Just a short five or so years ago, digital capabilities were a competitive differentiator for major service providers. Today, they’re a competitive must. As a result, global and offshore-heritage service providers alike are making significant investments in digital technologies such as blockchain, Artificial Intelligence (AI), Robotic Process Automation (RPA), and Internet of Things (IoT).
While the global players took the lead in building what is now a billion-dollar digital landscape, offshore-heritage service providers such as Infosys, TCS, and Wipro are quickly catching up. And their strategies to build and deliver greater value through digital-driven productivity and IP are clearly paying off. For example, our research found that their digital revenue jumped from 20 percent to 30 percent of their total revenue between Q1 2018 and Q1 2019.
Let’s look at how offshore-heritage service providers are upping their game with digital investments.
Internal digital-based capabilities
One of their strategies is to enhance the customer experience and improve efficiency through internal development of digital-based capabilities. For example:
- Infosys launched AssistEdge Discover to increase the rate of automation implementations at the enterprise level through process discovery
- TCS launched the connected intelligence data lake software on Amazon Web Services (AWS) to help clients build their own analytics services
- Wipro made its AI and Machine learning (ML) solutions available on AWS to govern supply chain processes and enhance productivity and customer experience
- Tech Mahindra launched NetOps.ai, its network automation and managed services framework, to speed up 5G network adoption
- HCL launched iCE.X, an IoT device management platform, to bring intelligent IoT device management to telecom and media services, and increase IoT use case adoption.
As their initial reskill/upskill approach left them far behind global service providers’ inorganic approach, offshore-heritage service providers have taken the leap and started acquiring companies to obtain direct access to already-trained talent. For example:
- Genpact acquired riskCanvas to access its suite of anti-money laundering (AML) solutions
- Tech Mahindra acquired Dynacommerce, a computer software provider, to support its digital transformation strategy and enable a future-proof and future-ready digital experience for its customers
- HCL acquired Strong-Bridge Envision (SBE), a digital transformation consulting firm, to leverage its capabilities in digital strategy development, agile program management, business transformation, and organizational change management. With this acquisition, SBE will become part of HCL’s global digital and analytics business
- Tech Mahindra acquired K-Vision, a provider of mobile network solutions, for US$1.5 million to build and support the roll-out of a 4G and 5G telecom network in Japan. The acquisition will leverage the local presence and expertise of K-Vision to build its network services business in the country.
Partnership with startups
In order to develop skills and knowledge about these next-generation digital technologies in the general workforce, offshore-heritage service providers are partnering with niche start-ups to improve their agility/flexibility, reduce costs, and access stronger and better insights. For example:
- Wipro partnered with RiskLens, a provider of cyber risk software and management solutions, to deliver quantitative cyber risk assessments to enterprise customers and government organizations
- Tech Mahindra partnered with Rakuten Mobile Network to open a next-generation (4G and 5G) software-defined network lab. The partnership will help both the firms drive innovation and disruption in the 5G space
- TCS partnered with JDA software to build next-generation cognitive solutions to optimize supply chains for customers. The partnership will develop joint, interoperable technology solutions for supply chains of the future, and accelerate human-machine collaboration to solve complex business problems
- HCL partnered with Kneat.com, a software firm, to provide and implement next-generation digital solutions for facilities, equipment, and computer systems validation processes leveraging Kneat’s paperless software platform.
With digitalization on the rise across industries and product segments, and a bearish economy outlook in key markets such as the United States and Europe, offshore-heritage service providers will continue to invest heavily in next-gen technologies. This will help them to emerge as strong partners for global organizations to wade through their economic pressures.
To learn more about offshore providers’ digital strategies, key market trends, global locations activity, and service provider activity in Q2 2019, please see our Market Vista™ : Q2 2019 report.