GIC Upskilling/Reskilling: Confidence, But Challenges Remain | Market Insights™
February 28, 2018
GICs leaders are confident about upskilling/reskilling for future needs, but challenges remain
GICs leaders are confident about upskilling/reskilling for future needs, but challenges remain
Skills such as intuition & innovation, design thinking, pattern recognition, leadership, and problem solving are likely to become highly critical to GICs for service delivery in the future
The reason for the widening skills-gap include:
Just a month ago I rejoined Everest Group as its chief research guru. And while I thoroughly enjoyed my stints as chief research officer at Market Track (a competitive intelligence firm for advertisers) and The Hackett Group (an intellectual property-based strategic consultancy and benchmarking firm) over the last 10 years, I’m feeling like a kid in a candy store in today’s digitally-oriented global services industry!
Here are my gut reactions to visits I had last week with two sell-side organizations.
Wow, wow, wow.
That’s research speak for how I felt after the inauguration of Wipro’s brand new Silicon Valley Innovation Center on August 1. The Center, which Wipro bills as, “…state-of-the-art R&D and incubation hub, designed to develop and showcase next-generation technologies and solutions for enterprises” clearly displayed how much its value proposition has changed.
It wasn’t that long ago that Wipro and its peers were promoting savings, quality, and scale, along with a thin layer of industry expertise. Now it’s showcasing innovative solutions along a broad array of concepts that include the future of retail, banking, and healthcare, to name just a few.
It’s clear Wipro knows that the robots are coming, rendering its traditional proposition passé, similar to what EDS, CSC, ACS, and HPE experienced over the past 15 or so years. So will its ideas be enough to compete in this dog-eat-digital global services environment? It’s hard to say, but it’s certainly going to give it the old college try. We’ll update our thoughts in due time.
No C3POs to be found, but I did see some game changers.
I took advantage of my time in Silicon Valley to stop by Automation Anywhere’s headquarters. And I was sorely disappointed when they didn’t show me a warehouse full of R2D2 and C3PO robots. Instead, they showed me an evolutionary capability that has reached a tipping point that should make enterprise executives do an immediate rethink of how they design their organizations.
I had a spirited debate with CEO Mihir Shukla and his team about how Automation Anywhere’s RPA-based solution will impact enterprises. Our mutual thoughts were that some will use it incrementally to create short-term savings and process improvements, but that really innovative executives will use it as one of several key tools to change the competitive landscape in their markets. For them, it will be a thing of beauty. For others? Well, let’s be positive.
Watch this space for some really cool fact-based insights that help differentiate the winner and loser enterprises over the coming months.
Disruption from new technologies and new business models fundamentally changes companies’ competitive positioning. Most CEOs and boards of directors today recognize their business is at risk if they don’t change, as disruptive competitors will gain ascendency over them. Because they recognize the power of disruptive technologies and the need to change, many invest in pilots to determine whether a technology can create the desired performance outcome. Unfortunately, pilots rarely deliver real value. Furthermore, look at Amazon, GE and other firms that successfully incorporate disruptive technologies into their business model, and you’ll realize they don’t use pilots to drive change. Why not?
Pilots often succeed in demonstrating a technology is useful in achieving company objectives. What happens next is an “evangelist” communicates the success, believing this will result in the organization implementing the technology and driving change. Sounds good, but there’s little evidence that this works. I’ve observed countless pilots over more than two decades, and very few resulted in meaningful changes to competitive positioning. There are three primary reasons why this happens.
QA of the future: open, as-a-service, innovative, outcome-led
The GIC model has evolved significantly over the last decade, and is gearing up for the third wave of evolution – GIC 3.0, as some are calling it – driven by GICs’ strong desire to move away from the “arbitrage-first” delivery model towards a “digital-first” model.
Everest Group describes the journey to mature GICs as progressing through four different stages.
Our research shows that best-in-class – or Stage 4 – GICs deliver up to six to eight times incremental value beyond arbitrage. Yet, while many of our engagements over the last few years have made it clear that most Global 1,000 GICs deliver value beyond arbitrage, very few track and measure their impact. When they do, it’s typically in a piecemeal, selective manner. Thus, their parent perceives that they are delivering limited business value, beyond arbitrage, to the enterprise.
By educating their parent on their impact, GICs can improve their credibility, and build a case to secure support for expanding their role.
We believe that putting a dollar number to the business impact is the most objective and effective way for GICs to showcase their true worth. The framework we use maps value drivers linked to savings, risk, and revenue, quantifying all forms of impact created by the GIC.
Here’s an example: a U.S. company’s GIC was able to prove to its parent that it delivered US$20 to 22 million in overall business impact, compared to incremental cost arbitrage of US$4 to 6 million, through increased effectiveness, greater efficiency, and revenue growth. This helped the GIC secure the parent’s buy-in on increasing the scope of functions currently delivered out of their GIC.
A comprehensive quantification facilitates measuring the overall business impact across businesses/LOBs supported by the GIC. A GIC can use these results to:
Contact us about Everest Group’s business impact quantification framework, and learn more about our research on in-house delivery models.
Enterprise evaluation of disruption in both outcome and approach to innovation
Enterprise executives say continuous innovation based on collaboration and proof of innovation are most important aspects of their approach of innovation
Enterprises define disruptive innovation as transformation; they rate business model transformation, improved functionality, and better user experience as most disruptive
Enterprise perception of innovation in AS methodologies
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