Category: Digital Transformation

3 Walls IT Leaders Must Take Down | Blog

The supportive IT services that delighted businesses yesterday seldom spark the same delight today. Companies just expect IT to deliver quality technology components and services at an ever-decreasing cost per unit: That’s considered “hygiene.” Now they want IT to create new business value. But many CIOs and IT groups make three operational mistakes that build walls between the IT organization and the rest of the business. Those walls must be broken down.

Read my article on The Enterprisers Project

Companies Need To Rethink How They Manage Services In A Digital Environment | Blog

Buying services is no longer a matter of decisions that stand independently, like buying technology or products. In the past, many companies had the misconception that services are “one and done” or that they could be built and then be fine or at least fine for three or four years. But that’s not the case. Services are more of a journey – long-term commitments whose nature constantly evolves over time. It’s crucial that companies recognize this fact and that they rethink how they buy and manage services today. Why? Because the digital economy requires integrating more services into offerings, and they are becoming more integral to a company’s value proposition to customers and stakeholders.

Read my blog on Forbes

Getting Digital Product Verification and Validation Right Through “As-a-Service” Models | Blog

In today’s digital world, a car isn’t just a car, a home isn’t just a home, and a factory isn’t just a factory. They’re all connected and intelligent and rely on both hardware and embedded software to deliver value to end-customers.

But to make sure these connected and intelligent products operate safely and as intended, enterprises need to completely rethink the way they verify and validate them before they release them to market.

Here are the key things enterprises need to keep top of mind when reimagining Verification and Validation (V&V) for their digital products.

  • Product security: With increasing volumes of data and products operating in an “always connected” state, enterprises need to emphasize security compliance and testing for digital vulnerabilities. Examples such as Microsoft’s AI bot Tay going haywire and hackers being able to remotely control Tesla car functionalities make it clear that these vulnerabilities expose their users to multiple risks.
  • Ecosystem integration: Here, enterprises need to think beyond the component and system level to verify and validate how the product functions within its connected ecosystem. For example, how does your connected medical device interact with other hospital equipment, patient records, doctors’ offices, and patients’ smart phones?
  • Response predictability: Making products connected and intelligent also means that interactions with them will yield different responses based on context and the period they have been in service. This lower predictability in responses – as compared with legacy products – makes it complex to manage quality and mandates a degree of automation in the V&V process.
  • Compliance: As regulatory bodies are imposing increasingly stringent compliance and certification requirements on digital products, especially in industries such as medical devices, BFSI, and automotive, enterprises need to quickly and adeptly revise their quality assurance practices.
  • Speed: With an ever-increasing competitive requirement on time-to-market and the many frequent changes that characterize digital products, enterprises must appropriately tune their V&V programs to deliver with speed and scale. At the same time, they need to manage the complexity of embedded and hardware development lifecycles running at different cadences.
  • Learning curve: Given the new technologies and capabilities required for developing digital products, enterprises also need to determine how to manage hard-to-find skilled talent, collective organizational knowledge, and the typically steep learning curve around quality engineering.
  • Developments in processes and technologies: Finally, enterprises need to leverage new developments such as Design For Quality (DFQ) to rectify design flaws earlier in the product lifecycle, cognitive testing techniques enabled by AI/ML, analytics, and robotics to make the V&V process productive and repeatable, and “digital twins” to increase predictability of product performance in the real world. They also need to keep pace with the innovation in tools and procedures in areas such as EMC, environment, acoustic, and mechanical testing to ensure better coverage and conformance.

Third-party service providers can help

Because these capabilities require significant infrastructural and talent investments many enterprises find it challenging to leverage them. As a result, V&V for digital products is emerging as a highly relevant category for global sourcing with the presence of specialist partners that provide “as-a-service” capabilities. Their offerings, including Quality-as-a-Service (QaaS) Testing-as-a-Service (TaaS,) and Testing-as-a-Utility (TaaU,) are cost effective, and can provide multiple benefits to enterprises, including:

  • Access to consulting expertise: Ideation and planning for quality requirements, and associated strategies for leveraging technology and maximizing test coverage
  • Scalability: Easy accommodation of demand fluctuations
  • Access to the latest techniques: Because service providers are consistently investing in upgrading their labs
  • Compliance and certification support: Prescribing the necessary procedures for compliance and certification and readying all documents for submission to certification authorities.

Over the last few years, service providers have invested heavily in making this model a success. Examples include Wipro’s Tarang Labs, which provides product qualification and compliance services in diverse areas such as EMI/EMC, mechanical, environmental, reliability, safety, and acoustic testing, and domain-specific labs, such as LTTS’ Autonomous Validation Studio, which offers digital validation of autonomous practices, annotation correction, and image processing in ADAS scenarios.

With digitalization on a rise across industries and product segments, we expect demand for third party V&V services to grow. We also expect the technological complexity involved to drive specialization, in turn making these “as-a-service” models emerge as an industry norm over the next few years.

