Artificial Intelligence and IT Operations

Of late all major IT companies have been bombarding with jargons like Artificial Intelligence, Machine Learning or Design Thinking. We need to understand what really is happening in the IT industry to figure out the trends and the rational why IT service companies are talking about AI automation platforms like never before.

As any industry IT industry has been forced to reinvent itself quickly every 3-5 years now from the way it operated previously where it was in the driver’s seat pushing the technology that it wanted caring less about what business wanted. 

Every couple of years there was an inflection point and IT latched onto it gladly making money in the process be it Y2K problem or Dotcom era or IT Outsourcing. The model was simple have an offshore center providing the cost benefits as well as productivity improvements with Onsite team to handle client relationship. 

Money was flowing to IT vendors and they made merry. IT vendors invested heavily in Offshore Delivery Centers. The major contracts close to 60% of came from Application Support and Maintenance contracts requiring people with less programming and more trouble shooting skills. The cost of training as well as cross training was fairly simple. 

Now for the challenges and the disruption shaping the IT space. We have Customers on one hand facing brutal on slot in their operating environments pushing IT vendors to cut costs and drive their Business Outcomes rather than just provide cost benefits. IT industry is also facing cost pressures from raising salaries as well as skill issues due to the changes in the IT space from Digital Transformations via SMAC to stay relevant.

 IT industry have used all their productivity levers of low skilled resources for handling L1 and L2 support , Tools, Best Practices etc. The Salary and Attrition is on the raise but are still forced to provide competitive quotes to stay relevant. This has forced IT service companies to move away from a FTE based model to manage IT operations which is more than 50% of their IT budget. 

This has forces all IT majors in looking at AI and Automation platforms to manage IT Operations and moving away from FTE based model. This is the only way to sustain the business and be relevant.

The challenges are plenty though and lot of open questions, how effectively will the AI automation platforms help companies move away from FTE based models? Are they just marketing jargons for IT service companies to be relevant? How Cost effective will they be and will there be cloud based solutions to be cost effective for companies to leverage?

 Only time will tell if this is really an inflection point for managing IT operations.