The journey of Digital Transformation has now become a matter of do or die for most companies looking to stay relevant in a disruptive marketplace. Yet many companies seeking to ‘go digital’ are still unclear about the best way to set up their IT organisations and develop the tools and talent required to meet their transformation goals.
Typically, the talent required for such agendas is not available in-house and the notion of outsourcing (and indeed offshoring), brings with it concerns regarding loss of knowledge capital and customer-centricity.
In the case of the latter; fragmented supply chains, protracted processes, and cultural misalignment in outsourcing relationships increase the gap between IT, the business and ultimately the end user. This gives rise to countless opportunities for friction to break down collaboration and timely customer-focused delivery.
If digital assets support a company’s competitive advantage, then the people who develop them are also valuable company assets and should be treated as such. Losing key people and their knowledge capital represents a risk to digital agendas. This risk is never more present than in outsourced projects where redeployment of talent to other client engagements is not uncommon. With attrition at its highest in global talent hotspots like India, companies looking to build global capability around digital need to factor in the risk profile of the local talent markets.
To respond to these concerns and bridge the gap between supply and demand for globally delivered digital services, outsourcing providers need to re-imagine their operating models to service the two speeds at which IT organisations must operate—integrating slowly changing legacy transactional back-ends with more dynamic customer-facing front-end systems and applications.
Global service providers are now rethinking their approach to capability-building in the context of this two-speed architecture, supporting their customers to scale up digital initiatives quickly and sustainably. By accelerating the connections between all parties, adopting emerging technologies for collaboration and empowering multinational teams to embrace change and practice deep democracy, digital provision can evolve with the customers’ ever changing needs.
Service providers the world over are realising that competitive advantage is no longer just about cost savings. It is now ‘talent’ that drives advantage and buyers of outsourcing are open to greater investments in people despite the potential increase in overall costs. Re-engineering recruitment processes to acquire the best skills in crowded markets where employment dynamics can often be transactional and more of a ‘numbers game’, is critical to the ongoing success of digital service provision.
Beyond talent acquisition, service providers need to rework their approach to employee empowerment so that team members have the behavioural competencies to succeed in a globally distributed agile environment. Providers must also consider new ways to retain talent, in spite of the commercial pressures and career progression roadblocks presented by traditional operating models.
Forward-thinking service providers are reworking their project-management model, overriding the usual staffing models which rely upon ‘command and control’ hierarchies. Such management styles inhibit the behaviours that drive agility; collaboration, critical thinking and autonomy. By restructuring the model for digital and establishing explicit collaboration with their customers, service providers drive customer-centric innovation, where goals are constantly refined and experimentation is encouraged.
Global service providers in the digital age are re-imagining their supply model to match their customers’ two-speed demand. Next-generation providers must find ground-breaking ways to attract and nurture global talent, recruiting by know-how not by numbers. In the digital marketplace where talent is king, those who invest in building employee loyalty, trust and commitment will have the edge. It is time for service providers to realise that they must disrupt or be disrupted.