AI: A Generational Perspective

TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
AI: A Generational Perspective
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Eric Müller of Work & Co meets with “TBR Talks” host Patrick Heffernan to discuss security in the AI age, the importance of curiosity and creativity, and advice for the upcoming generation of talent from his perspective as a seasoned industry professional.

Eric Müller is an Associate Director of Product Engineering at Work & Co, part of Accenture Song. With over 20 years of experience spanning banking, social media, B2B, retail, fashion, and online gaming, he brings deep expertise in both engineering and digital security. Before joining Work & Co, Eric served as VP of Engineering and CISO at Presence, and held key roles at Wells Fargo, Charles Schwab, Razorfish, and Mekanism. He has led award-winning digital initiatives for major brands including Microsoft, Samsung, eBay, and DKNY. Eric is known for his empathetic leadership style and transparent communication, which foster resilient, high-performing teams that deliver without burnout. He also champions strong agency–client collaboration, involving partners early and often to build trust and create better outcomes. Outside of work, Eric is an amateur photographer, baking enthusiast, and passionate advocate for digital security. 

Episode highlights:

• The slow ROI of AI

• Compliance and security in the age of AI

• AI impact on developers

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Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

AI: A Generational Perspective

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about AI and generational trends in technology with Eric Müller, Product Engineering Associate Director at Work & Co, part of Accenture Song. 

Photography and architecture to technology

All right, we’ll jump in. So, Eric, thank you very much for joining TBR Talks. Really appreciate it, and looking forward to this chat so much. Why don’t you just give us a sense, not only what you’re doing now, but your background. What brought you to the point that you are right now in your career?

Eric Müller, Product Engineering Associate Director at Work & Co: Yeah, absolutely. Thank you for having me, by the way. I’ve been doing this for a while, and my background actually was not in computers. I started off, well let me take a step back, you know, I did get involved with computers as a kid, as a teenager. My dad had built a computer that my mom was basically using as an overpowered word processor for her doctoral dissertation. And of course, I started playing with it and I guess we’re lucky I didn’t destroy her dissertation. And, you know, when I got to college, this was in the 80s. I wasn’t really sure what I wanted to do, I studied photography for a little bit, I studied architecture for a little bit. I ended up working at Wells Fargo Bank, but I fell back into technology, the love was there, I missed it. And the timing was, you know, I was very lucky. It was the late 80s, and the internet was sort of like this nascent thing. And by the early 1990s, of course, the web was blowing up. 

And so, while I was at Wells Fargo, I became a developer there, started doing some web work, started contracting and bouncing around between agencies. So, I was a consultant, I worked for companies like, you know, Charles Schwab, Wells Fargo, did a brief stint at Netscape. And, you know, along the way, I just kind of kept building up these development skills and really kind of fell in love with the agency space. I think the fact that I enjoyed photography and architecture earlier in my life, and I still do photography as my primary hobby, really kind of informed where I wanted to move with technology. So, I ended up at Razorfish for a while, Edelman for a little bit, and about 13 years ago landed at a company called Presence. So, I ended up being the Head of Technology and our CISO. What we did is we partnered with design companies to build out, you know, what they had been working on, their designs. I always like to say that we realize people’s dreams as a technologist. And so along the way, Presence was acquired by Work & Co, a great design firm, strategy, technology, product development, who was also ultimately acquired by Accenture, although we are still an independent brand. And that’s how I got to where I am today.

Being curious and continuing to take on new challenges

Patrick: It’s fascinating. So, you’ve had the opportunity to work in so many different organizations, different structures within the technology space. So, I think of an agency, I think of an Accenture, I think of a bank as being just organizationally, functionally so different. Was there a certain appeal to someplace like Razorfish where it was an agency?

Eric: Yeah, you know, it’s interesting. When I look back, there are two things. One is obviously the ability to be creative. And so, I’m building stuff out, but while I’m doing that, or my team is building this stuff out, we’re also working with the creative team, and so there’s a lot of back and forth, and we bring our understanding of user experience and design as technologists and as end users to those conversations, and I’ve always worked in places that appreciated that kind of feedback. And the other thing that I really like about agencies, and I do include a company like Accenture in that, is that we are exposed to different things all the time, right? So, I have an opportunity to work with, you know, over my career, I’ve worked with small startups, I’ve worked with Fortune 100 companies. I’ve worked on hardware, software, mobile experiences, and, you know, I might work on a project for a year or two and it’s wonderful because I’m learning about new technology. I’m learning about a new business. And I dive in very deep into that space. And so, it’s just this constant, it’s like I have a new job every couple of years, but I’m not changing my employer, right? And so, working in places that appreciate that and give me that space, it’s been just incredibly fulfilling.

Patrick: And I would say in all of our research, I think a lot of the folks I speak with who enjoy what they do and they’re still with the same company are often the ones that describe exactly what- have the same experience you had, which is every couple of years they bounce around to something new, something challenging. It’s like- it’s maybe the best way to keep the best talent is to continually give them something new to do and make them challenge themselves to do it well.

Eric: Yeah, and you know, all of the companies I’ve worked at, and I think, you know, I think about Presence and Work & Co in particular, my last, you know, two companies, they really encourage learning, right? I think companies that are successful recognize that no matter how experienced a person is, that there’s always something new to learn, and they encourage that exploration. I didn’t start off in security, as an example, but when I got the Presence, you know, I realized that we had a need with our clients to really understand the security space. And so, although I’d done a little bit of work with that when I was at Charles Schwab and at Razorfish, I really dove in deep at presence, became our CISO, we got our SOC 2 compliance, and then I started consulting with our clients to help them get their SOC 2s or their ISO 27001s. And then that’s been very helpful when AI became the thing, right? And I’m talking not, you know, not just classic machine learning or data analytics but, you know, LLMs that people are talking about now. There’s a lot to learn there, and being able to go into a new field or a new technology and have that curiosity, I think, has really benefited me.

Patrick: Yeah. And you bring not only the curiosity, but also the experience. I mean, you mentioned Netscape earlier, not a whole lot of people that are, you know, that are mid-career right now would remember that, ’cause, you know, I’ll confess, Eric, you and I are both older here, but I think that experience too is important to have grown up at the early ages of technology in this sense.

Eric: Yeah, absolutely, and I find it fascinating that people talk about, I’ll lean into the age thing. You know, people talk about digital natives, and I think people miss the fact that a lot of folks our age, we actually grew up, like we were the first generation to have video games. We were the first generations to start using computers at work and we had to dive in and understand it. It wasn’t like an iPhone or an iPad, we had to really understand the operating systems.

Patrick: Right, and had to understand the change that came with being able to adopt a technology. 

The slow ROI of AI

And actually, that’s a good segue into AI. I wanted to talk about AI a little bit, in part because sort of everybody talks about AI all the time now. It’s the biggest topic. But there’s a couple questions that sort of- that kind of come to mind, particularly knowing your background, knowing what you’re doing now, and especially your background on the agency and the consulting side. There has been a ton of investment in AI, and there’s lots of really cool stories about enterprises adopting this or that, you know, particular piece of AI, particular solution. And there’s a lot of revenue for consultancies, but there hasn’t been that much ROI for the enterprises. In your opinion, and again, this gets back to your experience, your long experience in technology. Is it surprising that there hasn’t been that return on investment right away with AI? Should we have expected it to be slow? Should we have expected faster adoption? I’m just curious, like you’re thinking around all the money that’s being poured in, not a lot of ROI coming out. Does that make sense? Or did we sort of, was the expectation that adoption would be faster and ROI would be quicker, was that just a missed expectation?

Eric: You know, it’s interesting because I, yeah, I’m not that surprised. I think that with any new technology, people need to figure out how to use it. And then- so that can take a little bit of time. I think it’s unfortunate that we are spending so much money on it. I don’t think we need all these companies dumping that much money into this space. And I think there’s some missed opportunities because of that. And I think that there are some really strong use cases that I’ve seen. I mean, full disclosure, I will use an LLM when I’m writing some scripts, right? I’m not a full-time programmer anymore, but I still want to automate some stuff. So, I’ll go ahead and I’ll open up an LLM, and I’ll use it to crank out some Python scripts. And I know some great developers who are using it as a very powerful tool that accelerates their process. I know some folks who use it, I think it can be a very powerful tool if you’re, I don’t know, having to do a little bit of writing. It can be a tool to kind of support that effort. I think the problem is, is that people, for some folks, they think of it as not a tool, but as a replacement, and I don’t think that will be successful in the long run. 

I think that, you know, creativity is a human endeavor, right? An LLM is not creative. It is derivative. It generates the synthetic content. I think that’s all powerful, I think that’s a useful tool, but true creativity, true intuition, that’s a human endeavor, and I don’t think that’s ever going to be replicated by a machine. And I think the idea that we can remove humans from this process is bound to fail. And so, I’m really bothered in this space because I feel like there’s some folks who feel like, you know, they’re on the hype train and they think these AI tools are gonna come along and if we’re not careful, we’re gonna get Skynet, we’re all gonna die, right? That’s not gonna happen. I don’t buy that for a second. I also, I’m really bummed out by people who sit down and say, these tools are worthless and you know, why are we bothering with them? I don’t think that’s true either. I think the middle ground is true, that they’re very powerful tools if they’re used properly and that’s all they are, they’re support. And we shouldn’t think of them as anything more than that.

Compliance and security in the age of AI

Patrick: Yeah, I love how you brought up creativity, because I think the two things that we look at when we say, okay, there will always need to be a human in the loop, to use a very overused phrase, but still it’s the two C’s: creativity and compliance. And I’m really interested in your thoughts on the compliance part of it, because when we think about how much AI can take over running a system, and now I’m thinking more agentic AI, but running within an enterprise and be able to remain compliant and be able to meet all the regulations. That’s all well and good, but at the end of the day, when something goes wrong and something always eventually does, you’re not going to sue the robot. You need to sue a human. You need to, you know, the legal action that comes in goes after a human being. So, with your experience in security, do you think that compliance is sort of always going to be certainly accelerated by and certainly assisted by agentic AI and AI broadly, but always going to have to have that human in the loop?

Eric: Yeah, absolutely. And it’s interesting, so my first pitch here is everyone should go and read the OWASP top 10 on AI. You know, that’s the Open Web Application Security Project, and they’ve always had this top 10, a list of security vulnerabilities for general web application development. And now they have one very focused on agentic AI, and so, I think it’s a wonderful place for people to look at. So, I think that AI tools, having said that, is both the cause and the cure for a lot of security problems. So, starting with secure space, I love, you know, the fact that we can use these tools and going beyond LLMs, right? Going back into classic machine learning, data analytics, sentiment analysis, all those kinds of things, right? They’re very, very powerful tools when you are, if you’re running a SOC as an example, right? And you have to deal with, you know, hundreds or thousands or tens of thousands or millions of potential alerts, right? Having an AI tool there looking for those patterns, those potential attacks against your space, it’s just amazing, right? It takes over or enhances human experience, right? So, it looks for these patterns, it looks for potential attacks, as an example, that can then be analyzed by a human, right? So, I think that’s an excellent example of how AI tools can be incredibly powerful support tools for us in the security space. 

On the other hand, I think that these AI tools, particularly the LLMs, have a lot of security vulnerabilities. So that’s the OWASP top 10. And like any other tool, we need to make sure they are secured. And I think, unfortunately, not enough companies, not enough people are thinking about the risks of, you know, as an example, giving an agent complete control over your local computer, right? 

Patrick: Right.

Eric: There is a massive risk there. What kind of data do you have on your computer? And do you know what that agent is truly doing? Is it exfiltrating data right now? You know, is it reading your emails? Is it pulling up your bank statements? And so, I think people need to be as skeptical of AI agents as they would be of a human, right? Would you ask a random person that you really haven’t vetted into your space and give them complete control over your GitHub, over your databases, the ability to deploy whatever they want into your AWS account? You wouldn’t do that with a human. Why would you do that with an agent? 

Patrick: Right, right. And that’s, I mean, that’s the whole, the trust factor that is just- every single time the hype cycle gears up into a new higher speed around AI, the trust factor goes in the other direction. People are just uncomfortable with exactly the way you just described it. Why would you hand over the keys to your IT environment, to an agent that you haven’t actually trusted, vetted, and ensure that it’s not going to do something harmful?

Eric: Yeah, absolutely. And again, it’s not like the tools should be ignored and they shouldn’t be used, far from it. It’s just we need to be very thoughtful about the way they’re being used.

Patrick: Yeah, yeah, totally agree. 

AI isn’t going to get rid of developers

I want to sort of take a step back and like you, again, I keep referring to how long you’ve been in the business, but I think it’s important because you’ve got that longevity, that longitudinal perspective. And I’m wondering if there’s been a change, a development in the technology space that you kind of expected that didn’t happen. I mean, flying cars is the one that everybody, you know, always taps into or mentions, but forget about flying cars for a minute, something more grounded, something that’s more like, maybe even just in the last year, things that haven’t developed the way you thought would happen, or maybe the opposite, like something like, okay, we’re a lot further along with this technology development than I thought we’d be in 2025.

Eric: That’s an interesting question. You know, a long time ago, I stopped making predictions. *laughs*

Patrick: *laughs*

Eric: That’s part of the problem. I, you know, I- gosh, I really don’t know. I mean, there’s so many of these, so many trends that have come and gone, right? I’m thinking about as long as I have been in this industry, there has always been this idea that we can get rid of developers, right? So, I’m thinking all the way back, remember when 4GL languages were kind of the thing that, you know, you could drag and drop components around and your application would work. And now “what do we need these developers for,” right? 

Patrick: Right.

Eric: It’s interesting. That is a trend that I have always been skeptical about. Maybe that’s the better way to describe it, I’ve always been skeptical of this idea that we can get rid of developers, that everything can be done through drag and drop or, you know, talking to an LLM, like vibe coding or whatever. 

Patrick: Right.

Eric: And so, I’m not surprised that people have not been able to eliminate the developers. I know I’m not answering your question, but that is one trend that I have been seeing for the last 30 years, is how do we get rid of technologists and it still hasn’t happened and I’m really skeptical that it’s ever going to happen.

Getting to the higher value tasks

Patrick: So, I think it’s really important the way you frame that because it’s easier to look at the things that didn’t happen that you thought they would or things that happened quicker than you thought they would. It’s a lot harder to think about all the different expectations and predictions that sort of have flatlined or have sort of not panned out despite all of the investment and effort that people have put into it. And, you know, I think about like, when we look at companies and they tell us that through automation, RPA, artificial intelligence, agentic AI, whatever, they’re going to have such productivity gains that their people are going to be able to do higher value tasks. I always ask the same thing, which is like, why aren’t those people doing those higher value tasks now? What is stopping you? Why are you not? And that has been a drumbeat for, I don’t know, a couple decades now, where the expectation is that the technology will allow for people to do higher value tasks. And yet, those higher value tasks remain elusive. And that’s not a, I mean, that’s not a trend so much as it’s just a constant that, curiously enough, has not been resolved. Maybe it will be. Maybe we’re on the cusp of that with agentic AI and all. We’ll see. We’ll see.

Eric: Well, I do think we are seeing a little bit of that. And in some ways, I think, you know, I’m being biased here from a technology standpoint, I think we have seen that over the years. In that, as we develop more higher-level languages, that it becomes easier in some ways for folks to kind of get their job done. They’re not worried about like memory management as the classic example, right? And so that allows them to focus more on functionality, and I think, what’s interesting to me with a lot of the agentic tools, particularly in the development space, is that you can offload a lot of the basic stuff, you know, setting frameworks, you know, maybe unit tests, you know, boilerplate code. You can offload that to these tools and then your developers can focus on the core of your business. Right. 

Patrick: Right.

Eric: So, I think that in a lot of ways, that’s kind of leaning into that where your developers- you’re getting more value out of your developers, not because they’re necessarily cranking more code. And I’m always bummed out when people sit down and say, you know, I forget who said this recently, but they’re like, I’m doing 10,000 lines of code a day, you know, using agentic AI. I’m like, whatever, who cares? What problems are you solving? What is your business doing? How is it growing? I don’t care about number of lines of code. I’m concerned about functionality. I’m concerned about user interfaces. I’m concerned about your core business. And if you’re offloading a ton of that boilerplate to the AI, now your developers are working on that higher level stuff. They’re focused on the core of your business, and they’re delivering that higher level value.

Patrick: And that gets exactly back to what you said at the very beginning, that you sort of were, I’m going to paraphrase this because I can’t remember exactly the way you said it, but something to the effect of you help people realize their technology dreams. And that’s- if you’re thinking about lines of code, you’re not thinking about dreams. If you’re not thinking- but if you are thinking about why is this good for the business, what’s the business value in bringing, then you’re actually beginning to realize what you’re trying to go after, right?

Eric: Right, right. I mean, it’s the classic line that developers use, which is the best line of code is the one you don’t write. And so, you know, focus- I’m going to repeat myself, but again, it’s like, offload the boilerplate, offload the drudge work, focus on the core business value, and you’re going to have a lot of, you’ll have a successful company, and you’re going to have a lot of happy technologists as well. They’re doing work that’s meaningful.

Patrick: Right, yeah, and that’s what we all want. 

Finding a passion outside of the workplace

A couple more questions, Eric, this has been really fantastic. I’ve enjoyed this conversation immensely. I do- I’m curious because you mentioned at the beginning that you studied architecture and photography and you still bring those perspectives with you to everything you’ve done in your career. Does that make you, have you ever thought sort of, all right, what would I be advising people in their, you know, early 20s or even late teens heading into college, what should they be studying if they want to have a career that’s similar to the one you’ve had? Or what should people study if they want to go into technology other than, of course, technology?

Eric: I’ve always felt, so obviously technology, but I’ve always felt that it’s important to have a passion outside of technology. You know, I’ve always hated the phrase, if you do something you love, you’ll never work a day in your life. And it’s like, no, that’s BS. The moment that you’re sitting down and your passion becomes the thing that you need to do to put food on the table and a roof over your head, you have a different relationship with it. Because you, you know, with a passion project, you can put it down for three months, who cares, right? You can’t do that with work. And so, I think it’s important to have something outside of your career that can re-energize you. Now, it can be related to technology, if you’re a technologist and you want to have a side project, do that. Absolutely do that. But you need to carve out the space for that. But it doesn’t have to be a side project in technology. You can be into photography. I’ve had friends who play an instrument. I know technologists who love to cook. And, you know, the interesting thing about all these things, particularly with cooking and baking is there’s still this geeky kind of component with it, right? 

Patrick: True. 

Eric: You know, guitar playing can have that, photography can have that. You can kind of see how these side creative passions still lean into, you know, mathematics or, you know, formulas or, you know, kind of doing things step by step. They’re very related and for me, photography, to make it very personal, that recharges my energy over the weekend. I go out, I take some pictures. I’m not writing code. I’m not thinking about technology per se, but I’m leaning into the stuff that made me fall in love with technology in the first place. So, I come back Monday morning, I’ve got the energy back. And so, I think for a junior developer, having that kind of weekend recharge tool or passion, I think is really, really important.

Patrick: Yeah, absolutely. I agree 100%. I’ve always believed you have to have a going to work life and a non-work life. You have to have those things that you love that are not what you’re doing every day at work. 

Change management for developers around agentic AI

I want to ask to bring it back to what you’re working on, speaking of work, what you’re working on right now. I’m just curious, to sort of frame up like what are, what’s something that you’re working on now with the company you’re with that sort of has, this might be a strange question, but kind of has you puzzled? And I mean that in a good way. Like it’s a thorny thing that you’re trying to figure out now. And I’ll give you an example. We’re looking at how AI is changing the labor pyramid within IT services companies and consultancies. So, like, how is AI going to change those 800,000 people and that pyramid? And we’re trying to figure out when AI changes the size of the average consulting team, maybe it just expands their capabilities and adds digital full-time employees, whatever. We thought we would see this change by now. We would see more obelisks and fewer pyramids, but we’re seeing the opposite. Companies are actually hiring. So, we’re sort of puzzled about why that’s happening. And I’m not asking you about that. I’m just saying, is there something you’re working on sort of day-to-day that has you kind of asking, why is this happening right now? What’s going on?

Eric: So, I can’t answer that. *laughs* This is probably one we’re gonna cut out, because for NDA reasons and all that, I just really don’t speak about what I’m doing right now.

Patrick: Oh yeah, all right, I understand. Yeah, that’s fine.

Eric: Yeah, looking at it, I can look at it from- I can speak philosophically around that. I think that it’s interesting to me from talking with folks in other companies, with some of my colleagues, that there’s this idea within technology that when we have a new technology that comes along in theory, people are going to lose their jobs, right? And we’ve seen that forever. You know, the classic is the, you know, the buggy whip manufacturer, right? 

Patrick: Yep.

