LinkedIn Facebook Twitter Youtube
Contact us

   

BACK TO Business Resilience

ZINNOV PODCAST   |   Business Resilience

The Great Digital Convergence: Bridging the Chasm between Natives and Migrants

Vijay Anand Guntur
Vijay Anand Guntur Corporate Vice President, Engineering and R&D Services HCL

The pandemic has no doubt accelerated the digital transformation journeys of companies across verticals. Additionally, there is a marked increase in the Digital Engineering spend by enterprises to accelerate their go-to-market and to keep pace with the disruptions happening in the ecosystem – both because of COVID as well as otherwise. Vijay Anand Guntur, Corporate Vice President, Engineering and R&D Services at HCL chats with Pari Natarajan, CEO, Zinnov, where they touch upon the mega trends that have emerged in the technology ecosystem, post-COVID.

Vijay also explains how Technology Service Providers like HCL have been instrumental in driving the digital agendas of both digital natives and digital migrants, as well as the different ways that HCL has been partnering with their customers across verticals and translating their know-how into tangible business value. Vijay also delves into the nuances of catering to customers in different verticals, especially in the post-pandemic era, where digital transformation and digital technologies have taken center stage.

PODCAST TRANSCRIPT

Pari Natarajan: Hello, everyone, and welcome to an all-new episode of Zinnov Podcast – Business Resilience series, where we bring you unique perspectives and points of views from visionary leaders from across the technology ecosystem on how to build resilience in businesses. I’m Pari Natarajan, CEO of Zinnov and I will be your host today.

Recently, during a conversation with a customer, he touched upon the fact that COVID-19 has unofficially become the Chief Digital Officer of many companies. That’s the extent of digital disruption and acceleration that the pandemic has brought across companies and across verticals. In fact, we are witnessing a marked increase in Digital Engineering spend, with our research estimating that this spend will account for 47% of overall ER&D spending by 2023.

In the light of this increased spend, what are the digital technology trends and disruptions happening in the market right now? How can technology Service Providers play a strategic role in addressing the challenges faced by enterprises in their digital transformation journeys?

To shed light on some of these aspects and how services companies are increasingly becoming strategic partners for enterprises, I have with me, Vijay Anand Guntur, Corporate Vice President, Engineering and R&D Services at HCL. Currently, Vijay leads a team of 35,000 engineers who develop and support products and platforms for several marquee customers on top R&D spenders across the Hi-Tech and Manufacturing verticals. Vijay has recently taken over the Engineering and R&D services business at HCL.

Congratulations on your new role Vijay, and great to have you with us today.

Vijay Guntur: Thank you, Pari. Glad to be with you here today. Thank you for having me on the show.

Pari Natarajan: Awesome. Let’s get right into it, Vijay.

Our latest research report on how enterprises are focusing on Digital Engineering to build antifragility into their businesses, estimates that Digital Engineering spend will account for nearly 50% of the overall ER&D spend by 2023. Given this massive spend, what are some of the mega trends that you have observed in the technology and technology-enabled enterprises?

Vijay Guntur: Pari, like you said, COVID has been the Chief Digital Officer for many firms, very easily accelerating the digital journeys that customers were planning on taking. The biggest disruptor has been the Cloud, and adoption of Cloud, and availability of Cloud and the choice that it has provided to customers to take this journey on faster.

The need for working in different locations, having to coordinate teams – enterprises have switched and use a lot more collaboration tools, a lot more digital tools – not only their internal systems, but to serve customers. You hear a lot about digital transformation happening in media; you hear about streaming, gaming. All of that is something we see and feel today. Collaboration in Cloud is disrupting how people interact, how teams interact inside organizations and outside organizations.

You see in Telecom space, the other big trend is 5G networking. It had been a buzz for quite some time. It is now a reality. You see roll outs, you see end user applications, you see B2B adoptions, whether it is in Manufacturing or Industrial IOT. I think these are some big things – you see Mixed Reality becoming very commonplace today. You think about Facebook, their devices have become so popular as an example of that. I also think that the data consumption trends that we have seen also have got accelerated.

