Last week, IBM announced it would invest as much as $3 billion (Rs. 18,000 crore) over the next four years to set up a new Internet of Things (IoT) unit. Please remember that the giant is no longer a product company, although it makes some, and is essentially a consulting and services company that is market leader in the IT services industry.
The news is symbolic of how there is a new round of reinvention ahead for Indian or India-centric companies such as Infosys, Tata Consultancy Services (TCS), Cognizant and Wipro, which have already taken some steps in the direction. This may be their most challenging phase yet, because this is no longer about bringing Westbased work to India at lower costs, but to cope with automation of services by advanced pieces of software or its new, hybrid cousins.
IBM says 90% of data generated by devices such as smartphones, tablets, connected vehicles and appliances is never analysed or acted on. As such data becomes part of manufacturing businesses, clients of IT services change, and with it, the way software-driven services respond to it.
Last month, Cognizant released a study of 537 senior decision-makers under its “Center for the Future of Work” that focuses on intelligent process automation (IPA), which in plain English more or less means “work done earlier by real people”. The study says software robots and concepts such as machine learning, artificial intelligence and Big Data (analysis) are driving savings, speed and insights in client companies.
On an average, 25-40% of the workflows are getting automated today, Cognizant said, quoting its executive vice-president Gajen Kandiah: “The future of process work includes connecting skilled people to increasingly powerful technologies...This shift is playing out in just about every industry.”
“To take advantage of new, cloud-based opportunities, today’s companies will need to fundamentally rethink their orthodoxies about value creation and value capture,” the Harvard Business Review said last year in article titled “How the Internet of Things Changes Business Models” – and argued that a simple emphasis on cost, focus or differentiation from competitors will not do in future.
The article’s focus is mainly on manufacturing companies, but given the rise of software automation and the fact that these companies are the clients for Indian IT companies, what this means is that in hiring, training and rewarding their knowledge workers, they have to move well beyond the past and current practice of hiring and managing code factories.