It’s been a difficult few weeks for me personally . First I lost Hobo . Then I had to rush to India since my father fell critically ill and passed away . It was not clear if or when I could return to US given the Corona virus situation – and after being away for three weeks , I got home yesterday . It took me about 30 hours door to door and most of that time I was thinking about how the world around me is evolving at a break neck speed .
Obviously I have no crystal ball to gaze into the future and I have done no scientific studies on this topic either . And as always – these are purely my personal opinions and not that of my employer .
I have been thinking about whether this pandemic is a one time thing or whether this is a pattern we should expect in future . A quick poll on Twitter was the closest to a checking around I could do from TRIVANDRUM .
This is what the handful of people who responded thought . It aligns with my own thinking – we should consider the possibility that this could be a trend and evolve our personal and professional lives to deal with it .
So with that background – let me share what I think we should plan to deal with in the world of IT services . Some or all of it may apply to other industries too
1. Obviously , we will learn to work better from remote locations
I have worked from home and client locations nearly all my adult life . I offered some quick tips last week when I saw posts on social media by people who seemed to be struggling with the transition . I absolutely think any temporary loss of productivity can be mitigated with better connectivity , processes, education and tooling . I say this significant conviction because I didn’t see any serious loss of productivity when a big part of my own team and I went remote as part of invoking our business continuity plans .
2. Travel and co-location become less important
It might take a few years to be fully embraced – but the difficult times we go through now will provide enough proof points that we can function effectively and efficiently without all being in one location . Consultants flying every week to a client location (or commuting for hours every day) is a habit we have carried over from a different era (when there was no internet and remote communication was ineffective and costly) and we can finally stop doing it as a primary mode of delivery . Face time will always be important – but it will probably come at a premium in future .
The money saved from all these can either go to bottom line or even better, spent on more value generating projects . We will all be doing a greater service to the only planet we can call our own !
3. Less divorces , and more happy families
It’s a touchy topic and taboo generally to talk about – but I am going to say it anyway . I personally know several people who ended up in divorces because of the nature of our work . I think this will change for the better if the low value travel in our line of work is minimized or eliminated .
I also know several friends – and many of them women – who had to make a hard choice to not raise a family because of the constraints of work ( mostly related to travel ) . I hope they have more choices in this matter going forward.
There is a part of me that does worry that families will need some adjustment when we all work from home . But hopefully this can be worked out with relative ease if we approach it consciously . I have some thoughts – which I plan to pen eventually .
4. Different measurements
The general measurement paradigm for staff consultants is utilization and for executives it’s sales . If and when work becomes more remote – I think we will have to switch to a different set of measures than billable utilization . This is perhaps the hardest change this industry will face and we better prepare for it now .
I also think the way to measure sales will also change. Revenue in the accounting sense of the word may not be enough when cash becomes even more important for businesses . Not sure if DSO is the right measure – but some cash related metric might need to be incorporated into sales metrics . Also important will be customer retention , Client satisfaction etc . It’s not that these things are not important today – just saying that we may change what’s peripheral now to a more primary component of comp models .
5. More pressure on the bottom of the pyramid – for both providers and clients
Back in the day, young consultants got into long term projects at low billing rates and learned the trade in an apprenticeship model . That’s already hard in today’s world with project sizes and time lines shrinking . Now when remote work becomes mainstream – it will be much harder to bring inexperienced new hires to the level of skills that is needed for actual projects .
This also will need some serious rethinking by the service providers along with their clients .
6. Project delivery has to evolve
Every aspect of the delivery life cycle will need to evolve and probably evolve faster than we are used to . For example – a lot of shops have already stopped splitting a work product between onsite and offshore teams . Instead they give fill autonomy to remote teams so that they are self contained . That helps minimize people needing to wake up early and sleep late everyday . That’s the kind of culture that needs to become mainstream in IT services.
I am used to globally distributed agile – but honestly it took some time getting used to it . It’s a significant change management issue for most companies – service providers and clients alike . And it might need a new kind of leader to make it happen and stick with it .
