How the Indian IT services sector is seeking to make its biggest transformation
Learners get trained on basics first and then focus on domain specifics, the expectation being to make a visible business impact.
Technology services businesses are used to change. Veterans in the $160-billion industry employing almost 4 million engineers fondly recall how they caught up each time technology changed — from client-server to business software (oh, that ERP!), web, internet, cloud and more. With each new generation (in tech, that can be as short as three years) they reskilled thousands, literally upgrading CVs as engineers diligently learnt new code.
In more recent years, though, the technology shifts have become tectonic. Growth is down to single digits from the high teens, even as companies in sectors from banks to automobiles consume more tech and look like technology firms themselves. Customers want the next digital tool that will help them stay ahead in the game and attract millennials to buy their products and services.
Today, tech outsourcers are expected to be up to speed with an alphabet soup of contractions — ML, AR, VR, AI, IoT. That’s machine learning, augmented reality, virtual reality, artificial intelligence, and Internet of Things. Besides, buyers today are not just chief information officers but include vertical heads like retail banking chiefs, product head honchos in consumer products companies, CMOs, CFOs and CSOs (chief strategy officers).
“It’s a perfect storm,” says Jagdish Mitra, CSO, Tech Mahindra, a $4.3 billion services firm. “Technology is changing, skills are changing, buyer behaviour is changing and geopolitics is changing,” adds Mitra, pointing out the contours of the storm. The biggest shift is of course technology itself, with customers demanding more of digital and less of traditional coding work.
Having borne the brunt of the storm over the last few years, companies are back to the learning decks. “TCS BSE 0.54 % appears like a classroom,” says Krishnan Ramanujan, president and head, business & technology practice at the country’s largest technology services provider.
Ramanujan who has been at TCS for 26 years has himself re-skilled several times — from COBOL to client-server to ERP to cloud, before moving into more stable managerial roles. But the reskilling he’s witnessing now is like none he’s seen before. “Several thousand associates get reskilled every month. There are 65,000 digital skills that engineers are getting trained in,” says Ramanujan.
Future archaeologists looking for clues of changes in this era will notice the unmistakable shift from traditional software to the smarter digital age. Says Mitra, “Our goal is IT to DT transformation.” DT, or digital technology, includes analytics, non-linear platforms, AI, ML, IoT, among others. At present Tech Mahindra gets 32% of its business from DT. Digital is TCS’ fastest growing business, albeit on a base much smaller than the traditional slice of the pie. In the April to June quarter of this fiscal year, digital grew 29% over a year ago, and contributed to 19.1% of revenue. The non-digital business, about 81% of the total, grew less than even the industry average at a snail’s pace of 6-7%. “Every customer asks for digital skills. Pressure to learn has increased,” says Ramanujan. Employees are learning all the time via nano-courses or even 15-minute podcasts.
In the first quarter of this fiscal, Wipro, among the top five services providers with revenues of $8.48 billion, trained 15,000 employees. Some 75,000 of the total workforce of some 167,000 have been armed with digital skills. In the same quarter, digital revenue was 22.5% of the total. Wipro BSE 0.65 % has created technology academies that provide hands-on, immersive training by way of virtual projects. Talent transformation initiatives such as TopGear, OneVoice, Adroit and Prism are helping reboot sales teams, delivery leaders and technology talent.
Meantime, the $780-million Mindtree has developed a digital learning platform called Yorbit. “This offers over 1,000 courses covering 500 digital skills to create the digital engineer of tomorrow,” says Krishnan KS, whose designation offers a clue to the task at hand – he’s associate vice president for culture & competence. Yorbit trains engineers on big data, cloud tech, mobile and new-age design thinking. Engineers can opt for learning capsules including 101, 201 and 301. The first doze is bite-sized learning for a few hours, the second offers up to 40 hours of study material and the third offers a deep dive into future tech with 100 to 200 hours of learning content. Close to 40% of Mindtree’s business comes from digital segments.
TechMahindra has similar nomenclature to Mindtree’s for its digital skills programs, although the different levels in this case refer to proficiency acquired. IT starts with 101, which is mandatory for all its 116,000 employees, and goes up to 401. The final level, says Vaishali Phatak, head of technical training at Tech Mahindra, “transforms the client-server era engineer into a digital consultant, working on new-age design thinking.”
Phatak explains the change in connecting with customers. For example, many newspapers in the US are using robots to capture data. “We provide learning on the job. Training is for 20-25 days spread over three months.” 101 gives the basics of digital businesses, 201 gets into domain specific learning like use of digital tech in healthcare or auto industries. Next, 301 is hands-on training on solutions, a must-have for software architects. And 401 helps upgrade to become the ultimate digital geek. With employees spending considerable time in upgrading, this is easily the single largest re-skilling exercise across companies.
While most take the usual academic route to upgrade employees, a few are choosing less conventional paths. For instance, HCL Technologies BSE 0.71 % is looking at partnerships, like the $780-million intellectual property pact it entered into with IBM to get new business and develop stronger competencies in areas such as DevOps, UX (user experience) modernisation, automation.
“Our approach to training is practice centric,” says Subrat Chakravarty, senior VP, HR operations, HCL Technologies, the Noida headquartered $7.2 billion company with 126,000 employees. Be it cloud solutions or cybers ecurity or IoT, employee training at HCL is aligned to specific customer needs and projects they work on.
“We have decentralised training to bring it closer to business, that helps us get better training RoI,” adds Chakravarty.
Chakravarty acknowledges this is the most disruptive and sweeping change that companies and customers have embarked upon. But there’s no need to panic. “In the past industry scaled up to newer technologies. It’s doing it again now; of course the change is most significant now,” he adds. At $14-billion Cognizant, the style of learning differs, more in sync with millennials than traditional classroom learning.
James Lennox, chief people officer, Cognizant says: “New digital-age learners prefer social connects, gamification and learning at their own pace,” says Lennox. Cognizant has created a Digital University platform, which provides a series of gradational learning paths. The pitch: learn, practice and perform.
Learners get trained on basics first and then focus on domain specifics, the expectation being to make a visible business impact. By end-2017 Cognizant hopes to have a cadre of 100,000 AI, IoT, cognitive computing experts, among other specialists, in a total workforce of 256,800.
CHALLENGES OF SKILLING ALL
While companies are following multiple paths to digital nirvana, getting all employees future-ready, beyond the basics, may neither be possible nor desirable.
“There’s plenty of legacy work,” points out Cognizant CSO Malcolm Frank. “You still need people who can manage traditional IT and you still need those skills.” For example, front end for a bank may be an app, but back end is still mainframes and client server architecture. Similarly, airlines may not shift their critical systems like flight operations to digital till technologies stabilise. Hence need for traditional skills will not go away very soon.
Besides, the pace of change is so rapid that it can overwhelm employees. For example, even as cloud and analytics mature, the next wave of disruptive technologies like blockchain and additive manufacturing is already upon us. Lennox points out, “The scale of the opportunity is exciting. Professionals are expected to apply digital expertise to business problems. However, the ability to learn new technologies even before previous technologies have reached maturity is crucial.”
Some 150,000 sensors are being embedded in almost everything across industries every minute. In a few years, there will be more than 80 billion sensors –embedded in everything from toasters, electric meters, cars, drones, virtual mirrors, e-commerce shipments, bus seats — the subsequent data deluge will need new thinking in analytics to design. Shelf lives of technical skills is getting squeezed while at the same time learning agility, adaptability and creative thinking are becoming key differentiators. Humans who master the tricks on this unstoppable learning treadmill will create the best AI, ML tools and will be the most sought after—both by the services companies and their customers.
February 17, 2017
September 13, 2017