Category: IT Services

Key Issues 2023: Assessing the Global Services Industry’s Performance Against Expectations | Blog

The global services industry’s confidence waned in 2023 after a banner post-pandemic year. Leaders were more cautious and prioritized cost optimization. To gain valuable insights into how the year unfolded compared to expectations, read on.

Participate in the Key Issues Survey 2024 to better understand the current thinking of industry leaders across the globe.

Coming off a bumper year in 2022 with double-digit growth driven by pent-up demand after the pandemic, the global services industry entered 2023 with macroeconomic uncertainty clouding the forecast.

As a result of these concerns, global leaders adopted a more cautious stance going into this year, according to Everest Group’s annual Key Issues survey of over 200 global leaders across industry enterprises, Global Business Services (GBS) centers, and providers.

In the survey, price and cost margin pressures ranked as the top business challenge expected in 2023, and subsequently, cost optimization emerged as the highest business priority for the year.

As 2023 nears an end and leaders start planning for 2024, let’s reflect on how the year fared against global services industry expectations of the industry.

1. Macroeconomic uncertainty subdued industry growth in 2023

In the face of macroeconomic uncertainty, most industry leaders felt cautiously optimistic about 2023. True to their expectations, results from the first three quarters of this year indicate subdued industry growth similar to the pre-pandemic numbers. A mix of macroeconomic concerns, rising prices, fiscal tightening, and geo-political tensions have resulted in a slowdown in customer demand and growing margin pressures on the global services industry. While revenues grew, the escalated cost and price pressure resulted in stagnant or even declining operating margins for most providers, as presented in Exhibit 1.

Exhibit 1: Key financial metrics for providers for 2022-23

Picture1 2

2. Talent demand and supply mismatch eased but remain challenging for niche skills

With attrition at an all-time high and growing industry demand, talent supply continued to fall short of the demand in 2022. The talent/skill shortage was the top concern industry leaders highlighted as part of the Key Issues Survey 2022. However, as the industry prepared for the looming uncertainty in 2023, these concerns took a back seat. In line with the industry expectations, the talent situation eased in 2023. Data for the first half of 2023 show that attrition rates have declined, and most delivery geographies are reporting a narrowing talent demand-supply gap. An assessment using Everest Group’s proprietary Talent GeniusTM tool indicates talent demand for delivery of IT and contact center services has declined substantially compared to 2022, as shown in Exhibit 2.

Exhibit 2. a: Talent demand across select countries for delivery of IT services indexed to January 2022 (Jan 2022 = 100)

Picture2 1

Exhibit 2. b: Talent demand across select countries for delivery of contact center services indexed to January 2022 (Jan 2022 = 100)


However, this improvement in talent supply has not applied to all global services, especially those requiring niche skills. Digital and next-generation technology services continue to witness a mismatch between talent demand and supply. This disparity is especially true for emerging skills like generative Artificial Intelligence (AI), where talent supply is even more limited. Preliminary estimates by Everest Group show that only 1% of AI talent has expertise in generative AI, pushing companies to focus on upskilling and reskilling their employed talent pools to bridge this gap.

3. Offshore locations and tier 2/3 cities are being considered to optimize costs

To manage growing cost pressures, a key strategy for global leaders entering 2023 was continuing to leverage offshore locations and exploring alternative delivery strategies, such as leverage of tier 2/3 cities. Global services trends in 2023 resonate with this approach. Offshore locations like India continue to be the destination of choice for global service delivery, given the significant cost arbitrage opportunities. Similarly, enterprises and providers alike are more enthusiastically exploring tier 2/3 locations driven by needs of cost savings, talent access, employee preference, and market competition management. Exhibit 3 shows how the leverage of tier 2/3 cities witnessed growth in 2023.

Exhibit 3: Trends in center setup across Tier 1 and Tier 2/3 locations (2022-23)


4. Provider bill rates increased but at lower levels than expected

Despite the prevailing macroeconomic pressures, providers maintained optimism about bill rate increases in 2023, although they were expected to be at a lower rate than in 2022. Unlike other economic downturns, provider bill rates have continued to show positive growth despite the growing cost and price pressures in the first seven months of 2023. However, with the macroeconomic scenario hitting much harder than expected, input-based pricing has been subjected to hard negotiations. This has led to muted growth (0.5-2%) in bill rates across different functions, much lower than provider industry expectations going into 2023. For example, provider bill rates for traditional applications skill delivery in offshore regions grew by only 0.5-1% compared to the expected growth of 2-5% from January to July 2023.

5. Provider portfolios underwent significant rebalancing and consolidation to ensure better deal terms

Enterprises reported much lower satisfaction with providers in 2022 compared to 2021 when providers played a key role in supporting enterprises in navigating the pandemic. The leaders cited a lack of innovation and communication as the key reasons behind this dissatisfaction. Consequently, procurement leaders expected a significant change in their provider portfolios. Additionally, with macroeconomic concerns clouding all strategies, enterprises looked to consolidate and rebalance provider portfolios to negotiate better deal terms with limited providers. As expected, 2023 witnessed a shift in provider portfolios, with major providers winning deals that had vendor consolidation components.