Eric: And I think that in this space right now, from talking with other folks and from what I’ve read, you know, we’re learning that, you know, the dream was that, and I don’t think this is a good dream. Unfortunately, a lot of companies kind of felt like- here’s a great example. I had a friend who said that when all the agentic AI stuff came out, he’s talking to his board of directors and the board said, great, when can we fire all of our developers? Right. Like, there’s this idea that we can fire everyone and our profitability will go up and look at how smart we are. And a lot of companies did that. And then they learned, hey, hallucinations are never going to go away. Like, that’s how LLMs work. You need hallucinations, right? And LLMs can’t create something from scratch, right? They’re always derivative. And so, they kind of made those choices, they realized they made mistakes, and now they’re bringing people back. They need those senior folks back who understand their core business, who understand how to make these tools work. And that’s, I think, the adjustment that we’re seeing right now.

There’s also the cost, right? You know, the AI companies need to turn a profit, and they’re starting to change their price pressure. And so, companies are starting to sit down and look at it and go, you know, for the quality of the work that we’re getting, you know, do we keep dumping money into it? In some instances, absolutely, it makes sense. It’s a great tool that’s supporting them. In other instances, I think companies are kind of rethinking it. And I think we’re still in this space where folks are trying to figure out, one, for the AI companies, how do they turn a profit? And then I think, you know, how do they turn a profit and how do they price this at a level that is profitable? And then for the companies that are using those tools, it’s like, what is the proper use case for it? And what is the team that we need to surround to make it successful?

Patrick: Right, and that is the, well that’s the sweet spot for consultancies to talk about change management. But that is the biggest challenge, I think, going forward for enterprises is it’s not necessarily the adoption of the technology, it’s the adoption within the enterprise, within the organization, what it’s actually going to mean to the structure of the organization and achieving those actual business outcomes from AI, not just the promise, the actual outcome.

Eric: Yeah.

Skills to pursue 

Patrick: Yeah. All right, so I lied. I have one last- I’ll call it a last, last question, but it really, it’s just because I’m really, given your background in photography and architecture and that you still do photography, I have to ask this. So, and we were talking about, you just mentioned, like, when can we get rid of all the developers? We talk about AI replacing people in jobs, that running fear. But we also talk about sort of the importance of skills, of mastering something so good that AI could never replace you, right? So, and just thinking like about skills like that, is there any skill, if you could say, all right, I’m taking three months off of work, I’m just going to perfect this particular skill, like playing, you know, you mentioned your friends have played guitar or maybe speak 4 languages or even turn yourself invisible. What’s a skill that you would say, okay, I’m going to spend 3 months and I’m going to master this?

Eric: Well, it depends, right? So, are we talking about reality of AI?

Patrick: No, there’s no reason to stay within the realm of reality. We can be creative here.

Eric: Well, I ask that because, I mean, if the dream is that AI can do everyone’s job. And if that is true, then there’s no skill you can pick up. If AI can replace us, if it truly is capable of replacing us, then there’s no skill you can pick up that’s going to make you valuable in the future. They’re just isn’t. But I don’t think that’s reality. I think that the cost alone, you know, the energy cost, the compute cost, all of that would be just too high to replace everyone’s job. And so, I think it’s going to be a little rough while people are trying to figure out how we use these tools, how we incorporate them, like I said, how the companies become profitable. And so, I would say, continue to follow your passion. right? If you love technology, continue to do technology. If you love medicine, keep doing medicine. If you want to do the trades, right? If you want to be an electrician or a plumber, continue to do that. And I think this will all shake out. It is going to, unfortunately, it’s going to be kind of difficult. And we’re kind of seeing that some jobs are harder to fill right now because the perception is that AI is taking it over.

Patrick: Right.

Eric: But I just don’t think that’s sustainable. I just don’t think in the long term the costs are going to justify basically replacing every human being in every company. It’s just not going to happen.

Final thoughts

Patrick: Yeah. So, listen, we’ve touched on so much stuff here. I know you said you don’t make predictions anymore, but I would like to predict that we can get together in six months and have a second round of this discussion, and we could probably expand on a lot of the different topics that you brought up and the different trends that we’re seeing, and we just- you just mentioned energy that’s definitely something I think is going to be a constraint as we go forward around AI. So, I think that would be, I’d love to have this conversation again sometime in the spring, Eric, and talk about what we see that’s different now, six months from now.

Eric: Yeah, absolutely. I’d love to see how absolutely wrong I was. *laughs*

Patrick: *laughs* I’ve been wrong so many times and it doesn’t bother me at all anymore. So, Eric, thank you so much for coming on. This has been really fantastic. I appreciate your time. Appreciate your insights.

Eric: My pleasure. Thank you very much.

Patrick: Next week I’ll be speaking with Dan Demers about managing strategic alliances and ecosystem partnerships. Don’t forget to send us your key intelligence questions on business strategy, ecosystems, and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies, large and small, answer these questions with the research, data, and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us and see you next week.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

AI Tools for Knowledge Management, Featuring Kelly See, Knowledge Analyst for BI/CI at Ericsson

TBR Talks: AI Tools for Knowledge Management, Featuring Kelly See of Ericsson
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
AI Tools for Knowledge Management, Featuring Kelly See, Knowledge Analyst for BI/CI at Ericsson
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Kelly See, knowledge analyst for BI/CI at Ericsson, joins “TBR Talks” host Patrick Heffernan for a discussion on the state of AI tools for knowledge management inside one of the world’s leading telecom vendors. See also shares how the demands of global knowledge management are being served with artificial intelligence tools across a diverse global workforce.

Episode highlights:

• Measuring knowledge management success

• How changes in technology and AI have evolved the day-to-day role

• Working with internal AI for the best results

Listen and learn with TBR Talks!

Submit your Key Intelligence Questions for Patrick and his guests

Connect with Patrick on LinkedIn

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

AI Tools for Knowledge Management, Featuring Kelly See, Knowledge Analyst for BI/CI at Ericsson

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem, from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about adopting AI tools and how non-traditional skills are applied in a corporate setting with Kelly See, Knowledge Analyst for BI/CI at Ericsson. When the Ericsson team released their tool to the full organization, the name was established as “Ask BIC” to keep the team branding consistent, but in this conversation, it was referred to as Erica. Please enjoy my chat with Kelly.

Corporate libraries

Excellent. Kelly, thank you so much for joining the podcast. I really appreciate it. I know when we met in Texas a couple of months ago, it was great to see you in person, and I know I sort of threw this out there as an idea, and I’m so glad you jumped on the opportunity.

Kelly See, Knowledge Analyst for BIC at Ericsson: Thanks for having me. I’m looking forward to our discussion.

Patrick: Yeah, and maybe we could start off with just sort of your roles and responsibilities at Ericsson, maybe how it’s changed and like sort of what is most of your job today and maybe a little bit of, you know, how it’s changed from when you first began at Ericsson.

Kelly: Yeah, so I started at Ericsson almost 20 years ago. We had a library at our North American headquarters in Texas, and I was getting my master’s in library science. So, I was an intern and then got hired to work in the library. And so, we did all the traditional library things. We actually had books that we checked out. We had some digital material, and then we did research. And eventually that library went away and I went to work in the Business Intelligence Center, which is similar in that we do research, and we support people that are trying to find information. But we solely have market research as our purview. So, we put market research into a portal that we have online, which we call BIC, or our Business Intelligence Center. And then I specifically support internal knowledge management. So, we have all the external market research that my colleague Elizabeth Roberts is responsible for. And then I work with internal teams to help get internal sources of intelligence, so reports or presentations or any material that they’re generating in their daily work and getting that into our portal so that when our users go out and search for information, they can find both that external and internal material. 

Patrick: Yeah. So, you said a couple things here that really have sparked a lot of interest for me. First, getting a master’s in library science. You- when you started, when you started your sort of academic pursuit in that, you probably weren’t thinking I’m going to work for a great big telecom company, or was Ericsson a company you had targeted that you wanted to work for? I’m just curious.

Kelly: No, not at all. I figured I would probably either work in a public library or an academic library. And I did not have any previous library experience when I started grad school. And I went to a networking session where they brought in librarians from all different aspects. They had academic and public, and then they had several corporate librarians there. And that’s how I met someone who had worked at Ericsson, and she connected me with Elizabeth, who was working in the library at Ericsson, and that’s how I ended up where I am.

Patrick: That’s fantastic. I mean, so I was with Deloitte for a while doing competitive intelligence and the same kind of experience where I didn’t even know that competitive intelligence within enterprises and companies existed. Sounds like you probably didn’t know that there were such things as, you know, these corporate libraries that you could go join.

Kelly: Yeah, exactly. And the great thing was that the aspect of it that I really loved was doing research. And I got the opportunity to do that in addition to the traditional library things. So, it ended up being a perfect fit. And now so even more with working in BIC, getting to support intelligence research and learn more about business and competitive intelligence has been really good.

Measuring knowledge management success

Patrick: And knowledge management, which we talk to companies across the entire technology spectrum, I mean, so, from IT services and consulting and telecom and cloud and software. One of the consistent, so I’ve been here a dozen years, one of the consistent themes is that knowledge management is really hard, often underfunded, never quite measured well, and always something that people sort of fall back on is, oh, we need to do better at it. So how do you, let’s take a couple of those, like how do you measure your own success when it comes to knowledge management? What’s the way that you say, okay, my mission here at Ericsson has been better served this year because we accomplished this with respect to knowledge management.

Kelly: That’s a really tough one because it is something that everybody knows they need to do and that they need to do better, but it’s a challenge to make the time and to change people’s habits and to get people to share, which can be really challenging. So, one of the ways that we have measured it is just counting the number of things that people are sharing. So, just in a really simple way, how many knowledge assets, we call them, are people sharing into the BIC platform. And then we’ve also worked with teams who have found other ways to share not just knowledge assets, but other types of insights. We also do special pages on our platform for different teams so that they can come into the platform on their own dedicated page that has information that’s specific to their business area or their market area. So the more interaction that we have with teams, the number of teams that we’re supporting, the number of questions or projects that we work on with those teams, those are just kind of the basic ways that we measure it. Also, we work a lot to just make people aware of what we’re doing, not just knowledge management, but also just BIC in general and the market research that’s available to the organization. So we do newsletters, we do training, we participate in team meetings and things. So, we keep track of all of our interactions as well.

Who is a good internal knowledge management client

Patrick: Yeah, and so that, I mean, that’s a- you have to start with, sort of, the most fundamental thing, like what are people actually sharing, that makes sense. And keeping track of that’s got to be a challenge. But we’ve had on the podcast a number of analyst relations professionals. And the question I come back to them a lot is, what does a good internal client look like? Like who do you like to work with within your own company because they understand what you do and what value you bring? How about for knowledge management? What’s a good knowledge management client, internal client? What are they like?

Kelly: Just somebody who is eager to share, I would say is probably the best internal client. Somebody who really gets behind the idea that what we’re doing is benefiting other people in the company, and they’re willing to work with us and help us as well as we help them. So, they become actually our biggest cheerleaders within the organization as well. So, they’re sharing in our portal, and then they go out and tell people, hey, we have this great tool. You should be using this as well.

Patrick: Yeah, that’s something that you share in common with the analyst relations professionals that we talk to, is that when they find somebody who’s an advocate for what they’re doing. It’s sort of- it’s great for you to go out and tell everybody about what you’re doing, but it’s even better when somebody internally is like, hey, this is this incredible resource, go use them. So, yeah. 

Kelly: Exactly.

How changes in technology and AI have evolved the day-to-day role

Patrick: I’m curious, so the other thing I’d love to talk about is sort of how much- so of course, technology has changed everybody’s lives, and especially in the last few years the way AI has sort of upended so much. But I’m curious, when you think back to what’s happened over the last five years, has it been that AI and technology has sort of changed your day-to-day work so much that it’s very different, or has it just accelerated what you typically did and just made it easier?

Kelly: I would say it’s accelerated it and made it easier. We’re still working to incorporate a lot of that AI into the work that we do. We have tried to be very careful about the way that we do that because we want to make sure that the AI is helping and not providing the wrong answers or bad sources of information. That’s something that we find to be really important, obviously, in intelligence work is that we want to make sure that we’re providing right answers, the best answers, accurate information. So, we have wanted to embrace AI, but we’ve taken it really slowly to make sure that the ways that we’re using AI are valuable to us.

Patrick: And you’ve hired an intern named Erica to help you do that, right?

Kelly: We have, exactly, yeah. So, Erica is our newest team member in BIC. She’s our AI research assistant. And we launched a little over a month ago with having that service available in our portal. And we’ve gotten some really good feedback about it, I think people really like it, so.

Patrick: Do you think that Erica is going to be most helpful, because it’s not just use cases, I’m anthropomorphizing the AI, but still, we’re all going to do that, so I might as well do it. So, is she going to be most helpful with competitive intelligence, market intelligence, you know, generating sales enablement kind of stuff? Like where do you see five years from now, you’ll say, okay, Erica’s no longer an intern, she’s a full-time digital employee that is super helpful in what?

Kelly: I think that she is most useful for market intelligence right now. I’m not really sure what to say about where she’s going to go. It’s going to be interesting to see. I think that right now, her strong suit is being able to take all of the information that she has available and kind of synthesize that, speed up the process for our researchers and give an answer that kind of synthesizes all that information. She’s not doing a lot of insight work. The technology behind Erica is that she uses RAG. So, she takes the information that we have, the market research, looks into it and brings back an answer. So, she’s not reading it and necessarily creating insights out of that. She’s just pulling out information that the analyst firms have provided us. So, in that sense, she’s providing insights, but they’re not her insights. So, we’ll see what happens if she learns and is able to create her own insights. That sounds a little scary to me, actually.

Patrick: It does. It does. It sounds a little scary to me as well.

Kelly: Yeah, I think it’s really important that our analysts still do their own reading and their own analysis. So, this tool can speed that up for sure, narrow down where they need to look for the insights that they’re gathering. But I think they still need to focus and make sure that they’re doing their own reading and analysis. I think that’s such a valuable resource that we have are the people inside our organization. And I don’t want AI to be seen as a magic tool that will take the place of all of these important minds that we have.

Patrick: Right.

Kelly: Yeah.

Patrick: Right. Yeah. And it’s, I mean, you need the- you need the trusted opinion, you need the contextual analysis. And if Erica can simply find it faster and bring it to the sort of end user quicker, that’s the skill set.

Kelly: Exactly, yeah.

Working with internal AI for the best results

Patrick: I’m curious, and this is going to get a little bit into the weeds on this, and if it’s too much, let me know. But knowing that Erica’s the set of knowledge that she can tap into, the contents of the large language model or small language model, however you want to phrase it, that she’s tapping into is a diverse set of opinions and analysis from a diverse set of analysts and analyst firms. Is there a way over time, I know you just launched it, so man, this is again, maybe too in the weeds and too early to ask, but is there going to be a way over time for you to say, okay, she typically, she’s relying more on these three or four analysts or these three or four firms and relying less, like sort of tier out and say, these are the top, these are the middle, these are the bottom. And if that happens, would there be a way to sort of say, to evaluate that? Is that good or bad? Is she tending to lean toward a particular set of firms because of X, or is it just, we’ll take whatever she- however she evolves in that way?

Kelly: I think that because we have such a vast variety of content. So not all of the firms that she’s looking at provide information on the same things, that she will continue to look at all of the different resources. I think that is an interesting question to look at to see is she depending too much on one source or another or a topic that maybe two firms cover. So, that would be an interesting thing to track. It’s not something that I’ve actually thought too much about, but I do think that just because we have a variety of information and we have people asking a broad range of questions on different technologies or different trends and things that are happening in the industry, that hopefully that won’t happen, but something to watch for.

Patrick: Absolutely. And maybe we can gather again in six months or so, have Elizabeth on with us and talk about where Erica is now. Has she- she’s no longer an intern, she’s now a full-time digital employee, and these are the things that she’s doing really well.

Kelly: Exactly. And that’s something too that we’ve asked our users to provide feedback for us on the tool, because they’re the ones that can point out to us, is there an error. She doesn’t hallucinate very much. Just, there have been a couple of things where she’ll give an error in her answer, as I think all AI LLMs have been shown to do. And so, we have to make sure that we’re finding out about those errors. And so, we have encouraged our users, hey, if there are errors or there’s an answer that’s not quite right, please share that with us. We want that feedback. Because Elizabeth and I use the system but not in the same way that somebody who’s doing research on a topic that maybe we’re not looking at is.

Patrick: Right. Yeah, it’s fascinating. And I think, from your own sort of career trajectory to go from coming in as a trained librarian to being an expert in how to wrangle knowledge management and make knowledge management an asset for the company to now how to make AI even more of an asset internally, it’s just fascinating.

Kelly: It’s a very interesting change for sure. But I think that the knowledge that I have from library science and that you learn all of the search techniques and Boolean logic and all of that, I think that will translate to prompt engineering and figuring out how do we ask the generative AI systems questions so that we get the best possible responses. And that’s something we’re also focusing on is training our users to ask questions in the best way. Because search is not necessarily a natural skill that everyone has. You know, they are used to going out to Google and just asking a question, but with AI, you have to be very specific. You may have to include dates and sources and things like that. So that’s another, hopefully, skill that I can bring to helping our users get the most out of our new AI assistant.

Patrick: Yeah, that’s, and that reminds me of like when GenAI first, when ChatGPT first like, sort of exploded a year and a half, two years ago now, one of the, sort of the ways I thought about it a lot was that we have an Alexa in our kitchen and there are still times when we ask Alexa a question and we get an answer that makes absolutely no sense at all. It’s like, yeah, there’s still a ways to go here with the AI. There’s still a lot of work to be done. And not just in the AI and the technology itself, but in the human component of asking the right question, understanding how to ask the right question.

Kelly: Exactly. Yeah, there’s challenges on both sides.

Final thoughts 

Patrick: Yeah, well good, as long as there’s challenges on both sides then neither of us are going away. So that’s all a good thing. Kelly, this was fantastic. Thank you so much. And I promise we are going to do this again in six/nine months and talk about everything that you all have learned over the last six/nine months with your new intern.

Kelly: That would be fantastic. Thanks so much for having me.

Patrick: Excellent. Thank you, Kelly. 

Tune in next week for another episode of TBR Talks. Don’t forget to send us your key intelligence questions on business strategy, ecosystems, and management consulting through the form in the show notes below. Visit TBRI.com to learn how we help tech companies large and small answer these questions with the research, data, and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us and see you next week.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

AI Delivery to Enterprise via Technology Alliances: Which Vendors Own Each Piece of the Transformation

‘TBR Talks’ on Demand — AI Delivery to Enterprise via Technology Alliances: Which Vendors Own Each Piece of the Transformation
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
AI Delivery to Enterprise via Technology Alliances: Which Vendors Own Each Piece of the Transformation
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TBR Principal Analyst Boz Hristov joins “TBR Talks” to share his insights into how global systems integrators and management consultancies are partnering with ISVs, hyperscalers, model makers and OEMs to deliver solutions to enterprise.

Additionally, Patrick talks through industry specialization, permission to play, data management and transformation orchestration within the rapidly evolving AI marketplace.

Episode highlights:

• Three paths companies are taking with their AI strategy

• Change management for AI

• How to partner the right way

Listen and learn with TBR Talks!

Submit your Key Intelligence Questions for Patrick and his guests

Connect with Patrick on LinkedIn

Connect with Boz on LinkedIn

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

AI Delivery to Enterprise via Technology Alliances: Which Vendors Own Each Piece of the Transformation

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about artificial intelligence, the ecosystem, and professional services with Boz Hristov, Principal Analyst for TBR’s Digital Transformation Practice. 

Three paths companies are taking with their AI strategy

Boz, welcome back to season four of TBR Talks. I know, wow, it’s kind of crazy. I think you might be the most frequent guest on TBR Talks, we’ll have to go back and check the data on that. But a lot of that is because your work here at TBR spans across almost all practices because of the ecosystem research that you lead up, that is actually an outgrowth of the digital transformation research that you led. So that means that we have to have you on as often as we can, and so early on in season four, we wanted to talk about two things in particular. One is that ecosystem, and when we say ecosystem, we’re talking about the interplay, the relationships between IT services companies and consultancies, cloud vendors, software vendors, infrastructure vendors, OEMs, VARs, everybody. And that’s topic number one. And topic number two, because we can’t get away from it, is artificial intelligence, which just comes up all the time. 

And you know what, let’s start with, let’s start with artificial intelligence, because I was just in San Francisco a few weeks ago, and every single billboard on the highway, physical, hard copy billboard, was about AI, often agentic AI, but always AI. So I’m curious, it’s easy to sort of say there’s a bubble happening, and it’s easy to get caught up in some of the hype, but more importantly, because of the way we look at this and the way we come at it, thinking about companies first, what are some of the things that you’ve seen over the course of this year so far that are concrete, that are real, that are meaningful? And what do you think is coming in 2026?

