Customers want IT providers to invest in digital

Indian IT is seen as a le­ader in the global race to bu­ild skills around automation technologies and domain- sp­ecific expertise. Automati­on has existed for as long as the industry has and is a na­t­ural progression of search for efficiencies. It started off in the form of automation of specific areas like testing, remote infrastructure monitoring, or claims processing, and has now reached a stage where bots can takeover low -value tasks without need for human intervention. Automation has resulted in an improvement in average re­v­enue-per-employee from $15,000 to $56,000 between 2008 and 2018 as it allows resources to take on higher value tasks that require subject matter expertise in te­c­h­nology or vertical specific processes. Digital is another jo­urney in search of even be­tter value propositions, said Hansa Iyengar, a senior analyst at London-based consulting firm Ovum, in an interview with Mini Tejaswi. Excerpts:

How do you view the status of Indian IT industry?

There’s no doubt that the In­dian IT industry is curre­n­tly facing headwinds, whi­ch threaten the growth pro­s­pects. Shifting spending patterns, tightening visa regulations, geo-political uncerta­inties and internal metamo­rphoses are all posing major hurdles for a sector that has seen its margins getting thin and growth peter out over the past few years. But it’s just another ph­a­se in the evolution of the industry and it will bo­unce ba­ck li­ke it has done before. This phase is temporary – it’s a time for reflection, realignment and regrouping.

What are new customer expectations and demands from IT providers?

Services using new techno­l­o­gies like artificial intellige­n­ce and machine le­arning, IoT, analytics and UX (user experience) de­sign form the core of ent­erprise demand around digital services. It requires vendor to work directly and clo­s­ely with clients, provide co­n­sulting around business pr­ocesses and technology ro­admaps, which are different from what vendors are us­ed to doing. The current bu­sin­e­ss environment is fo­r­cing In­dian IT to recalibrate st­r­a­t­egies and go-to-ma­rket app­roaches. Resource-based ef­ficiencies are being replaced by efficiencies of automati­on, demand for IT is being dr­iven by need for value ra­t­her than need to lo­wer costs and traditional lift-and-shift work is being rep­l­aced by hi­gher value work that requ­ires a different set of skills.

What kind of investments are bing made in digital?

Clients are making serious in­vestments in digital. But th­ey are reluctant to spend la­rge amounts on untested technologies and want vendors to invest in pilots and tr­ials to get an idea of capabilities before scaling up – and this requires vendors to put more skin in the game. These are areas that are relatively new to Indian vend­o­rs and require them to bu­ild new capabilities, partnersh­ips and engagement models as well as reinvigorate th­e­ir talent pool. This takes time.

Indian tech players are vying for a sizeable share in digital engagements. Wh­at’s the future outlook for digital?

We are witnessing an evolution of Indian IT. Portfolios have been realigned to add­ress client’s digital ag­e­ndas, acquisitions are being made to bolster capabilities, and the industry is investing in re-skilling nearly 50 per cent of its talent to reorient them towards digital services.