The outsourcing industry has been Indian IT’s growth engine for decades. Now, amid a massive churn, threatened by automation and a landscape staring at rapidly shifting technology needs, Indian IT companies need to speed up the pace of change to stay future proof. Today, the industry is fraught with rapid challenges and opportunities and digital has been woven into every facet of business.
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In other words, the convergence of Artificial Intelligence, Internet of Things (IoT), AR, VR and blockchain has ushered in a new wave of business models that tech leaders have to brace with. According to a new research, titled Ready Or Not, Disruption Is Here by Marsh Risk Consulting, companies today are ill-equipped to handle the change. One key highlight is that for current players– the shelf life a company survives on the S&P 500 has come down to 18 years. Some of the barriers listed to adoption of disruptive technologies are: a) inability to model the magnitude of risk; b) lack of regulatory clarity; c) lack of resources; d) lack of senior management buy-in.
Embrace digital or go bust – tech leader’s new mandate
In the Indian context, the companies are at a tipping point of disruption and the tagline business leaders are hammering out repeatedly is – Embrace digital or go kaput. According to industry veteran Vanitha Narayanan, Chairman of IBM India Private Limited, disruptive has to be the new DNA of a company. “When you start to put things like IoT, blockchain and AI cognitive, it is your entire ecosystem, it is your employees and you have got to take the fact that your millennial want to work and live differently and your customers want to interact with you differently,” she said at a summit.
However, old legacy companies are at the losing end of the game. Rana Kapoor, Founder, Managing Director & CEO, Yes Bank, surmised at a summit, “Old institutions have deep pockets, they must keep the vision intact and change strategies and follow the FANG strategy (Facebook, Amazon, Netflix and Google). So you adopt these global strategies and look how Uber and Airbnb have become global multinationals”.
Has India Inc embraced disruptive tech — report card
Today, disruptive technologies are all massed under the same rubric – Artificial Intelligence with companies like Infosys and Wipro making significant investment in AI platforms. Infosys has the newly renamed NIA while Wipro is banking on Holmes to deliver the goods. Besides, there is also frenzied activity in acquisition space, with companies strengthening automation/AI platforms through M&As. Interestingly, global consulting giant Nielsen has put its might behind pursuing reverse innovation programs to innovate in emerging economies and adapt these innovations in developed markets. Recently, EY unveiled its first AI centre in Mumbai to help clients in the implementation of emerging technologies such as AI, robotics, machine learning and cognitive technology effectively.
While AI is already being deployed across several industries such as telecom, technology, manufacturing, automotive, finance, there is still a growing need for enterprises to gauge how best to deploy it to their advantage. A recent survey findings indicate that B2C companies are quick to adopt emerging technologies while B2B is the slowest adopter. According to a KPMG survey, 56 per cent of tech leaders admitted that disruption had a positive impact on their businesses and leveraged it shape their organization’s business model.
- In a fast moving technology, tech companies are uncertain which disruptive technologies will be the real game changer: with so many emerging technologies such as robotics, 3D, VR picking the winner is a tough call
- Another key constraint is that disruptive technologies are undermining the company’s business model and has spawned a new breed of competitors within the industry itself
- Traditionally, business invest in proven technologies that leaves them behind the curve
Disruptive means breaking down boundaries
Case in point: Uber and Tesla are essentially tech behemoths but are pushing into automotive companies. Globally, automotive companies are pushing ahead in customer interface technology, through AI and image processing to improve autonomous vehicles. This is a direct outcome of innovations led by firms looking for new solutions that are not currently on the market. Richard Hanley, US Advisory Industry Leader, KPMG noted in a report that Google, Facebook and Amazon have come up with innovative ways to manage computing power and networks and have developed solutions that can be monetized, thereby posing a direct threat to legacy players like HP, Cisco and Ericsson.
Disruptive technology means breaking down boundaries within industries. Let’s map out the top three technologies that are having the greatest impact: data & analytics; cloud; mobile occupy the top three slots. Meanwhile, AI, digital payments and currency, VR/AR, robotics, wearable devices and 3D printing take the second half. In terms of driving productivity, quality and reducing overall costs, these five technologies take the top slot – IoT, Data & Analytics, Robotics, AI and marketing platforms.