Reskilling will redefine Indian IT firms' biz model

The global IT industry, which is now valued around $146 billion, is undergoing dramatic changes as the technology landscape led by social, cloud, analytics, automation and mobility, and calls for skill sets which are niche and specialised. Since client centricity is the driving force for service delivery, IT companies find an innate demand that employees should come up with innovation as a differentiator.

Realising this importance, Indian IT companies are reskilling their talents in newer areas so that the gap can be filled at the earliest, which will help them in unique service delivery. The Indian IT sector, which employs over four million people, is looking at these reskilling initiatives in an endeavour to become partner of its clients at a time when the business environment is going through turbulent phases.

Indian IT sector evolved itself by taking various cyclical changes in the industry head on through turbulent times, and looked at every obstacle as a business opportunity. Not to be left behind, they have started the initiative of reskilling their employees form the next journey. In an interaction with Deccan Herald, Mphasis Chief Executive Officer and Executive Director Ganesh Ayyar said the IT sector is undergoing tremendous transformation on a fundamental level which will decide the new champions in the IT world in the next decade. “In an age of digital transformation, focusing on specific areas of business and achieving excellence is the need of the hour. A culture of experimentation within organisations leads to innovation,” said Ayyar.

Reskilling initiatives have been looked at from the perspective of product and services companies which are feeling the heat from the startup wave and companies bring in a platform-centric approach in service delivery and customer acquisition. Here, we have look at reskilling from the prism of lack of high-technology talent for Indian IT companies, as they are taken away by platform-based new age behemoths and startups who have come up with new business models.

Indian IT companies had to face skill deficit during the initial stages, as there was a widening demand-supply gap, fuelled by lack of knowledge and disconnect between the industry and educational institutions. As Indian IT companies grew at a faster pace, and there was more demand for engineering managers, project managers, among others. These skill sets became commodity skills in the market that companies started looking at less experienced managers than experienced ones. Since unlearning was necessitated by technology changes, companies also started recruiting medium and fresher candidates.
According to Wipro Vice President and Global Head (Talent Transformation) Vishwas Santurkar, the company introduced Newton’s Cradle as part of its reskilling efforts. “The benefit from Newton’s Cradle is two-fold. Newton’s Cradle provides an opportunity for our experienced employees to engage in high value projects in digital domain and for newer employees to fill in for the experienced employees. The technology landscape is quickly moving towards business requirements in the digital space,” said Santurkar.

Newton’s Cradle has created a huge opportunity for top performing experienced employees to get reskilled in digital and emerging skills, like analytics, big data, cloud, artificial intelligence, among others. At the same time, it provides the fluidity to existing engagements where newer employees come in as replacements and enable the establishment of a better pyramid in these projects.

Wipro has made it clear that employees have been trained in technologies that the company has internally identified. These include advanced Java, new web and mobile frameworks, analytics, DevOps, automation, next-generation networks and cloud platforms and IoT.

India’s second largest IT services company Infosys COO Pravin Rao said it is not that there are tens and thousands of people available with experience in new technologies. “The idea is to reskill people. If technology changes and people don’t have those capabilities, you’ve to reskill them and reorient them,” said Rao.

Vishal Sikka, CEO of Infosys, made it clear that the company’s futuristic plans regarding efficient utilisation of talent and the resources. “Infosys is aggressively pushing towards automation and focusing more on areas such as Virtual Reality (VR) nowadays. The company plans to deploy automation across its top customer projects and be more profitable by reducing its bench,” he said. Besides making Infosys a $20-billion company by the year 2020, the company under the leadership of Sikka also lined up plans to make 81% human resource utilisation and increase the revenue per employee from $50,000 currently to $80,000 per employee in near future.

But there is an apprehension in the technology parlance that automation and frameworks will bring down the cost of development. Since the developers number has been reduced, companies do not need so many engineering managers, project managers, quality managers, tech managers etc. So it is likely to happen that a massive shrinkage in the number of employees need to do a project, but need a different type of employee to get the work done. Now companies are looking at employees who are capable of seeing big picture of business requirements and understand technology well enough.

According to a recent survey, the total SMAC opportunity globally is expected to grow 75% to $287 billion in 2016. Techies with over the last 7-8 years and doing the same job/role for the last couple of years are finding far and few between in the traditional IT roles. With the entry of AWS and Google, the number of people needed to maintain servers are really flattening. Massive automation and deployment of cloud service help firms ensure jobs which were done a team of 100 people can now be done by five really good dev-op guys.

NIIT Technologies Vice President (HR and Head — Learning and Development) Deepa Mukherjee said, as a technology partner, customers also expect us to understand their customers, bring more value and exhibit excellent service levels. “Therefore, employee skill sets for our industry are no longer restricted to technical areas. Client centricity has made domain expertise a ‘must have’ skill than a ‘good to have’ one. As a technology partner, our customers also expect us to understand their customers, bring more value and exhibit excellent service levels, therefore, employee skill sets for our industry are no longer restricted to technical areas,” said Mukherjee.

NIIT Technologies finds that reskilling has certainly a positive impact on the productivity. “Many a time, clients have specific skill requirements with some particular product or technology for which they are also willing to invest in reskilling our staff. The clients themselves pick up licensing cost associated with it, if any. The advantage is employees are getting a hands-on experience and direct involvement of client domain experts,” she said.

Roll of startups

Startups have focused agendas which give immense opportunity for learning in a challenging environment and exposure in specific areas. Employees gain exposure, develop skill sets and look to be a part of larger and stable organisations, and hence, migrate to new jobs once they are skilled.

Startups have emerged as a hunting ground for lateral hiring, and at times, they are also acquired by larger companies to build capability in particular areas. Besides the $100-million fund driven by Rishad Premji, son of billionaire Chairman Azim Premji of Wipro, companies like Infosys have set up Innovation Fund with a corpus of $500 million so that they can invest in companies and also take solutions to clients. Banking on their aggressive acquisition, for example Infosys buying Skava and Panaya; Wipro’s buyout of Designit; and Mindtree acquiring Magnet 360,  Indian companies have brought another strategy to bring in new technology and skills.

Wipro made it clear that the company use innovative tools designed by startups in our reskilling activities. “New platforms for content delivery, assessment of skill level of employees are some examples of tools that we use,” said Santurkar.

“Recruitments for niche technologies have particularly gone up. The demand of talent for niche technologies is forcing us to create a robust ‘build plus bring’ strategy for managing this capability. Even though skilling is done internally, IT companies are also seeking the help of many skill-based specialised training providers such as Edureka, Jigsaw Academy, Simplilearn, among others,” he said.

Proactive reskilling ensures that we are able to address customer requirements in a timely manner and ensure quality in the deliverables. This leads to improved customer satisfaction and confidence. Ability to deliver projects to schedule with high quality ensures a positive impact in client satisfaction.

Phill Simon in his book The Age of the Platform states that, “Without question, the Gang of Four has built the world’s most valuable and powerful business platforms. He states that creating a robust platform does not just hinge on consistently developing great products or services. “Rather, it requires a completely different mind-set. Companies must not only exist, but they must thrive in a state of constant motion. They need to constantly reevaluate and redefine basic precepts such as: What they currently do? How they do it? What they could do? How they could do it? With whom they do it?  How each piece interacts with other parts of its ecosystem and the world at large?

Hope Indian IT companies learn what Phill Simon said and redefine their service delivery and product development.