The global technology landscape is riding along a huge transformation curve, endeavoring to weather inflation. The pandemic has played a crucial role in accelerating the proceedings by triggering a hybrid work culture and bringing digital transformation to the center of business processes. It calls for innovative maneuvers using technology and strategic IT leadership. On the other hand, this transformation has a side effect in the form of exponentially growing levels of cyber threats. It is hardly surprising that the lengthy array of challenges makes it difficult for organizations to focus on their core business amidst the threat of a slowdown in the industry.
In the process, the organizations strive to leverage in-house technology leadership to the fullest and increasingly settle in the banks of managed services providers. With a higher level of technology focus, resources, and expertise, managed services companies could not only help you focus on your core business but also provide solutions to multiple business challenges powered by futuristic technologies. Rakesh Aerath, President—Asia Pacific, CGI, engages in an exclusive interaction with CEO Insights to decipher challenges and opportunities in the technology industry. Rakesh is an industry thought leader with nearly three decades of experience in leadership roles across Client management, Delivery management, Innovation, Business Development, and member management in large companies.
In conversation with Rakesh Aerath, President—Asia Pacific, CGI
CGI is known for its close relationship with clients. How do you perceive the evolution of IT in the enterprise business through your clients' eyes?
We speak annually to about 1700 client CXOs, through our well-established strategic process, ' Voice of Clients'. Through this, we systematically take inputs from our clients, which directly goes into our analytics system and, in turn, our strategic planning exercise for the next three years. When we talk to these CXOs, we continue to feel a slow but steady shift from IT being an enabler to being the core part of the business strategy. Today, IT drives their growth and there is an increasing mandate for them to modernize technology, use new Agile and DevOps practices, and transform the customer interface. We see investments in technology modernization and human-centered design, and we step in to add value on how our clients can deliver differentiated service to their end customers by leveraging technology.
We speak annually to about 1700 client CXOs, through our well-established strategic process, ' Voice of Clients'. Through this, we systematically take inputs from our clients, which directly goes into our analytics system
From an Indian IT services perspective, there is a huge need for us to keep pace with the rapid technological change. If it conventionally took five to 10 years for a technology to evolve, it changes every six months or even less now. Hence, we must continue focusing on talent development, learning and development, and innovation. We must listen to our client needs, be consultative with our approach, provide genuine solutions to their challenges, and help them compete and grow in the marketplace.
The advantage of IT is not confined to the enterprise realm either. Common people from all walks of life consume more and more technology. Take the case of a car, for instance; a modern car incorporates about 100 million lines of code. Even a modern EV, almost 50 percent of the product comprises of software. Banking is another important aspect of our daily life, wherein we consume all banking services via our smartphone and rarely make a physical visit to the bank.
How do you look at the inflationary situation prevailing in the global industry? Also, how is CGI approaching the increasing demand for everything as a service?
The current inflationary situation prevailing in the global environment is unpredictable. We don’t know whether it will lead to a recession or a soft landing. But we can see a general slowdown in the IT industry, which is quite evident when interacting with our clients. There is a lot of focus on reducing discretionary spending. Businesses are depending on managed services providers to increase operational efficiencies and reduce the cost of running the business. As we continue to provide our clients with managed services solutions, they are mostly looking for three aspects: innovation, agility, and cost reduction.
In a nutshell, although there is a reduction in spend in consulting and professional services, there are significant opportunities in managed services. CGI is well positioned to capture this opportunity with our end-to-end services from business consulting to system integration and managed services. We are very well-positioned to capture this opportunity and provide value to our clients. There is also a significant change happening in terms of moving from a CAPEX model to an OPEX model. Clients want everything as a service. We are ideally positioned to satisfy this need. For instance, we have a huge Intellectual Property (IP) portfolio comprising more than 170 IPs, most of which are available today in a SaaS model. We have also built an operations layer on top of this pay-per-use model to provide a differentiated business process service on top of our IPs.
How do you perceive the legacy vs modernization challenge of organizations? How is CGI positioned to help them?
Most of our clients, especially the large, tier-one organizations, battle with the challenge of legacy vs modernization. I would say that large organizations must get used to two-speed IT. A two-speed IT architecture means that your organization's front end, which is facing the end consumer, has to be nimble, fast, and agile. This high-speed front end needs to be seamlessly integrated with a legacy, transaction-focused back end. We are helping all our clients transform their legacy systems into a modern environment. In truth, you don't have to do a big-bang modernization of your core system, costing hundreds of millions of dollars. You modernize in small chunks by developing microservices and leveraging APIs to modernize your front end by launching new products and services and developing human-centered design. Simultaneously, we integrate it into and get the benefits out of your legacy system, which is usually stable and performs transaction processing efficiently. We are working closely with our clients to help them master this two-speed architecture and slowly evolve and modernize their entire system.
How do you effectively lead in the technology era? Also, how does GenZ come into this picture?
At CGI, we maintain a fine balance between all our stakeholders - our clients, our professionals, and our shareholders. Every decision a leader makes should maintain that fine balance. Being a good listener and adopting a consultative approach are significant aspects of achieving that balance. We also have a fourth stakeholder: our community and we believe that we must give back to the community where we live and work.
On the other hand, in today's dynamic environment, it is extremely important that you meticulously understand the nuances of technology as well as the domain and how both impact your client's business. You must have a keen focus on the changes happening in the technology/domain so that you can be a partner and an expert of choice for your clients.
Another important tenet of leadership that I really focus on is collaboration. You must collaborate well internally in a large organization and, more importantly, externally with the ecosystem. In today's vast technology environment, you might not be able to fulfill all the needs of your clients. Hence, you must partner effectively with the ecosystem players, such as the cloud and technology platform providers, and bring the best value to your clients.
Millennials and Gen Zs are a significant part of the present and future. They are inclined towards experimentation and seek challenging work. Satisfying these two aspects is an important part of retaining them. Our Global Innovations program is focused on ROI led innovation for our clients provides them opportunities and testing ground to innovate and create new solutions for our clients to address their challenges and it is working well for us. Also, CGI getting certified as ‘A Great Place to Work for Millennials’ is a strong testament to this.
What advice would you like to give to budding leaders in the technology industry?
Be a student for life! The technology landscape is changing faster than ever before and you must constantly learn and evolve. Never think that you have reached a position where you can relax. In fact, I spend a few hours every day learning about new technologies. We all have to be students of the industry and focus on technology and business domain changes to be able to be a partner and expert of choice for your clients.
You might see guidance from the industry that things are slowing down, but I strongly believe that technology as an industry is the place to be in. As I mentioned, we continue to consume more and more technology in the products and services that we buy or use, and there will always be huge opportunities for leaders who learn and adapt. On the other hand, there is a debate about whether AI will replace jobs. Yes, AI will continue automating many monotonous tasks, but in the process, it will create 20 to 30 percent more time for all of us to do more high-value work. We will have to reskill and upskill to leverage this available time for higher-value work.
Lastly, as a leader, I believe we need to evolve from command and control-based leadership to trust and inspiration-based leadership.
Hobbies: "I love to watch sports of every kind, especially Formula One, and Cricket. I also closely follow the stock markets.
Favorite Movie: "I loved the movie Rush, which is about a Formula One champion."
Favorite Book: "Outliers, by Malcolm Gladwell."
Favorite Travel Destination: "I would say Switzerland as that’s a family favorite. I recently traveled to Kashmir and loved it too.."
Favorite Quote: “Talent wins games, but teamwork and intelligence win championships.” ~ Michael Jordan