Mechanics, Economics and Humanics of IT Services for Digital Enterprises

By: Samson David, Senior Vice President, Commercial Delivery, Offering Delivery & Transformation and India Co-Lead, DXC Technology

We are truly at an inflection point in the history of business. As we look at the world around us, we see a massive fusion of bits and atoms, across industries and geographies. As the digital and physical worlds come together, it is clear that as they coexist, they complement and even amplify each other.

This fusion is primarily being driven by two forces: imagination and technology. Imagination is about exploring possibilities by questioning and upending the status quo (e.g., do I need to own a fleet of vehicles to run a transportation service, are physical stores required to run a retail business, etc.).

Technology converts those possibilities into reality. The outcome of this is a disruption of incumbents, across industries, through a large-scale disaggregation of traditional business models. Across industries, incumbents are finding themselves disrupted if they don’t keep pace with technology and respond in a timely and strategic manner. The imagination-led and technology-driven companies are the ones responsible for causing this disruption.

Many of the incumbents being disrupted are seeking guidance and support in navigating this significant change. Technology services organizations can play a pivotal role by partnering with their clients to identify the elements of change and then “getting it done.” This entails focusing on three pillars: Mechanics, Economics and Humanics.

Mechanics

While digital transformation is inevitable, legacy systems form a significant component of any large organization’s technology landscape. To start with, these systems must continue to run with utmost tranquility, without any interruptions to business. Furthermore, technology operations need to be run hyper-efficiently, leveraging advances in areas such as analytics, artificial intelligence and DevOps. This will set the stage for the subsequent phases of the landscape evolution toward digital.

The next phase — which doesn’t necessarily follow in sequence — is a renewal of the landscape to make it ready for the future. While running of the legacy systems can be managed independently by the technology provider, the renewal needs to be driven in close partnership with the client. This involves modernizing not just infrastructure and applications, but also processes and mindsets. For example, customer service will increasingly incorporate chatbots to handle automated interactions to free up engineers for more creative tasks.

In parallel with running the core systems with tranquility and renewing the landscape, the future must be reimagined. This requires an even stronger partnership, not just between the client and the services provider, but also involving the larger ecosystem. Re-imagining helps organizations reinvent themselves so they are not just fighting the headwinds of change, but becoming disrupters in the space.

Economics

Economics plays a key role in decision making in every business, both during steady-state operations and while making future-looking investments. From a digital disruption standpoint, there are various models emerging that place a greater emphasis on outcomes and risk/reward rather than on effort alone.

While most businesses face downward pricing pressures on an ongoing basis, it is imperative to focus on the value generated for clients, for the organization and its stakeholders. In the process, it is also important to positively influence and impact the ecosystem players in a manner that yields greater results for them. In short, it’s about “doing more, with less, for more.”

Humanics

That brings us to the human element. Transforming businesses to align with the modern digital context requires deep cultural changes. In the past two decades, technology services delivery involved building an at-scale workforce spread across different geographies. The associated talent metrics were around offshoring ratio, pyramid, utilization and attrition rate.

A 2016 survey by the Freelancers Union showed that up to 35% of the U.S. workforce is made up of freelancers. This trend is gathering momentum in India and other regions as well. In the new digital business environment, cultural change management includes changing delivery structures as well as building a thriving workforce that includes robots and freelancers (digital workers). This enables the transition from the traditional onshore/offshore model to an onshore/offshore/“no-shore” model. This relates to the coming together of bits and atoms, but with a strong underlying human dimension. This change needs to be brought about by rethinking the fundamentals of hiring, training, performance management, career development and the entire hire-to-retire life cycle.

While the business and industrial world has seen multiple revolutions in the past, this particular transformational phase is much more inclusive and democratic, requiring entities to work together to create solutions with a forward-looking vision. That is where organizations with a stronger history of partnerships and collaboration will have an edge over others in the market.