NASSCOM conducted the 30th edition of the NASSCOM Technology & Leadership Forum February 16-18, 2022. This year’s theme was Shaping the Techade: The New Now and the Next. The event was primarily focused on three key sub-themes:
- The New Wave of Growth
- Leading in the New – Maximizing the Impact of Tech
- Reimagining the Art of Possible: What’s New – Tech & Trends
ISG analysts attended all three days of this prestigious event that had a gamut of speakers from leading service providers, technology vendors, consulting and advisory firms, enterprise clients, startups and representatives from the Indian government.
“Techade” is a term coined to describe the next decade, which is largely expected to be driven by accelerated technology adoption among enterprises. The event focused on aspirations and actions of India’s Techade, and where industry leaders discussed the future of technology transformation, India’s digital roadmap and ongoing investments in innovative technologies. It also included focused discussions around acquiring and retaining talent and the future of work; driving customer experience and personalization with the help of data; and enabling cloud transformation. In addition, the event drew attention to the increasing traction on environmental, social and governance (ESG) aspects in future tech, human centricity and the efforts toward a sustainable future and a clean planet.
Two major themes that stood out in the event ― and had an impact on enterprises and service providers alike ― were digital transformation and talent, and how these will contribute in the coming decade to drive NASSCOM’s theme of shaping the Techade.
Digital Transformation: A Fundamental Strategy
Even before the COVID-19 pandemic, transformative technologies were making inroads into businesses, enabling them to be digital ready, gain efficiency and create value for customers. The pandemic compelled enterprises to fast-forward their digital strategies and adopt the digital-first model. It accelerated their digital transformation initiatives, at scale. ISG opines that if enterprises do not stay apace with innovation, they will fail to meet the desired business outcomes or become obsolete.
During the event, several service providers showcased technology initiatives that address the growing demand for digital transformation. Some initiatives have been detailed below.
Cloud transformation initiatives: Infosys, with its COBALT platform, helps customers in their cloud transformation journeys. Foreseeing great opportunities in the private cloud area, Infosys has invested significantly in establishing separate business units for the various hyperscalers.
Quantum computing and synthetic biology: Capgemini considers quantum computing, metaverse and synthetic biology as the three disruptive technologies of the next decade. Consequently, it is investing heavily in these technologies and has already built a quantum computing lab for developing futuristic applications for customers. It has similar plans for metaverse and synthetic biology. Capgemini plans to achieve this by creating a distinct position of a chief innovation officer along with soliciting the advice of vertical-specific experts.
Data, Web3 and metaverse: Accenture’s IDEAS framework is focused on five areas to help customers in their digital journeys: intelligence, data, experience, architecture and strategy. Accenture aims to leverage the latest technologies such as emotional intelligence, common sense AI, Web3 and metaverse.
Many providers such as TCS and Tech Mahindra are creating metaverse capabilities but have yet to realize revenue from these. ISG recently published an article on Web3 and metaverse exploring why it matters now and how enterprises can strategize to gain competitive edge. We anticipate that providers might increase investments in setting up innovation centers and creating frameworks to develop their capabilities around these emerging technologies.
In an increasingly digital world, customer expectations are changing. Investments toward a digital journey will help enterprises offer a quick turnaround time for results and faster time to market.
To gain better traction for their initiatives, service providers must focus on four key aspects:
- Industry vertical differentiation: Service providers should continue to invest in building cloud-based platforms, solutions and frameworks to address the needs of different industry verticals. Although a few providers have already embarked on this journey, sizable investment on building portfolio and talent along with vertical-specific innovation centers would help them in the long run.
- Strong partner ecosystem: For better access to the latest technologies such as metaverse, service providers can build a robust partner ecosystem that encompasses technology vendors, startups and academia across the world. For startups, they can either invest through their investing ventures or provide the required technology backbone.
- Proofs of concept: Service providers can develop proofs of concept on various customer challenges using the latest technologies and upsell them by leveraging innovative cost models.
- Technology democratization: Service providers offering digital transformation services should focus on creating value through transformation projects and offer low-code/no-code tools, allowing room for citizen developers.
Talent Crunch and the Great Resignation: A Threat and an Opportunity
In the pre-pandemic era, enterprises could possibly take as long as a decade to reach a certain level of tech adoption. However, the pandemic triggered rapid technology adoption and digital transformation initiatives across industries in the last two years. There was a sudden spike in demand for (already scarce) digital talent across geographies, but the digital skills available were not adequate to meet this demand rapidly. This scenario escalated the talent war primarily because the remote working model allowed providers to source candidates from different geographies to fit in with their requirements, contributing to what is being called the “Great Resignation.”
