Everyone is talking about disruption and how it affects the Indian software narrative. At the outset, let me replace the word affect with influence, for what is happening is influencing rather than affecting. While international politics, the rise of technology disruptors, drive towards digitisation etc. are external factors, implementation of GST, demonetisation, Digital India etc. are internal dynamics that call for rapid innovation and disruption.
4th industrial revolution
The world is at the tipping point of an unprecedented technological revolution driven by the convergence of physical, digital and biological worlds. This, the 4th industrial revolution, will change our lives, and has already started an irresistible drift which will renovate the world with an exponential leap and will force everything change.
As discussed by World Economic Forum, the 4th industrial revolution has the potential to connect billions more people to digital networks, dramatically improve the efficiency of organizations and even manage assets in ways that can help regenerate the natural environment, potentially undoing the damage of previous industrial revolutions.
Indian IT industry
Quoting an article that I read recently, India’s tryst with information technology (IT) started more than three millennia ago. Aryabhata laid the basic foundation of IT and digitization with the invention of zero. This is very true.
That the 4th industrial revolution will be driven by Information Technology is the biggest opportunity for India thus far. Indian IT companies can be the largest software suppliers for the next autonomous car, an IT company can be the next digital bank (Paytm already is ) or Indian software companies can drive the next wave of manufacturing powered by robotics, analytics, augmented reality and 3D printing.
Our industry, which has been a pacesetter in the last few decades, needs to understand, embrace and drive (and ride on) this exponential wave.
My take is that we should focus on the following:
1. Value creation
2. Building new competencies
3. Managing talent
4. Creating innovative delivery models
5. Leveraging the power of platforms
6. Providing enhanced customer experience
Indian software industry has been on the vanguard of several innovations, the biggest being the global delivery model. However, over the past few years, alternative delivery models, fuelled by the rise of SaaS and on-demand economy, have been transforming the IT landscape. From now, organisations which focus on value creation through innovations and tell apart offerings will be on a higher growth path than those which focus on traditional value drivers like cost reduction.
To build these innovations and offerings, it is important that we understand customer pain points, look out for what’s next, practice design thinking, focus on agile delivery for rapid prototyping and development, and leverage the power of cloud. This is important because organisations’ buying behaviours are changing and demand for technology innovations and outcome-based solutions are increasing. Indian software companies have to continue their flight, up the value curve – from being talent suppliers to being strategic partners.
Building new competencies
Augmented reality, 3D printing, artificial intelligence, machine learning, fin-tech, cybersecurity, big data and data analytics - the upsurge of these areas has disordered traditional business modes. Look at Tesla Model S, driven by software – it has only 18 moving parts compared to the 2, 000 in a traditional car
The rise of the areas mentioned above has been powered by amplified use of algorithms. Organisations across the world are using existing algorithms or developing new ones to build solutions. India, with its strong foundation in Maths and being the birthplace for algorithms, is best equipped for this. The Union Government, with initiatives like Make in India, Aadhar (the largest biometric database in the world), Start-up India etc. are providing impetus. Software companies need to reciprocate. As Michael Porter wrote - Ultimately, the only way to sustain a competitive advantage is to upgrade it—to move to more sophisticated types.
Future demands a very different, and more heterogeneous, talent pool, where the emphasis will shift from scale to skill. Even as several reports that suggest that nearly 40% of the current work-force in Indian companies cannot withstand the wave, I strongly believe that everyone has the ability to learn and upgrade his or her skills.
Leveraging current talent to its finest and training new talent – the two will have to happen I tandem. A culture of continuous learning has to evolve.
Companies can leverage the power of massive online open courses provided by online educators and universities, to upgrade the existing talent. Leveraging the power of 20 hour learning theory to quickly upskill the existing workforce, is another option. Software associations like GTech should work with governments and educational institutions to ensure skilling graduates with the cutting-edge.
Creating innovative delivery models
With software becoming core to the enterprise, the traditional mode of IT spending is decentralising. The old design-build-test-deploy model has also become obsolete. An agile approach coupled with a partner driven collaborative delivery model has already set in.
As we grapple with changing technologies, we need to look at digitizing key business processes, even if they currently are cash-cows, and make it future ready and scalable. For example, the traditional customer service model can be replaced by a chatbot supported by cloud providers such as AWS or Azure with human intervention only as needed.
In the era of cloud, enterprises desire to spend less on technology, upfront, and move towards outcome based models which are flexible. We have to align our organisational structure and service model to keep up with this trend.
Leveraging the power of platforms
Each customer wants to be treated individually while businesses need scalable solutions. To help customers / partners, we should leverage the power of platforms. Companies like Apple (as an app marketplace), Salesforce (as a CRM platform) and LinkedIn (as a talent platform) created platform based models which were able to address existing problems and were able to scale up quickly.
I must mention that in a recent study, it was forecast that in 25 years, 50 percent of the S&P 500’s collective net income (profits) will come from platforms. Apart from the ubiquitous financial benefits, platforms also provide businesses with several added benefits.
With a large data in hand, a large and growing population, the explosion of data and a strong support infrastructure, we are best poised to leverage the potential of a platform based business model. The larger IT companies are also quickly warming-up to the model. Moving towards a platform based approach will also help the Indian software companies become the customer owners in the long run.
Providing enhanced customer experience
Customer Experience has been and will be is the key to the success of any enterprise. . Digitization and the rising use of smartphones are establishing new standards for fast, seamless customer service in all settings.
We need to realize that customer experience is increasingly becoming a way to stand out from the peers. We should redesign the customer journeys end to end, addressing all dimensions of customer experience – process, people, products, feedback etc. It is important for the companies to understand the perspectives and needs of the multiple stakeholders and map the same into the customer journey.
Coming from the land of Mahatma Gandhi, who said Customers are not an interruption in our work, but the purpose of it, I am sure the Indian companies are best placed to do this.
Redefining India IT
Let us use our pole position to build on the strong legacy and capitalise on the disruptions under way. Future is opportunities galore; but also poses some questions to our software companies. Unlike 30 years ago, the Indian IT industry is the incumbent and innovation is primarily being driven by new age companies. We need to move up the value chain and become strategic partners to organisations and governments worldwide.
I must also reiterate the importance of our industry in our country’s landscape. IT industry has been a beacon of India’s economy, employs several lakhs and transform lives of several millions. As we move forward, it is important that we measure success not by the revenue that we make, but by the number of lives and societies we transform.
The previous industrial revolutions were driven by industries like iron, steel, oil, electricity etc. and these industries made several Western countries the global leaders. The 4th industrial revolution is India’s opportunity.