6. Investments in strengthening the digital core are a priority over moonshot endeavors

Prioritizing resilience through uncertainty, the focus of the global services industry continues to be on pragmatic digital investments like cloud solutions, cyber security, analytics, and automation. While the advent of newer technologies like generative AI has created an industry buzz, the primary focus continues to be on strengthening the digital core and building a resilient technological foundation. Most industry verticals continue to wait and watch before diverting constrained resources to newer projects with limited use cases and industry adoption.

As 2023 comes to a wrap, the global services industry is at the forefront of another transformative shift – the need to create value and the need to create it fast. This becomes especially imperative as technological advancements like generative AI threaten to shift the industry’s current equilibrium and potentially start the next phase of a technological revolution. The global services industry must adapt swiftly to stay ahead of the curve.

Participate in our Key Issues Survey 2024 to capture the pulse of Information Technology and Business Processing industry leaders across the globe and uncover major concerns, expectations, and key global services trends that are likely to amplify in 2024. To discuss further, or for any questions, reach out to Ravneet Kaur or Hrishi Raj Agarwalla.

Don’t miss the Key Issues 2024: Creating Accelerated Value in a Dynamic World webinar to gain valuable insights into 2024.

Unleashing IT Industry Growth Potential with Asset-Based Business Models | Blog

With slowed IT industry growth, service providers can drive momentum with asset-based business models that center on delivering services built on digital products and platforms or monetizing the platforms and assets themselves. To learn about the advantages and key questions service providers should ask to successfully move to this model, read on.

Contact us to explore this further.

After fast growth on a once expansive highway, the IT industry hit a roadblock in recent years and is now navigating on narrower lanes. Service provider leaders are grappling to help the IT industry find new avenues of growth. Asset-based business models that prioritize the monetization of digital products and platforms may hold the key to moving forward. Let’s explore this concept further.

Finding stability amid uncertainty

With IT revenue and operating margins already down (approximately 14% decline in operating profit per employee since 2018), larger macroeconomic and geopolitical disruptions will continue to impact the IT services industry as the sector interconnects ever more closely with enterprise operations.

This tough climate is pushing service providers whose traditional linear business model is oriented around services to seek innovative growth opportunities. Amid these challenges, the asset-based business model is attracting attention.

An asset-centric business model revolves around a strong foundation of digital assets like products and platforms. Asset-based models are appealing because they help promote client loyalty, streamline operational costs, expedite market entry, and provide a competitive edge.

Assets as catalysts for growth

Some may argue that the concept of harnessing assets isn’t new, as it has been a steadily growing trend for a long time now. While some suppliers use assets closely bundled with their services, others have been able to position themselves as product providers.

Some large system integrators record anywhere between 8-12% of revenue in 2022 through assets. Their lessons learned and success stories have paved the way for other service providers to explore and scale asset-based models.

For instance, Accenture’s acquisitions of Navitaire and Duck Creek Technologies showcased the power of assets, while TCS strategically positioned ignio™ as a transformation catalyst and upheld BaNCS as a revenue-generating platform within banking, financial services, and insurance (BFSI).

Some of the notable benefits realized by these leading players include:


  • Revenue diversification: Relying solely on traditional services may no longer be sustainable. Integrating digital assets can create new revenue streams and ensure business sustainability
  • Time-to-market advantage: Developing digital products and platforms allows IT service providers to respond quickly to market demands, gaining a competitive edge
  • Reduced cost-to-serve: Automated and scalable digital assets enable cost efficiencies, enhancing profitability while delivering high-quality services
  • Talent solution: The scarcity of skilled resources in the market makes it imperative for service providers to embrace digital solutions and optimize their talent pool

 Embarking on the asset-based journey

 When considering moving to an asset-based business approach, providers need to answer key questions and consider their unique objectives, strengths, and market synergies. These include:

  1. What is the appropriate business structure? Should we opt for a specialized asset-centric business distinct from the services business or integrate assets within the existing services structure?
  2. How does an asset-based business model impact the existing service provider positioning?
  3. How do we select the products that can help drive long-term growth? Should we build or buy them?
  4. How does this approach change our talent model? Do we need a team of product specialists? How do we train sales teams to pivot to products from services? How will this impact internal collaboration?
  5. Who owns the responsibility of developing the asset and subsequent implementation?

When beginning this transformative journey, we recommend:

  • Pick the battle and weapons meticulously: The first and the most critical aspect is strategically selecting assets based on market potential and alignment with business objectives
  • Manage synergies internally and externally: Strike a balance between maximizing synergies and mitigating conflicts between the existing services business and the new asset-based ventures. Addressing any potential conflict in customers’ perception is crucial
  • Establish a holistic model: Forge a comprehensive asset-based business model, addressing strategic vision, organizational alignment, commercial models, talent strategies, and operational intricacies

Don’t miss Everest Group’s much-anticipated annual webinar, Key Issues 2024: Creating Accelerated Value in a Dynamic World, to gain valuable insights into the current perspectives of IT-BP industry leaders.