How to Reduce the Complexities of Change In Digital Transformation | Blog

Why do digital transformations experience more failure and face more peril than companies anticipate? Why do they take far longer than anticipated? With apologies to Einstein, I believe we can understand the answers to these questions by viewing them through the lens of “GUT” – (General Unified Theory) of digital transformation – and how many related factors intertwine to increase complexity and complicate change. I’ll explain those factors in this blog and discuss how to navigate them so your company can minimize the perils of change and end up with a beneficial economic model.

Read my blog on Forbes

Technology Decisions to Avoid Digital Transformation Exhaustion | Blog

Organizational exhaustion is the deadliest enemy of companies undertaking digital transformation. It may be hard to believe, but one reason this happens is that companies do a lot of work to prepare for an unknown objective. Therefore, they effectively dissipate their commitment, resources, money and energy in areas that don’t bring value. This exhaustion prevents companies from completing their digital transformation journey. Let’s look at why and how this happens, and I’ll share how to avoid it. The remedy likely will seem counter-intuitive, and it goes against all that technicians believe. But it works.

Read my blog on Forbes

How To Identify What Technologies To Invest In For Digital Transformation | Blog

Unfortunately, two common situations in digital transformation cause CIOs (or others leading the transformation) to deliver little or no business value. An Everest Group study last year found that 73% of the digital transformations that we studied failed to provide any value whatsoever, and 78% failed to achieve their business objective. Put another way, only 22% achieved their business objective. In both common situations that lead to delivering little or no value, the executives leading the transformation took a technology-first approach. In this blog, I’ll explain how this leads to digital transformation failures and explain an alternative approach that succeeds in delivering value.

Read more in my blog on Forbes

Issues in CPO And Sourcing Organization Digital Effectiveness | Blog

There is a useful framework or construct for activities and issues that are critical to an organization’s success. We call these issues “moments that matter.” By focusing on the activities in moments that matter, an organization can ensure that employees and managers are effective in their jobs; it’s also a way to differentiate between hygiene activities and critical activities. Take the Chief Procurement Officer (CPO) role or sourcing organization, for instance. Consider the following moments that matter to their success so you can ensure they are equipped for the moments that matter to your company. These moments and activities separate CPO organizations that are highly effective from those that merely go through the motions

Read more in my blog on Forbes

Offshore Service Providers Embracing M&A to Regain Market Share from Global Counterparts | Blog

Offshore-heritage service providers’ cost arbitrage value proposition served them well in the outsourcing industry’s earlier days. But to gain competitive advantage in the digital age, clients’ expectations over the past several years have evolved to include value-add capabilities, innovation, industry-specific expertise and skill-sets, etc. In turn, offshore service providers increasingly lost market share to global service providers that made heavy inorganic M&A investments in these areas.

Following the global service providers’ lead, many offshore providers took the M&A path to growth. And the results have been astounding. In fact, our Q1 2019 Market Vista report shows that the offshore providers’ revenue grew by 8 percent in 2018, as compared to the global providers’ 2 percent growth.

Offshore heritage SPs increase their wallet share through acquisitions & aggressive pricing

Where have the offshore providers been investing their M&A dollars?

New technological capabilities

Because of clients’ digital-oriented mandate, the majority of offshore providers’ acquisitions have been to obtain new technological capabilities such as cloud, cybersecurity, analytics, and automation. For example, Wipro in 2018 acquired Cooper, a design consultancy firm, for US$8.5 million to expand its design and digital innovation capabilities in North America. And TCS acquired Bridgepoint Capital to expand its capabilities in the financial services and insurance domain, particularly in U.S. retirement services.

Offshore based service provider developments

Start-ups

Due to lack of skills and knowledge about these next-generation digital technologies in the general workforce, offshore service providers are acquiring niche start-ups to:

  • plug gaps in their portfolios
  • quickly enter domains where sizable language and cultural barriers exist
  • improve their agility/flexibility
  • reduce their costs
  • access stronger and better insights
  • improve processes.

In fact, our most recent Market Vista report showed that start-ups accounted for as many as 50 percent of offshore players’ acquisitions in Q4 2018, compared to 42 percent in Q3 2018.

For example, Cognizant acquired Mustache, a creative content agency start-up, to expand its digital content capabilities by leveraging Mustache’s innovative approach to planning, producing, and distributing compelling video content and programming. Infosys acquired Fluido, a Salesforce Cloud consultancy start-up, for US$76 million to help clients in digital transformation and strengthen its position as a Salesforce enterprise cloud service provider.