Bozhidar Hristov, TBR Principal Analyst: Yeah, thank you for having me. Always good to be here and talk about what we see in the market and the companies we cover. AI, I mean, it’s definitely, I would say it’s a transition year, number one, so far what we’ve seen. Looking from 2022, kind of the hype, kind of everyone’s trying to understand where the investments are being placed and how it’s going to evolve. And there’s certainly a heightened expectation for ROI in 2026, but I’m sure we’re going to talk that about when 2026 comes around. What we’ve seen so far, it’s interesting just to think about the evolution of the AI market and the way GenAI started. And I would say fast forward, pivoted into the whole agentic AI notion, right? And what it means to the companies’ business models, we track how they interact with their alliance partners. So there certainly has been a lot more push around agentic and companies making a choice, either investing and building the pre-configured agents or staying in their swim lane and trying to be more into the agent orchestration game, agent management services game. And then the last group of vendors, which is often the consultancies, are trying to stay more in the upper echelon and trying to be little bit more of the business transformation discussion and trying to stay a little bit providing that wrapper for like the consulting led, the industry led. I mean, they all invest in some way, shape, or form in some certain capacities in their agentic AI capabilities, but largely more into the enhancing the consulting value proposition. So three camps of vendors, again, more on the business side, agent development side, investment side, and then the agent orchestration side, which I think is probably not surprising given the convergence of how the market has evolved and how some of the more bold companies, meaning they’re trying to test new operating models and new commercial models, are trying to go, especially in the agent development side. So that’s kind of, this is the big trend. 

So those agents, as it pertains to the development, let’s start with those. We’ve seen a lot more focus on agents that have industry flavor. We start first with the horizontal and functional specific agents, which is still the case like supply chain and customer experience and sales automation, we’re starting to see that industry specialization. We know often IT services companies talk about industry knowledge, industry specialization as a way to differentiate, which will be very interesting. Now it’s going to be really tested because agents essentially are very similar, because that’s the whole idea behind the AI’s leveling the knowledge field. So now the vendors that really have a deep industry knowledge and specialization will really have to come up and show and demonstrate that either by themselves or partner with specialized partners, could be in healthcare, financial services, telecom, you name it, right, specific vendors that play in that space. 

The agent orchestration side is kind of a continuation, I would say, in a way of how some of the IT services vendors and consultancies have tried to position themselves as ecosystem orchestrators, essentially, multiple technologies, trying to understand who is best positioned to serve a particular client need and how the role of and how the framework around multi-party alliances is starting to play. Now we’re talking about multi-agent setup, the different agent stacks that needs to be connected, certain protocols such as MCP and others that are coming up in the market that are being deployed. So what this goal boils down to is those vendors that are trying to position themselves as more of agent orchestrators is how well and how much permission they have access to of the data and the relationship with the line of business buyers as well as kind of the C-suite buyers that are often in charge of managing that client data because your agent is as good as your data access. So, getting that access and ensuring that data access is not just within the line of business, but it’s cross enterprise wide, it will be so critical. And obviously the last piece is the business transformation side, as I mentioned more on the consulting side.

Are industry specific agents a fad?

Patrick: Yeah, so I want to back up to the industry stuff, because the industry specialization and industry flavored or industry specific agents. So, we’ve been down this road before. Industry cloud was a thing, and then it wasn’t anymore. So, is anything different this time where agents are going to be different than a fad like industry cloud was?

Boz: I think the labeling of the agents is part of the fad part, personally. But I think it gets boiled down to how vendors are positioning them and how they are looking to charge for the capabilities that the industry agents are going to be addressing certain needs, essentially, right? So, it’s not just labeling an agent for agents’ sake being a financial services agent, what’s your value proposition? How do you ensure that, you know- is it the domain? So that domain knowledge, context engineering is becoming kind of the new “SKU” that’s the evolution from prompt engineering, right? 

Patrick: Right.

Boz: That’s the next wave of context engineering that we’re starting to see and hear how- and essentially what it is, in my view, is IT services companies enhancing their consultants’ value proposition being trained on the technology and the translation layer, so that- 

Patrick: Right.

Boz: Think of it that way, the industry specialization in 2026 will be equal or greater, you know, or will be more enhanced by, or kinda like the- I don’t even formalize the formula in my own head, but it’s essentially it’s the context engineering, so that the new industry consultants- 

Patrick: Right.

Boz: That’s the new way of thinking about it, so that’s where I think it is. It’s about how fast, how well can you translate what the agent is doing, because typically the agents is saving you time, so now you have more time to present a greater insight.

The data access challenge

Patrick: Right, okay, so that’s something to keep an eye on for 2026, like the context engineering and industry. 

With respect to data orchestration and ecosystem orchestration, that again, we can look back 10 years and say there were IT services companies and consultancies that were positioning themselves as orchestration layers 10 years ago. And if you had said 10 years ago that the data access problem is still going to be unsolved in 2025, even with the advent of incredible technologies like ChatGPT and GenAI and all that, you’d look like a fool, and yet that’s exactly where we are right now. So why is the data access challenge so persistent for IT services companies and consultancies?

Boz: I think it’s a two-fold thing. One is change management. That’s from the buyer’s side, right? So, line of business, leadership, anyone who understands, you know, that they may see it as a threat, potentially a threat. Now, why am I sharing my data with my peers’ data and, kind of, what does that mean to me? Is it going to be a consolidation and how- humans don’t like to lose control, especially when they’re in charge, you know, that, you know, trying to, they’re in that position because they are good at managing processes, or people or otherwise. So that’s a change management, it’s a factor. The other piece is the, I think, over the years, and I think it’s kind of with the first one, is the inability for vendors to demonstrate the scalable ROI. And that’s a challenge because, you know, vendors can argue and say, well, we didn’t have the right data to show the ROI because the buyers didn’t share the right data with us and the right amount of data. So, I think it’s kind of like a chicken and the egg kind of a problem in this case. I think we’re going to probably see a new wave of data re-architecture and focus on the data orchestration and governance as we’re thinking about how everyone that is looking into the bigger landscape, what it all means and companies that are being on the buyer’s side that are a little bit more further ahead in their “digital transformation” I mean, they’ve used cloud for years and they’ve, kind of, have set up their right data architecture to take the opportunity from agentic. They are going to be the ones with the test beds. But that’s probably less than 10% of the market right now, I would say. So it’s still a long way to go for a lot of opportunities, which generates for the IT services companies to still do a lot of that foundational work around data and kind of the way the restructuring and getting the structured and un-structured data being in the right position, the different data pools and how feeds and stacks up and- which again presents new opportunities for new alliance ecosystem partnerships because there’s a new- they’re not so somewhat new, but they’re kind of like more of important players, I guess, in the space, from the Snowflake and Databricks of the world, but now you’re looking at like the different model developers, the OpenAI, and all these kind of like, model developers. So, they are to be, look up and see how do they play in that whole data stack orchestration as well, because they’re great to provide the POC to start the conversation, but are they preparing themselves to be the right partners. And do we see the likes of Accenture, Deloitte, or anybody in the IT services stack partnering the right way with those companies? Are they training their staff on Anthropic technology or OpenAI practices the way we saw with the advent of hyperscalers and then the ISV providers. So, I think that’s where we’re going to see the back and forth between the various parts of the ecosystem, the push and pull relationship, understanding like who is ready to invest and how the technology partners are seeing the services partners, services companies. Do they see them as an opportunity to open doors for them? Or they may be saying, you know what, we can do it all by ourselves, why do we need you? So, there’s that conversation that I think we’re going to start seeing in the next year or three years, just as the market evolves, as those model companies become a little bit more important players. Not that they’re not important right now, but they’ll definitely need to be paid more attention to as we move forward.

Patrick: So, I want to get back to partnering the right way, because I think that’s both something we need to dive deep into, and it’s a perfect segue into the ecosystem discussion. 

Change management for AI

But before we leave this idea that you laid out sort of three different things. There’s the folks that are developing the agents, and there are the folks that are developing the ecosystem. And then at the top end of it, or at the other end of it, is the change management, the consulting part, the business reinvention, business model reinvention, all that stuff. When you look at those three, it seems to me that the change management piece may actually have the most sort of long-term revenue because those other two pieces are going to constantly be in flux. And so when you look at the companies that we cover, are there, I mean, not that you have to name names, but if you want to go right ahead, are there companies that you think stand out for their, both capabilities and their position with respect to providing change management specifically in a AI/agentic AI/GenAI age?

Boz: Yeah. I mean, obviously, you have the, if you go back to what we always preach is stay in your own swim lane, the usual suspects, the McKinsey’s, the BCG’s, the Bain’s of the world, they have deep roots in change management, right? So, you’d expect them to be as the natural kind of vendor to tap into and to explore that. But which puts a little bit more pressure on them, how well do they understand the agentic AI space? Because they know operations, they know change management, they know organization and change inside and out, and they have the relationship and proven use cases. But they also need to better understand the impact of agentic on the client’s business workflows and whatnot. So there’s a little bit of a, as much as a low-hanging fruit, it’s more of a test of their willingness to change themselves because they need to be able to demonstrate that knowledge, which means that they have to bring in people with certain skill sets in the mix so, it’s not just a consultant at the table, but a consultant plus maybe a context engineer that they may be sitting next to along the way. So that’s going to put some pressure on their business model as well as they try to tap into the opportunity. Others from the IT services spectrum, like the Accenture’s of the world and the Deloitte’s of the world, they’re very strong at HR management. We know Accenture has been investing in their learning services for some time now, which I think it’s in a way a door opener for some change management, kind of the Accenture way. *laughs* You know, maybe you have to take a couple of steps before you actually lead to that, but that’s just a way of doing business. 

I think another change management we may see is the idea of trying to drive a kind of back-to-front consulting, using operations and workaround managed services as driving consulting. Because in the change management there’ll be a different starting point there around work processes and workflows optimization, which when I say, you know, that’s more of a technology discussion, but I think that’s, you know, if you’re able to reverse engineer what the process is and try to think about how it actually impacts your skills in your organization, that’s where you can do that. So, we know that someone like Capgemini recently announced the acquisition of WNS, big splashy acquisition. We see it a little bit more of a test to see what Capgemini can actually do in a world where BPO is getting commoditized, knowing what we know about WNS, a business space, you know, but it’s certainly a space to keep an eye on, as we know the likes of Deloitte is looking a little closer to drive that kind of back-to-front consulting with driving and expanding to operate business overall. So, there’s certain aspects that are, you know, again different starting points and different tests when it comes to, you know, the companies that we usually track to see how well they can do change management and what does change management mean to them as a way how it fits into the bigger, broader play if they are going to be the agent orchestrator versus agent builder and is the goal being an agent managed service provider versus, you know, business transformation discussion.

Patrick: Right, and honestly, from everything you just said, if I had to guess, we’ve spent a lot of time in 2025 answering our clients’ questions about AI. And I think we’re going to spend a lot more time in 2026 answering client questions about managed services to consulting. Like converting that managed services space into consulting opportunities. Because it’s coming up again and again, and the companies that you mentioned are the ones that are sort of at the forefront of being able to tap into that. And they’re doing that themselves, and yet there are a lot of competitors that they have that we don’t need to mention, but everybody knows them, that have massive managed services contracts in place now that they need to either renew or find ways to leverage into consulting opportunities around change management around whatever else. 

Boz: Yup.

How to partner the right way

Patrick: So, excellent. Let’s pivot here to ecosystems. So, we talk about this a lot because we talk about ecosystems a lot. One of the things, I’m curious, in the last year of thinking about ecosystems and all the reports that you published, there’s gotta be a couple things that stand out for when you said companies that partner well or partner the right way. What exactly does that mean? Like what are the two or three things that partnering the right way actually comes down to?

Boz: Yeah, I think it’s a moving target, I would say, but there’s certain common, you know, attributes that we see and we do, as we’ve spoken in the past, you know, we do have the Voice of the Partner report, which the latest results came in September now, but so, it’s where we survey groups of vendors, OEM providers, cloud and software providers, and professional service providers, and we try to better understand what are they, the big question is what are they missing from their partners when we talk to OEM providers, how do they work with the other two groups and vice versa, right? So, I think we know some of the common practices still remain true today around knowledge management, it remains the foundation. It’s a big gap. Co-investments in terms of developing resources, trying to be, you know, skilling and upskilling and reskilling, portfolio development, co-innovation, that’s the part of it. And obviously there’s a lot of like that alignment, thinking about how, you know, leadership sees it because we often find there’s a disconnect between leadership alignment, but then also the field salespeople have a little bit of different priorities. So, aligning, you know, priorities from, you know, just the vision and go-to market, but also incentives and sales motions. 

And we said before, how well can your partners tell your story? Can they say it as good as you can? And we saw some of that changing in the last Voice of the Partner report, where we see some of the, like the OEMs, for example, were looking to, at least they are saying that they’re willing to be a little more agile, a little bit more open. We know historically that group of vendors as a whole has been kind of doing their own way where they do direct sales. Now they’re a little bit more open to the channel, a little bit more looking for support and willing to collaborate in even the multi-party alliances set up with the services providers and the cloud providers. Which I think a common denominator we identify obviously is the likes of NVIDIA that provides the great opportunity right now around AI, going back to the AI comments, but it seems like that’s kind of the common layer that everyone is gravitating towards. And it’s a good way to test how much those companies are really willing to be as flexible as they say they might be in the first place. 

But again, commercial models, I think is the next thing, because it’s about- as much as technology alignment is important, making sure you have the portfolio and the speeds and feeds. Again, if your commercial model is not aligned, this makes it much more challenging. I think AI and agentic AI will further test that commercial model alignment because we hear from the professional IT services companies often talk about outcome-based pricing. But then at the same time, we still hear from the technology partners, license-based or SKU-based sales, subscription-based sales. So, there’s a disconnect between that. So, It will be very hard for the technology partners to move into the outcome-based world, and we don’t think that even IT services companies will go full on outcome-based because clients are not willing to go full on. So, it’s like a domino effect. But I think there’s opportunities in certain industries and certain function areas that that could work. And so, we start hearing more about that consumption-based pricing as the common ground where everyone is maybe willing to compromise for the good of the partnership and for, kind of, creating winning scenarios for all parties.

Where the value for customers is

Patrick: Right. I want to get to customers, because I think everything you’ve just said is very much focused on the relationships between the companies that you’re talking about, the different kinds of companies you’re talking about, but it’s how they behave together, and I want to get to what does that mean for the customer. Well, one thing I think you said that’s really important is the difference in the views of pricing, outcomes-based pricing versus a subscription or some other model, for software. And that actually is reflective of the higher value or the more strategic metrics, which is around, and we heard this directly when we were on the road together in California back in the beginning of the summer, like a software company that is saying, hey, net new contract value is the only thing that matters to us. 

Boz: Yep.

Patrick: And an IT services company saying, it’s the relationship that’s the only thing that matters to us because the relationship means renewal or new opportunities for us. So, having those two things align and then below that is the pricing. I know we have Voice of the Customer coming up in December, we’ll be publishing in December. So, what from the customer’s perspective, because this will be like the fourth or fifth Voice of the Customer at this point, maybe even sixth or seventh. 

Boz: Yeah.

Patrick: It’s a lot. What value does the customer get from an aligned ecosystem of two or three or four, an IT services company, a cloud vendor, a software vendor, and an OEM, all coming together and working well together? What’s the value that a customer gets out of that? Or do they even care? I mean, that’s what it is.

Boz: Well, yeah, I was going to say, because here’s the thing. So, we know historically enterprise buyers don’t like vendor lock-in, right? That has been the thing, you know, it’s a risk management, essentially. That’s what it’s all about. about risk management. So, they have tried that model for years and they continue to do so. They still try to segregate vendors in categories, the way they know them, they work best and the way they see them fit the most. It could be on the consulting side, could be on the managed services side. That’s still the case for the most part right now. But for multi-party alliances structure, one area that we have when we talk to the buyers is, and there’s a recognition that is very challenging that that will happen at the company-wide level. It’s so much more risk to put OUX on one company versus-

Patrick: Sure.

Boz: But when you click down on the line of business level, I think this is where there’s an opportunity for better collaboration, because now you have fewer vendors that do things really well, and with AI and agentic AI, that’s the expectation is in that direction, because you need to do more with less, right, essentially. And so, we’ve seen that vendor consolidation and technology consolidation going on for the last several years now. And I think when you have three, four vendor in consortium going to market and say, we are tackling financial services, you know, supply chain, whatever the case might be, we are the top, you know, three, top five, premier, most use cases vendors, and they can tell each other’s story the best way. I think that’s where it provides that depth and we talked earlier about industry specialization, that’s another layer that can come in. So, vendors can- so buyers can actually get value that for the buyers potentially is really to get the most out of it. That ROI that everybody is talking about, they can now really measure it. Obviously, there’s going to be a greater need for transparency around pricing, accountability, who is overseeing that relationship and whatnot. So, I think that’s going to be behind the scenes, you know, think about what agents could do is essentially is to, hey, these are my agents versus your agents, right? So now you’re talking about whose agents are you orchestrating, how you’re doing all that stuff. But if you have the trust, if you have the permission to demonstrate that value, I think it’s a good opportunity for the buyers to really drive, elevate, you know, internal value within their own stakeholders within the company and shareholders externally as well, just by the nature of the structure. Because we know that all these line of business leaders and others, they have struggled with getting the most out of their investments from cloud and other technologies. 

Patrick: Right.

Boz: So now is the time for vendors to demonstrate that this is not just yet another technology in the cycle, but we actually can prove value. That’s kind of where, but again, it’s going to go down to change management. 

Patrick: Okay, yeah.

Boz: Circling right back to because line of business leaders then thinking about the procurement that gets involved, how do they handle, you know, whose contract the paper is on and who’s being held accountable? So, it is certainly being tested. We’re aware of use cases like that. Is it the norm yet? No, it’s not. But can it become? Yes, it can. And especially as the generational buyers are rotating as well.

Patrick: So next time we chat, we’re going to talk about Voice of the Customer. But if we chat before December, we’re going to talk about change management as a service for startups in the AI space. We’re going to talk about pricing. And we’re going to talk about too much technology and technology burnout. Those are going to be our three topics next time. 

Final thoughts

I have a last question for you, because I know you did a lot of traveling this year, 2025. So, not counting what’s coming up and your anticipation of events to come, what was the best work trip from the best event from 2025? Totally unfair question, but I have to answer that.

Boz: No, it’s not fair at all. Well, I mean, it’s, I gotta say, I mean, probably definitely one of the highlights, you know, of the year, my trip to Japan with PwC.

Patrick: Oh yeah.

Boz: Certainly very much, you know, appreciate it, the time spent with the company, seeing things from a completely different culture perspective being brought up, more change management, how things have been applied internally and externally. So, obviously appreciate the food there in Japan, so that’s always an important factor traveling, so very much liked that. The trip to California with Fujitsu, I know- we know it was great. I think it was a really well-structured event as well. In terms of content, I gotta say I give kudos to the analyst relations team there, just being very receptive to the feedback that we and others have shared with them, and applying that feedback throughout the two-day event we spent with them, and the opportunity to connect with them, so definitely, yeah.

Patrick: It is kind of fun to pat ourselves on the back and say we provided feedback, and then we saw it. Of course, KPMG Lakehouse is at the very beginning of the year.

Boz: KPMG Lakehouse, so I was going there. I was going to say, yeah.

Patrick: Last, last question, because this one kind of fascinates me. So, we talk about AI a lot, and when we talk about AI, and actually the broader discussion around AI is often around how it’s going to replace jobs, it’s going to take away jobs. And so, then the next piece of that is, all right, what are the skills? What are the things that humans can do that AI can’t do, won’t ever do? So, then you think, okay, what are the skills that I would need to make sure that I’m not replaced by a robot, that I’m not replaced by a digital full-time employee? So, if you had 10,000 hours, if you have from now until the end of the year to just simply perfect one skill, and it can be anything. It could be like playing the guitar. It could be speaking four more languages. It could be turning yourself invisible. What is the one skill that you want to have that AI will never be able to do, but you’ll be able to do?

Boz: Wow. Gotta think about that. The languages have definitely crossed my mind as you were saying that, because I just have affinity to study new languages, but-

Patrick: AI can speak new languages.

Boz: AI can speak new languages as well, but I still have that trust factor, we still see people that’s meeting, we don’t see AI talking, translating, there’s people next to them that does the translation, right? 

Patrick: That’s true.

Boz: But anyway, so from- oh ha, swimming.

Both: *laughs*

Patrick: You wish you could swim like across the English Channel 

Boz: Yeah.

Patrick: or swim all the way up the Hudson River.

Boz: I don’t think AI can do that.

Patrick: I don’t think AI can do that. Fair enough.

Boz: Something that requires physical interaction than actually mental I would say.

Patrick: Excellent. Excellent. All right, Boz, thank you so much. Great chat as always. We’ll talk soon.

Boz: Yep. Thank you.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

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AI in Strategy and Geopolitics at BCG Henderson Institute

TBR Talks: Ericsson’s AI Strategy: Business Intelligence at Scale
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
AI in Strategy and Geopolitics at BCG Henderson Institute
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In this episode of “TBR Talks,” Senior Director David Martinez shares his point of view on key topics covered by his BCG Henderson Institute team, particularly regarding geopolitics and artificial intelligence. The BCG Henderson Institute is an internal think tank at Boston Consulting Group.