Asset-based business outlook

With the bumpy road ahead in IT, the asset-based business approach gives service providers a new lane to accelerate in. By embracing this model, businesses have the potential to transform into innovative engines that can swiftly navigate obstacles and seize new opportunities.

To discuss strategies for adopting an asset-based business model, reach out to Alisha Mittal or Parul Trivedi.


Exploring Emerging Generative AI Trends in Technology | Blog

Generative Artificial Intelligence’s rapid evolution holds the promise to transform enterprise operations and decision-making across many industries. Several emerging key generative AI (GAI) trends can profoundly impact automation, productivity, and human expertise, but harnessing GAI’s many opportunities will come with risks that will require enterprises to make complex choices and strategically adapt. Read this blog for valuable insights to prepare for this new frontier. 

Developing Generative AI Trends and Innovations

The trends to watch in the near and mid-term:

  • The move from general to specialized models – As generative AI moves into specific industries and domains, more examples of models fine-tuned for specific purposes are expected to emerge. For instance, models could be specifically trained for banking, insurance, or Human Resources domains, with the capability to speak the language of these narrower fields
  • Applications built on top of foundational GAI models – Apps built on top of large language models (LLMs) or conditioned LLMs to solve for specific needs will likely proliferate. Beyond ChatGPT, we already see early-stage web navigation concierges, code development assistants, and more. Initially, business-to-consumer (B2C) contexts will rise, but once the risks around GAI are solved, business-to-business (B2B) or business-to-employee (B2E) applications also will surge in activity
  • Lower costs – GAI is still relatively expensive but prices already have dropped significantly. As infrastructure, hosting, training, and inference become more efficient and economies of scale improve, we expect further cost reductions

What the generative AI trends mean for enterprises

  • Automation, productivity, and skills – Automation of tasks by GAI will boost employee productivity and also change the nature of expertise. This shift will require enterprises to rethink their talent agenda, workforce planning, learning and development (L&D) programs, and so on. Consider the example of an entry-level developer. With the benefits of GAI, the traditional “skill” of knowing a particular syntax for a specific language will become much less important. As a result, the bar of “valuable” human expertise will be raised. Enterprises need to account for these changes by rebuilding skill taxonomies and subsequently reassessing talent planning
  • Focus on enterprise data strategy – The true power of GAI comes into play once enterprises go beyond the low-hanging fruit of using it to generate generic outputs, like text, images, or other media. For instance, we could envision a world where GAI creates appropriate business or IT workflows, creates complex documents from scratch, or generates marketing collateral tailored to a company. Getting to these use cases will require seamless access to enterprise data, regardless of the approach (whether specialized models built from scratch, fine-tuning, or in-context learning). While GAI will unlock the power of this data, enterprises will need to surface it for use. The enterprise data journey is not new, but GAI will require a renewed focus and potentially more investments to advance it
  • Competition, disruption, and lowered barriers to entry – As GAI enables significant automation, organizations can do more with less. With lower costs, fundamentally new business models will become more feasible in multiple domains. Similar to how digital banks, built from the ground up, started nipping at the heels of established brick-and-mortar ones, this technology can potentially give birth to new contenders. One possible scenario to imagine is a new video game company creating complex video games relying heavily on GAI with a dash of human ingenuity. Similarly, GAI has the potential to disrupt stock media, customer service, entertainment, and other industries.

Enterprises may face difficult future choices, including making massive pivots, cannibalizing existing revenue streams, etc. While these decisions will naturally be difficult, enterprises must be willing to make hard calls to rapidly evolve and stave off existential threats further down the line.

However, there is no need to press the panic button yet. By investing in leadership education, keeping on top of developments, being open to innovations, and investing in home-grown and external GAI solutions, enterprises can position themselves well for when the time comes to make those hard choices

But before putting the horse before the cart, the many primary risks around GAI need to be addressed for broad-based enterprise adoption. These include regulatory concerns (including intellectual property), data and privacy, explainability (to some extent, at least), and others. Based on early trends, at least partial workarounds or mitigation mechanisms will be developed, in the short-term.

Everest Group provides insights and guidance on the risks, use cases, pricing, and implementation strategies to best position enterprises across industries for GAI adoption success. To learn more about Everest Group’s generative AI research or to discuss generative AI trends, reach out to Anil Vijayan.

Don’t miss our webinar, Key Issues 2024: Creating Accelerated Value in a Dynamic World, to hear our analysts discuss major concerns, expectations, and trends for 2024.

Examining the Impact of the Israel-Hamas Conflict on Cybersecurity Innovation | Blog

The Israel-Hamas war has immediately increased cyberattacks, depleted technology provider resources, and postponed venture capital funding. While novel cybersecurity products from Israeli startups will face temporary setbacks, the situation may foster future cybersecurity innovation. Read on to explore the impact of this conflict on Israel’s cybersecurity firms, technology providers, enterprises, and venture capitalists.