So, the ability to not only manage data, but also ensure data quality is good before you can use it for any analytics, inferences, and a whole lot of buzzwords around AI/ML. Before all of that, ensuring data quality is good.

These are some big trends and I’m sure, if you look at each vertical, these trends manifest in a different way. You think about autonomous driving – a lot of it is data, a lot of it is Cloud, a lot of it is connectivity – is a good example. Sometime before it gets mainstream, but you’re seeing progress. It’s across industry segments, so we are seeing adoption of these technologies accelerating and transforming businesses.

Pari Natarajan: That’s very interesting. As a significant number of new technology areas are scaling almost simultaneously, and also there’s a convergence of how these technologies interact in various use cases across industry segments. So what are some of the challenges that enterprises are facing in the quest to leverage these digital technologies and optimize their overall Digital Engineering spend?

Vijay Guntur: I think the first and foremost is a lot of firms, and I see a trend, the ones that are digital native probably have less of this challenge. But whatever we call digital migrants or people who are adopting and transforming their businesses using these Digital Engineering technologies around it, they find it very hard to first understand technology and get their workforce skilled and capable. A lot of people are trying different things. Some build, some buy, some partner to build this capability. But the biggest thing is the change management. The technology is one challenge, but it is, I think, the lesser challenge. The bigger challenge is the change management. And we have seen this in companies that have gone from on-prem to SaaS as an example.

While the technology part and the product adoption to the Cloud is one, the other is to make sure the salesforce is able to sell, the incentive structures are right and managing that change, the HR incentives. So the organization change management is a bigger challenge that you’d see once you decide to embark on a transformation journey. The technology challenge and capability comes next.

And there, I think there is enough help available or options people have today with the technology access. I’m not saying capabilities and experiences are less relevant, but I think the bigger thing enterprises are facing – customers are facing – is the ability to manage change in their organizations.

And then the third part, which is less of a technology part, is about how do you fund this technology change? And there are some businesses that are able to fund by themselves in internal cash accruals, some borrow and invest.

Pari Natarajan: Got it. So there are three challenges, one is a sales organization – the go-to-market for some of the newer products and services are very different. And the second is the technology and capability. And third is really how do they fund these initiatives. And you also talked about maybe the digital natives are a little bit sorted, but the digital migrants who are getting into this, it’s much harder for them to face these challenges.

So how are services companies like HCL helping enterprises solve these challenges, and be ready to this – whatever the new normal post-COVID is going to be. And what are some of the customer pain points you’re solving for?

Vijay Guntur: So Pari, the three challenges that you mentioned and summarized are right. The change management, HCL is doing a little bit, but not a whole lot in that area. But we have some organization change management practices and capabilities, but that is less of an impact.

However, the second area in the technology bit, there’s a whole lot of capability that is there. And a lot of methodology processes that HCL has built over time doing this for several customers. We started with the natives first and then the migrants over the last five to seven years. All of that capability, experience, and process methodologies are helping in the second part – that’s where we do a lot of that heavy lifting.

And the third part, which is the ability to innovate on commercial models too, we are able to do risk/reward models, which we pioneered many years back. But quite a few trusted relationships today – customers who have those are willing to walk that path with us in coinvest in the technology, and then, when the technology actually makes a market impact and revenue impact and gain from that. So we are in it together with customers to solve the third problem. And the second is our ability that we have built over time. Not only the technology ability, but also domain understanding and what technology changes are happening in that space.

Pari Natarajan: Interesting. So you are experienced working with digital native companies, helping them build products and services. You were able to transition some of these know-how to help the digital migrants. Because the digital migrants, like you said, it’s not just a talent issue, but also a know-how issue. You’re able to translate and provide them the know-how, but also overlay with the business model innovation around risk/reward to allow them to creatively fund some of the initiatives. Very, very interesting.