David Zuluaga Martínez is a Senior Director at the Geopolitics & Society Lab, based in BCG’s Brooklyn office. Prior to his current role, David was a partner affiliated with BCG’s Public Sector practice. Previously, as an Alum Ambassador at the Tech & Biz Lab (2023-2024), he co-authored research on generative AI and, as an Alum Ambassador at the Strategy Lab (2021), on business resilience amid the COVID-19 pandemic and collective business action to address climate change. Since joining BCG in 2018, David has worked on strategy, operations and technology projects primarily for social impact and public sector organizations.

Episode highlights:

• Designing a research agenda

• The importance of feedback in the research process

• Go-to daily sources

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Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

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Art by Amanda Hamilton Sy

AI in Strategy and Geopolitics at BCG Henderson Institute

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem, from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional services, IT and telecom vendors.

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about artificial intelligence, the research process, and philosophy and consulting with David Martinez, Senior Director at the BCG Henderson Institute’s Geopolitics and Society Lab.

From philosophy to BCG

David, thank you so much for coming on TBR Talks. I really appreciate it, and we’re kicking off season four, this is pretty exciting. We’ve been doing this for a while now. So, we’re so happy to have people from outside of TBR come in and give us their insights. And so, I’d love to, if you could just tell us a little bit about yourself and about what you’re doing right now. We know you’re with BCG and you’re in the think tank part of BCG, which is fascinating to me. But just give us a little bit of your background and what you’re up to right now.

David Martinez, Senior Director at the BCG Henderson Institute’s Geopolitics and Society Lab: Of course, and Patrick, thank you for inviting me to the podcast. Very, very excited to be joining you today for this conversation. So, my background is in philosophy, so I have a bit of a heterodox non-business background in terms of my academic training. I have a PhD in political philosophy and joined BCG as a consultant once I left academia. I was until recently a partner at BCG’s public sector practice, working primarily with state and local clients in the US and have for a couple of years now been in a different role as a senior director at the BCG Henderson Institute. That is, as you mentioned, BCG’s think tank.

It’s a very different job compared to regular consulting work. It is not client facing in the same way. So, we don’t do projects for specific clients, but rather we spend our time thinking about and researching the topics that we think are decisive in shaping long-term strategic outlooks for companies. And in all fairness, for policymakers as well, for leaders in all walks of life. So, we do research on, you know, AI of course, technology, we do research on geopolitics, on, kind of, traditional strategy topics from a business perspective, uncertainty, resilience, optionality. Now we’re doing more work on demographics, for example, and the impact of demographic change in many, especially affluent societies. So, these are all topics that might feel a tad removed from the immediate exigencies of running a business, but precisely because they are slightly removed and nevertheless vital when you take on a sufficiently long-term perspective, someone’s going to think about them. And we think as a company that somebody within BCG has to think about them. That’s the role of the BCG Henderson Institute. That’s what I do specifically in the technology and geopolitics space.

Designing a research agenda

Patrick: That’s really fascinating. And I want to get back to the technology and geopolitics in a second, but one thing that you said at the beginning was how it’s topics and trends and issues that you think are most important. And so, we’re in market research here at TBR, so, we have the things that drive our research and a lot of it is tied to the earnings cycle. So, companies release their earnings, we’re all over it. If you’d like to release your earnings as BCG, I would certainly appreciate it, I know you can’t today, but maybe you will someday.

David: *laughs* Above my pay grade.

Patrick: *laughs* But that’s where we’re getting those- we look at the company’s activities, what they’re doing. And that drives how we think about, and what we go after in terms of our research. So, do you get any feedback from or any insights from companies themselves who are coming to you and saying, hey, can you take a look at this? Or maybe it’s BCG partners that are saying, this topic keeps coming up with my clients, what do you guys know about it? Are there other sources of inspiration for what you want to go after? Or is it more you guys sitting around and thinking about what are the most important topics today?

David: Yes, to all of those.

Patrick: Okay.

David: So we source our topics and frankly the questions, rather, that we want to explore from yes, clients. Yes, also partners, folks at BCG who talk to numerous companies and business leaders and start noticing patterns around, not necessarily what people might be thinking about, but also what perhaps they’re not thinking about, which is just as important, and that I think ties to the third source of guidance, if you will, in designing a research agenda, which I would describe as sort of the intuition around what people aren’t thinking about and either should or will soon have to.

So, the challenge that we’ve set for ourselves is to be simultaneously responsive to the concerns that are already there in the business community amongst business leaders, but also to be able to anticipate some others. And I’ll give you an example. The topic of resilience is now everywhere, right? Everyone thinks about it. Everyone’s very mindful of it, very aware of it. I surely don’t need to mention COVID as a particular catalyst of interest, but we were doing work on that for a few years before COVID happened. Already thinking about, and this is particularly the work, for example, out of our strategy lab, thinking about how environmental systems or ecosystems rather in biology are resilient. What are the structural features of resilient ecosystems and through biological analogies, trying to understand what makes for a resilient enterprise and analyzing the value creation potential. So that’s just an example, but it goes to show that it’s a combination. It’s sourcing what people are already interested in and thinking about and in need of answers to, but also what might lie ahead.

The importance of feedback in the research process

Patrick: Okay. That’s fascinating. And I was going to go to geopolitics, but you’ve sort of teed up another question that I had, and that’s around feedback. So, I’m sure you got feedback from folks within BCG and outside of BCG, BCG’s clients, about the way that you were approaching resilience when it went from something you were thinking about to something that suddenly everybody was thinking about. But within the- and so I think of us, TBR, as an intelligence firm more than anything else, and as intelligence advisors, and part of the intelligence cycle is that feedback. You have to know what people are saying and thinking about the research you put in front of them in order to get better at your research. So has there been, maybe it was with resilience, maybe it’s with something else, where there’s been a sort of piece of feedback that you’ve gotten that has sort of changed the way you think about the way you do your work, or was just so fantastic that you said, hey, I’m the best at this, or made you question whether or not you should be even doing it at all? I mean, have you had that experience where the feedback is sort of that exceptional?

David: Of all sorts. Yes, of all sorts, actually. And it makes for a very fruitful dialectical process. I would add that it’s very important for us to also go beyond the business world in pursuit of that kind of feedback. So, one thing we’ve been doing for a number of years, for example, is this convening we call the Meeting of Minds, where we invite numerous leading scholars, but also senior policy makers and maybe journalists, and also business leaders to talk about a big societal topic. And part of the point or part of the purpose is to ensure we’re not too wedded or too anchored to narratives or concerns that might be idiosyncratic to the business world, and that would benefit from that dialogue and that exchange beyond the business world. So, I would just add that those other layers, those other spaces for conversation, are very important to the work we do as well.

Patrick: That’s phenomenal. So, you’ve got a really sort of structured way to keep yourself grounded so that you’re not wandering off into, you know, woods that don’t matter to people in the business space.

David: Yes. And the way we do this very tactically is when we start pursuing a research project, we always do an academic literature review and also a business thought leadership literature review. We need to know what’s being said, what has been said, what hasn’t, to really understand what are the prevailing narratives or beliefs or conceptions, what are the competing perspectives on a given topic. And I think we also benefit, this is true of consulting generally, but it is particularly true of the research environment at the Henderson Institute. We benefit from the combination of deep expertise and potent analytical abilities of our generalist consultants, who may not be subject matter experts, but precisely because they’re not, they can sometimes help us ask what seem to be the simplest questions. And perhaps at first, they might come across as, you know, silly questions to raise, but they get at fundamental issue. So that combination of deep expertise, business world inside, perspectives from outside the business world, and analytical horsepower that is not sort of encumbered by the baggage that sometimes come along with expertise, the combination of all of those, I think, makes for a very rich research working style for the group.

Patrick: Yeah, that’s fantastic. And the baggage that sometimes comes along with expertise, I think is a beautiful diplomatic way to say what you’re really trying to say is which sometimes people think too much.

Tapping into boots on the ground for geopolitical questions

I want to get to geopolitics, but I want to come at it in an angle, a very specific angle. You, your firm, BCG, has people all over the world. You’ve got incredibly brilliant consultants who are day-to-day working in different countries with different kinds of clients. When it comes to tackling geopolitical issues, how often do you sort of tap into or directly tap into the people that you have, that have their feet on the ground that are living in a particular country and in a particular environment? Let me give you a very specific use case of what I’m thinking about, sort of framing this up. So, if one of your questions or one of the topics you’re looking at is sort of the economic implications of political turmoil in France, you’ve got, I don’t know, 15,000 people or so working in France. You know, you got 15,000 French people that you can directly tap into and say, hey, what’s it feel like right now? What do you think is going on? Do you ever use BCG itself as a source of primary intelligence for geopolitical questions?

David: Absolutely, we’ll be remiss not to. I think part of what we are very mindful of is that the credibility that the Henderson Institute has in offering a perspective is in large measure a function of its proximity to the front lines of business activity and strategic decision making. And that we know through our staff, through our colleagues who are doing work on the ground with clients. So, we do it. I think we have to do it. We always do it. And it helps us sort of navigate sensitive topics also in a way that is very strictly grounded in facts and analysis. Because for any firm, there are questions that are challenging in terms of developing a perspective and putting it out there. Geopolitics, of course, is particularly sensitive in many cases, but what we do is always fact-based and we endeavor to develop points of view that are analytically robust. We can do that because we can rely on the distributed knowledge of BCG as an organization and because we have very clear principles for the kind of quality in the research output that we commit to.

Patrick: That’s fascinating. A lot of your peers do not do that. I’ve spent time speaking with folks that are in a similar position to you and in a similar kind of firm that have that global capability. They have those boots on the ground in many countries, and they don’t really tap into that as well as you guys do. So, it’s fascinating to me.

Research questions we want to answer

I want to ask a little bit about the challenge that we always have when it comes to research, and that’s you sort of, you can’t please everybody. You put out a piece of research and somebody tells you, “you didn’t go deep enough.” And then this, you know, the same piece of research generates the, “you missed the bigger picture here.” So I want you to sort of take, I was literally, I’m not- don’t literally take your headphones off, but take your mind back, just step back for a second and think to yourself, okay, give me six months to just research anything I want to research in the world. What’s that? What’s David’s six months, I’m looking at anything I want to kind of project? What would you go do?

David: Well, I think right now, a very important question in our minds is how the roles of the corporations and governments are changing in the economy and how some of the traditional boundaries of strategy, as in, well, you think about your strategy in a competitive environment is primarily responsive to business factors, how that is changing. Because what is a business factor that you ought to take into account, is actually an expanding set. I think that’s an important, kind of a foundational question for how companies think of a strategy for the foreseeable future, given the current geopolitical trajectory of the world, which I recognize is a hopelessly vague statement, but I think you know what I mean.

AI research questions

Patrick: I understand exactly what you mean. Yeah. And then I will say we can’t have this conversation without talking about AI at some point. So is there an AI sort of trend or issue that you look at and think, okay, if I had, six months is probably too long with AI because it’ll change. But if there’s some, is there a top of mind issue for you right now that’s sort of gnawing at you that you really wish you could spend more time diving into with respect to AI?

David: Yes. And I think I’m not alone in suspecting that one of the big unanswered questions is how should we think about adoption for generative AI technologies in particular? There’s a lot of noise and a lot of uncertainty around this, and it matters because it shapes how we form expectations for, say, productivity effects or cost reduction or revenue enhancing effects for businesses. And at what point should you expect to see some macroeconomic indicators of AI making a difference? All of this has to do fundamentally with the extent of adoption of this technology by businesses on the ground. We know those processes too historically have been slow, much slower than people usually expect. How much faster the process might be with GenAI, which builds, of course, on top of the internet, which makes the distribution of new technologies, new digital technologies much faster. Nobody really knows. But I think the specific question that really fascinates me is how could we better understand the extensive versus the intensive margins of adoption? If you ask companies in binary fashion, do you use GenAI or do you not? You’re going to get the overwhelming majority saying yes. But what does that mean?

Patrick: Right.

David: If you pay for a Copilot subscription that nobody uses, does that count as adoption? Really, in the interesting sense, how do we even get our heads around that intensive margin and its structure, I think is a very, very important and puzzling question that many big economists are thinking about that I am not comfortably qualified to explore, but that I wish I could devote more time to, because I think it’s very important.

Patrick: It’s fascinating. And it’s super important for the companies that we look at, because that adoption and that expansive adoption and deep adoption is what’s going to drive their business. They are dependent on their enterprise customers actually adopting and then using AI. So, the answers that you’ve discovered are going to be important to businesses going forward.

Philosophical technology questions

I do have a question now that you’ve raised in my head that I know that you’re qualified to answer because you’re a philosopher. And the reason I need a philosopher to answer, I’ve never asked a philosopher this question before, but we talk about it all the time. So, we look at at businesses and technology and a sort of saying that we have around here is that the technology always works, the people are always the problem. So, from your perspective, that’s kind of a philosophical thing to say, you know what, it’s the people that are always the problem. When you think about AI and adoption, when you think about the changes that technology is bringing geopolitically, but also then at the enterprise level, are people always going to be the problem? Is this just going to persist?

David: Probably. And I might, I think in the same spirit, I might restate the view a little bit differently. Whether the technology has a problem or not is a function of the interests that human users have. Pieces of technology do not per se themselves carry their purpose with them, as it were. They’re instruments. And that for which they are an instrument is not set by the technology itself. It’s set by the people who use the technology. So, whether the technology fails or doesn’t fail is logically downstream from the interests of human users that that technology is intended to serve. So, I might, if you will, I would put it even further up the intellectual change ahead of the tech.

Patrick: I was putting them side by side, but you’re right. They need to be a little higher up. One more philosophy question, I promise, and then we’ll move on. But I have to know, because you mentioned this in the introduction and explaining your background, and then you said you worked with a lot of public sector, state and local clients. Having been in public sector myself, I was federal government, US federal government, for a long time, and surprising as this may be to some out there, I’ve actually been elected to local town government. So, I’m actually back in government at the very local level. I have never run across a philosopher consultant in my entire time in government. Were you the only one? Are you BCG’s only philosopher consultant?

David: No, no, no, no. There are a few more. And a friend who has since left BCG was actually a theologian. So that might have been even more interesting. It’s funny because I think the place that AI now has in so many conversations has sparked a certain interest in what are one way or another profoundly philosophical questions. So, it’s been a fun time to be a philosopher in consulting, thinking about technology topics, because even when people say, well, I’m only interested in the pragmatic business side of things, you know, have a chat with them. You’re always a few questions away from “are they conscious or not” and stuff like that. So, it’s been fun to be in this type of role with that sort of background. So, not too many of us, but also maybe more than you suspect.

Patrick: So, the WhatsApp group for philosopher consultants is bigger than I thought it might be.

David: *laughs* Yes.

Patrick: Fair enough.

Go-to daily sources

I do want to ask one question that came to mind when I was sort of thinking about this discussion we’re going to have. Because you’re in research and because of your role now with BCG, when I started with Deloitte, one of the pieces of advice I got, and it was in intelligence, and it was, look, you need to know what your boss’s boss’s boss is reading every day. You don’t want to bring to them something they already read in the paper. And so, I think about that all the time. Like for our readers, for the people that are looking at my analysis, I want to make sure I’m bringing them something- I want to know what they get every day. So, in order to do that, I need to ask people all the time, so what do you read every day? So, what are your go-to sources, both for maybe news and sort of current stuff, but then also your maybe longer-term analytical thought pieces, kind of sources, other than, of course, the stuff you and your colleagues are already writing yourselves.

David: Yes, yes, yes. I mean, you make an excellent point. I don’t think the role of a think tank like ours is to be a news aggregator. There are enough good ones out there. I think the role is to help distill the narratives that make sense of the relentless succession of news with which business leaders and leaders in other spaces too are bombarded on a daily basis. So, I think that’s right. It’s very sound advice that you got. And for me, I try to make sure because so much happens every day. I try to make sure that yes, I read the FT and I read the Wall Street Journal and look at the Times. I have a handful of newsletters, some that are more politics oriented, some that are more technology oriented. I try to balance perspectives. So, there are certain temperaments that come with these newsletters and aggregators and kind of light touch commentators. And it’s good to balance them out a little bit and have some optimists, some skeptics on a variety of questions.

But for me, what’s most important is to always make time to read deep research. I have tremendous respect for academics who do very serious, very rigorous, slow work that seldom hits the CEO’s desk but that can be profoundly illuminating. And I think oftentimes the role for think tanks like the Henderson Institute is to help mediate between those two universes. You’ve got lots of noise when all you’re doing is reading the news. You have lots of depth, but a little bit of disconnect from the urgencies of the day when you’re only reading academic literature, someone has to help see how those tie together and what might be the narratives that unify them or the questions that shine a light in both directions. So, it’s very important for me to always make time to read papers. So, I mean, I’ll give you a very concrete example. I read everything David Autor writes. He’s one of the great labor economists at MIT. He’s done amazing stuff on AI. And a lot of my thinking on labor economics of AI has to do with what I’ve learned through his work under long brilliant papers. And so, it’s just important to make sure, as we all know, that there’s time for what’s important, not only what’s urgent, and I think of huge chunks of academic research out there as falling in precisely the category of the important.

The impact of the Henderson Institute’s work

Patrick: I love the way you framed it, because you didn’t say that you read academic papers. You said that you make time for that deep reading. And I think that’s the thing that I think I know I’m guilty of, and I think a lot of us are, is that you just don’t make time for that. I do make time to read the hard copy of the New York Times every day. I think I’m the last print edition subscriber of the New York Times in America, but I do get it on my doorstep every day. So, I know that I have to have it or else my day isn’t complete. I want to bring the conversation back to something that you said at the very, very beginning, which is that you’re not client facing. And yet it seems like throughout this conversation, there have been multiple times when you’ve talked about the way that your research is directly presented to or absorbed by and influenced by BCG’s clients. So, do you think there’s- do you feel like you have a solid measurable, maybe not measurable, but an important impact on the way that your clients actually think about the world?

David: I certainly hope so. *laughs* So, when I say my role is not client facing is perhaps in the insider sense that I’m not part of a project that is executed on behalf of a specific client. Doesn’t mean that I don’t talk to clients, on the contrary, because I’m not in any one project that is committed to a specific client. I get to talk to lots of them at the same time about questions that are of common interest and concern. But yes, the work we do goes straight to clients, just as to your earlier question, clients themselves are a critical north star in designing a research agenda. They’re also, in a certain sense, the terminus ad quem of what we do. The whole point is that we do develop and help shape the way senior executives think about their broader context and their business and the questions and strategy that they’re grappling with, for sure.

Patrick: Fantastic. You are, by the way, the first guest that we’ve had in our four seasons to use the word dialectical and also to drop a Latin phrase into our discussion. So, I didn’t miss it.

David: *laughs* That makes me a professional snob, I suppose.

Patrick: *laughs*

Human skills in the age of AI

All right, so I have one last question before we wrap up. And this has been a fantastic conversation. I really appreciate the time that we’ve spent together. I’ve been thinking about this a lot because AI, when we talk about AI, the first question that comes up outside of the confines of TBR and outside of the confines of the technology space, but when I talk about it with my friends, when I talk about with people outside of this little insulated world, it’s all about what jobs are going to get taken away by AI. And you mentioned the labor economists at MIT and all that. So, I think about how to counter that sort of narrative. And part of it is, well, there are some skills that will never be replaced by AI. So, when you think about that, you think, all right, well, what would be a skill that I would want to master? And maybe it’s playing the bass guitar, maybe it’s speaking 4 languages, maybe it’s the ability to turn yourself invisible. I mean, what is, and if you could think, you know, David, what’s the skill? Give yourself time to master a skill that’s sort of, maybe AI proof is part of it, but more importantly, it’s like something you would really want to have. What’s that skill?

David: This is going to sound very abstract to you, but I think sense-making is something we won’t, for the foreseeable future, be able to or want to delegate. And this relates to your earlier question as well, you know, is it the technology’s fault or is it the human’s fault? And when I was saying that humans set the ends for which they use technologies as instruments. The reason why I think that’s a very important fact to keep in mind is that technology helps us solve problems. It doesn’t actually define the problems. What counts as a problem worth solving is on us. And I don’t mean that as a burden. I mean that as, you know, it’s a wonderful thing and it’s as it should be. And so, when I say sense-making, I mean defining that for which the technology is useful, that for which it is not, that for we want to use it, that for which we won’t want to use it. Now, there’s a side of the response that, you know, just could turn to, you know, almost cause disease and phenomena of that sort. Whereas, you know, whereby we know that whichever distinctively human skills are not mastered by AI will thereby become more valuable, more economic bottlenecks command a greater share of spend in the economy. That’s all true, but I think the more fundamental question is, does it make sense to think of AI as a technology that sets its own ends in terms of problems to be solved in the economy? I don’t think so, because I don’t think degrees of autonomy for the execution of tasks really get to the point of saying, well, this is a task worth executing in the first place. I think that will remain strictly and a profoundly important human activity for as long as I can project out my sketchy vision of the future.