Reach out to discuss further.

Israel’s cybersecurity innovation under attack

A powerhouse of cybersecurity innovation, Israel has nurtured a rich startup ecosystem that has skyrocketed to global fame. Companies like Orca, Imperva, CyberArk, Radware, SentinelOne, Wiz, and Snyk have broadened their wings to the US but maintain deep-rooted connections to Israel. Many cutting-edge cybersecurity solutions have emerged from Israel’s robust research and development (R&D) and product engineering foundation.

Let’s delve into how the ongoing conflict is impacting various areas:

  • Israeli technology providers

The conflict has reverberated across Israel’s tech landscape. The mobilization of reserve troops, many of whom play integral roles in cybersecurity companies, has created an immediate resource gap. Israel Defense Forces (IDF) veterans who established many of these startups have been deployed to the battlefield. The sudden staffing shift has caused internal R&D and engineering delays, hampering cybersecurity innovation and project timelines.

Looking ahead, the ramifications could manifest more significantly. The ongoing challenges may lead companies to strategically reshuffle and geographically diversify critical R&D endeavors to avert future disruptions.

This resource shift can have long-lasting impacts on global technology conglomerates that have deeply ingrained partnerships with Israeli cybersecurity startups.

The mobilization of Israeli cybersecurity specialists has created an expertise shortage likely to have a ripple effect, causing short-term disruptions in international alliances and collaborations. Consequently, global tech providers may face challenges in maintaining the innovation charter in cybersecurity solutions as their niche Israeli partners grapple with a temporary resource crunch due to the war.

In the long term, the heightened conflict could catalyze cybersecurity innovation, fueling the development of novel solutions tailored to an evolving threat landscape.

  • Broader impacts

The conflict has had repercussions in the digital domain. Recent cyber incursions targeting Israel’s missile alert systems and media outlets are mere precursors to potentially broader cyber warfare. The looming threat of escalated cyberattacks menacing critical infrastructures such as power grids, oil and gas installations, and telecommunication networks is palpable.

With its robust cybersecurity infrastructure, Israel stands well-poised to thwart these cyber forays. Yet, maintaining unwavering vigilance coupled with a strong response and recovery strategy is imperative to safeguard both national interests and ensure uninterrupted business operations.

  • IT service providers

Indian IT firms have limited exposure in Israel, which accounts for less than 1% of their revenue base. Nevertheless, even though these firms have a solid foundation due to offshore operational bases, the IT security services continuum is still vulnerable to the unfolding scenario.

A noticeable delay in the rollout of novel cybersecurity products from Israeli startups is anticipated, stemming from the reduced engineering and R&D workforce. As a result, service providers entrenched in the Israeli startup ecosystem aiming to drive innovation with clients stand to be the most impacted.

  • Venture capitalists

The venture capital ecosystem has been disrupted by the conflict with a few early-stage companies from Israel recently postponing funding announcements. Merlin Ventures, a US-based firm that invests primarily in Tel Aviv security startups, canceled its planned Israeli Cyber Showcase. We believe the war will not only slow new cybersecurity product development in the short term but also cause venture capital funds to divert attention to other geographies.

The outlook

The Israel-Hamas war highlights a complex scenario that arises when geopolitical discord and cybersecurity intersect. This situation has quickly elevated cyber threats and strained technology resources. However, in the longer term, it could lead to a new chapter in cybersecurity innovation to thwart the increased threats emerging from this conflict.

At Everest Group, we remain focused on following the evolving situation and providing insights to navigate cybersecurity challenges in these turbulent times. To discuss, contact [email protected].

Stay informed with Everest Group’s annual webinar, Key Issues 2024: Creating Accelerated Value in a Dynamic World, to gain valuable insights into the current perspectives of IT-BP industry leaders on trends for 2024.

Current Risks Involved In Adopting Generative AI Technology | Blog

There is no doubt that generative AI technology is incredibly important, extremely powerful, and will have a significant and disruptive effect on how businesses operate. The release of ChatGPT by OpenAI exposed Gen AI to the world and allowed people to experiment with it. This caught the attention and imagination of every business and every board of directors. It is certainly top of mind today for most senior executives. For example, one major corporation recently charged each of its departments to come up with actionable strategies to incorporate Generative AI into their operations.

Read more in my blog on Forbes

What Is Happening Now In Tech Services Spend? | Blog

The beginning of 2023 saw tech services budgets slightly up, with robust IT spend during the first quarter. In mid-April, companies began significantly reducing their discretionary spend and delaying or canceling initiatives that had been budgeted. Any new initiatives focused on cost saving and how to do more with less. Now, the sentiment is shifting again: there is a bit more money to drive business value, and I expect that to slowly build for the rest of the year. Where will IT spending occur for the rest of 2023, and what are the implications?

