Tag: customer centricity

Is Infosys Repositioning as a Silicon Valley Company? | Sherpas in Blue Shirts

At Everest Group, we’ve heard industry rumors that Infosys CEO Vishal Sikka – formerly on SAP’s Executive Board and global lead for products and innovation – recently hired two former SAP executives based in Silicon Valley. This move comes on the heels of Sikka planning to invest in startups in Silicon Valley. What does all this mean for Infosys and for the rest of the services industry?

Upon hiring Sikka from SAP, we knew Infosys was changing its direction to become an IP company, and we expected him to make significant changes. In addition to his former exec role at SAP, he earlier worked in Xerox’s research lab in Palo Alto in the Valley. He is a well-known figure in the American software world, and he continues to be based out of Silicon Valley.

As I predicted in a blog three months ago, Sikka had begun the transformation and I thought his next step would be to build on the Infosys talent pool by bringing in selected additional talent. Now he has done that and is using his relationships at SAP in Silicon Valley to recruit other executives to join him at Infosys.

This move means a number of things. Most importantly, it means that Infosys drinks its own champagne. Following Cognizant’s example, Infosys is establishing North American headquarters – but going one better. Rather than basing its business in New Jersey as Cognizant did, Infosys is building on its next-generation theme and basing its American business in Silicon Valley. This strategy has a number of potentially positive attributes for Infosys.

Commitment to disruptive technology wave 

First, it helps reinforce the brand that Infosys is committing to the “leading technology” aspect of its new-and-renew strategy. And lining up Silicon Valley executives to supplement the Infosys leadership team is another clear demonstration of its strategy.

Significantly, having North American headquarters in the middle of the Silicon Valley ecosystem allows Infosys to tap into the Valley’s rich innovation talent pool as Infosys moves from its traditional labor arbitrage-based model to an IP-based model. It also places Infosys close to its customer base. Soon to be gone are the days of the factory control from Bangalore dictating to customers how to use services.

I think this speaks volumes around the provider’s commitment and willingness to stay the course and pace as the services industry evolves with the digital world’s new technologies and new business models. Infosys is trying to catch that wave of next-generation digital disruptive technology that emanates from Silicon Valley’s ecosystem.

Sikka talks about Design Thinking, which puts him right into the heart of how Silicon Valley thinks and tries to behave. Infosys is making a commitment to be at the heart of the Valley’s ecosystem to better leverage that thinking. Bangalore is a long way from that ecosystem. New Jersey is closer, but Infosys chose to be in the heart of it, right in the Valley.

Will Infosys succeed in these new moves? 

I think this starts to ask hard questions of the rest of the industry, and I believe the rest of the industry will watch Infosys intently to gauge its success. In the event that Infosys succeeds in making this pivot, I think we can expect other Indian pure-plays to follow suit quickly.

Photo credit: Flickr

Silver Bullets Don’t Drive Growth in Services | Sherpas in Blue Shirts

Every service provider is looking for the one, simple thing they need to do to change their growth trajectory. They think they may need to change their messaging or perhaps they should incorporate automation into their finance and accounting offering. Or they think moving from FTE-based pricing to transaction-based pricing will grow their business. If a silver-bullet answer existed for the question of how to grow a service business, it would be a wonderful thing. But here’s the sad truth: none of these actions will change the game.

Insanity is doing the same thing again and again and expecting a different result. Are service providers going insane? It appears so, since they keep looking for simple, one-dimensional answers over and over again. I think by now they should be willing to step back and realize that their growth problems are much bigger than getting their messaging right or delivering the right combination of offshore and onshore resources or even adding a host of new service offerings in cloud, as-a-service, digital and automation platforms.

We talk with providers that are very enthusiastic about their new offerings and say they’ve signed dozens of new deals. But when we ask how much revenue comes from the new deals, the answer paints a very different picture. Often these are small sales, pilot situations and small revenue with the hope that they will grow into something larger. That may be where the market is heading, though not always.

Does a provider’s future success depend on moving to new technologies, new offerings? Providers need to recognize they can drive bigger sales by focusing on well-established areas that customers are already buying. For example, businesses will spend small amounts of money experimenting with cloud and social media, but they will spend huge amounts of money extending their CRM system so it supports the provider’s new offering. Evolving established technologies drives much larger revenue than experimenting with new technologies or new business models. That said, this still won’t change the game.

I believe providers need to stop their insane search for silver bullets and look, instead, at the fundamental tenets of how their customers perceive them and then change the nature of those relationships.

Providers that want to change the trajectory or the nature of their customer relationships and move into a deeper relationship on a larger scale likely need to change how they treat customers. Today’s customers want deeper, more intimate relationships.