Patrick: That’s fantastic. We were just today, I was talking with one of my colleagues about exactly what you just described, which is the way we were coming at it was, why is AI being applied to solve some problems and not other problems? And we thought about many of the use cases that AI is being put to now that are such low stakes. And maybe it’s because they are low stakes that more are being applied there. When there are other use cases that are much more higher stakes that AI seems to be ignoring, or the people who are developing AI solutions seem to be ignoring.

David: Yeah, absolutely. I think that’s right. And add a layer that it’s not just about what’s technologically feasible or possible. I think it’s easy to mistake that which is technologically possible for that which will happen or should happen. And technology may be able to do many things. And for a whole host of reasons in specific contexts, you might decide, again, with good sense, that it shouldn’t be used for that purpose. Right? A piece of technology for example, may not have the requisite type of accountability that a certain type of service ought to have in a certain conception of your value proposition. And so that means that whether a GPT could do what person A or B is doing is kind of not the real question in that kind of case, it’s, well, GPT is not the sort of entity that can be held to account. And that possibility of accountability is essential to the valuable proposition in this instance. And so, the person being there serves a valuable purpose, an important one, independently of whether kind of a neutral description of the task would lend itself to automation. I just think that that sometimes obscures more than it illuminates when you think about the application of technology in real life cases in all sorts of contexts.

Patrick: And as soon as you bring up accountability, accountability by definition includes some sort of legal structure that can hold someone accountable. And right now, you cannot sue a robot. You cannot sue a bot. You need to have a person. So, until that, until we flip that switch, which maybe we- maybe we shouldn’t, you know.

David: *laughs* But it’s not just legal. It’s not just legal, Patrick. Think about just interpersonal dynamics in, I’ll speak, but what I know, the professional services environment. When you’re working with a client, the role of trust, the role of conversation, the importance of being able to persuade someone and being persuaded in turn, these are all, they might seem soft and fluffy components of the value proposition. Sure, that’s because we often don’t have to spell them out because there has been no alternative to the human delivery of, you know, the insight, the strategy and whatnot. But once you have a non-human alternative for the delivery of exactly that content, you start realizing that there were these other features that are just as important to the full package, to the whole value proposition, that are not nearly as easily replaceable, and that’s not a function of technological capabilities. It’s a function of the kind of entity that a piece of technology is, namely, not a human. And that alone becomes significant.

Patrick: Right.

David: So even before you get to the law, it’s already, I think, a very relevant factor in many contexts, certainly in the services space of the economy.

Patrick: 100% agree, and I think part of why we both agree is because we are in the services sector of the economy, so we need that to be true.

David: *laughs*

Patrick: Sometimes what you think is true is what you need to be true, so.

David: Hopefully we’re both true and beneficiaries of the truth, but not because there’s a causal link between those two.

Final thoughts

Patrick: Right, And I’m not going to ask whether or not philosophy is pursuit of the truth, but I will ask you, just last thing, is there anything that you want to let people know they should go check out and read, anything you want to call out, stuff that you published recently? Like where can someone go after they listen to this to get more of your insights?

David: Yes, of course. I mean, anyone who’s interested in the type of work I’ve been describing across a variety of topics, it would be great for you to check out bcghendersoninstitute.com or bcg.com, either of those, and you’ll find lots of the research we produce. A lot of my work over the last few months has been about the geopolitics of technology and AI in particular, and thinking about how AI changes the way we think about power relations in the global stage and what can we expect. And it’s a very, very relevant topic, of course, at the moment, and one where, if anyone cares to share their feedback, I’d very much welcome it.

Patrick: Well, as a former diplomat who now, for some reason, spends all this time talking about technology, I’ll read it and I’ll give you some feedback because believe me, I’ve got thoughts when it comes to geopolitics. I’ve got thoughts.

David: I look forward- I look forward to that, Patrick.

Patrick: David, thank you so much for coming on this podcast. This has absolutely been fantastic, and I really appreciate your time.

David: It’s my pleasure. Thank you for inviting me.

Patrick: Tune in next week for another episode of TBR Talks. 

Don’t forget to send us your key intelligence questions on business strategy, ecosystems, and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies, large and small, answer these questions with the research, data, and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us and see you next week.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

Ericsson’s AI Strategy: Business Intelligence at Scale

TBR Talks: Ericsson’s AI Strategy: Business Intelligence at Scale
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
Ericsson’s AI Strategy: Business Intelligence at Scale
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In our Season 4 premiere episode Elizabeth Roberts, global head of Information Management at Ericsson, joins “TBR Talks” host Patrick Heffernan to share insights into what Ericsson is doing to leverage AI tools for internal knowledge management at the world’s leading telecom vendor.

With over 3,000 regular users, each of whom support different business groups, executives and field leaders, Ericsson’s Business Intelligence Center (BIC) has become a powerful use case of AI internally. Elizabeth shares the challenges with AI adoption, change management and the never-ending need for quick and correct intelligent answers to business questions.

Episode highlights:

• How roles have changed because of technology

• Changes and accelerations in company culture

• Ericsson’s new AI tool: Ask BIC

Listen and learn with TBR Talks!

Submit your Key Intelligence Questions for Patrick and his guests

Connect with Patrick on LinkedIn

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

Ericsson’s AI Strategy: Business Intelligence at Scale

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about Ericsson’s AI strategy and new AI assistant, with Elizabeth Roberts, Global Head of Information Management at Ericsson. When the Ericsson team released the tool to the full organization, the name was established as “Ask BIC” to keep the team branding consistent, but in this conversation, it was referred to as Erica. Welcome to season 4 of TBR Talks. Please enjoy my chat with Elizabeth.

How roles have changed because of technology 

Elizabeth, thank you so much for coming on this podcast, I really appreciate it. We have known each other for over a decade now in our respective jobs, at Ericsson for you and TBR for me. I just, for everyone listening, could you just maybe sort of walk through what is your title? What is your actual role at Ericsson? I just know you as Elizabeth from Ericsson, but I’m sure others at Ericsson actually know you by title so, what is it?

Elizabeth Roberts, Global Head of Information Management at Ericsson: So, my external title is Global Head of Information Management, which is a nice, fancy, fluffy title. Internally, I’m known as the head of BIC, Business Intelligence Center. And that actually defines my role better, which is more of the responsibility of taking care of all of the external research and getting it into one portal where all the users internally can access it.

Patrick: And about how many users a month, say, access BIC?

Elizabeth: We have about 3,000 that are fairly consistent monthly users. 

Patrick: Okay.

Elizabeth: We have about 300 that use it almost daily. So not a bad amount for, you know, a company of 100,000 people.

Patrick: Yeah, that’s fantastic. And I mean, responding to being responsible to 3,000 users a month, that’s not a small task. I imagine you get a lot of compliments and complaints, right?

Elizabeth: A lot of complaints more than compliments, but that’s okay. We learn from a lot of the complaints. So, it makes things better.

Patrick: Excellent. I want to ask you just sort of, because you’ve been there a while at Ericsson and your job maybe has evolved a bit and changed a bit, but really talk about some of the changes in the last couple years, either from a technology perspective or from a responsibilities within an Ericsson perspective. And technology has changed so much in the last couple years, I’m curious if there are things that when you look back and you think about, okay, my job five years ago was not this because of a piece of technology, or my job five years ago was not this because of new responsibilities. I wonder which has changed more for you?

Elizabeth: I’d say responsibilities, but the responsibilities came about as a result of technology. You know, Google is an amazing thing, you know, when we talk about a search engine, it really honestly and truly has changed how research is done. And so, the technology behind how people search for information has changed, which means how I go about answering questions has changed. And I don’t actually have to answer nearly as many questions as I used to five years ago. That technology is available there to make it easier for end users. So, I spend a lot more of my time actually doing more things contract-wise, things along the lines of dealing with compliance and legal and things like that to make sure that we have rights to use the information. And just ways of making information easier to find for people, because while it’s easier to search, you know, natural language search isn’t as great as we’d all like it to be. I wish it could all be just as easy as saying, where can I find X? And the answer would come right back to me, but it’s still not there yet. We’re getting closer.

Changes and accelerations in company culture

Patrick: And how much has the culture within Ericsson changed? And I know that’s a really loaded question, but in the time that we’ve known each other, the workplace has definitely changed. I mean, from a technology perspective, as you mentioned, that sort of search has been increasingly better and better refined. We had, AI has become such a huge part of our daily lives. But also we went through a pandemic, we went through a whole work from home surge, and now it’s changed, and now we’re heading back in the other direction. And I’m wondering, as a technology company, how much has the, not just the technology, but also the culture within Ericsson changed?

Elizabeth: The culture within Ericsson has changed quite a bit. I think the pandemic actually, like most other companies, forced us to become faster at certain things. And in fact, my laptop became 5G enabled last week. 

Patrick: Wow, alright.

Elizabeth: So, I don’t have to connect to Wi-Fi anymore. I could be anywhere, which is an amazing thing. So, in that aspect, I think it’s going to continue to change. I think the biggest cultural change, honestly, within Ericsson is related to compliance. I think we’re a lot more conscious now of what can and can’t be done in certain things. And some of that’s come about because of forced circumstances. And some of it’s come about just because of how fast technology has changed. You know, we used to have the huge standards that said, well, this is how things are done and you had to go through them. And now you don’t have time to spend, you know, 8/10, 9/12 months writing a standard to get to how something should be done in technology. You just kind of say, okay, well, how do we do this, and how do we get it done fast for the customer? So.

Patrick: Right. Yeah, that is, I mean, and for a, especially for an established, a well-established technology company making that kind of cultural change to speed up, to accelerate, to make changes faster, that can be really hard.

Elizabeth: Yeah, it can.

Patrick: And your role as, sort of in some ways the chief information officer, you could say, how, is it- do you feel like you’re part of helping with that acceleration?

Elizabeth: I think so, because I find myself more and more often trying to find answers to questions that there’s no research for. You know, we’re starting to- before it would be, okay, how do we find this answer? And it was fairly easy to find established information because we were, you know, technology wasn’t changing as quickly. And now we’re at- we have people asking questions where there is no research created. There is nothing that’s there. It’s going to have to be created. And so, it’s a matter of, well, where do we go to try and start to put this together?

Finding answers to unanswerable questions 

Patrick: And is that where you just, you’re relying on the trusted resources you’ve had and you’re sort of cobbling together a few different trusted views? Or how are you- that’s crazy to me that you’re getting questions that have no answers to them, and you’re tasked with finding them out. So, what are you doing exactly? Where are you going?

Elizabeth: We just keep asking the question over and over again in different ways and talking to analysts and talking to the firms we work with and talking to people like you, Patrick, where, you know, you might say something that then sparks a different way of looking at the answer to the question, or maybe there’s something that’s said that, oh, we hadn’t thought about that. You know, if you look at the RIC market, so radio, intelligent radio, RAN controller, there was nothing there. But in order to try and figure out how to do something to create a forecast, well, somebody said, well, why haven’t you looked at SMS and the growth of SMS? I mean, it’s kind of the same thing. Well, then suddenly you realize, you know, I’ve been going about this backwards. I’ve been trying to find information on something that doesn’t exist when I should have been trying to find information on something that did exist that I could then draw a parallel to, to create some sort of, you know, beginning of a forecast so that we can look at, you know, how is this going to trend, how is this going to change? And I think that’s where AI is really going to come into play in the future is being able to take things that, as you start to ask questions about the unknown, can it help you find those known parameters to come up with, well, ways to start trying to find an answer to the unknown?

Patrick: Yeah, so let’s talk about that. I mean, in five years from now, do you think a lot of these questions are going to be easier to answer because the artificial intelligence is going to be better? Or where do you, where do you see, how do you see your job? How do you see those challenges being different five years from now?

Elizabeth: I honestly don’t see my job being that much different, to be really honest. I think the need for what I actually call antiquated skills, which is that ability to doggedly search, to try and find an answer to their problem and a puzzle, is not going to go away. AI will make it faster, for sure. But it’s, you know, you’re still going to have to have somebody who can think about a problem in multiple different ways because an AI can only think about the problem the way you write the question. 

Patrick: Right.

Elizabeth: It’s not going to be able to take that question and think about it 16 different ways and go, okay, well, let’s look at it from this direction now. There’s still going to have to be somebody who does that and tells the AI to look at it differently.

Patrick: Right. So, it’s that sort of persistence and judgment that you’re going to have to continually bring to the table, right?

Elizabeth: Correct. Yes.

Ericsson’s new AI tool: Ask BIC

Patrick: Yeah. But I know that you’ve got a new tool, a new colleague, if you will. So-

Elizabeth: Yes, we have an intern now. We call her Erica.

Patrick: Tell me more about that.

Elizabeth: So, Erica is an AI-driven research assistant. We refer to her as an intern basically because she’s still learning. You know, she’s good at answering qualitative questions, like most AI. The problem is quantitative. There’s not really an LLM out on the market that I’ve found, if somebody knows of it, I’d love to know, that can handle numbers and, you know, great big spreadsheets and things like that. That, you know, you and I spend our days living in.

Patrick: Exactly.

Elizabeth: So, until there’s an LLM that can do that, analysts aren’t going to go away because they can handle the numbers. But no, Erica’s been great for answering, you know, some of the more simple, I hate to say more simple, but it’s more simple questions. You know, what are the AI use cases in telecom? You know, she can produce a really nice report to start that answer, but then somebody once they’ve looked at that can delve deeper into, okay, well, what are the front-end and the back-end use cases? You know, can you break that down for me? So, in that aspect, it’s great. The thing that makes Erica different from other things out in the world, AI wise, is she only looks at the resources we tell her to look at. So, she only has about 13 providers that she can read. And we went through a lot of work with those providers to get clearance and permission and the ability in our contracts to use that information in a large language model, because a lot of research providers obviously don’t want to have their research used in an open model where it could suddenly become, you know, common knowledge and things like that. But Erica’s closed, she’s a walled garden, as we used to say in the telecom. And, you know, it’s been interesting. It was a part of my job I never thought I’d learn to do, but I enjoy it.

Patrick: That’s awesome. And so, I’m curious whether internally whether the use case for Erica is more sales enablement, more competitive intelligence, more market intelligence? Is there, do you see it, do you see Erica leaning in any one particular direction in terms of how she gets used?

Elizabeth: We actually have a lot of use from the strategic side.

Patrick: Okay.

Elizabeth: So more of those developing insights. Yes, there’s still the traditional, you know, produce a SWOT analysis on this company in this particular, you know, product area, or give me a comparison of competitor X to us in this service, but we’re seeing a lot more of it from the perspective of tell me about insert a topic here and how it’s going to impact us in the future.

Patrick: Yeah, and I guess, and it makes sense, and if that’s where it’s being used now, that you want to restrict the number of inputs. You want to, like you said, keep it only to the trusted providers that you’re- you believe in their data, you believe in their analysis, you believe in their opinions, and you want to make sure that that’s captured there, but not just the whole world. So that makes a ton of sense.

Elizabeth: It does. And then the other thing we love about what Erica does is she’s a great intern in the fact that she cites her sources. So, everything she comes back with, she can tell you exactly where it came from. So, if you have a question about whether or not it’s right, you can actually go look at the original report and see where that quote that she’s pulled out has come from.

Patrick: So, she’s not come back and said, I made all this up myself? That hasn’t been one of her responses?

Elizabeth: No, in fact, if she doesn’t know an answer, she’ll come back and tell you, I’m sorry, there’s not enough research for me to provide you an answer. 

Patrick: Wow.

Elizabeth: I had a hallucination finally the other day. I was doing some work on one of our competitors and she came back, and she told me she couldn’t find information on Nike. 

Patrick: Ah, *laughs*

Elizabeth: Now, there’s several letters in that are very similar to Nokia, but it was after, I’ll be honest, it was after I had run multiple different queries in the same kind of conversation. And so, we were kind of at the end of the limits of the research that was available. So, it makes sense to me, but there’s still things like that do kind of occur and I get a good laugh out of it.

Patrick: So, for a moment there, you had me hopeful that I could get some nice new Ericsson kicks one day, you know, like get the logo on the side, look like an Adidas or something. So that wouldn’t be so bad.

Elizabeth: Well, no, actually, it’s Nokia that used to make tires and shoes, so you’ll have to go with them.

Where Ericsson will be in 15 years

Patrick: That’s true. That’s true. Listen, I want to just wrap up with one question. You know, you’ve been doing this job for a while, and Ericsson has been really- has been a kind of company that we always have to keep an eye on because it’s such an important player across the market, such an important player in the ecosystem. And I’m just curious, when you look out sort of 10-15 years from now, where do you see Ericsson? How do you see- you’ve had such a great window into how the company has evolved and changed and grown over the last 15 years. Where does it go in the next 15?

Elizabeth: I think Ericsson will continue to be a leader in back-end telecom technology. 

Patrick: Okay.

Elizabeth: That’s always been our bread and butter. So as the technology changes, as it becomes more software driven, as it honestly becomes more AI driven, I can see Ericsson transitioning to help that move faster and more smoothly so that, you know, there’s not the interruption on the front-end for the operators or for the end consumer. They’ll never see, you know, everything we do and all of that. And that’s okay. You know, as long as the backbone works and runs, that’s what matters.

Patrick: That’s awesome. And that, I mean, we’ve seen, especially in the last five years, you know, the companies that have said, this is what we do well. We’re staying in our lane. We’re going to continue to do it well. Those are the ones that have grown, outpaced the competition. And so, I think that’s just a great strategy going ahead for Ericsson.

Final thoughts

Patrick: All right, I lied. One more question. I know you were recently in New Orleans, a city that I absolutely love because I love to eat. So, I need to know what your favorite foods were. And I say foods because you can’t go to New Orleans and have one favorite thing. So, what did you love the most?

Elizabeth: Well, you know, Patrick, I’m a researcher at heart. So of course I had to do some research. So, I visited multiple places for beignets, I have a ranking system now for beignets. I can tell you where to go for the most- the crunchiest ones, the ones with the most sugar, the ones that are flakiest. So obviously beignets, but gumbo. I mean, you can’t go wrong with gumbo.

Patrick: Yeah.

Elizabeth: And here in Texas, they make gumbo, but they leave the okra out, which just is like, that’s not gumbo.

Patrick: It’s not gumbo, no.

Elizabeth: That’s shrimp soup. *laughs*

Patrick: All right, now I know what I’m making for dinner tonight. So, I got to swing by the Market Basket and see if I can find some okra because yeah, I do love some gumbo. Excellent. Elizabeth, thank you so much. An enormous pleasure. And I’d love to have you come back in about six months or so, because I want to hear how your intern’s doing and whether or not she’s been promoted to a full-time position.

Elizabeth: Sounds good to me. I’d be happy to.

Patrick: Excellent, thank you, Elizabeth. 

Tune in next week for another episode of TBR Talks. Don’t forget to send us your key intelligence questions on business strategy, ecosystems, and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies, large and small, answer these questions with the research, data, and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us and see you next week.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

Hitachi Digital Services: IT/OT Convergence Across the Ecosystem

TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
Hitachi Digital Services: IT/OT Convergence Across the Ecosystem
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Principal Analyst Bozhidar Hristov joins “TBR Talks” host Patrick Heffernan for a discussion on Hitachi Digital Services’ view into Industry 5.0. Looking beyond the marketing spin of Industry 5.0, the pair discuss how Hitachi Digital Services leverages its engineering expertise, industrial know-how and IT capabilities to bring solutions to the market with its partners.

“I think just the way that Hitachi framed its value proposition — I think they coined it as Industry 5.0 and it’s IT plus OT plus AI — is a good way to start thinking about bringing the parties together, and obviously, that’s the part of the messaging, part of the marketing approach. I get that part, but kind of peeling back behind what’s actually — what’s the meaning behind the Industry 5.0, what are Hitachi’s capabilities — it’s really falling back on its legacy expertise and really being part of that engineering cycle,” said Hristov.

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Connect with Boz on LinkedIn

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

Hitachi Digital Services: IT/OT Convergence Across the Ecosystem

TBR Talks Host Patrick Heffernan: Hi everyone, I’m Patrick Heffernan from Technology Business Research and I’m here with my colleague Boz Hristov for this very special, quick episode because we recently spent time with Hitachi Digital Services, a company that we don’t traditionally cover and we haven’t spent a lot of time with, but we were both intrigued by everything that we heard over a couple of days out in Dallas, I had to remember where we were Boz, Dallas. And so, we’re going to publish a special report on the event, what we call at TBR an Event Perspective, but I wanted to think ahead a little bit to, who ought to be reading this report. Because again, we haven’t spent a lot of time with them, this is new for us and possibly new for our clients and folks who typically read our research. 

