08 Jun 2021
Predicting the Unpredictable in IT Services
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In this era of change, our global Technology and IT Services experts delve into the recent industry transformations and upcoming trends to watch in 2021 and 2022.
The Technology and IT services industry has undergone a considerable transformation over the last couple of years, with the global pandemic merely accelerating changes that were already well underway. The shift to cloud, new technologies such as AI and machine learning, the offshore vs onshore services debate and widespread changes in delivery methodologies are shaping and reshaping the sector in ways that were hard to imagine even five years ago.
The nuances of local markets mean these changes may be felt at different speeds in different regions, observes Tim Sleep, Partner in the UK Technology and IT Services Practice, who has recently relocated from Sydney, Australia where he led the Australian Odgers Berndtson business for 4.5 years.
"Having recently returned to London to focus on the rapidly evolving world of IT services within the UK market,
it’s clear a fascinating global landscape is emerging.... the vast majority of IT services firms are in rapid growth mode, with a large cross over in skills and expertise needed at senior executive level."
How the firms differentiate themselves in the market to attract senior executive talent is less clear, with many having very similar value propositions – at least at first glance. This also extends to how these firms tackle lack of diversity at senior executive level. Until they are clear on how they are different, there will be no clear winner in the new war for talent.
Currently, we are seeing some of these nuance’s dissolve – particularly as the pandemic brings aspects of the business world closer together. Conditions and predictions for the future vary widely across countries and from company to company. All, however, acknowledge the centrality of technology to the future of work and life in general.
Franklin D Roosevelt coined his famous adage, ‘Smooth seas never create skilled sailors.’ If that is true, the recent choppy seas of the last year suggest that a new breed of extremely skilful sailors will emerge.
Can we predict the unpredictable for IT Services?
There was a strong sense that 2021 would see ‘the big get bigger’.
Sayed Sadjady, Head, U.S. Professional Services and Human Capital Practices, New York, believes for most organizations, the adoption of new technologies across key business operations, remains the core driver of business transformation. However,
“the technology landscape in itself is constantly shifting, and consequently consulting firms need to keep up with the rapid pace of innovation in the digital spectrum, from advances in AI to blockchain, to cybersecurity to cloud.”
When trying to predict the unpredictable, knowing the questions to ask is a good start.
What are IT Services predicting for the years ahead?
#1. Distributed Workforces: Global virtual teams
International leaders and teams have never been closer or more accessible. The ‘new’ distributed team-model comprises a workforce that is not limited by any geographical restrictions or boundaries. Instead, it allows a unique opportunity for companies to access and reach a rich mix of international experts and delivery teams remotely, across countries and around the globe.
Worldwide, the experts with niche knowledge and experience are certainly always in huge demand.
Richard Pooley, Partner, Professional Services, Technology, and CFO Practices, Boston, agrees.
“As adoption of digital and cloud technologies are accelerated post-Covid, the “War for Talent” is reemerging amongst the tech consulting firms, particularly in the US where traditionally, firms relied on overseas talent sources to manage peak demand.”
Whilst the new US administration will loosen the visa and immigration restrictions imposed by the previous administration, this is unlikely to be sufficient to meet the resource demand.
#2. Delivery Success and Benefit Realisation Certainty: Clients want more!
The best way for a company to do this is to prove that they have delivered a similar project elsewhere. Linked to the first point, bigger firms are better able to prove competence by bringing global teams together. The track records are more transferable, and overseas insight and IP is more replicable than it has ever been. This means the large multinationals are set to get bigger and better.
#3. The Volume Game: The stage is set for bigger deals at lower margins
A lot of projects, whether advisory or implementation, are large and complex. The bigger firms will be able to fulfil mandates whilst offering lower margins in return for the volume.
As cost and margin pressures increase, consultancies have recognized the need to maintain more flexible resource models by directly leveraging independent contractors as a key component of delivery teams. This also ensures engagement leaders gain better access to specialist skills on demand.
New Leadership Traits and Attributes
As in all sectors, great leaders are key to the success of IT services companies. A new breed of leadership is moving to the fore. Gone are the days of the hierarchical, self-reliant style of leadership, where processes were linear, and productivity was seen as a function of simple cause and effect.
Qualities of the leader that is most needed now:
- Empathy, empathy, empathy
Leaders really need to be able to create an environment that prevents, addresses assistance and provides support to mental health challenges, at all levels. This will be non-negotiable.
- Reinvent workplace culture and embrace a continuous learning environment
Leaders have always needed to adapt and embrace change, but the current environment takes this to a whole new level. The ‘mindset over skillset’ debate will be more relevant than ever. Instead, those who move to the fore will be those who demonstrate empathy, patience, communication skills, problem-solving skills, and a proactive approach to continuous learning.
Tim Sleep notes,
“Leaders must also learn how to successfully host and hold virtual team-building events. KPIs will need to be re-imagined, focusing more on outcomes and less on hours worked or being seen in the office. This calls for trust and transparency; it’s not easy!”
- Multiple areas of specialty
Increasingly, leaders will need all three of the following areas of strength:
- relationship-building skills (far more complex and nuanced than many assume)
- industry expertise
- an area of technical depth
Leaders who tick all these boxes are rare. Worryingly, there is very little leadership development in the IT services and advisory sector, and almost no focus on developing great leaders from within.
Firms who can identify, retain, develop and attract leaders with all of the above qualities will be in a position to grab huge market share.