Even before this latest executive order, it is clear that the Indian service provider industry was taking steps to reduce their dependency on H-1B, as reflected by the drop in overall applications for H-1B from 236,000 last year to 199,000 this year. The majority of this reduction is thought to be the reduced number of applications that the service providers are submitting, says Peter Bendor-Samuel, chief executive officer of Everest Group, a global information technology researcher.
Given the newness and complexity of digital technologies, it’s not surprising that the previously relatively scarce pool of resources working in the digital arena commanded premium pricing. However, in the last six to 12 months, we have observed an improvement in the supply side, particularly in social and mobility, and to some extent in cloud and analytics. Thus, the premium prices being paid for these skills are starting to come down.
Some contributors to the digital supply increase
- Most service providers began training their employees on digital capabilities and platforms right from the start, resulting in an already effective and large workforce
- Giants such as Cognizant, Infosys, and Wipro have their own market places on which they list multiple training companies for their employees
- Reskilling platforms like Planet Ganges and Pluralsight, and on-demand technology learning companies, are gaining traction
- Many enterprises, and even some service providers, have strongly relied on merger and acquisition activities in the digital space to upskill their talent availability
From a geographic standpoint, there are some differences in the digital demand-supply scenario. For example, while the North American, European, and Nordic markets have a robust supply of digital resources keeping up with the demand, (interestingly, the Nordic countries were very early adopters of smartphones and high speed Internet), APAC nations such as India, Philippines, and Singapore are still relatively behind in bridging the gap. This is likely due to the higher demand in these countries, since they are the key offshore sourcing locations. In China and Japan, demand for highly skilled mobile app developers, especially in the gaming domain is quite high. These roles are mostly filled by local resources, as global competitors find it difficult to break through the cultural and lingual barriers.
Not all digital roles are seeing price drops
Although prices are dropping for many types of digital roles, some still command a significant premium due to relatively low supply and advanced skill set requirements. Roles in this category include data scientists, graphic designers, scrum masters, and usability experts, etc., as they not only need to have technical expertise but also creativity and knowledge of how ideas and actions can generate greater customer satisfaction.
In the short run, we don’t see the premium these digital roles are demanding going down, as they play a key role in the digitization of business models, which is a key priority for enterprises these days.
At the same time, new technologies will unquestionably enter this transforming landscape, once again changing the demand-supply-pricing picture.
For another take on hot, yet rapidly revolving, skills in the IT services arena, please read: “Modern Today, Legacy Tomorrow: The Nature of Fast-Changing Skill Demand in IT Services.”
The earlier assumption that artificial intelligence (AI) would impact “routine” jobs first is not holding ground anymore. Indeed, we might be deluding ourselves by thinking that the time in which AI could be the most used interface to engage with technology systems is far in the future. But I’m getting ahead of myself. Let’s look at what’s happening today in the creative sector.
IBM Watson was used last year to create a 20th Century Fox movie trailer. Adobe Sensei is putting the digital experience in the hands of non-professionals. Google is leveraging AI with Autodraw to “help everyone create anything visual, fast.” Think about anyone, any one of us, taking a picture and then telling photo editing software what to do. No need to work with complex brushes, paints, or understanding of color patterns.
AI and creative talent
This is scary for creative people such as graphic designers, digital artists, and others who may consider artificial intelligence a job killing replacement of their skills, despite pundits’ claims that it will “augment” human capabilities. Antagonists proclaim that AI systems will at best reduce the overhead with which creative people deal. But removing overhead is just the first step; the next step is surely the creative. More so, AI systems can ingest so much data, and will increasingly rely on unsupervised learning to correlate so many behavioral traits to create compelling creative content that a human creative artist cannot possibly fathom or understand. Thus, these artists will begin leveraging AI systems to create exceptional, “unthinkable” user experiences that have no “baseline” of reference, but soon may be replaced by these very systems.
AI and businesses
Businesses have always struggled to hire highly skilled creative professionals, and have paid through the nose to secure and retain them. That they will be able to leverage artificial intelligence to take charge of creativity to drive messages and communication to their end users, rather than relying on creative experts, will make them extremely pleased. As the intent of most AI systems is to enable non-specialists to perform many tasks by “hiding what is under the hood,” businesses might not need as many specialist human creative skills.
However, despite this seeming upside of AI systems, their under the hood nature will create problems of accountability. The complexity of their deep learning and neural networks will become such that even the teams developing the systems won’t be able to provide answers to specific decisions they make. Thus, if something goes wrong, where should the blame be placed? With the creation team, or with the AI system itself? The system won’t care – after all, it’s just a technology – and the team members will argue that the system learned by itself, far beyond what was coded, and they cannot be held accountable for its misdeeds. This is scary for businesses.
AI and the impact beyond business
Imagine the impact this will have on the society. Although you can track back how any other technological system arrives at an answer, AI systems that are now supposed to run not only social infrastructure but also much our entire life won’t be accountable to anyone! This is scary for everyone.
I don’t want to add to the alarmist scare going on in the industry, but I cannot be blind to successful use cases I witness daily. People will argue that AI has a long way to go before it becomes a credible alternative to human-based creativity. But, the reality is that the road may not be as long as is generally perceived.
Healthcare payer BPO market drivers and challenges
- Changes in U.S. federal healthcare policy
- HIX losses & withdrawals
- Value-based reimbursement models
- Payer-provider convergence
- Declining payer profitability
As the market reaches labor arbitrage maturity, buyers are increasingly looking to next-generation solutions to improve performance
As buyers’ needs evolve from traditional purchasing drivers – such as cost reduction – to emerging purchasing drivers – such as better technology and expertise – service providers also need to evolve to remain competitive
Healthcare payer BPO market growth decelerating due to
- Declining payer profitability
- Value-based reimbursement models
- Changes in U.S. federal healthcare policy
- Payer-provider convergence
- HIX losses & withdrawals
- Visit the report page
Artificial Intelligence (AI) in the systems development life cycle is currently oriented on automating rote, mundane activities, but the true potential of AI can be uncovered by making it work on creative activities such as software development
Some are beginning artificial intelligence adoption; need more proof points
