Tag: Peter Bendor-Samuel

H1-B visa issue: India needs to lobby harder to be heard by the US | In the News

The issue of H-1B visa remains a sore point for the Indian information technology industry. Little has changed in the attitude of the US towards H-1B visa workers despite President Donald Trump’s assurance to overhaul the system.

“The Indian firms are not well positioned to lobby the US government, further more they have for years been significantly under invested in US government relations particular in their ability to influence policy,” said Peter Bendor-Samuel, CEO of the Everest Group, in an email response earlier this month.

Read more in moneycontrol.

Google Touts Programmers 10 Times More Productive | Sherpas in Blue Shirts

Are you looking to increase productivity at your company? Google believes that its engineers are 10 times more productive than a typical engineer or programmer. On its surface, that sounds astounding. Yet, Google believes this to be the case. Is it that the people Google hires are 10 times smarter? That doesn’t make sense. We know the distribution curve of IQ means there is no such thing as someone 10 times smarter. So, something else is going on here. What is it?

Let’s take Google’s claims at face value. Here’s how they make their claim a reality. Google hires smart people and then puts them into an environment with accelerators (such as cloud, automation, integration tools and agile product disciplines) that enable them to be 10 times more productive. The results are astounding both in impact and cost to operate.

Let’s compare this this impact to the other most important factor that shaped the market for the last 20 years: labor arbitrage. If you can move work offshore to a third-party service provider, they can pay workers between 20-60 percent of what is paid to onshore workers. After taking into consideration service provider profit margins and overhead, on an hourly cost comparison, this realizes savings of 20-30 percent. If we just compare the cost savings to Google’s claim of 10 times greater productivity, the benefits dwarf those of the arbitrage model.

Is Infosys on Course for Stability and Growth? | Sherpas in Blue Shirts

The management squabbles of Infosys occupied headlines this year, culminating when CEO Vishal Sikka resigned in August. The same day, the company brought former co-founder and ex-CEO Nandan Nilekani in as non-executive chairman of the board, and I blogged that Infosys was taking a big step toward stability. Nilekani declared in a post-earnings conference call yesterday that Infosys is on course despite the distraction in 2017 and is refreshing its strategy. What does this mean and what are the chances it will succeed? Here’s my take.

The Digital Strategy

The company’s strategy refresh is basically the same strategy to move to the digital world as it adopted when Sikka was CEO. Despite the desires of some company executives to maintain its market leadership in the labor arbitrage business, it is now crystal clear that the IT services industry is moving to a digital model and Infosys must move quickly to digital. But there are some differences in the strategy under Nilekani.

Aggressively acquiring digital companies is a key component of the strategy. The public conflict among Infosys founders and the heavy board scrutiny restrained Sikka’s execution in this effort. With the reconciliation with the founders, Nilekani has a clear path to execute on these necessary acquisitions.

Another nuance in the strategy: senior leadership is reorienting toward Infosys-developed talent rather than the outside team Sikka recruited. This emphasis on returning to the company’s Bangalore talent roots and deemphasizing Palo Alto talent will likely improve company morale in the short term and will save money. But it’s questionable whether this strategy will be effective in the long run, as Infosys needs digital skills and experience to lead the company into a leadership position in the digital marketplace.

Another area of the strategy – building and selling software-based solutions – appears to be gaining momentum. However, if much of the talent recruited by Sikka leaves and is replaced by traditional Infosys talent, these efforts may stall.

The Short-Term Picture

In the short run, I believe that Nilekani’s execution of the firm’s refresh strategy will improve. He has stature and enjoys the confidence of investors, employees, and customers. The reorientation back to Bangalore talent removes a major sore spot for Infosys traditionalists and removes an irritation in the short run. The halt to the open, public war among leadership, the board and the founders, will benefit the firm in the short run with improved morale, less customer and market confusion and a less constrained senior leadership team.

Adopting a more aggressive pricing posture was a major factor in accelerating the growth rate under Sikka. Although this was not specifically called out in any Infosys communications about strategy yesterday, it is clear from market intelligence that the firm continues to pursue new business aggressively and does not appear to be looking for the pricing premium that it traditionally looked to capture. Continuing the aggressive pricing posture will position Infosys to win new business and retain existing business.

The Long-Term Issues

Let’s look at the other side of the coin for the issues I mentioned above. The firm’s ongoing effort to return cash to shareholders may constrain Infosys in investments in developing intellectual property and acquiring digital companies and recruit and retain the talent required for becoming a digital leader.

To ensure flexibility and breathing room to gain share in the digital market, Infosys also needs to reset expectations on margins. The new leadership must be willing to challenge the entrenched company culture that is deeply rooted in the legacy labor arbitrage model. The culture must commit to a technology-led approach and very different digital delivery and new business models. In addition,

Future Success?

Much of the firm’s future success depends on its selection on the new CEO. It appears Infosys is looking at internal or ex-Infosys candidates to be the new CEO. If true, this is a departure from the strategy that resulted in hiring Sikka. At that time, the firm thought an outsider was necessary to challenge the entrenched culture and accelerate change. A CEO drawn from the industry or with an Infosys background may not be as aggressive in leading change. On the other hand, such a CEO may command more loyalty and face fewer internal challenges from divergent interests of the founders, investors, and employees.

I expect execution of the firm’s company to improve in the short run. However, Infosys still faces an uphill battle as it must change to succeed in a fast-changing industry. The significant flaws that became apparent in the Sikka-led strategy have yet to be addressed. If these flaws continue, they will constrain Infosys as it moves forward.

