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IT Services Companies has operate as Ambidextrous Organizations

Sushma Rajagopalan is Chief Executive Officer & Managing Director, ITC Infotech . She is also the Chairperson of NASSCOM IT Services Council. With over 28 years of experience, Sushma has held senior positions at various companies including CMC, Citicorp, iGate, Zensar, L&T Infotech and LiquidHub in leadership roles across HR, global business operations, marketing, sales & delivery, consulting and M&A. She has led organizational transformation, headed strategy and corporate development and has been responsible for several large deal acquisitions through planned strategic investments. Sushma has won numerous accolades which include “Innovator in Technology” in 2013 and “Best Technology Woman Leader” in 2011. In an exclusive interaction with DATAQUEST sometime back, Sushma talks about the disruptive trends that are altering the IT services landscape.

At this point in time, how do you see the trends in the IT services space?

There is an interesting paradigm shift happening in the industry, which I would call it ‘ exploiting the now and exploring the new’. With the changes that are happening in the industry right now, IT services companies has to operate as ambidextrous organizations. What does it mean?  We need to manage the disruptions on the demand side and at the same time is aware of the disruptions happening on the supply side. On the one hand on the demand side, the clients are grappling with the digital transformation challenges and on the demand side as a vendor, I need to be proactive to these demand-side disruptions and address the challenges convincingly and be relevant.

I believe that the industry is going through a major transition across many fronts. First, let’s take the delivery models. Here the industry started as ‘body shoppers’ and then it evolved into ‘a fixed time projects on a fixed price model’. Then came the whole concept of outsourcing with geography agnostic delivery of services with SLA’s ruling the project delivery. Then managed services changed the whole equation with a value being associated with services completed. The current and next generation is the ‘on demand age’ where most of IT can be delivered ‘as a service’. Building huge skills to address the ‘anything as service’ demands will be key and all service providers are building a whole lot of non-linearity to up their overall value quotient.

How are these new business demands and delivery models impacting the vendors?

I believe despite the disruption, it is still a mixed bag out there with old models complimenting with the new ones. Having said that, its no brainer then that increasingly traditional software that is consumed in most cases is also available ‘as a service’ as well. That obviously is impacting the traditional software maintenance costs, which are coming down. Any company that derives a whole lot revenues out of software maintenance work will obviously be impacted and we need to be amply prepared as we transition to the ‘on demand age’. Other trends, I am seeing is that with implementation cycles for software coming down dramatically, the large scale annuity contracts are being replaced with short-term implementation ones and the deal value has come down. There is also a shift towards pre-packaged solutions.

How are you aligning your competencies to the new normal?

We are building a very strong technology and business consulting practice, and we are leveraging domain expertise across verticals and have a robust, scalable and sustainable delivery model that can address the wide-ranging disruptions happening in the industry right now.

Do you see a shift in the global delivery models?

I see a shift in terms of increased local delivery.  Going forward it will not necessarily be the current proportion, maybe it will be like 50:50.I do see a shift in the global delivery models as we move forward.

On Innovation

Well, here I am going to differentiate between innovation and ‘innoruption’. In my personal view innoruption is the disruptive innovation. This is where we need to focus on, otherwise, if you look at say, a subsequent product version and make some changes, it is just innovation, but not necessarily disruptive. So clearly, to address disruptive innovation, we need to have a R&D mindset. Yes, services companies can also do R&D, and the concept of only services will be challenged in future and we need to build non-linearity in many different forms.

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