Talent

Because offshore-heritage service providers’ initial reskill/upskill approach left them far behind global service providers’ inorganic approach, they’ve taken the leap and started acquiring companies to obtain direct access to already-trained talent. For example, Wipro acquired Syfte, a design firm, to strengthen its design and innovation capabilities in Australia and Asia Pacific. Under the agreement, Syfte’s talent will join Designit, a subsidiary of Wipro, to enhance the transformation services offered by Wipro Digital. Similarly, Genpact acquired Barkawi, a supply chain management consultancy, to add talent with consulting and digital technology capabilities in supply chain management and aftermarket services.

To learn more offshore providers’ M&A strategies, key market trends, global locations activity, and service provider activity in Q4 2018, please see our Market VistaTM: Q1 2019 report.

Application Modernization for Digital Transformation: The Rise of Good Technical Debt | Blog

Many organizations today treat technical debt like a pariah. They equate it with legacy systems, worry about how subsequent changes will be complex, time consuming, risky, and cost prohibitive, and consider it something that should be avoided in their journey to becoming a digital enterprise.

What they do not realize is that the debt is not bad in and of itself. Indeed, because speed-to-value is critically important in digital businesses, teams may intentionally take planned shortcuts in order to accomplish the task as quickly and responsibly as possible. As long as the teams understand what they are doing and compromising on, and have suitable plans to address it soon, assuming this debt can be a smart move.

Where enterprises err with technical debt is poorly managing it.

In order to manage it suitably and safely in a digital transformation environment, they should classify it into five major buckets.

The Rise of Good Technical Debt

Planned debt

This is when people knowingly become indebted. It is like buying a house on a bank loan. You know you must repay the loan, and you plan for it accordingly. The defining feature of this type of debt is that the team knows it has the capabilities and resources to “pay” it back. This is a good debt that helps you quickly achieve business objectives.

Blind debt

This is a dangerous debt where system teams do not even know they are building the debt themselves. This is generally the result of poor practices within the team, unplanned and haphazard development, and a fundamentally broken organizational culture. This often also happens during M&As when the acquirer does not know what kind of mess it is getting into.

Acquired debt

This type of debt is unavoidable in business environments. Many systems that were developed in the past with improper technology platforms, tools, coding practices, governance models, and frameworks build technical debt over time. These legacy systems hold valuable information for enterprises aspiring to become digital businesses, and cannot simply be jettisoned. Instead, they need to be made “debt free” in a prioritized manner.

Dead debt

This is probably the worst of all kinds, because, irrespective of corrective measures taken, the systems have degraded so far that they do not support digital initiatives. Therefore, rip and replace becomes the only option. Enterprises need to be careful with identifying this debt as they may confuse it with other types of debt that can be “repaid.” They may end up spending good money after bad, with no way out.

Mirage debt

Not many enterprises think about this one. It appears during system analysis, when architects and others mistakenly believe they have technical debt, when in reality they do not. If there is any, it is in small components, not the system itself.

What should enterprises do to address technical debt?

They should start by understanding that modernization should be of system components, not the systems themselves. Then, they should look at each of their systems and identify the components that can meet future digital demand, and those that could potentially create problems. Once they have catalogued all the components, they need to invest in reducing each one’s technical debt in the most appropriate way. For example, we have seen enterprises successfully build component capabilities outside the main system and exposing APIs for backward integration. This can work across core functionalities as well as user interfaces.

Our research with over 190 application leaders suggests that 75 percent plan to continue to invest and modernize their applications. There is no reason to fear technical debt as long as you understand what you are getting into. For digital businesses, taking on good technical debt can be a strategic choice. Though processes have their value, enterprises that are driven by processes rather than innovation, and are scared of risking short-term technical debt, will struggle in the digital world.
What has been your experience with application modernization? Please share with me at [email protected].

Digital Enables Shared Services Centers To Deliver New Wave of Business Impact | Blog

The number of shared services centers is growing, and enterprises are also expanding the size of their existing centers. Why? A key driver is that digital transformation enables shared service centers (also referred to as “Global in-house Centers” (GICs)) to deliver a new wave of business impact to their parent organizations. Digital technologies such as analytics, automation, and other enabling technologies allow GICs to drive their enterprises’ digital agendas. In fact, Everest Group’s market research shows that the share of new GIC setups that supported digital services was 52% in 2018. However, it’s important to note that some GICs perform better than others and deliver superior outcomes in driving digital agendas. What makes the difference?

In Everest Group’s report, “Digital Maturity in GIC – Pinnacle Model Analysis 2018,” we identified the characteristics of what we refer to as “Pinnacle GICs”™ – global shared services centers that stand apart from other GICs for their business outcomes and capability maturity. Pinnacle GICs achieve superior business outcomes because of their advanced capabilities. We study these best-of-the-best GICs to provide insights into key enablers for desired outcomes and investments required for the greatest speed to impact.

Read more in my blog on Forbes

Request a briefing with our experts to discuss the 2022 key issues presented in our 12 days of insights.

Request a briefing with our experts to discuss our 2022 key issues

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

  • Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.