6. Automation will increase manifold
One of the biggest take always will be that people are the biggest risk to an Enterpise when the risk is biological in nature like a pandemic . So perhaps even for some wrong reasons – I expect the focus on automation to increase manifold just to decrease the dependence on humans .
But in the same breath – I have to say that what I see around me now is that automation has not replaced human decision making yet . In fact a lot of human effort and thinking is going on at the moment to mitigate the unique risks that are coming to light .
So I guess the best way to think about this is that we need highly differentiated skills to be employable in the future world of services . Again – I have way too many thoughts on this topic that I will post in another blog .
7. Security is probably the new black
Security was always important no doubt – but as we get even more distributed in terms of delivering work, I think it will become a more central issue in IT than it already is . For a long time – all consultants who were good at analytics have had a bit of an edge in the field . I think that will continue of course – but now security (specific to your domain) might be that extra skill set that will help you stand out .
8. Massive consolidation will happen
Some amount of consolidation has been happening already and I think it will pick up significant speed . The mid tier companies probably won’t have a viable way to continue and will have to merge or get acquired to stand a chance to survive in the evolving market .
Unfortunately I also think a bunch of those mid tier companies won’t make it and will just disappear . Given the gloomy nature of the topic and because I have dear friends who work there – I will resist naming any names .
Even the ones who will stay around – I don’t think they will have big pools of full time employees anymore in the middle to long term . I fully expect vast majority of these firms to depend on gig workers to get things done for their clients . And commodity skills will probably become a mainstream online platform business where clients and providers can both buy .
9. Systems integration business will grow
I know it’s a hot button topic for several people I know and respect , who believe cloud will kill SI business . That’s not how I see it . I do think SaaS and other cloud models will continue to grow . And as it grows , integration and analytics challenges will grow as well . Consequently I think the SI market will continue to be a good employer for a long time to come . The kind of work will shift over time – but the effort to integrate will continue to grow for a long time .
I am not sure yet on whether in-sourcing of IT will get affected or not in future . I will be keenly observing and if I see any visible common trends , I will share in a future blog .
10. Redundant collaboration tooling
As we increase our dependence on webex , zoom , teams etc – those services going down will have significant issues for our businesses . I am sure those companies will become very good at providing highly resilient services – but I can’t imagine any company risking their business with just one tool anymore . Maybe they will when SLA from these providers are that good – and I am keen to see how this evolves .
I am very interested in your views on this topic . Please leave your comments and I look forward to learning from you .
Post Script : here is a little video Dennis Howlett did with me on March 23, 2020 on this topic
6 thoughts on “How will the IT services world look post Corona pandemic ?”
Good post! I’d suggest some of the services sector is over leveraged with junk bonds that make mergers/acquisitions tricky. We are going to find out very soon which are the zombie firms.
Add to this SI and cloud budgeting haircuts on the client side and we could see a lot of limping along with old tech for some time.
Regarding collaboration, the subject is like the groundhog day film for me. After I left Sony PlayStation where I resurrected and ran the global collaboration environment, I spent a lot of time and energy discussing improving efficiencies at large firms in the Enterprise 2.0 era but from a budget perspective these initiatives typically made the also ran ‘nice to have’ list.
Today this is IMO a vital part of digital initiatives, but sadly office politics and sharp elbows trump coherent frameworks and working practices. T’was ever thus and the current fiasco hasn’t changed at all since a decade a go as this early 2014 video demonstrates
Two more things I see:
1. People will accept more and more that work hours may not be strict 9 to 5, but throughout the day intervened by non-working tasks. How HR will handle this is a major challenge to me — will it leave it on basis of trust to employees and what about overtime, for example?
2. As people will self-organize and non-office work processes mature, middle management layers will be obsolete.
One aspect, could be how the Reality sector emerges from this reality where so many people would be WFH in future. Lot has invested in office space across world in getting the office space at premium price, how they will cope with this new alignment. At present reality sector is among the few, who has been worst hit in India post demo, of not office spaces, residential for sure!