Read more in my blog on Forbes

Cisco’s Acquisition of Splunk Marks the Beginning of the Battle for Integrated IT Operations | Blog

In the biggest technology transaction of the year so far, Cisco agreed on September 21 to buy cybersecurity firm Splunk for a staggering US$28 billion. With the potential to help organizations integrate their IT operations across various aspects such as applications, data, infrastructure, security, and networks, this acquisition is highly significant. Cisco’s purchase of Splunk clearly indicates that the convergence of IT operations and data analytics is a priority in today’s digital business landscape. Read on for our expert analysis of the deal. 

Contact us to learn how this could affect your organization.

Why did Cisco acquire Splunk?

Cisco has wanted to buy Splunk for some time due to multiple business and revenue synergies. Cisco will immediately gain approximately US$4 billion in recurring revenue from subscription-based services. Cisco’s revenue is currently split between products (74%) and services (26%). By increasing services, Cisco will be better positioned to compete with hyperscalers, cybersecurity providers, and platform providers to capture the major portion of enterprises’ IT spend.

Cisco has somewhat lagged behind competitors in the cloud wave of enterprises’ technology spend and has experienced a decline in its collaboration product suite, making its cybersecurity portfolio a key investment area. The deal will act as a catalyst for Cisco’s business transformation, heightening focus on subscription-based revenue and, in the long run, Artificial Intelligence (AI)-driven integrated IT operations.

Key benefits Cisco’s customers will see from this acquisition include:

  • Cybersecurity development: The cybersecurity space will most immediately be impacted by the acquisition of Splunk, the leading security analytics platform in the market with a highly loyal customer base. This platform will enable Cisco customers to transition from threat detection and response to threat prediction and prevention by leveraging generative AI (GAI) to improve visibility and data usage
  • Observability platform: Splunk’s comprehensive and highly regarded observability capabilities could complement Cisco’s products and platforms. Splunk has strong integration capabilities with most of Cisco’s products across data centers and networks. With the acquisition, clients can expect better visibility, and with the incorporation of AI and analytics, they can effectively utilize the terabytes of available data

Beyond this, the biggest benefit that customers can anticipate from this deal is the potential for integrating IT operations across the entire stack – solving a problem of siloed operations and insufficient end-to-end visibility that has plagued enterprises for years. Cisco’s acquisition of Splunk is a clear signal that the integration of IT operations and data analytics is a priority in today’s digital business landscape.

Enterprises stand to gain many benefits through an integrated IT operations approach, including optimized resource utilization, single pane of glass view, agile and prescriptive problem resolution, enhanced security, improved collaboration between IT and the business, cost savings, enhanced user experience, and data-driven decision making aligned with business outcomes.

Cisco and Splunk union in the data-driven AI world

This combination of synergies, coupled with the power of AI, can result in a comprehensive suite of solutions that can help organizations more effectively achieve their IT and business objectives.

Among the potential benefits are:

  • Single pane of glass view: The integration of Cisco’s networking solutions with Splunk’s analytics tools can offer end-to-end visibility into an organization’s infrastructure. This visibility would enable companies to identify bottlenecks, improve performance, and optimize their IT operations
  • Advanced threat prevention: With the combination of the IT telemetry data and Splunk’s powerful analytics, threat detection capabilities will be enhanced. Organizations can proactively identify and respond to security threats, reducing the risk of data breaches and other cyberattacks
  • Improved performance: Efficient troubleshooting through preventive diagnostics can create a world where IT systems are always available and efficient
  • Business-driven IT operations: By accessing rich data analytics, businesses can start to make data-driven decisions that positively impact their top line, whether optimizing supply chain operations or improving customer engagement

Cisco is not the first to move in this strategic direction. IBM, for instance, recently acquired Apptio to gain end-to-end visibility across the IT stack and build its cloud-agnostic IT operations model. All hyperscalers have been expanding their capabilities through acquisitions in the cybersecurity space to provide a unified view of the IT environment.

In the long run, the acquisition of Splunk is likely to be highly beneficial for Cisco.

This significant deal will act as a catalyst for Cisco’s business transformation, heightening focus on subscription-based revenue – a strategy other providers of all sizes have seen success in.

If Cisco gets this right, its customers will benefit from an array of operational benefits across the IT stack. It also has the potential to make the IT stack always available, secure, and aligned to business outcomes.

To discuss the potential of this acquisition and what it means for businesses, reach out to Titus M at [email protected].


Insights on Challenges and Opportunities from Oracle CloudWorld and the Oracle Health Conference | Blog

At last week’s Oracle CloudWorld and the Oracle Health Conference in Las Vegas, the company presented its new positioning, which includes leveraging its broad portfolio, making the next move in healthcare, and delivering lower-cost cloud technology. However, Oracle faces challenges such as not dominating any market, opaque pricing strategies, and the loss of competitive edge to a healthcare rival. Read insights from our analyst who attended these events about the company’s path forward.  