The remote working model has extended office boundaries and created the pressures of surging wages and the requirement for more investments for training, reskilling and upskilling. It has also given rise to difficulties in retaining talent for both providers and enterprises. The recent ISG Global Advisor Pulse Survey (referenced from ISG Index Insider) found that enterprises are addressing attrition in the IT segment by evaluating alternate providers, agreeing on price increases, delaying negotiations or project work, adding or enforcing attrition-related SLAs and by allowing providers to use more subcontractors.
Concurrently, talent, as one of the competitive advantages for service providers, has witnessed a surge in investment with increasing focus to curtail high attrition and talent inadequacy. For example, Infosys created learning pathways, based on identified digital skills, on its Lex learning platform. It included “digital quotient” as an evaluation parameter for its employees. The company is also planning to hire 55,000 fresh graduates in this fiscal year and will be equipping them with comprehensive training to make them market ready. Similarly, Capgemini is focused on hiring fresh graduates, rehiring recently resigned employees to expand its talent pool and adopting focused talent retention strategies. Accenture recently announced expansion to tier-2 cities with definitive plans to set up office spaces in two such Indian cities. Such expansion is seen as a strategy to retain talent and offer more work flexibility. Likewise, HCL has adopted a similar strategy of hiring fresh talent, at scale, to meet the demand, offering stock ownership as a method to retain top talent.
The current supply and demand imbalance in digital talent requires a mix of strategies. ISG believes that talent is the centerpiece of the service ecosystem and investment in talent should be one of the top priorities of service providers. While hiring fresh graduates could be a short-term strategy, offering the existing talent competitive remuneration, flexibility, alternatives of asynchronous communication and focus on learning and development can help providers stem the tide of the Great Resignation and benefit from a large digital talent pool in the long run.
The hybrid working model and the gig economy seem to be the future. It is critical to build processes and a culture that put emotional wellbeing and empathy closer to the top of the employee experience.
Conclusion: Focus on Innovation, Radical Thinking and Business Purpose
Digital adoption was once limited to a few large enterprises and specific industries. However, the pandemic pressed for technology adoption across industry verticals. The dire need to have a resilient, customer-centric, and future-ready business has led enterprises of all sizes ― large, medium and small ― to transform their business models. At present, enterprises are at different stages of the technology adoption curve. However, within a decade’s time, adoption is expected to scale and become the way of business worldwide. NASSCOM has been shaping this “Techade” with key themes that have a strong focus on digital transformation and talent management.
With a robust IT service provider landscape and a vast technology talent pool, India is positioned to take center stage in this transformation. Technology adoption with a strong focus on purpose-led innovation in a sustainable way should be a complementary theme for this transformation. This resonated with several speakers in their discussions during the three-day NASSCOM event. Taking a mixed-model approach that is driven by frontline workers and the right technology stack – and evangelizing technology (digital literacy) throughout the enterprise – could help unlock the true potential of digital transformation. This will enable enterprises to adapt to future digital technologies in a short timeframe. Therefore, innovation, radical thinking and business purpose remain the key imperatives for enterprises to thrive in the long run.
Service providers should focus on creating industry-based solutions, providing innovative cost models and democratizing technology with low-code/no-code tools. They should nurture talent by providing staff with right upskilling and reskilling opportunities, support them with the right set of technological tools to boost productivity and provide flexibility to innovate. According to the ISG IndexTM data, attrition is back to pre-pandemic levels, and providers are adopting all strategies from hiring to retaining talent.
About the authors
Akhila Harinarayan is the lead author for ISG Provider Lens™ with a focus on Digital Business Transformation and SAP Services. She has more than 12 years of experience across research and consulting including provider strategy, enterprise strategy, industry roadmaps, point-of-view papers, service provider assessment across regions. She brings in her expertise on strategy and transformation, digital insights, thought leadership, benchmarking, market assessments and go-to-market strategies.
Mukesh is a senior analyst with ISG, with key interest in market and industry research across emerging technologies. He is responsible for supporting and co-authoring Provider Lens™ studies on intelligent automation, IoT and others. He brings in more than 6 years of experience with expertise in cloud, automation, IoT, and technology research.
Riya is a senior analyst with ISG, with key interest in research on go-to-market strategies, account intelligence, benchmarking studies, and report writing. She comes with around 4 years of industry experience and is responsible for supporting Provider Lens™ studies in Retail & Consumer Packaged Goods domain.
Srinivasan PN is a senior research analyst at ISG and is responsible for supporting and co-authoring ISG Provider Lens™ studies on AWS Ecosystem, Insurance BPO, Mainframe and Cybersecurity studies. He has over 7 years of experience in the technology research industry. His area of expertise lies in the space of engineering services and digital transformation.