Author: Peter Bendor-Samuel

Video: Digital Transformation and The New Breed of CIO | Blog

Over the last year, it seemed that CIOs faced an existential threat. This threat was coming from new roles – Chief Digital Officer, Chief Security Officer, Chief Data Officer – as well as the business becoming more and more involved in digital transformation, and looking to inject its influence into IT.

It even got to the point early on last year, where there were questions as to whether or not the CIO’s role would continue, or would it dissolve or devolve into these different roles.

During the course of the year, we investigated this, and have come up with a strong point of view that in fact, the CIO has survived this challenge, redrawn its charter, and has emerged as a very powerful and sustaining executive role in the organization.

You know, in this new charter, what we find is there is no other executive in the organization that has the breadth of vision across all the different operating parts of the organization or the depth of resources to be able to deliver on digital transformation and support the new digital operating models that are emerging – leaving the CIO as the natural place for this responsibility to stay in.

And the new breed of CIO, therefore, is redrawing their charter to support this new vision. Now, redrawing this charter is not easy, and it requires substantial changes in organization, IT organization, as well as a substantial commitment to deepen the relationship with both the business and the board so that the CIO in the organization can play this transformative role.

I look forward to hearing from you this year on how your progress toward this new charter and your experiences as you build this very important role in your organization. 

How To Know If Your Company’s Investment In Building A Digital Platform Is On The Right Track | Blog

When your company undertakes digital transformation, undoubtedly a primary activity will be building a digital platform. As digital transforms companies, their digital platform becomes a differentiator. Building your platform is a crucial activity, as it will enable your company to change to a new digital operating model, and that model is how your company will create new value and new competitive positioning. But digital operations and technologies are still new and evolving quickly, and the business world lacks 10-20 years of experience and benchmarking data that could help your company determine the effectiveness of your platform’s performance. This is one of the reasons so many initiatives fail. To avoid that risk, let’s look at how to understand whether your digital platform will deliver your intended outcome. Read more in my blog on Forbes

How To Avoid Frustrating, Mistaken Approach To Digital Transformation | Blog

Digital transformation gives companies new opportunities to change their competitive position. Typically, the objective for using powerful digital technologies is to create new value that changes the customer experience, the employee experience or the ecosystem partner experience. However, executives become frustrated when they need to communicate to their boards or peers on how quickly they can deliver on the promises of digital transformation. We live in a world of instant gratification, agile methodologies and sprints. This leads to an impression that a company can quickly achieve a new competitive position in the marketplace or quickly get meaningful benefit from the investments. Inconveniently, this impression is not the truth. Read more in my blog on Forbes

Understanding Differences In Results Of Implementing Digital Technologies | Sherpas in Blue Shirts

I believe it’s now apparent that all companies will go through one of two different forms of digital journeys over the next 20 years. Why? These journeys are inevitable because of the irresistible forces of competitive advantage and lower cost as outcomes. It’s not a question of “if;” it’s a question of when and to what results. However, the result or potential outcome is an aspect of digital that executives sometimes misunderstand and, in doing so, they end up with failed initiatives. So, let’s clear up the possible misunderstandings and look at what digital journeys are about, the types of results that companies can achieve and how digital platforms fit into that picture. Read more in my blog on Forbes

The Big Four Accounting And Auditing Firms Are Becoming Challengers In Digital Transformation Services | Sherpas in Blue Shirts

The pivot of third-party services firms to digital is disrupting the entire services industry. Times of disruption always give rise to new competitors, and challengers among service providers can shift share. This is clearly happening now in the demand for digital transformation services. The Big 4 accounting and auditing firms – Deloitte E&Y, KPMG and PwC – are emerging as formidable challengers to Accenture, IBM and the Indian service providers. Here’s what’s happening and what it means for competitors and enterprise customers. Read more in my blog on Forbes

Why TCS Entering Digital Marketing Space is Significant in Digital Transformation | Sherpas in Blue Shirts

Two champions have emerged among service providers in digital transformation: Accenture and TCS. Accenture is driving business transformation, and TCS is doing a marvelous job of driving IT modernization. TCS’ recent acquisition of W12 Studios, a London-based digital design agency, is worth noting for its implications in the digital marketing space.

Motivation

 W12 will be part of TCS Interactive, TCS’ digital design division. Digital marketing is an attractive, high-impact growth area in digital transformation. It is pivoting toward greater and greater use of technology, clearly calling out for technology companies such as TCS to participate in it more fully. Accenture is building big business in this space quickly. Even so, this acquisition is surprising. Unlike Accenture, TCS has not driven its success by acquiring companies. But the digital marketing space is growing very quickly, so TCS felt it needed to break its mold and gain a foothold in the space by acquisition. The increasing need for sophisticated technology such as AI and automation to execute well in this space makes it more attractive for TCS. This technology sophistication is well beyond the capabilities of customers for third-party services.

Cautions

Two factors may be growth hindrances that affect TCS’ strategy for entering the digital marketing space. First, TCS is late to this party. Companies such as Accenture, Capgemini, Infosys and others already created very large, formidable businesses in this space. Accenture is the prime example and has a big lead. TCS historically proved effective at closing market gaps once it established a foothold. But the firm has a big gap to close in digital marketing. It seems unlikely that TCS will succeed in closing this gap purely without further acquisitions. Overall, the Indian services firms are late entries and are losing share to Accenture and the domestic players. For the Indian players to challenge for leadership, they will need to invest heavily and continue to grow inorganically. The second possible growth hindrance involves the delivery model. It seems reasonable that much of the support of digital marketing technology can be delivered from an offshore model. But it’s not clear that the creative aspects are best delivered from a remote location. However, given that the technology and technology support is growing in importance it makes sense that TCS distributed model will work well for this part of the equation. Despite a growing and rich source of creative talent in India, I am skeptical that customers will move their creative work offshore. Why? Because proximity to the business and cultural emersion are critical aspects of the delivery.

