The game is slowly changing for the Indian IT industry as digital transformation and automation takes over. Price is no more the deciding factor while making the choice. Consumers nowadays value time more than money. This is true not just for products but also for services. They need smarter and more accurate results in the shortest time possible.
Global developments like Brexit have slowed down the decision making processes of clients. Companies have no choice, but to renovate themselves and their IT staff to remain relevant in business.
A well-connected IT department can drive a company to new heights, but upgradation has still not become a common function among Indian peers. While most companies are focused on improving their customer response, they tend to forget that without a well-oiled IT system, continued performance can be quite challenging.
Challenges before Indian IT Sector
The banking and financial services sector, thanks to the promise of deregulation by the new US administration, still awaits a rebound. Not surprisingly, Indian IT is resigned to a single-digit 8% growth rate for FY2017, as estimated by industry body NASSCOM.
Amidst challenges like protectionism, new visa rules and IT disruptions, companies are moving to an online, people-based support model. India’s ongoing mobile broadband revolution is poised to create new growth opportunities in the financial services, healthcare, education sector.
Gearing up for the future
This digital transformation enabled by cloud computing and data analytics requires new skills even as low-skilled technological workforce is bound to be replaced by automation and tools in the near future.
To combat the future of technology, companies are making a fundamental shift from building IT to consuming IT. Besides reducing cost, companies need 24/7 monitoring, managing, and sustaining technology. Under the IT as a service (ITaaS) model, IT is run as a business and not like a tightly controlled department and therefore can be optimised according to business needs.
New ways of developing and maintaining software are indeed emerging and emerging rapidly! Which means, the Indian IT companies can no longer sit back and relax thinking there is no alternative to them. At the same time, the pattern of consumption and maintenance of both hardware and software are changing thanks to the Cloud and Software as a service companies.
According to a Gartner report, organizations will continue to aggressively build and invest in ‘cloud-first’ strategies in 2017. All industries and verticals are adopting cloud services across all layers of deployment models– Software as a service (SaaS), Infrastructure as a service (IaaS) and Platform as a service (PaaS).
The idea behind the concept of ITaaS is simple: Offer your internal clients the power of choice, allow them to pay only for what they use, and deliver it speedily. Most companies are likely to live in a hybrid IT environment such as private cloud, public cloud and in-house applications in 2017 and beyond.
Gartner in its “2017 Planning Guide for Cloud Computing” recommends to start building a cloud-first strategy now, for those companies who haven’t done so already. “The transition is difficult and will take time. Organizations must make public cloud services the primary, prioritized and promoted deployment model for all new business processes, workloads or applications.”
“Plan for a multi-provider strategy, and begin transforming the organization into a broker of cloud services. Delivering ITaaS will require training, integration and investments in hybrid architectures for networking, identity, data and other key services,” says Gartner.
Technology is central to any business
Organizations that avoid technical innovation will run the risk of being disrupted in their core business, potentially resulting in catastrophic outcomes.
One of the leading telecom operators in India relies heavily on Big Data analytics. The company uses Big Data to get insights into customer behaviour, supply chain efficiency and other areas of business performance. The ITaaS model helps companies focus on their core business and let the experts take care of the technology part.
Infact, one of the oldest private sector banks is selling credit cards based on their purchase history and social media analytics. Use of analytics and artificial intelligence helps companies compete and build individual profiles to increase business.
The scene at public sector banks has also changed. Tellers have been replaced by ATMs and the work traditionally done by peons is being executed by computers. India’s largest state-owned bank has also adopted the ITaaS model and outsources most of its services including housekeeping and ATM management.
This is just the tip of the iceberg. The volume game for IT is fast changing to value game and businesses today have numerous options for sourcing IT to help them get their work done. With that one simple change, the IT landscape has changed dramatically. To put it simply, IT departments now have competition. If they don’t leave their old skin and don the new attire they will eventually become redundant.
Hiring a full-time staff to monitor servers could be expensive and can eat up substantial part of the IT budget. By contracting an ITaaS provider, companies can save valuable time and resources. They can get on-call services for any disruptions, applications, or any website or hardware. The ITaaS provider will fix the issue and alert the company if necessary.
Things to consider as you move to ITaaS
There are seven major areas companies should address in their overall strategic plan for transformation. To become a true digital enterprise, offering IT as a service with full benefits, the following areas need to be addressed:
1) Technical infrastructure and architecture: Moving to an IT-as-a-service model means looking at enterprise infrastructure and architecture differently. Rather than organizing your architecture around projects, you need to organize it around relevant business services. It requires a shift from thinking in terms of hard assets to thinking instead of the business needs of customers.
2) IT management framework: Again, IT leadership should move the focus away from assets and projects to service architectures. Along with that shift, leaders need to rethink security, network, and risk management policies, because of the increased number of interactions with third parties.
3) Finance: The ITaaS model completely flips its finance model on its head. How do you price on a pay-as-you-go consumption basis, which comes with far more variables than traditional pricing models? For instance, price is too low and IT has a budget deficit; or price is too high and business units will find external providers that are more cost-effective.
4) Culture/people: Moving to IT as a service can ruffle the feathers of IT specialists. Deeply technical, hands-on types may not have the skills or temperament to move to a cross-functional, service-oriented culture focused on managing IT rather than delivering it. Training helps, but in some cases, even the right training will not equip some employees with the skills needed for a service-oriented culture. Be open to hiring people with different skills or outsourcing some functions.
5) Process: Business users see IT as an enabler, not as an end goal. To better serve business clients, IT leaders will need to make internal processes more consistent and agile. Determining how they will handle, say, unforeseen incidents such as outages or how they measure success will play a role in customer satisfaction.
6) Service management: Most IT departments are good at managing systems, figuring out, for example, how many servers are required at what run rate. Because IT professionals will now be acting on behalf of their business clients when negotiating Service Level Agreement (SLAs), they will need to become well versed in the language and logic of business. The technical knowledge is still necessary, but IT professionals now need to add business savvy to their wheelhouse.
7) Application management: Business units own the applications, but IT tends to have control over them. Getting business units to buy into pricing models and support agreements is key, otherwise, SLAs, no matter how well negotiated, will become a point of contention. IT employees need to clearly understand the business user’s end goal and day-to-day requirements in order to successfully manage the company’s application landscape.
The New Model
ItaaS takes companies from the old model to a much more customer-centric one. Most companies have employees around the world, which often means limited desk support. An ITaaS provider can deploy a self-service support portal, which allows employees to open support tickets, search a robust FAQ, check the status of issues, request new devices, or find any information related to the IT aspect of their position.
This is seamless for employees who want fast answers and quick relief from IT issues. It can be integrated with help desk software applications, making internal IT support easy.
• ITaaS: Lessons for leaders
• IT as a service is about offering internal clients the power of choice. They pay only for what they use and get it quickly.
• Implementing a service-oriented model is no small task, requiring a roadmap and a new mind-set to deal with more external partners and moving parts.
• A successful strategy will address seven major areas starting with technical infrastructure and ending with application management.
• ITaaS providers can report against enhanced SLA metrics beyond standard OEM warranty terms.
• For small-and-medium sized businesses, attaining these services through the OEM can be costly, which is why an independent service organization is an affordable alternative.