18 Jul 2017

DXC Technology: Relevant partner or the Sears of IT services?

A huge opportunity to provide large-scale business

18 Jul 2017

A huge opportunity to provide large-scale business innovation with smart strategies and effective execution is tempered by strong competition, legacy perceptions, and a ticking clock to successfully demonstrate relevance and effectiveness.

Large scale technology services vendors would be committing commercial suicide by selling themselves merely as legacy IT plumbers, outsourced administrators and historical code and process supporters, despite that being a largely accurate description of the vast majority of their skill sets.

sears.jpg

A Sears internet order in store pick up location, down a corridor by the HR department.

Instead we currently live in a noisy blizzard of posturing around “digital transformation” as mature IT firms struggle for continued relevance and credibility in a rapidly evolving world.

Today Computer Sciences Corporation (CSC) is relaunching after merging with Hewlett Packard Enterprise (HPE) Enterprise Services spin off, as a new business entity with the brand name DXC Technology.

It’s entering a very competitive landscape of global service providers, all of which are struggling to remake themselves as relevant and credible to their prospects and customers in this very different new era.

Customer prospect realities

Meanwhile on the US client/prospect side, Sears is a struggling poster child for a legacy retail business that is rapidly fading from relevance.

Despite being the brand equivalent of Amazon 100 years ago, brilliantly leveraging the rail system and newly graded roads to transform retail with the Sears Roebuck mail order catalog, Sears has failed to successfully make the transition to an era of digital customers.

Sears is an extreme example of the sort of clients a new services partnerentity like DXC Technologies has to find effective business strategies and execute for.

Short of funds, desperately needing a coherent and joined up strategy to captivate and motivate their prospects and customers with, all while struggling with last century culture and IT infrastructure, Sears epitomizes, at an extreme level, the challenges countless firms are struggling with to find direction and remain relevant.

Buyer beware

Now that just about everyone on the supplier side is dressed up in futuristic digital outfits and parroting transformational marketing speak for the spring 2017 services marketing season, the key challenge on the buy side is finding out who has genuine competencies to help identify and drive effective modern business strategies, tactics and execution.

In some cases this is easy and can be a knock out blow: The buy side’s long tail of experiences and engagements with legacy vendors will have shaped perceptions of strengths and weaknesses. HPE and CSC, despite being a new business entity, carry the legacy of their past client successes and failures into their new DXC era.

DXC will need to have an extremely well defined, competitive, and compelling retail strategy to win against strong competition, whether the opportunity to excel is an emergency turn around like Sears or a white space, shiny new digital initiative for healthier prospects.

An evergreen Drucker maxim nails the fundamental problem:

“Because the purpose of business is to create a customer, the business enterprise has two -and only two- basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

I wish Drucker had put innovation before marketing in that foundational statement, but putting that aside the massive efforts by engineering services firms to pass themselves off/market themselves as business innovators via technologies is largely irrelevant to the buy side.

Marketing masking legacy realities

The challenge in many cases is that prospective services partners are essentially marketing their claimed ability to innovate around modern digital constructs rather than actually having much demonstrable experience or staffing to execute. The analogy is your plumber suddenly showing up dressed as an architect and asking whether you would like to co-design an extension for your house, a proposition you would probably be wise to decline.

Virtually any legacy services firm of any size now has innovation labs to entice customers to co-create with them, typically also featuring some superficial digital eye candy on display — robotic arms automatically opening and serving beers, green initiatives around solar power helping to save the planet, big data magic shows, etc. “Design thinking” is the lingua franca of these efforts to coach businesses and identify areas they need help with.

Anyone doing their homework on the client side knows that most of this digital innovation display is a thin veneer on a large, legacy IT services culture that knows little about this new world.

Today and moving ahead, the sharpest people at the top of the digital strategy pyramid are significantly encumbered by the sheer volume of marketing hand waving and noise making around endlessly regurgitated second and third hand “disruptive” and “transformative” ideas. I’ve personally seen many expensive failed “digital” initiatives in the last six months, several as a result of getting sucked into naive design thinking sessions followed by unrealistic execution strategies.

dunning Kruger effect

It’s all too easy to fall for overconfident suppliers who exhibit the Dunning Kruger effect, assuming their shallow knowledge around digital strategy will evolve and mature into positive results.

As a result of this, we are seeing a lot of the “parasite economy,” where prospective buyers pick brains during tire kicking sessions, a sort of magpie culture where information is collected and hoarded by management types who have either been given the digital hot potato to run with or see a career opportunity to lead the charge in some sort of digital initiative. These typically end in tears for all concerned.

DXC’s opportunity

DXC has a major opportunity, as a fresh new entity, to remake itself to be a credible scale modern global partner with core legacy strengths, notably anchored on scale security.

Creating modern agile digital superstructure that interoperates with legacy infrastructure to solve multiple business problems and open up fresh digital opportunities for prospects such as Sears is the reality of a lot of the prospect work in a struggling retail sector.

Other business sectors are grappling with similar problems and already have IT expense and effectiveness fatigue. The clock is already ticking — will DXC earn a reputation as a relevant technology partner or be judged as the IT services equivalent of Sears?

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Originally posted on my ZDNet blog April 2017

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