Alternative View

I think it’s important to recognize that TCS’ goal may not be to enter digital marketing in a big way. At this point, there is such a fundamental disruption happening in the space that even capturing a small part of this marketplace might be a welcome and lucrative component to the broad portfolio that TCS offers. Even with a small market share, TCS can create a nice book of business given the growing market and secular trend toward technology.

Impacts From Changing Administrative Rule For H-1B And L1 Work Visas | Sherpas in Blue Shirts

The US Labor Department’s recently announced new regulations for H-1B and L1 work visas focus on the Trump Administration’s ongoing effort to tighten regulations and increase administrative hurdles. Viewed individually no new regulation is a show-stopper; but it’s clear that, collectively, they will have a more material effect. Here’s my take on the significant issues for service providers and their customers. Read more in my blog on Forbes

Trends And Disruptions In 2019 For Third-Party Services | Sherpas in Blue Shirts

I believe we’ll see significant changes in the third-party services industry in 2019. The coming year will bring some major movements and trends, along with disruptions and bumpy roads.

Bumpy Roads in Digital Transformation

This year has been a move from digital transformation pilots to programs, which led to a full-on wave of IT modernization to support transforming to digital operating models. The question we must examine going forward is whether this wave will survive a recession. It seems likely that the global economy will slow and even the US economy will come down off its heavy heights. If this happens and the economy decelerates, less capital and less discretionary funding will be available to fund companies’ modernization goals. If this happens – and the question is not if it will happen but when – I think it’s likely that it will start to happen in 2019. Read more in my blog on Forbes

How TCS Lawsuit on Workplace Discrimination Impacts Service Providers in 2019 | Sherpas in Blue Shirts

The jury trial in a lawsuit against TCS, filed by US workers alleging discrimination against US-born workers, opened this week. The suit claims TCS shows a preference for hiring Indian workers through H-1B visas when hiring locally in the US, even when trained US citizens were available. I believe this lawsuit is hugely important for the entire service provider industry, not just TCS, but not because of a possible settlement or the amount of damages. In fact, I believe whether TCS wins or loses the lawsuit is almost irrelevant. There’s a bigger implication: the services firms are in a no-win situation that they must now address. Let’s look at why this case is so significant.

Today’s US Workplace Environment

First, let me point out that TCS is not the only service provider firm to be sued for discrimination. In US companies, diversity is not only desired, but it is increasingly unacceptable to have a non-diverse workplace. Therefore, it’s perfectly understandable that the service provider firms, which have historically organizations which heavily utilize Indian talent, are easy targets for lawsuits claiming discrimination. Litigants may not need to show specific examples of discrimination – only the results from a pattern of hiring or promotion. It really doesn’t even matter whether the lack of diversity was intentional or not. It’s just a fact of today’s US workplace that non-diverse hiring practices (for employees, middle managers and leadership) are now problematic. And the scrutiny that the service provider firms face is growing because of the difficult political environment. It is quite understandable how services firms came to be in this position, and that they got into this situation honestly. They are great firms that were built with integrity with large work forces in India. As they grew, it was natural for the service firms to use H-1B and L1 visas to bring their own employees to the United States for the following reasons:
  • They trust these employees
  • The employees do high-quality work
  • The employees have a strong cultural affinity and are thus comfortable in an Indian environment transported to the US operations
  • They have the connections back into the talent factories in India and elsewhere
  • It costs less than having to hire in the US.
The natural advantages combined with the economic advantages of importing Indian labor and hiring H-1B workers, resulted in a demographic dominated by Indian labor – but not necessarily a result of discrimination. However, this is a difficult argument to make when the statistics clearly show a skewed labor force.

Lawsuit Results

Clearly, the service firms are at risk and, in all likelihood, will need to address these issues.  The demands both ethnic and gender diversity in workplaces. Given the US political environment that now exists, the third-party service industry will likely face increasing demands to change the status quo. They face a difficult set of choices, since they don’t want to discriminate against their current work force, yet they may need to take significant action to address the appearance of favoritism as well as change parts of their corporate culture, employment policies and benefits structure to bring them more in line with US expectations. If the service firms don’t address these issues, they run an increasing risk that a growing number of companies won’t do business with them. But it will be difficult and expensive to address the issues. It likely will cause rising costs in the US. The cost to remedy the demographic makeup of the work force is quite high and likely will adversely affect competitiveness and margins. Addressing the issues is also likely to create additional morale and legal issues. They can’t fire people to bring about a more diverse workplace. They must take the interests of existing employees in mind while they move to diversity. Moreover, addressing these changes will take time. And then there’s the reputation factor. At this time of great sensitivity to discrimination and jobs moving offshore, service provider firms face the prospect of increasing pressure to address these issues. But while doing so, they are still open to lawsuits, and these lawsuits would be expensive to litigate or settle. They can afford the litigation and possible judgments and settlements, however high the costs are. But they can’t afford damage to their reputations, brand and public image.

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