Is Indian IT awaiting its Kodak moment? Not if it can wake up to a tsunami of impending disruption
Kodak was a great company and most people in my generation have living memories created by Kodak. The company was a huge global brand with enviable talent, yet they failed to spot a big wave of disruption in the form of digital photography that eventually swept them away.
Disruptive change can make a deceptively slow approach. If a company is not alert or quick to respond or – even worse – if it responds with feeble incremental change, the damage can be fatal.
HP and IBM, for example, had seen the offshoring wave coming but their inertia and obsession with status quo eventually led to their losing significant markets to Indian IT. I call this the “Kodak moment”.
So is Indian IT facing a Kodak moment now?
It’s not just Trump or Brexit and possible trade barriers put up by them. Change could run far deeper. “Soon we won’t programme computers. We’ll train them like dogs,” said Wired magazine in their May cover story ‘Death of Code’, arguing that artificial intelligence will change the way we write and run software.
What they were fundamentally predicting was the death of the coder as we know it. Many others have predicted that in the next decade we will see a net reduction of global IT manpower working on back-end applications, and India will be worst hit by this mega trend.
This may be true. However, unlike Kodak, Indian IT still has three key trends playing in its favour. First, global spend on technology is increasing, thus India still has a lot of scope for increasing its share in the growing portfolio by realigning to the new tasks of our customers.
Second, right now no one has the digital skills that the world needs. The question is who can build it at scale first and we for sure know how to do that.
Third, the world is seeing marginalisation of the role of the CIO and emergence of a new set of business buyers. Just like we did in the case of RIM and BPO, we need to once again find and win new friends.
It is difficult for me to imagine that Indian IT is sleeping through this storm. Traditional customers will spend lesser and lesser on traditional services – thus it is just a matter of time before one becomes irrelevant. I believe Indian IT leaders are too smart to let this happen.
So, how do we prevent this “Kodak Moment” from sweeping us away?
It begins with a rather simple mantra – “If you can believe it, you can achieve it.” First and foremost, we have to accept that this change is not the small wave we see today but an inevitable tsunami that will fundamentally change everything. This change is too big for us to battle with tweaks and tucks; we need instead bigger, bolder moves like acquisitions, structural changes, top leadership realignment, etc.
Second, the start of this transformation has to be by cannibalising our own services. Attack what you do and disrupt it with new ways of doing it even if it results in reduced profits in the short term.
Lastly, recognise the importance of structures. The organisation structure should be hierarchical and aggregating if you want to work at peak efficiency and improve profits. However if you are looking to build something new, then create independent units with complete control of their destiny from order to cash. Smaller, passionate, focussed teams that learn and grow are the only ones who can truly innovate and break through in a legacy-heavy environment.
This is how Comnet built the multi-billion dollar remote infrastructure management business and this is the only way Indian IT can prevent its legacy from becoming its noose.
And what about Indian IT engineers? I am afraid there are troubled times ahead. Current skills are obsolete and you need to take responsibility to stay relevant, if you are not to fall into the Kodak trap.
Is the future of the Indian IT engineer and Indian IT firms uncertain? My response would be yes. But if you are wondering whether Indian IT will be Kodak-ed the answer is most certainly not, as they are too smart to be left holding on to their past, caught on a Kodak film camera.