So, three things came to mind for me Boz. One, any company that’s working in the IT/OT convergence, any company that’s doing that should be reading this report. Second, the management consultancies that we talk about and talk with very frequently. And then third, the technology partners, particularly the hyperscalers and the ISV’s, again the big global ones that we talk to all the time. So, knowing what you know from the time we spent with Hitachi and thinking about those three different groups, what are some of the reasons why? Let’s start with IT/OT convergence, like, why is that going to be- why is this report going to be helpful for them?

Bozhidar Hristov, TBR Principal Analyst: Yeah, absolutely. I think just the way that Hitachi framed its value proposition, I think they coined it as Industry 5.0 and it’s IT plus OT plus AI, is a good way to start thinking about bringing the parties together and obviously that’s the part of the messaging, part of the marketing approach. I get that part, but kind of peeling back behind what’s actually- what’s the meaning behind the Industry 5.0, what are Hitachi’s capabilities, it’s really falling back on its legacy expertise and really being part of that engineering cycle. Hitachi as a company, as a conglomerate, you know, as a massive conglomerate that has brands in pretty much every facet of the economy, investing in a lot of the physical products and investing understanding into what does it take to be a product engineering company, makes it an easy, you know, easier transition as you’re trying to bring in the OT and speaking the OT language. Now, the IT part becomes, you know, the important element here, as Hitachi Digital Services outside the bigger broader Hitachi has start investing in its IP capabilities and skills training, investing in partner technologies, understanding the implementation side, the services side and so forth, so then obviously comes the AI component that everyone is investing in, and they certainly are not shy of investing as well as having the know how of again the bigger brother Hitachi. So, it’s- I would say the IT/OT is buyer and reader probably OT have more familiarity with Hitachi but bringing the Hitachi Digital Services element to the mix wrapped in AI offerings, you know, certainly will elevate those discussions. So having the DNA, having the background of engineering, knowing the OT side of the house and now bringing in the IT capabilities that they have been expanding and enhancing through experience through the client use cases because it will be of use to understand what else can Hitachi Digital Services do for traditional OT buyer and how they can actually help them to connect better with IT buyers.

Patrick: Yeah, and I I totally agree that the IT plus OT plus AI is just a really smart way to frame what’s happening in the IT/OT conversion space. And then the last thing you said I think is really important when we think about the management consultancies and why should they care? Hitachi Digital Services is not large, so they’re not going to be stealing revenue from anybody, but they are going to win, and they have been winning, consulting engagements with known clients, with existing clients because they’re on the ground, because they have that expertise, because they provide something that a lot of management consultancies can provide, which is the ability to execute, the ability to actually provide the services all the way through, particularly again in the heavy manufacturing or in the spaces where they play, and I guess that’s the other reason why I think it’s important for the management consultancies to consider Hitachi Digital Services because they were very clear that there are certain industries where they have strengths, they have experience, they have the permission to play. And so, for the management consultancies looking to perhaps expand their footprint in automotive, in rail, in transportation, in utilities and energy, in all those areas, they are- they could be a really solid partner for a consultancy to say we can do a lot of this work, but we also can bring in our friends from Hitachi Digital Services.

Boz: Yeah, absolutely. I think- we know some of the major consultancies and IT services peers have already- product engineering has been double bonded to them, looking at the OT as a new buyer persona that can pursue, you know, discussions with certainly many have not shied away. Some of the IT services companies like Accenture and Capgemini and the HCLs of the world certainly have done a little more aggressively, so maybe perceived as more of a competitor to Hitachi in that sense. But then the likes of PwC and Deloitte, they do have, you know, that C-suite relationship that in an attached-with Hitachi can be a little bit more little, with Hitachi Digital Services, can be a bit more partner-like or co-opetitive-like set up than just pure competition.

Patrick: Yeah. And, they speak to the OT buyer in a way that that the management consultancies don’t. So, then the last group is the hyperscalers and the huge ISVs, the Salesforces and ServiceNows of the world and I think there, Hitachi Digital Services is not among the top ten partners for those, you know, for AWS and Microsoft and SAP and the rest. But they’re growing, and they’re growing in a way that I think should be something that those companies keep an eye on and maybe look to say, as we reevaluate our different relationships, as we evaluate our ecosystems, we look to consulting and IT services partners, is this somebody we should be partnering with because of the capabilities they’re bringing, particularly again around IT and the OT buyer and particularly around that convergence, that blending of AI into it. Yes, that they have companies and partners that can do that with them. But this is one that maybe has a unique set of- unique combination of skills and capabilities and current clients, to be honest.

Boz: Yeah, you made an important point. They may not be the number one partner. You may hear a little bit of pushback from Hitachi on that I guess.

Patrick: Maybe.

Boz: But I can put that big Asterix there, that’s in the TBR view of the world. 

Patrick: Yeah. 

Boz: And the way we scale the practices of the large GSIs and looking to the- when we do our data modeling and understanding how- what’s the size of those practices, and how are they changing, but they do have some strong relationships and they’ve been recognized by some of those partners as top partners for a particular domain area and whatnot. But beyond the marketing that Hitachi is looking for why the likes of Amazon or SAP or Oracle should be caring about Hitachi, I mean again they bring in that technology know how, the stack, an understanding of how it all fits together, how it all you know, essentially stitches together. Especially as the worlds, the macro trend, I should say, not the world, but the macro trend in the IT space is moving towards the physical AI.

Patrick: Right.

Boz: So, Hitachi provides a really strong conduit into the physical AI discussion in terms of how they can actually connect, you know, the hyperscalers, they provide the backbone infrastructure, the ISV partners can certainly provide those layers of application modernization and optimization everyone is talking about. But Hitachi actually makes that better connection into that physical AI world that, you know, the OT buyer can actually be able to have a better position with. So, again it’s the physical AI, is kind of the North Star at the moment for most of the vendors that we track, and I think when it comes to the relationship between Hitachi Digital Services and the hyperscalers and ISVs, they can be that accelerating lane essentially, their conduit to get quicker, faster.

Patrick: Right.

Boz: And provide more opportunities to them.

Boz: Oh yeah.

Final thoughts

Patrick: Excellent Boz. Thank you very much, and thanks everybody. I know, a quick sort of quick little in-between seasons episode, but really wanted to get this out there to complement the Special Report we’re putting out. Thank you.

Boz: Thank you.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

Disruption Writ Large with Darlene Wilson, Executive & Technology Thought Leader 

TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
Disruption Writ Large with Darlene Wilson, Executive & Technology Thought Leader 
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Technology executive Darlene Wilson joins “TBR Talks” for a discussion on tech disruptions, business model evolutions and life as a technology expert. Darlene is a seasoned technical strategist with over 20 years of leadership experience at companies like Amazon Web Services, Whole Foods Market, and E*TRADE, where she has driven growth through both market- and customer-centric efforts. She is known for building high-performing teams, mentoring emerging leaders, and championing women in tech through roles like co-sponsoring the AWS Women’s Summit and participating in T200. A technology leader and veteran of many disruptions, including “as a Service” to cloud and AI, Darlene talks Amazon Web Services’ entrepreneurial start, the evolution of multivendor alliances and the ever-present consistency of change.

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Submit your Key Intelligence Questions for Patrick and his guests

Connect with Patrick on LinkedIn

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

Disruption Writ Large with Darlene Wilson, Executive & Technology Thought Leader 

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem, from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors and chip manufacturers to value added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors.

I’m Patrick Heffernan, Principal Analyst and today we’ll be talking about all things technology, including a look back and a look forward with Darlene Wilson, thought leader in the technology space with experience in cloud, IT and digital transformation. Darlene, thank you so much for joining the podcast. 

Darlene Wilson, Technology Industry Thought Leader: Thanks, Patrick. Really excited to be here. 

Patrick: Yeah. It’s a pleasure to have you on. We’ve known each other for a few years now, and I would say we’ve had conversations that have stretched from life and how to live it, to everything you can imagine in technology. 

Darlene: Yup.

How has technology changed over your career 

Patrick: And I think that’s because we both bring very different experiences to the table. So I’m really curious when you look at things right now, when you sort of step back and say, okay, over all the time that you’ve had your different careers and all your time in technology, what have been the biggest changes, not only from the technology perspective, but also the business of technology, how the business of technology has changed over the course of your careers.

Darlene: It’s a great question. And in thinking about this and probably in answering this too, Patrick, I’m going to age both of us and out both of us in an age perspective. 

Patrick: *laughs* 

Darlene: But, you know, thinking back, looking certainly obviously over probably the last ten years of my career if I go back, and we’ll kind of go in reverse chronology here, but if I go back ten years, it’s really the advent of the cloud and everything has been, you know, cloud based and what has changed for a lot of businesses, largely in their journey to move into the cloud, and what prompted that. And again, you know, I’m going to give you a little extension of an appreciation here for, you know, hooking me up on the podcast Acquired, which is great because I did listen to AWS. Even though I had worked there, it was really interesting for me to re-hear the story and really hear it from a different perspective in a lot of depth. And they did a great job talking about how really the cloud and AWS was born, really, and started in the realm of startups. And that was really their target market initially was how do we get startups going really, really quickly and then how they extended it into the enterprise space. And so, for the last ten years, I’ve been sort of living and breathing that with, you know, either through my own applications and working with, you know, what I’ve been doing with certain companies, or even in the consulting space and trying to support some of those enterprise customers, ISV customers, DMB customers, SMB, all the different segments, and to see how they’ve applied that, it’s been really interesting.

But then going back even further than that, you know, it’s interesting to me because I started to think about what I was doing really early on in my career. And again, this is where I’m going to age myself back to the dinosaurs. But, you know, very early on, when I had worked at Dow Jones years ago, and this is back in probably the late 90s, it was really the early stages of the internet. And so, we were installing trading room systems. My job was as a product manager for our institutional and retail trading room systems. And we were installing these systems with on-site servers, point-to-point circuits. You know, all of- everything was very, very, bespoke for every single environment. And then, what I could see though, in this was there was now all of a sudden this, you know, new thing called the internet, but at the time still very static and mostly static HTML content. And people hadn’t quite gotten into the idea, the understanding more broadly, of how the internet was going to change from an application perspective.

And so it was, you know, once we started seeing new applications and, you know, I’ve talked before about Amazon being obviously one of the biggest, earliest adopters in this space, really started to change things. So, watching the evolution of, you know, these on-site servers, you know, very specific into the internet and then how that grew into what has become cloud computing and then watching companies and businesses go through their own transition in the cloud space has been really fascinating. And, what’s probably most interesting is, you know, watching large scale enterprises go through this, you know, adoption journey. But then some of the smaller businesses as well. And then watching the digitally native businesses grow out of, you know, straight up tech computing, the independent software vendors. Anyway, it’s just it’s been a fascinating evolution. But to watch now where we’re at in the cloud journey, I think is the most fascinating. And seeing what’s happening with companies in that space. 

Patrick: So, part of where we’re at in the cloud journey, to look at it from sort of the business side of the technology, is that cloud is now often- the cloud bill is often now the biggest piece of the budget for IT.

Darlene: Yes.

Patrick: And so I’m glad you brought up the Acquired episode on AWS and the startup part of it, because that was not the case, nor was that really the promise of cloud. 

Darlene: Right, right.

Cloud spend and the IT budget

Patrick: And yet that’s where we’ve ended up. So, when you look back, when you think back, in your mind was there sort of a strategic imperative that it was going to get there no matter what, that cloud was going to kind of consume so much of IT the budget? Or is it just that’s what happened organically, accidentally, not by any design?

Darlene: It’s a great question. It’s a challenging question. I think it was probably going to get there, you know, in terms of- what AWS had come up with was so revolutionary. And they were, you know, and they talk about that in the Acquired episode of being so far ahead of the curve, you know, just, you know, so much so that it’s still, you have Microsoft and Google still trying to catch up even though they’ve closed the gap. But what’s interesting about that, I think has been, you know, was that early adopters, that they talked also too about largely it was public sector that actually adopted it second beyond, you know, anything like the startups before the enterprises. And I thought that was sort of interesting. 

Patrick: Right

Darlene: Because that’s a massive trust factor. 

Patrick: Right.

Darlene: And, you know, but certainly I think, you know, certainly colleges, universities, the public sector who started to see the need for that elastic compute capability was- and largely storage as well. So, I think Amazon was really in the right place. I think it was inevitable more than anything. It was just a question of time. I mean, and, you know, you could see it going, you could see what was happening. I think the flywheel effect of starting in that startup space for that rapid, rapid adoption and rapid new technology and the fail fast and everything that you were able to do on, you know, even in these early just with the straight up, you know, compute, database, and storage. And that’s really what they started with. It was so basic, you know, and then CloudFront from a distribution network perspective as well. So, I think it was inevitable that we were going to go there. Because it was just a question of when everybody else was going to catch up. 

Patrick: Right. Exactly, exactly. And you’re right. I mean, they have caught up in a lot of different ways, but AWS still sort of sets a standard for how to- particularly how to run a cloud business. I’m curious, so you’ve had a few different spots in your journey, in your career. 

Darlene: *laughs* Yeah. 

How has partnership and alliance strategy changed

Patrick: And what that gives you is a way to look at the changing nature of the ecosystem in terms of partners and alliances. So, we talk about it a lot at TBR because we get a lot of questions about how do I partner better with this company, how do I create a three-party alliance? So I’m curious what you’ve seen, especially in recent years, with the way that companies across the technology ecosystem, from the consultancies and the IT services companies and the hyperscalers and the software vendors, and I guess even the OEM providers, how are they partnering differently than what you saw early on in your careers? 

Darlene: So, and you could do a multi-hour session just on talking about that for sure. 

Patrick: *laughs* 

Darlene: But, you know, thinking about this, and this is something I’ve been thinking about a lot in terms of, you know, during my last role, you know, and even it started to sort of develop in my time at AWS, too, and it’s the whole philosophy of Occam’s razor. Which is this, you know, the simplest solution is often the best solution. 

Patrick: Right.

Darlene: And one of the things that I think has, you know, when you think about, you know, certainly the different variations of partners that you have, you know, you’ve got the larger GSIs and consultancies who are focusing on the larger scale enterprise business. You know, you’ve got sort of the regional local players, and here in the US, you know, Slalom, Presidio, some of those very targeted- and then you’ve got ones that are, you know, I’ve got a number of friends and former colleagues who have started up their own businesses, which are very small boutique firms. Which is really interesting and focusing on, you know, very specific areas of expertise rather than trying to be broad and generalist and be all things to all people. What I’ve found particularly, you know, in a couple of areas is, it depends on which market you’re looking at. But, you know, because the enterprise space, when you’re dealing with these large scale businesses, but even, I think, down into the SMB space, it’s really coming at your clients and starting from a consultancy perspective of what’s the value you’re bringing to that customer, and helping connect the dots for those customers and for those businesses between what they’re trying to do in their business and how that meets their technology strategy. And I know there’s a number of studies out there that talk about the fact that, you know, two thirds of CIOs won’t meet their goals in any given year because their technology strategy doesn’t align with the business strategy. And what I’ve found is the easiest way to connect the dots and the most impactful way to actually really have an influence on your clients and, you know, become a trusted advisor is to be able to connect those dots between here’s what your business is trying to do, here’s how your technology strategy works for your business. And, you know, to me, this is- I’ve said this over, and I’m sure you’ve heard me say it in presentations before too Patrick, is technology exists to solve business problems. That’s really what it is. It’s there to solve business problems. I mean, it can solve personal, but in this case-

Patrick: Right, right.

Darlene: Certainly, it’s solving business challenges. But we often get so caught up in the technology for technology’s sake and the new, you know, okay, for a while it was Kubernetes. And now we’re talking about AI. And AI is a great example because there’s this boil the ocean approach that a lot of businesses are sort of seeing. They’re seeing so many possibilities. They don’t know where to start. And that’s where you get back into the Occam’s razor-

Patrick: Right

Darlene: Which is sometimes the simplest answer is the best answer. And so how do you break it down to simplify that.

There is a lot of discussion around AI, and it’s a challenging topic these days. And I just recently finished a fantastic book called The Coming Wave by Mustafa Suleyman, and I’m probably mispronouncing the name, but the book really talks about the transformational impact that AI is going to have on business, society, culture as a whole. And I would highly recommend that anybody who is interested in AI in general, but any business that’s looking to determine how to bring it in from a business process perspective or business product perspective, or just even wanting to understand more. It’s a great, great, great read. And I think it should be mandatory reading just because I think it’s so informative and it’s actually very well done. And it’s a very interesting read, but certainly highly relevant for the AI topic and one that opened my eyes tremendously. So highly recommend it to any of your listeners as well.

Patrick: I want to get back to AI in a minute. 

Darlene: Yeah.

How to connect the dots from product to what it does for your client

Patrick: But there’s one piece of what you said that we’ve consistently seen to be such a huge challenge. It’s often more than just a company being fixated on technology for technology’s sake. It’s often the case that a company is really good at technology. And so, they have their product, they have their solution. They’re extraordinarily good at explaining how it works and what it does. But it’s harder for them to do that, okay, this is how it works and what it does for you in your business environment. 

Darlene: Exactly.

Patrick: So, how do you, and I know you have experience on this, so how do you help companies that are technology minded and technology focused and maybe even, you know, to the nth degree, how do you get them to think that way? Because it’s not just the buyers, it’s not just the CIO that has to think about using technology to solve a business problem. It’s also the technology provider that has to have that mindset going in, so how do you do that?

Darlene: So, one of the ways, and it’s one of the things actually, frankly, I had to learn myself as part of my own growth in my own career as I switched from, you know, leading a team of cloud platform engineers and being super hyper focused on what we were doing to support, it was a shared services team, so how was I supporting my teams. How was I supporting, you know, what the entire organization was trying to do. And when I moved away from that and moved into a role at AWS in professional services and started basically, what I really started to do was to really understand my customer’s industry and understand their business. And this is what I found so- that a lot of, you know, a lot of organizations, a lot of individuals within organizations struggle with, is they don’t know their customer to understand- and we all assume, like to your point, we all assume that our customers that we walk into already have that idea of, well, this is my business, this is my technology strategy, and to your point that they can explain how that technology really actually adds value for you.

Patrick: Right.

Darlene: So, what I found is, and there’s a great book out there that I recently finished called The Trusted Advisor, which is, you know, a phenomenal book, which talks about how to become or shift in mindset from a vendor to a partner, and how do you become a partner. And really, that’s shifting. And I’m sure in your business, you see this all the time too, how do you become a trusted advisor in terms of the knowledge you’re sharing, that expertise. So, what I’ve done is started by breaking it down again, back to the Occam’s razor it’s all very simple, is we tend to overcomplicate it. But I think if you can come in and look at it and say, here’s what’s happening in your industry. You know at the highest level.

Here’s what’s happening in your industry, so how do you fit into your industry now? Now here’s what’s happening in your business. And you can look at it both from a business perspective, a market perspective, a technology perspective. But I’ve found that coming in with some ideas and presenting ideas back to those clients, rather than coming in and sort of with a blank sheet of paper and saying, tell me your five pain points, and then kind of trying to go back, go in and be a little bit creative about it. Not overly arrogant to suggest that you know more about their business than them but really try and understand what they’re doing before you walk in and spend that time with them, because they’re looking at you for that expertise. And then largely in some of these, you know, the various partners and the partner organizations, you know, and again, if I go back to my you can take the girl out of Amazon, but you can’t take the Amazon out of the girl, is Andy Jassy used to say famously, and it’s something that’s just burned into my psyche and being right now is, “there’s no compression algorithm for experience.” And so, any business that goes to a partner and is looking for information, even coming to TBR is looking for, you know, looking for that expertise and that experience and so while there’s no compression algorithm for it, that’s what we are able to provide. That’s what you’re able to provide. And so, coming in as and starting with that level of, you know, credibility, and then being able to build on it, which is here’s what we’re seeing with other customers in your space. What we’ve seen that’s worked well, what’s not worked well, shared that, but then gone out and really done your homework and understand what’s happening within the industry as a whole, it makes a huge difference. And so, for me, it was really looking at and it was- I’ve never, when I was at AWS in the professional services, technically, I was in the sales organization of professional services. I never felt like I was selling. I was solutioning for my customers. And then we’d have a commercial discussion about how much that was going to cost to solve that particular challenge. But we would come in and co-build the solution and co-define that solution.

Patrick: That’s fascinating. And I think what we’re seeing now with, to get back to the alliance’s discussion-

Darlene: Yeah.

Patrick: Is a lot of companies shifting their mindset from, I’m going to be a vendor to I’m going to be a partner. 

Darlene: Exactly.

Patrick: And making sure that they understand what it is that they’re- whether it’s the technology or the services or whatever or the software partner, what they’re actually going through as well. And so, coming to the table, not just with here’s what I need to sell you, but coming to the table with, I understand from a consulting kind of mindset what’s going on in your industry-

Darlene: Yes.

Patrick: And being aligned, at least, around sales, around IP, around knowledge management, all that stuff. 

AI and GenAI as a compression algorithm for experience

So, I do want to challenge you on one thing and it ties nicely to AI. I get it, there’s no compression algorithm for experience, except maybe AI-

Darlene: Yes.

