With this, enterprises must address numerous critical questions. How should they go about selecting the legacy technology most suited for upgrade or replacement? How do they make a business case beyond cost savings? Do their CIOs and IT leaders have sufficient data points regarding this? What is the surety that they won’t regret their decision three or five years down the road?

One big challenge I see is that enterprises believe their legacy technologies are sacrosanct and should not be altered or experimented with. This has worked beautifully for technology vendors and systems integrators who have fed on these fears to sell their solutions. They promise to “integrate” legacy with newer technologies without disrupting ongoing operations. They are overzealous in committing that the investments in legacy will be protected.

While this sounds good in theory and has worked in the past, it has outlived its utility. For digital business to work, legacy technologies must be meaningfully altered and upgraded to incorporate the fundamental concepts of newer paradigms. These include an open architecture, service orientation, environment independence, dynamic resource allocation and consumption, and elasticity. Anyone promising to “protect” legacy without introducing the changes above is lying or creating a poor solution.

Though today’s technology is tomorrow’s legacy, the pace of legacy generation in the future will be exceptionally rapid. Enterprises will not be able to make their three-year, five-year, or ten-year plans, and will have to rely on extremely agile operations to ensure they can plug and play the most suitable technologies. Unfortunately, things are not getting any simpler. The myriad of technologies with their own protocols and lack of standards, multiple APIs with different performance characteristics, proprietary cloud technologies, and other similar disparities are again creating integration challenges.

What is the way forward? Enterprises cannot control the flow of technologies available in the industry. Their best bet is to invest in people who are going to use these technologies to create business outcomes. I believe the days of technology specialists are fast fading, and enterprises will require “multi specialists.” These are resources who understand technology beyond the monocular views of application developers or the operational view of the IT organization. They understand how and why different services should talk to each other, how to develop fluid, self-contained workloads, how to design systems that are open and allow technologies to be hot swapped, how to leverage external systems, and how to continuously monitor the impact of technology on the business.

However, new systems are becoming open yet more complex, vulnerable to attacks, costly to maintain, and difficult to architect. Enterprises are insufficiently investing in the people who drive the technology agenda. The silos of technology and business continue, while they ideally should have collapsed. And although the idea-to-cash cycle might have reduced, it has not been fundamentally altered.

Therefore, despite their best efforts and all the technologies available, enterprises may find themselves right back where they started – the dreaded legacy.

What do you think is the best way forward?

 

What I Learned at Infosys Confluence 2016 | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Infosys graciously asked me and many others to join its thought-leadership summit (Infosys Confluence 2016) in San Francisco in late April. As the event promos stated, the summit was intended to discuss how to leverage technology to create a future different from the past of doing more of the same. Here’s what I learned.

Infosys has made a commitment to design thinking and zero distance, and they used this event to showcase their commitment.

As you may know if you are an avid reader of my blogs, design thinking fundamentally allows Infosys to better engage with its clients. It focuses on listening to a client’s needs and engaging with the client in a way that allows Infosys to meet those needs in a much deeper way. Infosys claims, and I believe it’s reasonable to believe, that it has trained over 90,000 of its employees in design thinking.

Zero distance, the companion to design thinking, allows and enables all the engineers at Infosys to tap into and bring innovative ideas on how Infosys can create more value for its customers. And Infy is instituting a zero distance program with all of its customer accounts.

Why does this matter? If you have followed my blogs, three or four years ago I called Infosys out for being arrogant, focused on itself and overpricing its services. When Vishal Sikka took over as CEO, he set about addressing these issues. And I believe his embracing design thinking and the implementation of zero distance are the result of his taking action to focus on customers, equipping employees to tools to engage with customers in a genuine and deeper way than before.

Recently, under Vishal’s leadership, Infosys’ growth rate has increased. I attribute that increase in growth not to these design thinking and zero distance initiatives – which will take several years to take hold and be a growth driver – but more to the other aspects of Vishal’s strategy. He has shifted Infosys from premium pricing to being a price challenger. We’ve found that Infy is often one of the most competitive providers in the marketplace today.

Infosys is telling its investors that it will raise its margins, yet it is being aggressive on price. It seeks to reconcile these seemingly contradictory positions by aggressively using automation to be able to ensure that Infy can make adequate margins at lower prices.

What we can now see is that Vishal has addressed the key issues that were holding Infosys back. It is no longer a high-price provider and is bringing in extreme automation. It’s also changing the focus of the firm from itself to its customers through design thinking and zero distance, it attempting to shift from being the highest-price company to the highest-value company.

We can see the results of the pricing change immediately as Infosys has doubled its growth rate, We’ve yet to see how much of an impact design thinking and zero distance will have.