Company leaders presented their vision for Oracle’s future, which is focused on the following three important areas:

  • Breadth and depth of offerings – The company offers a full portfolio in cloud, Generative Artificial Intelligence (GAI), Enterprise Resource Planning (ERP), Human Capital Management (HCM), Customer Experience (CX), Enterprise Data Management (EDM) and healthcare to name a few
  • Big bang positioning in healthcare – With its acquisition of Cerner, Oracle is placing a huge growth bet in this segment, like all tech players. The company talked about new opportunities in this area at the Oracle Health Conference
  • Better cloud economics – While industry analysts previously called Oracle out for elasticity, security, and performance issues, it has moved to best-in-class in these areas

Let’s explore each of the elements of their strategy and the challenges they present:

  1. Master of none: There’s no doubt about Oracle’s breadth and depth of coverage. Oracle has credible offerings for each area it competes with AWS, Salesforce, or Microsoft, whose market messaging in certain instances is ahead of product maturity in areas such as healthcare and CX. However, this is not enough.

Oracle’s biggest challenge is that it lacks dominance in any one area. It is not the undisputed preferred choice in any of the markets it claims leadership in. Below are the leaders in market share or positioning in each of the segments where Oracle competes:

    • Generative AI: Microsoft
    • Cloud: AWS/Azure
    • ERP: Oracle (in the US) but head-to-head with SAP everywhere else
    • HCM: Workday
    • CX: Adobe
    • Enterprise Data: Snowflake/AWS

Oracle needs to double down and succeed on select growth bets that will help it reinvent its brand. ERP or databases cannot be those bets.

  1. Not Epic: At one point, the Epic and Cerner competition appeared to be headed toward a true duopoly. However, Epic has gained a significant advantage over competitors by taking aggressive actions on two fronts: swiftly moving to modern architecture by working with the cloud ecosystem and grabbing market share from tier-2 EMRs such as Athenahealth, Meditech, and Allscripts.

Cerner, with Oracle’s strong backing, should have stolen a march over Epic on both. Instead, Cerner was distracted by the integration with Oracle and lost considerable ground. Hence, instead of a duopoly, what we have is a market where you are either Epic or Not Epic.

  1. Opaqonomics: Oracle pitched they are “significantly cheaper than AWS or Google.” However, this claim cannot be consistently validated. While some enterprise clients indicate that Oracle Cloud is more affordable, others feel it isn’t. The difficulties lie in the following:
    • Oracle cloud economics is incorporated with its app economics, making it very difficult to separate the two
    • Pricing is not transparent or standardized. Inconsistent client feedback (some who feel it is cheap, others who don’t) impacts Oracle’s competitive positioning against other clouds
    • This inconsistency is also visible in client experience. One client mentioned it took Oracle CIoud Infrastructure (OCI) “six weeks to provision additional compute when on paper, the promise of cloud is to do it over six seconds.”

While this might sound like a harsh takedown of Oracle’s positioning, these issues can be fixed and serve as critical paths to Oracle’s reinvention. Oracle is a true engineering firm, and each capability that it delivers has an engine under its hood. Clients can trust Oracle to provide fully developed products. To restore its shine, Oracle needs to bring the same rigor to its customer success initiatives, master a few key markets, and establish transparent and standardized pricing.

For more insights from Oracle CloudWorld and the Oracle Health Conference, please contact Abhishek Singh.


Unveiling Hidden Dangers: Proactive Measures to Address Cloud Migration Risks | Blog

Moving an IT ecosystem to the cloud can be a complex undertaking that involves a multitude of risks – from technology and regulatory challenges to internal hurdles, as well as other unexpected problems that can arise without proper planning. Understanding these potential pitfalls and developing a comprehensive plan to mitigate them will ensure enterprises reap the many benefits cloud offers. Uncover the risks and learn recommendations to address them in this blog.  

In the last decade, cloud has risen to immense importance across all geographies and verticals, offering enterprises numerous benefits such as scalability, agility, and cost efficiency. As a result, it has become the bedrock of any digital business, leading more enterprises to increasingly migrate to the cloud. Additionally, enterprises are now also undergoing inter-cloud migration as they strengthen their cloud strategy and prioritize IT asset optimization.

Despite its apparent simplicity and prevalence in most digital transformation initiatives, enterprises must understand the associated cloud migration risks and proactively plan for contingencies. More than 55% of enterprises believe the COVID-19 pandemic rushed cloud adoptions and limited returns from cloud investments. This reinforces the importance of understanding cloud migration risks to fully realize the benefits that cloud promises.

Let’s look at the most commonly understood and observed risks that generally fall under the following categories:

  • Technology – This encompasses risk arising from challenges in integrating legacy and modern systems, possible misconfigurations during migration, and the ever-increasing technology skill gap
  • Regulatory – This pertains to risk related to data security and privacy, vertical and geography-specific compliance and regulations, and data governance and sovereignty
  • Client’s internal environment – This involves risks such as untrained internal resources, broken security controls, reliance on third-party vendors for different services, and possible operations disruptions

While service providers generally tackle these threats from the get-go, a few other potential impediments often get overlooked during the migration phase, creating larger issues later on if not proactively addressed.