Patrick: It’s possible that that that could be what, it is that algorithm. So, I think of the two of us, we’re, you know, we’re not going to be doing this for forever. But in the near term, we are going to see AI change things. So do you think that there’s, because I asked you at the beginning, you know, the biggest change and you mentioned cloud. 

Darlene: Yeah.

Patrick: If we had this conversation in 15 years, both of us will be long retired thankfully. 

Darlene: Yes.

Patrick: But if we had this conversation in 15 years.

Darlene: Let’s hope so.

Patrick: Yes, knock on wood, so would we be saying AI?

Darlene: I think so, because I think AI right now is pervasive, it’s transformative, it’s impacting everything. And it doesn’t- because it’s not just impacting businesses and how they’re operating. It’s impacting individuals in such a profound way. And, you know, it’s one of those things where the cloud largely kind of really focused more on the business aspect of it. You know, even though you could say you’ve got, like, sort of personal cloud computing, things like that. But I don’t think the cloud has really become as pervasive in the personal, individual space, you know, as AI has. And I would agree with you. And I think- the interesting thing I think for the AI is, because the possibilities are endless, I mean, when you think about that, the challenge that most businesses have right now, and I’m sure you’ve seen this in your interactions with companies too, is where do you start and what is going to bring the most value? And you know, that’s one of the challenges. The second challenge is of course, data, you know, schema, disparate data sources, all of that because AI’s only as good as the data you have. And so many companies are running on legacy data systems, things like that. That’s a big challenge.

So certainly yes, Patrick, totally agree that AI is going to have a massive impact, and is going to provide that experience. I think, though, for the foreseeable future. The way I saw it from a services perspective and a services industry perspective is the consultants are that experience. And we’re still going to need, for the time being, consultants to help bring that experience, to help orchestrate the best path forward. Is it going to be that we can accelerate that work through the use of AI? Absolutely, no question about it. And will AI eventually be able to orchestrate and define that path and self-develop? I’m sure we’re going to get to that place. But for the time being, it is the consultants that are able, and the services companies that are hired to come in and help with these particular projects. They are that experience, that they are how you achieve that compression algorithm, rather than going and trying to find 20 people you hire on your own and hope that they have the right experience and bring them together and hope that it works. That’s to me how I always positioned it with my customers was we are that experience, and we are what brings and helps condense that compression algorithm for you. 

But yeah, I think I agree with you. I think that’s going to be the- AI is the game changer because it’s in everything we’re doing and it’s phenomenal, you know, and even just listening to what’s happening, you know, as I was sharing prior in the digital media space and how it’s changing just our experiences with media and all of that is, yeah, it’s- but in the end, what’s so interesting is it all comes down to how are we saving people time. 

Patrick: Right. 

Darlene: And that’s the Occam’s razor for me on that, is anything you do with AI that saves somebody time is going to be a winning combination. 

Patrick: So- And I think the real next step. It’s not just the saving time. It’s the having something to do with that time that you saved. Because I’ve heard for years how automation and analytics and all is going to free people up to do higher value tasks. And my cynical response to that is always, you know, I don’t always say it out loud, but my cynical response is, why aren’t you doing those tasks now?

Darlene: Yeah.

Patrick: You know, if they’re higher value, go do them and figure out another way. You know, let the automation, let anything, take care of the lesser value tasks. And I think we’re at the same kind of position with AI where, like you said, anything that can free up time and then you have to know what you’re going to spend that time on. And that’s what may be one of the bigger challenges to that return on investment on AI is, is understanding where not just you saved money and you save time, but then you invested that saved money and time into something more valuable. 

Darlene: Right. No, you’re absolutely right. And that’s where I think, to your point, AI is going to sort of, and there’s been a lot of articles and a lot of pieces written about this and a lot of discussion about it is, are people going to lose jobs over AI? And you say it’s going to shift, you know, it’s the economy is going to shift. Much like if we go back and look at Amazon, you know, the discussion is like 60% of Amazon’s business right now marketplace is external third-party markets. So, they’ve created a whole new marketplace a whole new channel. And what it’s done is, people say, well, then people have lost jobs. You say, well, but to some degree you can look at it and say, it’s changed the small town, you know, Main Street. Main Street is now serviced. It’s now restaurants, it’s dry cleaners. It’s nail salons. It’s all of the service based industry as opposed to a hardware store or, you know, things like that. So, it’s the product side of it. And that’s where I think AI is sort of going to also shift things as well, is it’s going to be a skill set, and it’s going to be a lot around thought leadership in how you can actually now more effectively leverage AI across your business and coming up with new models and things like that. So, it’s a shift in the industry as a whole.

Patrick: So that-

Darlene: It’s going to be fascinating. 

Patrick: The English majors and the history majors are going to do well. You know, they’re going to be in a good position to tell a good story and understand what it all means. 

Darlene: *laughs* Yup.

Upcoming website launch

Patrick: So, two last things I want to touch on. I know, you’ve got a website you’re about to launch, 

Darlene: Yes.

Patrick: Which will be probably by the time we air this. So just tell us about that. What is it going to be. What’s it going to do. What’s it for?

Darlene: Oh, I appreciate you asking that, Patrick. I’m really excited about launching this website. And, as you know, I’m on a bit of a sabbatical right now, but I do think there’s an opportunity and I’ve had some interest from a number of different individuals, companies, even analysts, about coming in and talking with them based on some of the experience that I’ve had, fractional type leadership roles, things like that. And so it seemed very helpful and beneficial for me to launch a website talking about my own capabilities and being able to promote a little bit of my own experience, and then also being able to communicate my thought process in that I really like to try and connect the business with the technology and look at technology and how it exists to drive those business outcomes. But then also how to help simplify this for a lot of companies, without having to go to larger, you know, services companies and businesses to be able to do this, just to do it on an independent basis.

And I’m really excited about it. So, I’m also going to be blogging and writing about some ideas. All the books that I’ve been reading and listening to as I’m spending copious amounts of time while running and on my bike and doing other things. And so, I’m really excited about being able to share this out and hopefully being able to work with different companies and different businesses in either a smaller or larger capacity to help them on their journeys as well.

Patrick: That’s fantastic. And that really gets at the whole trusted advisor. 

Darlene: Yeah.

Patrick: Because the only reason why anyone listens to a simple or a boiled down, simple answer to a complex problem is if they trust that you actually understand the complex problem underneath it.

Darlene: Yes.

Patrick: If you can take that complex problem, understand it, and then give them the essence, the simple answer, then you’re truly that trusted advisor. So yeah. 

Darlene: Yeah.

Portland to Portland 

Patrick: Excellent. Well, now I have to ask you, you’ve got to tell us about Portland to Portland. I’m telling you, we are, we’re sitting in the studio in Hampton, New Hampshire. There’s no way you don’t go somewhere through Massachusetts or New Hampshire to get to Maine. So, we’re going to be out there with signs on the side of the road. But tell us about it.

Darlene: I’m so excited for that. And I do need to go and look at the detailed map so I can give you the exact days and I’ll be looking out for those signs too. So, the very short version is about probably a little less than a year ago, I was looking for a very nice, leisurely weekend bike road trip my husband and I could do, maybe through Napa. Something kind of casual. I love to cycle. I just, I, you know, I’ve been a cyclist for a while, and triathlete. I run and swim as well, but I thought it would be kind of fun to get away. Do something different as a little vacation. Stumbled upon Trek Travels Portland to Portland, cross-country supported bike ride and I found it in May of last year. And for three months I kept it to myself. But every single day I thought about it and almost every day I went back and looked at the website and finally I said to my husband, because it’s 3,800 miles from Portland, Oregon, to Portland, Maine. 3,800 miles 48 days. So, you’re, you know, riding on average 70 to 80 miles a day. And, I thought, well, this is sort of an interesting idea, except, you know, at the time I was working and I’m, you know, I also have a husband and a dog. And I was like, how do you just pick up and leave for 48 days and go ride your bike across the country? And so, I said to my husband, I said, I found this, I’m interested. And he said, sign up. We’ll figure it out later. And-

Patrick: That’s fantastic.

Darlene: You know, and I think Richard Branson is famous for saying, you know, if somebody asks you if you could do something, just say yes and then go figure it out later. And that’s sort of what I’ve done. So anyway, my time has been largely, in my sabbatical right now has been my part time job, has been basically training and readying myself for this massive undertaking. And I’m very excited about it. And I’ll also be blogging about that, too. So-

Patrick: Fantastic.

Darlene: It’ll be interesting.

Patrick: And when does it start?

Darlene: It starts August 21st.

Patrick: Wow.

Darlene: And on August 21st we will dip- there’s 18, somewhere between 18 and 22 of us, we will dip our wheels into the Pacific Ocean, and then we will ride until October 6th. And we will dip our wheels into the Atlantic Ocean and we will be done. And we will have done 3,800 miles across the U.S. 

Patrick: That is absolutely fantastic. Really looking forward to hearing that. Seeing all the pictures and all that.

Darlene: Thank you.

Final thoughts

Patrick: It’s going to be great. Excellent. And it’s just- it’s inspirational for me to hear you say something like, I’m just going to go do it and I’ll figure it out later. That’s just great, and you’re not inspiring me to do another triathlon. I’ve done those.

Darlene: *laughs*

Patrick: I’m done with those for now, but who knows? Maybe again. 

Darlene: Yeah.

Patrick: Darlene, thank you so much for coming on the podcast. Been so much fun.

Darlene: Thank you.

Patrick: We’re going to go ahead and book you for probably December so you can, after you’ve recovered from your ride, and you can tell us how it was and we can talk about everything we got right and wrong today on our whole chat about technology.

Darlene: That sounds great. Thanks for having me, Patrick. Been a lot of fun, I appreciate it.

Patrick: Thanks so much.

We’ll be taking a break over the summer and will be back with season 4 of TBR Talks in a few months. In the meantime, send us your key intelligence questions on business strategy, ecosystems and management through the form in the show notes below. Visit TBRI.com to learn how we help tech companies large and small answer these questions with the research, data and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, principal analyst at TBR, thanks for joining us and see you next season!

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

EY’s People Advisory Services: Diving Into a Critical Service Line

TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
EY’s People Advisory Services: Diving Into a Critical Service Line
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In this episode, titled “EY’s People Advisory Services: Diving Into a Critical Service Line,” Senior Analyst Kelly Lesiczka and Principal Analyst Boz Hristov share insights into EY’s People Advisory Services after their meeting with senior leadership and partners during a recent showcase of the service line.

Additionally, Kelly, Boz and “TBR Talks” host Patrick Heffernan discuss how EY manages the critical aspect of people advisory in digital transformation within its partner model, how enterprise needs have changed post-pandemic, and how people advisory engagements fit within EY’s larger framework of services offerings.

Listen and learn with TBR Talks!

Submit your Key Intelligence Questions for Patrick and his guests

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Connect with Boz on LinkedIn⁠⁠⁠⁠⁠⁠⁠

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

EY’s People Advisory Services: Diving Into a Critical Service Line

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem, from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about Big Four firm EY’s People Advisory Services, with Boz Hristov, Principal Analyst for TBR’s Digital Transformation practice and Kelly Lesiczka, Senior Analyst for TBR’s Professional Services practice. 

EY’s People Advisory Services updates

So, this week on the podcast, we’re doing something a little bit different. I’m joined by Kelly Lesiczka and Boz Hristov who recently spent some time with EY’s People Advisory Services practice. The firm was doing a little bit of a roadshow in Boston and so they went down and sat down with them for a briefing. Normally we would take this and we would turn it into a special report. We’d put it out there for everybody to read. We thought this time because we have this podcast, we’d turn into an episode and we just chat about it. We often say that we know more than we put on paper, so maybe that more that we know is going to come out in this episode. So, Kelly, I’ll ask you first, maybe just describe what exactly it was and what you sat through and what you did with EY.

Kelly Lesiczka, TBR Senior Analyst: Yeah. So, we got to meet up with a few other leaders from Chicago, and they were from not too far from us, which is great, but they were able to talk to us about some updates within their People Advisory Services. So, a lot of talk about their CHRO study, which had just come out so it was interesting to see the impact of how technology is influencing the role of HR and how it’s changing more into experience driven, it’s also more up to a change to say, like they used the terminology “change is a muscle” which I think is a good way to phrase it. It has an ongoing change they need to keep updating. And so it was good to hear some of the changes that are happening from that perspective and how companies are looking at the value of people and how to best use their, really, their best asset through technology or even through different platforms and how to align them better with their business, how their business is moving and what new needs they have.

Patrick: And we’ve spoken in the past quite a bit with EY’s People Advisory Services practice. So, is there anything that struck you as surprisingly new this time or was it sort of the steady evolution of EY’s People Advisory Services practice? That’s a really loaded question early on, but I’ll go ahead and ask.

Kelly: Yeah. No, I like it, though. I think a big piece of it is definitely the experience driven, I think you probably agree, I think that was more of- it came through a bit more I think than we’ve seen in the past from People Advisory. I think overall in the market, it kind of fell off for a little while. But I think people are starting to see the value in people, especially equipping them with different pieces of technology. Look at how agentic AI is taking off, really teaching their people how to use those tools is really a strong- there was another thing I wanted to say-

Patrick: Yeah. No, well we’ll come back to agentic AI. Boz, your sort of initial reaction to this session with EY.

Bozhidar Hristov, TBR Principal Analyst: Yeah. We saw, at least we heard I should say, and we saw some of the examples that they shared with us, what EY aspires to be as a firm. There was some very strong examples of that. What I mean by that is we know Big Four, they always struggle with the fragmentation of the member firm structure, but the People Advisory Services since they started making that pivot towards being a lot more globally organized as a practice, and so, they had- they shared with us that they had 33 separate systems and approaches and frameworks you want to call it across the various member firms across the globe when it comes to people advisory. Now it’s down to one.

Patrick: Okay.

Boz: So, that’s a massive change because that first and foremost requires a massive internal buy in and consensus across the member firms. So, it’s, you know, it’s sometimes it’s harder, oftentimes it’s harder to sell internally within those firms than externally, right. So, making that recognition that they need to, you know, acknowledge the standardization and consistency across the member firms is a very, very first prerequisite I would say for the firm to think about going to market because as we know, change management is hard. So, applying change management to themselves, so, thinking about through that lens is an important factor. Also, it’s, you know, how they’re doing it as well along the way. I mean, they brought up, they are re-skilling over 2000 consultants, you know, as a part of that, and that re-skilling is mandatory. So, they’re not just putting on paper saying, we have one methodology now. They actually have people putting people to work and understanding and providing the training necessary to understand how, you know, that new framework is set up and what it all means and all the tools that are available to them along the way. Especially as change management, People Advisory Services is no longer a standalone kind of an offering source, meaning those consultants that usually and typically attach with a technology consultant or operations consultant, whoever it might be, in a larger transformation project, right? So, this is a key element that recognizes from the get go that regardless, there will be a change management, depending- the skill may vary obviously, but that’s a big first step and doing it consistently across, no matter if you are doing business with EY in the US versus, you know, the Netherlands or Australia, you are, you know, experiencing the same kind of methodology approach.

Patrick: So, people advisory services and change management, generally to your point, is typically part of a larger deal, part of a transformation, part of migration, whatever. 

Boz: Yeah.

How People Advisory Services is positioned

Patrick: Did you get a sense at all that for the folks leading people advisory services at EY, that they see it eventually becoming something that would be the beginning of an engagement, not- it’s something that they could go out and sell and get new clients? Or is it always going to be part of why you should come work with us, is because we have this very robust People Advisory Services practice.

Boz: I will give the consulting answer but it depends you know.

Patrick: I walked into that so.

Boz: You walked into it, yes, you did. And I’m just thinking about that. To enforce that we’re part of that and being, you know, not just being a standalone leading with, always depends on how the company also takes the next step will be incentivizing and measuring success. What does measuring success look like, of a large transformation program? And everyone that is involved in that large transformation program gets measured the same way. Instead of saying, oh, the people advisory consultants are getting measured on ABC and then SAP consultants get measured on DEF, you know. So, if those incentives are aligned, the behavior will change and the approach will change and the approach will likely work along the way because you have the messaging, you have the framework, you’re going to market as a whole, as a firm. And you know, you’re not just trying to meet your own quota for the year, but you’re actually trying to drive towards the same outcome to make the client happy. So, that’s- I think we know from EY and from the other Big Four, there’s always been kind of that push to, as a, kind of a common KPI, so to speak, where service lines per client is kind of the common denominator. But we know from there, things start to water down a little bit and change depending on where you sit at the table, at what scale is your practice, and how things may, you know, vary and especially when it comes down to working across borders with member firms that may not be originating where the deal is structured from and shared services and sharing pools of profit and per partner and we’re kind of going down the rabbit hole here, but these are the challenges that could make a program that on paper looks really strong, actually very successful.

Patrick: Right. It’s been a 10-year conversation with EY about service lines per engagement and especially when they’re looking at globally, not just in individual countries. So, it sounds like that conversation is going to keep going.

Boz: I think so. I think so, but I think it’s because change management could serve, people advisory could serve as the, pun intended here, but as a catalyst of change, you know of the organization internally as well-

Patrick: Yup.

Boz: And applying a lot of those frameworks to themselves, which I believe they have started doing that already, could help them to identify. We know that they went through the Everest exercise. 

Patrick: Right, yup.

Boz: And I’m sure, we know that they learned there’s some lessons learned, best practices, what works, what doesn’t along the way, but continue in that direction, in that spirit of like one EY, I think it’s gonna take some time, but it’s- they’re making the right steps.

Patrick: Yeah. And then, so Kelly, you brought up AI. What were some of the conversation- what was the conversation about how they’re applying either agentic AI or GenAI or just AI generally into this People Advisory Services now.

Kelly: I can’t say for how they’re doing it specifically for their people, but one of the things they called out was their avatar that they’re using called Meg internally to try to equip people with more knowledge and it talks to them and helps them teach. So, I think it helps recreate kind of an in-person learning even when you can’t necessarily have that. But I think that’s just one of the many ways that they’re trying to encourage the use of AI because you really do need to know how to use it to move forward 

Patrick: Right.

Kelly: And go on in different ways. So, I think that was one of the things. Just- I want to just add one quick thing to what Boz was saying. I think one of the discussions we had with them was also around the shift from time and materials over to more value outcomes and how clients are really looking more for that. They want to actually see the value of the services that they’re getting and that could even be seen through AI if they’re able to use these tools and services, it’s something that they’ll be able to- I think it’s difficult to try to measure. There’s so much data out there. You could throw a dartboard at anything and you can use that. 

Shifting pricing models

Kelly: And go on in different ways. So, I think that was one of the things. Just- I want to just add one quick thing to what Boz was saying. I think one of the discussions we had with them was also around the shift from time and materials over to more value outcomes and how clients are really looking more for that. They want to actually see the value of the services that they’re getting and that could even be seen through AI if they’re able to use these tools and services, it’s something that they’ll be able to- I think it’s difficult to try to measure. There’s so much data out there. You could throw a dartboard at anything and you can use that. 

Patrick: Hmm.

Kelly: But I think the way that they’re shifting more into the value of what’s actually being produced and if they’re actually getting what they’re looking for, I think the risk on both sides of EY and the client is also growing through that too.

Patrick: That’s fascinating because the- for so long, change management has been the first thing cut, you know, when you sort are like we need to trim down this engagement, we need to, you know, the clients not going to pay this much. We need to cut something, let’s cut change management and what you’re saying is that if EY can get good at selling change management as a- on an outcome base rather than a time materials base that that might help propel their People Advisory Services practice.

Kelly: Yeah, I think, I think it definitely could. I think it showcases a lot of the value and I think the willingness on the client side to reap the benefit, it also shows that they actually want to execute on the change, because I think one of the main things they always say with transformation is how unsuccessful it is if you don’t have people on board.

Patrick: Right.

Kelly: And so to having skin in the game on both sides and actually the desire to transform just showcases the value of People Advisory Services for your organization in general.

The partner ecosystem and growth opportunities

Patrick: Right. So, all right, so Boz mentioned the internal- selling it internally, you’re talking about the relationship with the client, but then there’s that third relationship of the partner. So, did they speak to what it looks like for their partner ecosystem with respect to what they’re doing in People Advisory Services?

Boz: Yeah, I think that’s an opportunity for EY to grow even more when it comes to People Advisory and to take advantage of the framework that they have set up especially that as we talked a moment ago, People Advisory change management is becoming more and more part of the large transformation process. That’s where really the value is. And I recognize it from the beginning that there will be a change management point being at the forefront of the discussions. I think it’s critical. I mean they have a whole framework around being modular and scalable that the solutions that have developed, the technology solutions that have developed around the network experience, it’s really, you know, it’s a way to think about it that it’s not one-size-fits-all, right, way and that’s where it’s important to bring in the partners to not one-size-fits-all right. There’s a big transformation but depending on the persona, you can make better alignment, better adjustments. So, I think that’s an opportunity for them to have more partner discussions along the way, to understand the partner view and understand maybe there’s some, you know, new areas that you know the technology may or may not have recognized for development. Thinking about large SAP transformation programs or anything that’s, you know, with Salesforce or any of the other of their big partners, you know, Nvidia, or Dell or Microsoft, there’s so much potential there that they’re all part of big transformation problem, so, there’s, I think there’s room for growth when it comes to the partner dimension of EY.