You also work on – Manufacturing and Hi-Tech being the two of the focus verticals. While Manufacturing was badly impacted during COVID, at least the early part of COVID, and Hi-Tech witnessed increased investments and growth. In fact, our latest ER&D report reveals that Hi-Tech verticals cumulatively accounted for 36% of global ER&D spend in 2020. How do you reprioritize your focus across these verticals?

Vijay Guntur: The online and Internet or Software Internet segment that we have, it’s probably the segment that has got the most gain or benefit at the most from having gone through this COVID disruption, because the consumption of their services, whether it’s collab or whether it is Cloud mostly – and then, by individuals, by firms – those have really driven these companies to profitability. Of course, they’ve built other services around it, gaming, entertainment and all of that.

So all those services, capabilities that we have built and the solutions that we have built are transferable. Like you said earlier, that know-how is transferable. We built processes and tools which are transferable. You take an example. If you were to test a media service or a streaming service, today it is not one device. The last count I remember is 46 different devices it has to work on. In all kinds of television sets, your phones, laptops, desktops, you name it, you need to get that streaming application to work.

Now, you take, translate that capability to somebody in the Manufacturing space who has to support the field with products that have an installed base. And there are many users that do field support, they have different devices to do the field support. And the same technology is used to be able to build those end user products, which can be used to support the field. In my mind, that is, less and less people need to visit field in the Manufacturing, because you can pretty much do a lot of it remotely if you have connected systems, remote diagnostics, and you reduce the number of calls.

Earlier, if somebody who was going there thrice to go fix a problem – you diagnose most of it, you have the parts shipped out, and then will have, while the field engineer is supporting, you have enough of data and support systems who actually have the problem get fixed on the ground the first time somebody goes. There’s a lot of efficiency that has come in. And I also think a lot of this translation of what technologies we had in the Hi-Tech space or Software Engineering space, Telecom space is now getting applicable to a Manufacturing world. I’m sure there are many such examples that we have.

Today, if you look at a phone company that is manufacturing phones, it is very expensive to ship a phone with a defect. Think about it. You actually ship it. Somebody sells it. A user buys it, has a bad experience, returns it, goes through warranty repair probably one or two times, and then the customer gets the right experience. What we have done is with field data that is coming out from manufacturing, we can now predict whether a particular device that is going to be shipped or a part of that device is going to be defective or not, and not ship it in the first place.

So the cost of poor quality reduces significantly. Those are examples in Manufacturing, where you can think about what we’ve done, taking some of the technology and capability that we’ve built along with the digital natives and translated that.

Pari Natarajan: This is very interesting. Almost like how public Cloud vendor is building the kind of capability with somebody new, who want to have a massive Cloud infrastructure. They don’t know how to build it themselves. They use one of the hyperscalers. Similarly, when a manufacturing company wants to build more digital capabilities, the fact that you have that capability built with several years of working with software companies, they are able to use you to be able to drive some of this. Very interesting.

If you look at Digital Engineering, we think it’s kind of the intersection of overall Engineering R&D and the digital transformation in enterprises. And there are two kinds of Service Providers who are competing in this area. One is the traditional Engineering and R&D focus Service Providers. Then you have the large System Integrators who have been working with CIOs of large enterprises. And they now suddenly look at, oh, there is an engineering opportunity within these large enterprises. Let me take our expertise and go and sell into the CTO, sell into the engineering organization in large enterprises.

You come from a very strong engineering background. So how do you differentiate your positioning and offering in the market, and how do you maximize your return on innovation for your enterprise customers?

Vijay Guntur: Just like I talked about, digital migrants and digital natives, there is a segment of the market which is a services segment. And that is where you see these kind of opportunities more often. So if I think about a customer in the Media Entertainment space, typically there’s very little R&D spend in a traditional sense. But a whole lot of product innovation is happening in that market space. And some of it is coming from product budgets, business budgets, some of it is coming from CIO’s budgets.