Some of these additional risks can include:

  • Underwhelming perceived value: Enterprises often do not have clear post-migration expectations, resulting in most enterprises being dissatisfied within a year or two of starting the cloud migration process. An alarming 67% of enterprises have expressed their inability to realize the expected level of value from cloud. This extends beyond monetary value and also encompasses aspects such as innovation, compliance, resilience, and agility, which are expected as by-products of successful cloud migration
  • Negative stakeholder experience: Cloud migration can impact internal and external stakeholder experience. Any security breach or service disruption can expose corporate data and applications to cyberattacks and even damage the enterprise’s reputation and erode customer trust. Additionally, any unnecessary delay in migration timelines due to factors such as network issues, application incompatibility, or inefficient processes can lead to downtime and productivity loss
  • Exceeding budget expectations: Unplanned migration costs and the complexities surrounding the entire multi-cloud system end up giving most customers price shock. Around 60-70% of global enterprises believe cloud adoption costs were higher than their initial expectations of cost reduction. This occurs due to factors such as complex multi- and hybrid cloud environments, inefficient cloud resource management, lack of governance guardrails, and gaps in consumption visibility and management
  • Conflicting objectives: Senior stakeholders from various departments often view cloud migration from different lenses and have disparate objectives. Even if service providers meet the defined Key Performance Indicators (KPIs) and Service Level Agreements (SLAs), stakeholders still can be highly dissatisfied. This commonly arises due to misalignment between cloud, product, technical, and finance teams and the lack of defined accountability and ownership that results
  • Unplanned transitions: During the enterprise transition from one provider to another or from on-premise to an outsourced service provider, a proper transition methodology is crucial. Many enterprises struggle in this phase because transition teams do not contextualize their approach to the enterprise. This often results in a disconnect between expectations and outcomes in areas such as migration velocity, proposed SLAs, and risk management

Recommendations for mitigating cloud migration risks

To lessen these risks, enterprises should take the following actions:

  1. Define the value expected from cloud expectations
  • Define what value means to your enterprise. Different stakeholders often have varying ideas of value. Conduct a comprehensive assessment to come to a shared definition of value
  • Measure alignment to the defined value metrics at all stages of executing the migration plan
  • Recognize that value realization is continuous and emphasize the importance of making it a cyclic process rather than a one-time event
  1. Plan and assemble the right delivery team
  • Include an integrated cyber-cloud team to mitigate cloud security risks associated with migration efforts
  • Conduct a comprehensive RFP procedure to ensure the onboarding of certified and skilled talent with prior similar on-ground experience. Develop a detailed talent management plan across different execution phases
  • Ensure the availability of well-structured transition teams that offer industry- and enterprise-specific contextualization, particularly when transitioning from another vendor or a captive center
  1. Leverage Intellectual Properties (IPs) and frameworks
  • Implement a value-based migration framework internally or with a service provider partner to define and measure future value
  • Adopt an open communication framework that allows regular, timely, and contextualized communication with internal and external stakeholders to ensure consistent experience. This should be in addition to technology measures such as disaster recovery plans, incident response plans, and security measures
  • Prioritize the implementation of FinOps tools and solutions to enable cost optimization and visibility at all times
  1. Evolve contracting methodologies
  • Define Objectives and Key Results (OKRs), and don’t just contract for KPIs and SLAs
  • Push for some “skin in the game” from partners by encouraging transparent and flexible pricing models
  • Include knowledge transfer in the project scope to upskill internal teams to handle post-migration changes in the enterprise IT landscape

For more strategies to tackle cloud migration risks or to share your views on this topic, feel free to reach out to [email protected] or [email protected].

Unlocking the Power of OKRs to Achieve Ambitious Goals and Drive Business Strategy | Blog

Embraced by top tech companies, Objectives and Key Results (OKRs) help establish high-level measurable goals based on ambitious trackable targets. Paired with Key Performance Indicators (KPIs), these powerful tools can fuel organizational success. Discover how OKRs can benefit your business, the best practices for implementation, and how these goal-setting frameworks can work together to drive exceptional results.

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In today’s rapidly evolving and competitive business landscape, setting and achieving the right strategic goals is essential for organizational growth and success. Businesses traditionally rely on Key Performance Indicators (KPIs) as the primary methodology for tracking these goals. However, are they effective in driving your business strategy? Or can another methodology better suit your business needs?

Objectives and Key Results (OKRs) have gained widespread adoption in recent years as a popular methodology pioneered by Intel’s former CEO Andy Grove. Its appeal grew when John Doerr introduced them to Google. OKRs have since evolved and spread to various industries and organizations worldwide, driven by the need for better alignment, increased transparency, and more effective goal-setting practices.

So, what exactly are OKRs?

A powerful goal-setting framework popularized by major technology companies, OKR, at its core, is designed to align teams and individuals with the organization’s overall strategic objectives. OKRs consist of these two main components:

  • Objectives: Clear and qualitative goals that outline what an organization wants to achieve. They provide direction and purpose, inspiring teams to aim high
  • Key Results: Specific, measurable, and time-bound milestones that indicate progress toward the objectives. Key results serve as tangible metrics for success

Is it another fancy approach? Are OKRs of any use?

