Legacy, Digital Transformation

Love or hate the phrase, it’s clear that enterprises are increasingly embarking on "digital transformation". They recognise that applications are increasingly important, and are looking at new delivery models which will help them get software and new digital propositions and customers journeys to market in a faster, more efficient and more agile way. 

We believe that as this happens, the old SI partners that big enterprise have depended on for decades will not be able to effectively support their clients, and will eventually be disrupted in favour of more nimble and specialised competitors with a different approach to professional services. 

We’ve worked with large enterprises for many years now, and though we don’t want to knock the competition, these are the problems we observe in how SIs are supporting our shared clients:

Slow and Outdated Delivery Model 
SI partners are set up to deliver cost efficiently and predictably, with a focus on keeping the lights on. Much of the work is offshore and involves ticket based requests into overburdened shared service teams. This is in no way setup to support speed, agility, innovation, creativity which companies need from technology partners supporting their own digital transformation. 

No Focus On Capability Building
As technology becomes more strategic and part of your competency, you need to do more of it yourself in order to go at the speed and agility that you need. SIs are setup to do work for you, but they are not responsible for building your own skills, improving your own capability and changing your own culture. 

Skills Base and Talent 
Because these SIs are cost- and efficiency-focused, often they employ from a low-cost skills base, which negatively impacts quality. In addition, these SIs are losing their status as an employer brand, making it harder for them to secure top, niche, talent in modern areas such as cloud computing. In turn, this reduces the level of service they can offer to their enterprise clients. 

Legacy Contracting Model and One Stop Shop
The SI contracts and engagement models are bulky, long, and changes to engagements are expensive and protracted. SIs also like to take on large swathes of capability, pitching themselves as a one stop shop. Nowadays, companies need a much faster, more agile, more lightweight contracting model, where they engage with specialists to deliver specific project initiatives in a fast and dynamic way. 

One reason why enterprises like to use SIs is that they have the perceived scale of large teams who can provide everything as a one stop shop. However, one thing that I’ve seen over the years is that 2-3 talented engineers can achieve more than a team of 20+ average engineers, especially now that they can leverage powerful automation tools. 

Defending the Old Regime
SIs have established cost bases including physical data centres, investment in old skills. and the need to land and expand with big teams of people in the tens of hundreds. Again, this isn’t in the clients interest, who are looking to go at pace, and leverage new technologies and cloud services. Their interested are diverging. 

All in all, we believe that large SIs have their back against the wall, and have a huge task ahead to transform their own delivery models - let alone that of their clients. 

Is This Already Happening?

We won’t name names, but there are stories of large outsourcers and SIs laying off tens of thousands of people in 2016. Many are experiencing declining revenue, and even some of the headline numbers are masked by acquisitions in a bid to stay relevant. 

Some of this will be the usual economic cycle, but it is our bet is that this is also happening because of insourcing by clients, increased move to automation, increased use of cloud infrastructure and applications as a service. These are the perfect storm when you consider the picture above. 

Building a Professional Services Business for the New World

What we are building at Contino is a consulting and professional services business that can more successfully support digital transformation for our enterprise clients. 

We’re taking the flaws in the existing engagement model above, and putting them front and centre in our delivery principles:

  1. Build capability by doing work with our clients rather than doing work for them
  2. Be a holistic partner that can support cultural and process change as well as technology strategy and delivery
  3. Bring a deep and wide global skills pool to bear for the competitive advantage of our clients in emerging areas such as cloud computing, containers, Microservice, automation  
  4. Focus on differentiating applications with our clients and not commodity infrastructure
  5. Don’t be afraid to challenge the status quo rather than coast with it, even if it's uncomfortable

6. Be fast, agile and a true partner in our relationship with our clients 

We believe that if we stick to these principles, and never fall into the traps and habits of the old guard, the world will continue to move in our favour as enterprises discover they need, and then seek out the right partner who is a better fit for the new world. 

  • Benjamin Wootton

    Co-Founder and CTO

    Benjamin Wootton is the Co-Founder and CTO, EMEA of Contino. He has worked with tens of enterprise organisations on DevOps transformation and is a hands-on DevOps engineer with expertise in cloud and containers.

    More Articles by Benjamin