 

 

Nandan Nilekani may announce fresh strategy for Infosys | In the News

The spotlight will be on Infosys on Tuesday as it announces the September quarter results, the first after the exit of CEO Vishal Sikka and the return of co-founder Nandan Nilekani, as chairman. The company is also expected to announce a strategy refresh.

Peter Bendor-Samuel, CEO of outsourcing research firm Everest Group, said the future of the industry is in the new digital growth areas and Infosys must continue to push into them. “This means more acquisitions, continuing the investments in automation (the Nia platform), continuing the reskilling of the Infosys workforce, continuing the emphasis on design thinking, and continuing the commitments to hire more US and EU workers,” he said.

Read more in The Times of India

Q2 results and Nandan Nilekani’s new strategy today | In the News

Will Nandan Nilekani, the new non-executive chairman of Infosys, reveal his new strategy Tuesday when he announces the firm’s Q2 numbers? Nilekani has been working on the company’s new direction in the last couple of months since his re-entry.

Digital will be a key factor in Nilekani’s new strategy and Infosys has no choice but to continue to invest in this space, says Peter Bendor-Samuel, CEO of Dallas-based Everest Group.

Read more in Deccan Chronicle

Can Devops Be Delivered in a Distributed Labor Model? | Sherpas in Blue Shirts

Companies frequently ask us at Everest Group if the benefits a devops team can be delivered in a distributed labor model. In other words, can a company configure a devops team to operate with part of the team in one onshore location and other part of the offshore or in a different onshore location? To be clear, there is currently a significant debate around this question. Many tech companies and new service providers emphatically say devops can’t work in a distributed model. But legacy service providers with large investments in offshore talent factories argue that It absolutely can work and point to examples in which they are utilizing components of a devops model in an offshore and distributed manner.

Legacy service providers have a strong vested interest in maintaining their current offshore factories, which are highly leveraged with cheap junior resources and are working hard to persuade their customers that the offshore models only need an injection of devops technology. However, none of them appear to be running at the productivity level – or even close to the level – of devops teams that are not in a distributed model.

SMBs Turning To Finance and Accounting Outsourcing Because Of The Cloud | Sherpas in Blue Shirts

An interesting phenomenon is happening because of digital transformation. As enterprises collapse their technology and functional stacks through digital, it disrupts their talent model and leads to a new organizational risk. At the same time, it’s starting to drive a new market for service providers. Let’s take a closer look at this developing trend where it’s currently most evident – in the Finance and Accounting (F&A) processes in small and mid-sized enterprises.

In collapsing the technology stack, companies move from running financial management software on their servers with a license update to cloud-based SaaS systems (such as Intacct or NetSuite) that provide the software and a more flexible set of reporting functions. The standardization and functionality benefits are great.

Read More Here

Are you a senior-level employee in an IT firm? There’s bad news for you | In the News

Recently, about 400 senior executives of Cognizant accepted the company’s voluntary separation package. Cognizant had announced this programme for directors, associate VPs and senior VPs a few months ago.

Peter Bendor Samuel, CEO of IT consulting firm Everest Group, said industry growth has slowed and the ‘arbitrage first’ segment (traditional IT services) is in secular decline. “When this is added to the pyramid factory model, which requires new freshers to be brought in every year to keep cost low, it results in an excess of more experienced employees,” he said in an interview to ET in May.

Read more in The Economic Times

No, India’s High Tech Labor Isn’t Leaving The U.S. For Bangalore | In the News

If Silicon Valley thought that crackdowns on immigration in the U.S. would mean their favorite foreign worker would be hightailing it back to Bangalore, they are wrong.

Over the next three to five years, India will need around 40% less people than they current need for their labor arbitrage-based work, meaning outsourcing, or moving tech related service jobs to where the service can be done cheaper. Second, the real software and digital tech talent usually needs to be located in IT India’s main markets, which are the U.S. and Europe. Third, IT India has “over-hired” entry level computer science graduates and have too many mid-level employees who need training for the digital worlds being created on the backs of new technology like blockchain and artificial intelligence. The result is the continual churn of India’s IT employee base back home, says Peter Bendor-Samuel, CEO of the Everest Group, a global consulting firm with its headquarters in Dallas.

In the early 2000s, industry analysts said India’s advantage as a source for cheap tech talent would end by 2020. The consensus was that as wages rise in the U.S., it might just be easier for the Indian firms to move some labor back home.

“There is no doubt that India is still a a highly attractive and viable option for low-cost labor…and it will likely remain so for another three decades,” Michel Janssen, Chief Researcher at Everest, said. They now think India remains a hub for low cost tech talent way out into the 2040s!

Read more in Forbes

TCS to carve out a new brand identity for its artificial intelligence product Ignio | In the News

Tata Consultancy Services is creating a product brand for its artificial intelligence (AI) product Ignio and has hired from US companies to drive sales of the standalone product, a move that analysts say is akin to building a software company with a different model to its traditional services.

The company is working to ensure the Ignio brand is a standalone — with a separate website that has minimal TCS branding. Digitate, the unit that houses Ignio, is only once referred to as a TCS venture.

Indian IT companies have so far always sold their AI platforms as part of services and TCS is among the first to sell it as a standalone product. “TCS has taken a different approach to automation and cognitive computing than its competitors in the amount it is spending and that it is building its own software from the ground up and then attempt to sell it independently of its services,” Peter Bendor-Samuel, CEO at IT advisory firm Everest Group, said.

Read more in The Economic Times

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