OKRs offer several benefits that make them an attractive choice for ambitious organizations, including:

  • Alignment: OKRs ensure that everyone is working toward the same overarching objectives, fostering a unified sense of purpose and direction
  • Transparency and Accountability: By sharing OKRs openly, teams build a culture of transparency and accountability, encouraging individuals to take ownership of their contributions
  • Agility: OKRs allow organizations to adapt quickly to changing market conditions and adjust their strategies as needed
  • Motivation: Ambitious OKRs can inspire and motivate teams to go above and beyond to achieve extraordinary results

What companies have leveraged OKRs to fuel growth?

Companies like Google, LinkedIn, and Netflix have achieved remarkable success with OKRs in these ways:

  • Google utilized OKRs to launch innovative products and achieve significant business growth
  • LinkedIn used OKRs to expand its user base and improve customer satisfaction
  • Netflix leveraged OKRs to grow its subscriber base and produce hit original content

How can we define an OKR?

Here are some examples of OKRs to help you understand them better:

  • Objective: Increase customer satisfaction by 20%

Key Results: Increase the number of customer surveys completed by 40%. Increase the average customer satisfaction score by 10 points

  • Objective: Launch a new product by the end of the quarter

Key Results: Complete the product requirements by the end of the month. Develop the product prototype by the end of the quarter. Launch the product by the end of the quarter

What pointers should we keep in mind when defining OKRs?

To use OKRs effectively, consider the following four characteristics:

  1. Clarity: Objectives should be clear and easy to understand, providing a sense of direction for all stakeholders
  2. Specificity: Key results should be specific, measurable, and achievable, enabling progress tracking
  3. Ambition: OKRs should inspire and challenge teams to achieve exceptional results, pushing boundaries
  4. Alignment: OKRs should align with the organization’s overall mission and strategic priorities

Should we ditch KPIs now?

While both OKRs and KPIs are essential in assessing performance, they serve different purposes:

  • OKRs are aspirational and strategic, setting ambitious goals to drive overall organizational success
  • KPIs are operational and focused on specific metrics, measuring ongoing performance against predefined targets

OKRs and KPIs 09 12 2023 1

How can we use OKRs and KPIs together to achieve specific objectives?

OKRs and KPIs are not mutually exclusive. In fact, they complement each other in these ways:

  • OKRs provide the direction and inspiration to set ambitious goals
  • KPIs provide the data and measurement to track progress and fine-tune strategies
Parameter​ KPI​ OKR​
Objective Monitor “business-as-usual” drivers, identify problems, and areas for improvement​ Ambitious “business-goal-centric” view for measuring success​
Frequency Same metrics tracked for a longer period​ Metrics may change in the spirit of continuous improvement across multiple fronts and as business objectives change​
Ownership  Owned by departments or the organization as a whole​ Can be owned by individuals or teams​
Scope Focus mostly on operational metrics like velocity​ Focus on business objectives, such as growth, adoption, or customer satisfaction​
Level of challenge Maintaining current performance levels​ Push individuals and teams to achieve more​
Examples Increase velocity by 20%​ Improve brand awareness by increasing website traffic from 15% to 20% in Q2 through targeted marketing campaigns and content creation.​
Reduce customer churn rate by 5%​ Increase customer retention by 2% in May 2023 by improving customer satisfaction and loyalty through targeted marketing campaigns, personalized outreach, and enhanced customer support processes​

What best practices should my organization follow to successfully implement OKRs?

To ensure successful implementation and maximize the benefits of OKRs, consider the following best practices:

  1. Top-Down Alignment: Align OKRs with the organization’s overall mission, vision, and strategic priorities. Ensure that OKRs cascade down from top management to every individual, creating a unified sense of purpose
  2. Collaborative Goal Setting: Involve all relevant stakeholders in the OKR-setting process. Encourage open discussions and feedback to build consensus and ownership
  3. Clarity and Simplicity: Keep objectives and key results clear, concise, and easy to understand. Avoid jargon and unnecessary complexity to ensure everyone grasps their role in achieving success
  4. Measure What Matters: Focus on key metrics that directly impact the organization’s success. Avoid setting too many OKRs to prevent diluting efforts
  5. Flexibility and Adaptability: Embrace the agile nature of OKRs. Continuously review and adjust OKRs as circumstances change, allowing teams to stay responsive to market dynamics
  6. Regular Progress Tracking: Implement a robust tracking and reporting system to monitor progress regularly. Provide frequent updates and celebrate achievements to boost morale

OKRs and KPIs are powerful tools that can drive exceptional performance and success for organizations. By setting clear and aspirational objectives and measuring progress through specific key results, businesses can unlock their full potential. Strategically combining OKRs and KPIs allows organizations to achieve extraordinary results in a dynamic and competitive environment.

Start implementing OKRs in your organization today! Define ambitious objectives, set measurable key results, and foster a culture of transparency and accountability. To discuss how to embrace the power of OKRs to propel your organization toward new heights of success, contact Hemant Agrawal.

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