The New Face of IT
Date: Thursday , June 01, 2006
Static and Dynamic Patterns
In his brilliant novel ‘Lila,’ author Robert Pirsig makes the point that all good systems are the result of a harmonious balance between static and dynamic patterns. Static patterns represent forces of continuity and predictability. Dynamic patterns represent forces of change and experimentation. Too many static patterns in your system and you are headed for obsolescence. Too many dynamic patterns and you may descend into chaos. You need a healthy amount of both, but not too much of either.
Far fetched, as it may seem, the time is ripe for Indian IT organization to heed to this profound observation. The success of the IT services industry over the last decade has been based entirely on static patterns - the entire value proposition of our industry has been built on a foundation of process, repeatability, quality, and low cost. Rarely do we hear of Indian IT companies built on the dynamic patterns of intellectual property, innovation, and technical experimentation. Is this single-minded devotion to static patterns good for the industry? I would humbly suggest that it is not.
I believe Pirsig is right, and the most exciting IT companies of the near future will be those that focus on a blend of process and innovation, repetition and experimentation. Companies that build new products, or offer innovative services based on superior intellectual property, or allow employees the flexibility to experiment with new ideas while relentlessly focusing on customers are likely to be more successful, and therefore more exciting to work for. The days of IT services companies succeeding in the global market by simply waving the flag of process excellence and low cost are over.
Outsourced Product Development
Speaking of new IT, one phenomenon that is on the ascendant is outsourced product development (OPD). While most early outsourcing to India occurred with enterprise applications, large global independent software vendors (ISV) such as Microsoft, Oracle and SAP too have gone offshore with their core R&D activities. In the last few years, medium and emerging ISVs have embraced the offshore movement as well, and a growing number of specialized offshore service providers have appeared to service this nascent market. IT trade body NASSCOM estimates that close to $1 billion worth of product development is happening out of India today; it will rise to $6-7 billion by 2010.
What do product companies or ISVs do that is fundamentally more innovative than traditional IT services outsourcing? First, even when the starting point for an engagement is a specific technical activity such as testing or continuing engineering, the ultimate vision is to develop a rich ecosystem – a diverse range of high-end competencies offshore, from product architecture to design, product engineering to product management, professional services to customer care. For example, the product management group within a product company decides which markets to go after, and what functionality to build to address that market. In other words, it represents the essence of what the product company stands for. Furthermore, product engineering itself offers the possibility of world class R&D work, done over an offshore model. Similarly, the professional services group within an ISV tailors and customizes the product to fit the business needs of specific large organizations. When such activities are outsourced to India, it is an excellent opportunity for IT services firms to work on the cutting edge technology and business innovation.
Software Platforms for Future Proofing
Meanwhile, shifts are afoot in enterprise IT as well. Chief information officers (CIO) at large global corporations are in a bind. On the one hand, their chief financial officers (CFO) are demanding lower technology costs. On the other, CEOs and line of business chiefs are expecting complex business applications that can drive new sources of revenue. On the face of it, this is paradoxical; a CIO must deliver more software applications sooner, and do so at a much lower price tag. More must be done for less.
The automobile industry offers an interesting answer to this problem. Over time, major auto manufacturers have perfected the art of building standardized platforms that allow them to reuse identical components and assemblies (gear boxes, power supplies, braking systems) across product lines as diverse as sedans, trucks, and utility vehicles. The economic benefit of such extensive reuse is reduced cost across research & development, manufacturing, training, and maintenance. But there is another strategic benefit, and this has to do with improved business agility. If as much as 80 percent of components and assemblies are standardized, a new product such as a convertible can be designed, manufactured, and brought to market very rapidly, thus impacting the revenue line significantly.
Today, progressive enterprises are learning to consolidate myriad technology assets into unified software platforms, thus reducing the cost of ownership on one hand and accelerating the ability to deliver new solutions on the other. They are sacrificing a hodge-podge of software applications in favor of fewer, simplified, standardized software components & assemblies that work together harmoniously and can be readily adapted to support new business applications. For example, a software platform for trading, once developed by an investment bank, can be the foundation for diverse trading applications for equities, bonds and currencies. Or for that matter, a platform for contract management, once developed by a retail chain, can be leveraged to manage deals for books, music, electronic goods, and toys. Contrast this to the traditional approach where different applications would be separate and completely isolated from one other.
Within this landscape, the opportunity for Indian IT services firms is to help build software that is future proof. There was a time when success lay in designing software to meet specifications that were explicit. Today, success lies in designing software that can adapt easily to unforeseen requirements. A standardized software platform for trading that works for equities and bonds today must gracefully evolve to handle derivatives and options tomorrow, should business move in that direction. That is the goal new IT should be aiming for.
New IT and Me
How does all this relate to a young IT professional? First and foremost, winning is about balance. On one hand, each of us has to develop a core set of skills in structured, analytical thinking. We have to develop the rigor of executing predictably and consistently. Yet, that will not be enough. Each of us also has to develop creative thinking skills that can look at previously undefined problems and tackle them in novel ways. This balance between static and dynamic thinking patterns is key to success, at least in my opinion. Now, it is indeed true that some folks are naturally structured in their thinking, and others are naturally more creative. There is no question that most people are not endowed with both sets of skills in equal measure. The trick is to recognize your own core skill and work hard to compensate for the other. If you are a process-oriented thinker, you may want to take more risks! If you are a creative thinker, you may want to get more organized and planned! In team settings, it may also make more sense to induct team members who complement our own styles. Ultimately, since most IT work is now team-centric, being part of teams that are well balanced in terms of structure and innovation is absolutely key to success. Recently, I remember reading a quote from the CEO of Fiat, who said that, the ‘art of management is the tension between structure and creativity’. I could not agree more. If you can be structured and creative at the same time, the world is going to be your oyster.