But when we at Everest Group talk to providers about this reality, we find very few service providers are willing to step back and do that. Providers tell us they can’t afford to allocate more resources to customer relationship development and customer care functions because their cost of sales will rise too fast. So they just keep treating customers the same way but expecting a different outcome.

The dilemma for service providers is that they have a shareholder mandate to drive growth today. Sure, they get rewarded for growth in the current quarter, but their future ability to drive growth depends on their ability to position themselves should new technologies catch hold. When that happens, having already established deep, intimate relationships with customers will drive growth.

Digital Transformation is Digital Marketing. And You are Stupid. | Sherpas in Blue Shirts

In these times of “everything digital” mass hysteria, if we believe the first portion of the above headline, the second is almost certainly true. While I discussed businesses’ obsession with digital marketing and customer facing processes and their digital disruption in an earlier post, I am not surprised that the hysteria about marketing being everything in digital transformation has not abated. And unfortunately, it may not in the considerable future.

Multiple discussions with new and old age businesses such as ecommerce, banks, manufacturing, and retail reemphasize that digital transformation is a big boon for the marketers. With multiple channels and technologies enhancing the customer experience, digital transformation certainly hold great promise for CMOs. Given that it’s easier to get funding for “customer-centric” initiatives, organizations are defaulting to this choice. But they are over-focused on launching newer products/services and extending the reach of their organization. By believing the power of digital transformation resides just in marketing, we are doing it a great injustice.

To effectively adopt digital transformation, organizations need to rethink their business model. Many processes that dearly need digital disruption are internal to the organization, rather than external customer facing. What digital transformation should do is keep the end-user (the user who consumes the service, irrespective whether it’s a customer or not) at the forefront and re-imagine these processes. A clear role of digital initiatives needs to be defined across service center, support functions, legal and risk, HR processes, supply chain, and IT operations. Leveraging collaborative platforms, mobility, analytics, and cloud services should help all these functions to add value to the business rather than remain docile cost centers.

Moreover, various businesses are missing out on significant cost savings potentials that digital transformation can provide. In their single-minded obsession to drive customer engagement, and therefore over-emphasis on the top line, they are unable to fully realize the value of these initiatives to streamline and simplify internal processes and operations to save costs. If a business provides a wonderful mechanism to serve customers without really understanding how this should change its view regarding how it conducts the business, it won’t ever leverage digital transformation meaningfully.

Digital transformation is not only about spending a fortune in leveraging cool technologies to make marketing “next generation.” It’s something way beyond. It encompasses how much the business understands, values, appreciates, and respects people, processes, technology, and all the relevant stakeholders with which it directly or indirectly engages. It should not be viewed as just one more strategy for earning money from customers. Digital transformation should instead be seen as something that empowers stakeholders and the business. Something more than pure technology that helps in meeting and shaping people’s aspirations.

Excessive focus on sales and marketing may provide near term returns and easier funding. But it will not be sufficient to sustain digital initiatives. Digital transformation is a philosophy of conducting and doing business with simplicity, operational efficiency, and customer centricity. It is not just technology-enabled cool marketing. It’s fine to make engaging customer interaction platforms, perform all the analytics on customer behavior, and leverage virtual reality. But businesses that deploy digital strategies to fundamentally understand their role in serving all stakeholders, in turn impacting the related processes, will be truly leveraging the power of digital transformation. It’s a tremendous opportunity, and it will be pity if we do not exploit its full potential.

What has been your experience?

Photo credit: Andre Musta

How to Stand Out in a Crowded Global Services Market | Sherpas in Blue Shirts

As industry analysts we at Everest Group listen to endless PowerPoint deck presentations from service providers. They should provide information about what separates a provider from its competitors. But in reality, they just all merge together and lose relevance. Providers need to focus on a little less talk and a lot more action. Here are several reasons why the decks become irrelevant.

Providers think they’re being clever when they bring PowerPoint presentations displaying a framework to existing or potential customers. My observance is there are three problems from a customer’s perspective:

  • It’s impolite to force a customer to put your framework to their business problem.
  • Customers and industry analysts see dozens of PowerPoint frameworks. So it’s not impactful to show them yet another framework. It’s like water trickling over a stone — it takes a long time to make an impact.
  • Most customer executives problem solve by relating to a real-life story. But it’s a very painful process to try to take a highly conceptual framework and apply it to a customer’s real-life situation.

So what’s the remedy? It’s simple: let’s make a pact and do away with frameworks. My advice to providers is to just use concrete real examples in presentations. And it will be doubly valuable because none of your competitors are doing it.

Photo credit: Steven Depolo

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