Why Many Big IT Consulting Companies Might Soon Become Extinct?
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Why many big IT consulting companies might soon become extinct?

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Founder & CEO at Sankey Solutions

In last few years, weconstantly hear news about IT companies’ growth slowing down, fear of mass layoffs, expert talks about reskilling talent etc. But reality is that this problem is not limited to only IT services companies. Nor the problem is due to only Automation and Artificial intelligence as it is generally understood and explained. The problem is much broader and has an impact on the entire technology industry - services companies as well as technology organizations within the enterprises.

Why many big IT consulting companies might soon become extinct?

While IT industry is working on many steps to be relevant for future, no one has been able to get to bottom of real problem that is driving its current state – Organizational design that is incapable to adopt the change in technology.

Let me elaborate.

Underlying input material for technology organization is different programming languages, databases, infrastructure designs, application architectures, tools, products etc. Tech Organizations are designed/structured to leverage these and build solutions for business using talent who are trained on those input materials and designs.

For most part of this century, number of commonly used input materials were FINITE. MSSQL or Oracle were only two major options for databases. Very few languages were really used to build complex applications. Learning was traditional through books and problem-solving was mostly through peers. Open source technologies were not welcomed. As a result, focus was on one-time ramp-up of talent on input materials/designs and leveraging their knowledge for years to build and maintain the solutions. Millions of people made their career by learning or getting certified in few technologies and spending years of their life applying it. Organizations too were structured as per the technologies – web services team, front end team, database team etc. In short, it was a traditional factory model. Worked well for lot of years.

However, in the last few years, technology input material is going through paradigm shift. Open source technology adoption has become mainstream. People’s learning patterns changed from books to online content, complemented by powerful debugging forums like StackOverflow. Software is delivered as service and maintained on cloud. Many new and powerful open sources tools, languages and frameworks emerged. From relational databases to graph/columnar databases, from monolithic architecture to microservices architecture, from core languages to super productive thin frameworks, from manual release to automated release pipeline tools, from centralized code management to decentralized code tools such as git etc. I can go on and on.

In these years, variety and complexity of these input materials started changing and evolving radically. They were becoming more and more powerful. Concepts of AI, Automation, Bots are not new. But now it is far too easy for any non-statistical person to learn and leverage machine learning to build AI solutions. Algorithms are encapsulated and technology ecosystem is built to integrate with such encapsulated modules. AWS Lambda is another classic case of how now infrastructure and deployment is encapsulated enabling super-fast development. Same is the case with IOT. Phenomenon is same across other technology areas too.

While type and number of raw materials are continuously changing, organization design and talent mindset is still decade old. Talent which was valued due to experience in one technology is suddenly at same level as beginner in the new technologies. Technology organization culture of “Learn once and apply every-time” has disabled thousands of experienced people who are now incapable to get reskilled. Even if they are able to, by the time they are reskilled, technology raw material would have already changed.

In addition, not only input materials are changing, they are increasingly becoming interconnected and dependent on each other. Imagine Lego game where Lego block designs and how they fit with each other is constantly changing. That’s the new reality. Hence one-time retraining and reskilling strategy will not be effective.

To be relevant in the new world, you need to change from siloed technology mindset to “Solution Architect” mindset. Need to move away from focusing on syntax to teaching software engineering concepts. Not look for talent who are JUST experienced in specific technology, but build teams which can work on multiple interconnected technologies. In a medical analogy, build team of good general physicians with small team of MDs. Highly competent and multi-skilled team that can build from mobile/web solutions to data engineering solutions to performing data analysis.

Only such talent can cope up with the speed of technology change. Only such team can deliver agility to the business and enable them to be highly competitive. Only such team/talent can create innovation by connecting dots across the components and delivering innovative solutions.

And to create such talent, organization need to completely demolish older organization design, talent policies, incentives etc. They will have to create talent who are rewarded for fast learning and whose designations are not tied to specific technology areas. Create talent who are given opportunity to work across technologies very early on and rated on their solution design abilities than their language-based competencies. Build entire new type of ecosystem where whole is greater than sum of its parts. High powered learning culture where new input material and designs are constantly experimented, perfected and rolled out to clients.

For well-established technology services companies, it is going to be extremely hard or I would say impossible to create such talent. Their ecosystem is NOT equipped to create and maintain such talent. Inertia from existing legacy work and rigidity from experienced people will drag them further.

This is a true Kodak-Fuji moment for technology services. New companies with “Solution” mindset, talent and culture will be able to leverage this rate of change to their advantage. New companies will be able to create new engagement model with multi-skilled dedicated teams enabling business to experiment and implement new technologies at the pace never experienced before.

In an Automobile analogy, technology engine has got newer and changing spare parts. Older engine designs are obsolete. World now need new type of engineers who can understand overall engine anatomy and can constantly come with newer and newer designs. I believe it is one of those historic moments when market brings big companies at level playing field with small companies and let the best one’s win. To be relevant in this new era, real question is “Can technology organization and services companies take such bold steps?”.