TCS rebuilds for the agile world
Will the rise of agile and automation kill offshore delivery?
It’s a question that has been put to us many times in recent months with both buyers and vendors wondering whether the two big shifts in the industry are best delivered through globally distributed teams.
It was also a big topic of conversation at TCS’ industry analyst event this week, as the figurehead of the Indian IT industry provided an update on its progress in the UK and Europe.
The company is celebrating its 50th anniversary in 2018, and it is currently undertaking perhaps the most significant overhaul of its delivery model to date as it aims to become “enterprise agile by 2020.”
At its core, agile requires a close collaboration between all the relevant stakeholders involved on a project in order to reach their collective goals in a fast and efficient way. But do these people need to be co-located in the same room or geography?
Like its peers, TCS’ hiring in its domestic market has cooled in recent years while onshore agile specialist services shops are thriving. However, TCS believes that there is a vital role that it can play in helping businesses deliver agile initiatives at scale.
The company classifies more than 250,000 of its 400,000-strong workforce as being “agile ready,” which it boldly claims makes it the largest provider of agile skills in the world. TCS says it has more than 2,000 active agile engagements on the go, with clients including retail group Marks & Spencer. It also recently unveiled Jile, a cloud-based platform to support agile development, and this is backed up by Agility Debt, a framework based on its experience with 300 customers that helps them to assess an organization’s agile readiness levels across their structure, workforce, technology and culture.
TCS talks about delivering “location independent agile” services and one client we spoke with this week was Dutch airline KLM, which uses teams in TCS locations including Chennai to support agile development. The vendor has a pool of between 300-400 employees working across some 40 teams delivering projects in areas such as the development of bots to automate the way in which it responds to the 200,000 plus social media communications it receives each week, as well as accelerating the release of major applications.
The KLM project leader said that team participants across different geographies are kept in touch through “always open” lines of communication, large visual display screens and regular visits to TCS delivery sites. He also said that the benefit of using a location such as India to extend the working day of the European team is a big attraction in accelerating project lifecycles, particularly in areas such as testing.
UK chief Shankar Narayanan argues that since many of TCS’ clients are international in scope, many of the stakeholders on major projects are already regionally dispersed. But the company also acknowledges that not all agile development lends itself to offshore or remote delivery. It gives the example of a retail group, which may choose to use a local team to support a project to support a regional-specific marketing campaign that requires strong local knowledge or cultural understanding. But that same retailer could be better served by leveraging a more distributed team to tackle a project around payment gateway integration, which is based on standard technology and where the understanding of how they work is not restricted by national boundaries.
Like agile, automation is not a new topic, but it is something that is having a growing influence on sourcing decisions.
TCS is pushing on what it calls a “machine-first delivery model,” which is aimed at fostering a mindset of automating processes are far as they can before they require human intervention to handle exceptions.
It talks about “transferring the heavy lifting to machines,” and one example of this is at a European payments organization, where TCS has deployed 40 robots that are now onboarding 96% of B2B and B2C payment agreements and blocking 99.8% fraudulent cards.
TCS is partnered with several major robotics platform providers (including Blue Prism, and UIPath) but also leverages its own ignio platform, which now supports more than 100 clients worldwide. Revenue from ignio sales topped $30m in its most recent financial year, and TCS has said that it is looking to surpass the $100m mark within the next two years.
Ignio is described as “the machine that is necessary to build a machine first approach,” and is positioned as a cognitive automation platform that combines the operational intelligence (knowing what to do) of an RPA platform, with the reasoning intelligence (why is something happening, what should be the response?) of machine learning.
The platform was originally built for enterprise IT, but is now starting to be applied to other areas. One is software development, where ignio is being deployed to help customers build products that are designed for “zero ops,” and it is also turning its attention to entire business processes, where it is seeing the greatest momentum in the banking and insurance sectors.
In PAC’s view, the global delivery teams that have been built up by IT services vendors over the last two decades are here to stay. Offshore penetration rates still have plenty of room for development in many regions – certainly in continental Europe.
And while many organizations in markets such as the US and UK have already pushed the benefits of labour arbitrage as far as they will go, offshore penetration rates for some skills (testing, applications management) are plateauing, rather than falling off a cliff.
The reason for this is that access to talent is starting to replace cost reduction as the primary driver behind global delivery. Its true that many businesses will ease their way into an agile culture and way of working using local teams and partners, and as TCS admits, some agile projects will not naturally lend themselves to distributed teams. But TCS is clearly is making progress in reskilling and rebalancing the workforce to be ready for its customers when they take their agile adoption to the next level.