What we do there is to take some of the capabilities that we have and build solutions which are relevant to that market space. And, we have a sales structure which helps us take these innovative solutions through these vertical market segments. There we take the engineering capability and translate it to solve a business problem in the vertical segments. That is one possibility. The second we have seen is where we have lots of opportunities, which require not only the internal IT transformation, moving to the Cloud, supporting through a DPO service, then building the certain solution and certain product for that market where engineering and IT needs to come together and provide that service. We have a structure and we have a solution method mechanism to be able to solve these problems for customers.

Pari Natarajan: And Vijay, one of the other areas we want to go into is, how the industries are building a lot of expertise internally. For example, if you look at any hyperscaler, the hyperscalers are now starting to build semiconductor capabilities internally in the organization. If you look at a company like Apple, they’re building semiconductor capability. It seems like how Cloud is now something which every industry, every company is building expertise on. Similar to that semiconductor seems to be an area where consumer electronic companies, Cloud companies, Manufacturing companies, industrial product companies, all of them seem to be building expertise. As an engineering provider, how do you see this play out and what has been HCL’s role in enabling these companies to use this technology?

Vijay Guntur: So, there was a time where the differentiation was in the hardware. Then it moved to a time where the differentiation solely rested in the software and people innovated quite a bit to build that differentiation and capability in the software. It has come full circle now, where people want to go look at what differentiation can come from the semi capability or the semi chip capability and in the hardware itself. So there’s a whole lot of investments that are going on in the semiconductor chip space and the surround areas around it by several of the hyperscalers, as an example, consumer electronics companies.

Then there is also this whole need for manufacturing. We hear a lot about supply constraints and people are trying to solve that by building foundries. So, this opens up a lot of opportunities for a firm like ours, which has invested significantly in the Semiconductor space, in the digital and analog space and continuing to invest capabilities in that space, and experiences that we have are very relevant.

Just like we had talked about digital natives to digital migrants, I think that this is capability that is shifting from semiconductor chip companies, whose whole bread and butter is this capability to other companies that want to differentiate using hardware capabilities, like to you said, hyperscalers. And we are doing work in this space to take that capability and work with different consumer electronics companies and hyperscalers to bring that differentiation and capability and accelerate their products to market. And the innovation that we are building there is significantly useful in differentiating the end customer experience.

So I think, a lot of companies will try and do this. A few will be successful in doing it themselves. Many will partner. That’s my view, Pari.

Pari Natarajan: Thank you, Vijay. This is a truly delightful conversation with you. It’s very interesting to see how HCL is playing such a critical role, in helping organizations transform and accelerate adoption of some of the new technologies, be it Cloud, 5G, Semiconductor and also you bring in the product know-how; and applying that know-how to enterprises across various industries.

Thank you for sharing your thoughts with us, Vijay.

Vijay Guntur: Thank you for having me and thank you for listening. I really appreciate that.

Pari Natarajan: Thank you everyone for tuning into the episode of the Zinnov Podcast Business Resilience series. Stay tuned and we’ll be back with another episode with another visionary leader.

RECOMMENDED PODCASTS
Business Resilience Woman In The Mirror | Healthcare Edition 05 Nov, 2024

Join Nitika Goel with Lene Hylling Axelsson, Kalavathi GV, and Mohua Sengupta as they explore the realities of healthcare leadership.

Business Resilience The Healthcare Mixtape: CIO & CTO Voices 30 Oct, 2024

Listen to global leaders talk about the potential of AI and automation in healthcare transformation, in our latest episode.

Speak With Our Consultants

RECOMMENDED PODCASTS
Business Resilience Woman In The Mirror | Healthcare Edition 05 Nov, 2024

Join Nitika Goel with Lene Hylling Axelsson, Kalavathi GV, and Mohua Sengupta as they explore the realities of healthcare leadership.

Business Resilience The Healthcare Mixtape: CIO & CTO Voices 30 Oct, 2024

Listen to global leaders talk about the potential of AI and automation in healthcare transformation, in our latest episode.

close button