Patrick: Yeah, and it’s a thing that they’ve gotten very good at sort of determining who their strategic partners are, who they’re going to play with. 

Boz: Yeah.

Patrick: But that step of ensuring that those partners understand every single component of EY and like and how they can play in any one engagement. 

Human resources opportunities

So, nobody listening to this can see it, but you’re both sitting here with notebooks that you’ve actually written on pen and paper, which is sort of the opposite of technology, but that’s okay. And I’m wondering if we could and I’ll give you a minute to sort of dig in, but is there a nugget or two out of your notebook that you sort of wrote down and you got, you know, like I know when I’m taking notes at an event, I’m always like underlining and putting little stars next to something. So, I’m curious if there’s anything out of those notebooks that sort of has got your attention now, Kelly, you want to go first?

Kelly: Yeah, I can go first, I think the main thing for me is that HR, the transformation is needed and the recognition within it is needed. I feel like it’s often a thing that people just think you can outsource, so it kind of gets tossed to the side. But I think the way that EY has approached it and they discussed in their study, it- there really is so much more to it and actually making sure that your talent base is aligned with what you actually need as a company and how you can move forward. And I think acknowledging that change without the organization updating your service lines or what type of client you’re pursuing, I think you also have to take a look at your talent and make sure that they’re aligned more closely with the tools that they need, so using AI internally, you’re using all these different optimization tools, but then also just if they’re aligned with the same priorities that the client is or as your company is, as it progresses with these new areas.

Patrick: Right.

Kelly: I think that was the main thing for me that underpinned by just ongoing change is just it’s perpetual really, you have to keep going.

Patrick: Right, and I think about we’ve talked about this before too, like the role of the Chief Human Resources officer in the last 5-6 years has been crazy because they had to deal with the pandemic and suddenly they had to organize everybody remotely and then coming out of the pandemic, we had the whole like, quite quitting stuff that was going on. 

Boz: Yeah.

Patrick: We had lots of spin outs, lots of, you know, people going off on their own. Then we had all those firings that were happening across the technology space, sort of a blanket let’s just cut 10%. So, I imagine Chief Human Resource Officers have had a rough 5 or 6 years. So, getting all the help they can get from an EY, is- that’s a great.

Kelly: Yeah

Patrick: There’s a huge use case there. 

EY’s approach and mindset

Boz, is there something in your notebook that is like screaming at you right now?

Boz: I’m looking at it and I’m just thinking to kind of build up, there’s a couple of things actually that I’m- I think they’re interconnected. There was a comment, one of the executives we spoke to brought up how change was a commodity, now it’s a value, right? And thinking through that, lens about going back to the discussion about applying it as a value driver as about understanding who’s your change agent within the organization and now how do you actually help your clients? That’s the mindset EY is coming from and that’s the mindset they’re bringing to their clients as well because, you know, not- just because you play golf with somebody, doesn’t mean that that’s the best person, you know, you wanna task with doing that change management work. 

Patrick: Right.

Boz: And so, using the right tools, using the right approach, looking at it through that lens, it’s important. And to do that EY is taking two steps. Approach one is the mindset that what I have here is EY wants project architects. They don’t want salespeople. So, architecting it from that point of view, supporting that value creation is important, but also collaborating and tapping into EY’s wavespaces. Which we know it’s a huge asset for them, we know it’s a big part of their- how they go to market from an innovation standpoint and having that recognition that change management is a value, I think it’s how all of that discussion can occur and does occur at the wavespaces, and they’re not just there to showcase, but actually to demonstrate actually how it impacts organizations, because often those large transformation programs, you know, start at wavespaces, right, with discussions at wavespaces and then continue into the phases. So, kind of making that 90-degree shift in the mindset of EY’s approach both from the framework and the methodologies and the processes in place, but also how they approach the opportunities that change management can drive and tapping into the power of their most disciplinary model. I think it’s an important aspect.

Patrick: And we know from experience that the wavespaces can be used not only for the client to better understand everything that EY brings, but for EY itself to understand. So, if you’re a supply chain guy or an SAP guy, and you go to a wavespace and People Advisory Services shows up for the engagement, now you can more clearly articulate EY’s value 

Boz: Absolutely.

Patrick: In the entirety of the engagement, not just in your little sort of piece of it. 

Last takeaways: AI implications and global methodology 

Any last takeaways from the event? Anything you’re going to look for like 5-6 months from now or a year from now when it comes to People Advisory Services or EY as a whole? Let’s throw it out there, or the Big Four as a whole. Let’s make it as broad as possible. What’s your big take away for the Big Four or EY or People Advisory Services?

Boz: Well, I think to me it’s, I would say the broader kind of professional services space including EY and the rest of the Big Four and diving back to the People Advisory and the change management is what’s happening with AI and agentic AI, and how those companies make the pivot and the shift to recognize, but also adjust, to the implications of their own operations and the business model with the big- couple of big factors. One is on the people side, right, on the human element inside of the pyramid being impacted potentially, but also on the commercial model, right? So, those are connected obviously. So, I think it will be curious to see how much of the learnings and the experience that People Advisory Services can do to the client, actually they apply to themselves because we often forget that those organizations that, like EY and others are professional services and most of their clients are in the B2B sector, right.

Patrick: Right.

Boz: Manufacturing, aerospace, retail, etc. So, there’s a little bit of a different nuance to bringing your, you know, kind of like, you know, advising your clients to yourself, because there’s a different goods and services that your clients offer than yourself. So that’s where it might be a little bit more of a challenge, but it’s an opportunity because if they can apply it to the professional services I think it might be much easier to then apply to more of a tangible kind of a B2B industry client sector.

Patrick: And in a minimum you’ve got experience at scale and that’s-

Boz: Yes, absolutely. 

Patrick: What the clients are probably looking for.

Boz: Yeah, absolutely.

Patrick: So yeah, Kelly, how about you?

Kelly: I think for me, the biggest take away is around the theme of global and how they’re doing something so massive across organization, consolidating down to one main methodology. And I think the necessity to be more global is definitely coming through. I think other firms have tried to do it, but it can be very difficult to bridge together all of the different member firms and even across some of the professional services companies that are more heavily rooted in certain countries, it’s definitely difficult to create that global theme management tactic. I definitely think it’s a necessary thing, and I think it’s ever more present now, especially as companies overall, and this is something that EY had said, was that how they’re trying to be more proactive over reactive. And I think having that global mindset definitely enables you to be more proactive and you’re not just reacting because you’re so segmented. You have that one better view that shows more into what’s going on.

Final thoughts

Patrick: That’s perfect. And that’s exactly what we’re going to talk about in season 4 of this podcast is the Big Four firms and how global are they really, and what is it that- what are the advantages that- do they get from not being globally run and what are the advantages they’re trying to get to or the opportunities they’re trying to get to by becoming more consolidated globally, I think that’ll be our fall 2025 discussion. Does that sound good? 

Boz: Excellent. Yeah, looking forward to it.

Kelly: Sounds good.

Patrick: All right. Thank you so much both of you for being here. And will we get a written report from this? Doesn’t matter we did this, we did this podcast, it was perfect. Thank you.

Boz: Thank you.

Kelly: Thank you.

Patrick: Next week in our Season 3 finale, I’ll be speaking with Darlene Wilson, a thought leader in the technology space about all things technology, including a look back and a look forward. Don’t forget to send us your key intelligence questions on business strategy, ecosystems and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies large and small answer these questions with the research, data and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us and see you next week.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

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Diving Deeper into Global Systems Integrator Ecosystems: Geographic, Industry and Credentialing Data by Technology Partner

TBR Talks - Diving Deeper into Global Systems Integrator Ecosystems: Geographic, Industry and Credentialing Data by Technology Partner
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
Diving Deeper into Global Systems Integrator Ecosystems: Geographic, Industry and Credentialing Data by Technology Partner
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Principal Analyst Boz Hristov and Analyst Alex Demeule join “TBR Talks” for an exclusive look at TBR’s Ecosystem Reports, which detail how the top global systems integrators’ (GSIs) most important technology partners — Amazon Web Services, Azure, Google Cloud Platform, SAP, Oracle, Workday, ServiceNow, Salesforce, Adobe — collaborate with integrators and consultancies. How many certified, trained staff do these practices bring to their partnerships within the most influential GSIs? How do they address migration and modernization efforts? How are they deploying AI solutions? TBR has been answering these critical questions for years, and Boz and Alex are excited to announce that upcoming publications will include the addition of geographic data cuts for Americas, EMEA and APAC. (Industry vertical cuts on the horizon as well!) Additionally, the trio will discuss the possibility of more analysis on partner perception of working with one another as well as the addition of more research on ISVs such as HubSpot

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TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

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Art by Amanda Hamilton Sy

Diving Deeper into Global Systems Integrator Ecosystems: Geographic, Industry and Credentialing Data by Technology Partner

TBR Talks Host Patrick Heffernan: ome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors and chip manufacturers to value added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about TBR’s family of ecosystem research with Boz Hristov, Principal Analyst for TBR’s Digital Transformation practice and Alex Demeule, Analyst for TBR’s Cloud and Software practice. 

Boz and Alex, great to have you guys back on the podcast.

Alex Demeule, TBR Analyst: Good to be here.

Bozhidar Hristov, TBR Principal Analyst: Hey, good to be here. Thanks for having us.

New ecosystem analysis

Patrick: Excellent. Yeah. So, I want to talk about our ecosystem research, our ecosystem intelligence reports, which we’re in year three now of doing these. And it’s been a blend, a combination, a merging of work that we do in the cloud and software space and work that we do in the IT services and consulting space. Basically we look at each of the companies that we cover in detail in those spaces, but now for the last few years, we’ve been combining those two research streams and saying what are the relationships between these companies like and what can we learn about the ecosystem that they’re working in by understanding those relationships. And this has proved to be enormously valuable to our clients because all of them depend on their ecosystems in order to grow, and I want to wrap up when we get to the end to talk about how we see that kind of changing. But if you could maybe just walk us through right now what are we looking at that’s new in the ecosystem research? And I mean just to say at the beginning, we do have ecosystem research around the hyperscalers, we have it around some ISVs, and so maybe you can tell us where we are now and where we’re kind of, what’s new, maybe what’s coming next.

Boz: Sure, happy to. So, as you mentioned, you know the research spans across the consultancies and the global systems integrators, intersections with the hyperscalers as well as the ISV community. So, the streams of reports that we’ve been producing in the last three years have been focused on the infrastructure side, as I said, you know, and the application side. So, the application side of the house is what we are expanding in terms of coverage. So we’re about to launch our ServiceNow Ecosystem report, which looks at the intersection of ServiceNow’s relationship with 10 of the largest GSIs and consultancies, which is a very similar report to what we have for the likes of the SAP Oracle and Workday, Adobe and Salesforce on the application site, as well as the hyperscalers, the AWS, Google Cloud, and Microsoft Azure. So, that report is a brand new one coming up shortly and it’s really just the combination of a lot of conversations we have had with both sides of the house, both technology and services providers. And looking through the lens of the role of ServiceNow as it augments its own value proposition and enhances its partner strategy along the way, portfolio, technology portfolio, commercial models, sales promotions and so forth. You know, knowledge is happening in the short manner as we are recording this podcast. So, I’m sure we’re going to hear more updates on ServiceNow as well as its partners from Partner Day. So that’s coming up. 

So that’s the big new report that’s coming up. But we also are in the field right now with the next iteration of our Voice of the Partner report. So, the Voice of the Partner, as it suggests, looks at the intersection and the relationship between three groups of vendors, the OEM providers, the cloud and software providers, as well as the services providers, and really trying to answer the big question, what are partners missing of each other. And again we are going for the second iteration of that report, that should be publishing in the next three to four weeks as well, like late May, early June.

Patrick: Okay.

Boz: Essentially, last but not least we are adding additional data cuts, as I mentioned you know we have the Cloud Ecosystem report that looks at the hyperscaler’s relationship with the GSIs and consultancies. So that was the first set of reports that we launched 3 years ago and now we have reached kind of a point where we have gathered enough data, where we are going to model additional data essentially on our own and expend that proprietary methodology looking through the geo specific cuts. So, we’re breaking down the- let’s take for example Accenture’s AWS revenue and headcount by geography, right, we’ll do the same thing for the other three practice areas as well as across all the 11 providers there in the report. So, we’re starting to add additional data cuts in that report. So ServiceNow, additional data cuts, and Voice of the Partner, if I had to sum it up.

New analysis being added

Patrick: Excellent. And Alex, so now we have ServiceNow, SAP Oracle Workday, right, and then Adobe and Salesforce. So, we’ve got six. In your view, coming from the cloud and software side of the house are those the most important and who might be coming next?

Alex: Well, the big one that’s coming next for the cloud practice and you’re talking about Voice of the Partner is the Cloud Voice of the Partner. That report that Boz started, you know, we looked at that from the cloud practice and just such great insights coming from, you know, what’s differentiating these vendors within the ecosystem and how is the ecosystem looking at its peers and being opinionated about how they collaborate and with whom they’re collaborating with. So, we really want to double tap on the cloud angle around this Voice of the Partner report, so, coming out with a dedicated cloud report in the coming months, I believe that’s going to be a 2Q25 report for us, sort of towards the middle of the year. So that’s something that people can expect to see, a big new report coming out of the cloud practice.

Patrick: Do you anticipate within a year or so that we’ll be, or less, that we’ll be adding another ISV to that that mix along with Adobe and Salesforce and Workday and all the rest? Is there anybody else, I guess I’m asking that you’re like, I wish we had the ecosystem report for these guys.

Alex: There’s a lot of great companies that probably should be included in these reports. I think picking one is sometimes sort of the challenge that comes to my mind. You know, HubSpot is a fast grower. 

Patrick: Right.

Alex: When I look at the Cloud Applications Benchmark and their relationship to Salesforce, you know looking at how they compete, you know their name, that could be included within the Adobe and Salesforce Ecosystem report just because I think that they’re growing really well right now. And I think that their role in the market is going to continue to, you know, be very competitive.

Patrick: Right. And I could see coming at it Boz, from the services point, you might say, here are the companies that have chosen or are working with HubSpot in a very strategic way. So maybe highlighting them just from the services perspective.

Could the management consultancy’s labor pyramids collapse?

Alex, you said differentiation and that always sort of is a trigger for me, when you think about how these ecosystem reports are used, is that one of the most important use cases is like it allows you to see not just the staffing or the, you know, the dedicated resources and the acquisitions or the, you know, the investments that are being made, but how you can actually tell the difference between Accenture’s Azure practice and Deloitte’s Azure practice? Is that what sort of comes out in these reports?

Alex: Yeah, I would say so. And you know one of the things I mean, I’m always thinking about it from sort of the cloud angle, being in the cloud practice. 

Patrick: Right.

Alex: So, you know when we talk to these services vendors, like the word I just used opinionated, and so that opinionation is going to be based in what they see as differentiation by the vendors and sort of how they are executing on their product strategy and sort of what the road map looks like and sort of how that is positioned in the broader cloud opportunity, whether it’s you know, core enterprise migrations, or something more emerging like AI. So, you know, getting to the root of, you know, how these cloud vendors are being viewed by the services professionals and how that is influencing where the services professionals are investing their money, that’s really what I like to think about a lot.

Patrick: Okay. And then Boz from your perspective, the same kind of question.

Boz: Yeah, differentiation is like you said, it’s a trigger word for sure. And I think from a services side, one question we’ve been trying to get a better understanding of is how well services providers and their cloud and software counterparts think about each other meaning- and how well they know each other, I should say is probably is better way to phrase it, is, you know, that knowledge management and ensuring that SAP can tell, you know, the EY story as good as EY can tell their own story. So, I think that’s the kind of, the big question that I think no one has cracked the code on that particular challenge yet from just- from what we’re gathering sentiments and the Voice of the Partner, you know, surveys and just ongoing conversations. There are some bits and pieces and efforts in certain practice areas that we see some vendors being a little bit closer aligned and think ServiceNow actually, now that we’re doing the research around it, we see them, some of the partners being better positioned themselves within each other and between each other meaning, you know, there’s like three to four industry offerings for example for specific industries, right, versus, we can be ServiceNow’s partner across 19 industries, right? So that kind of starts to suggest you know the calibration of expectations and better alignment between the two parties, so that then when the sales process, when the go to market motions get fine-tuned, there’s a little bit more better alignment to that, which can actually essentially service the customer you know through the- to the best way possible. But I think that’s the differentiation for me is about how well partners can tell each others’ story.

Patrick: We just had a conversation recently with a client that was talking about how they’re trying to shift their own brand in the marketplace and how, you know, they’re trying to get more into, honestly into the consulting side of things. They’re trying to do, you know, higher value kind of work, which is great. And one of the things that we advised was listen, having your partners tell that story is going to be more powerful than you trying to go out and tell your story. Because nobody sort of, not nobody, but it’s harder to market, you know, believe that we’re different as opposed to having somebody like a, you know, a hyperscaler come in and say, hey, these guys are different. 

GenAI and pricing models

So, I want to pivot a little bit to, you know, what is it you don’t know? Like you guys are obviously experts, you know everything, but there’s gotta be stuff, there’s still questions you don’t know the answers to. So, when you think about the ecosystem and ecosystem intelligence, and I know from a competitive intelligence perspective, we’re really good at saying these are the key intelligence questions we’re going after. What are the key intelligence questions within the ecosystem intelligence space, that despite 3 years of looking at ecosystem intelligence reports, you’re still going after, you’re still trying to solve? Boz, you want to go first?

Boz: Yeah, sure. I mean, I think that the biggest opportunity for everyone that I think we’re trying to also untangle is around the commercial construct, an opportunity that we are starting to see being amplified and accelerated with discussions around GenAI. What I mean by that is so the GenAI focus and the push around, you know, we can sell you, you know, you can use the technology to increase productivity, to improve your kind of like operations etcetera, etcetera. So that is putting a different pressure on the services vendors. Meaning that now they’re on the hook for delivering essentially those outcomes. So- and historically, services companies, that’s what they know for, consultancies, they pride themselves on being able to talk about the business language, the business outcomes and trying to be a little bit more, you know, kind of a line of business and industry wrapper around the technology discussion. Now the challenge that we see and we’re trying to understand is how prepared are the software and the cloud providers to change their pricing models to become more of an outcome-based focus. We don’t know of any, we’re not aware at least, I don’t think- I spoke with many people around in the ecosystem, any single ISV provider or cloud provider that currently is prepared to charge on outcome-based for this piece of software, right.

Patrick: Yeah.

Boz: Now, one can argue that, you know, this is the job of the consultancies, right? But that puts pressure on the consultancies to ensure that the relationship is aligned and you know, we know about the consumption model. So, you can say, oh, there’s a consumption, they consume XY and get paid that way and the outcome is driven by the consumption, etcetera, etcetera. You can kind of massage the message that way. But I think the challenge is that, you know, the expectation is evolving, and I think that maybe it’s something that it’s three years, five years down the road, whatever time it takes for GenAI to start to really pick up steam in terms of making a difference on the financial side. I mean, now it’s got plenty of steam on the hype side from a GenAI perspective, but in terms of like the monetization of the technology, are there software providers out there, either current, that currently in the market space or up and coming, they’re really going to catch the Salesforce and the Workday of the world in the blind spot where they actually will be prepared to actually come out in the public and say we are going to- we’re changing the business model. 

Patrick: Yeah.

Boz: We’re changing the way we’re going to charge and that’s going to make everyone’s job different. Now that’s going to create opportunities for new partnerships because McKinsey can look around and say we always talk about outcomes. You’re selling on outcomes, your piece of software. Now we can make a joint- 

Patrick: So, we’re aligned. 

Boz: We’re aligned. So, I’m trying to draw some comparisons to 20+ years ago when, you know, Salesforce and Workday came around and disrupted traditional ISV models. The big change was, yeah, sure, the technology architecture was different from modular to agile. Yada, yada. But actually the big change was about how those companies are monetizing the IP, right. And the cloud was about business model change. So, is the next wave of business model change for ISV’s going to become more an outcome-based, and that’s something we’re trying to understand. It is, I will understand that especially if you become publicly traded company messaging to Wall Street and whatnot that’s a completely different, that changes the narrative.

Patrick: Right.

Boz: But as you know the, you know, this has to change, the professional services companies are gradually evolving and they’re trying to change you know how they’re thinking about their commercial models as well and trying to think how much GenAI is disrupting their business model and from a being times and material to more fixed price or outcome-based?

Patrick: Right.

Boz: So, this is kind of the big questions we’re trying to, you know, go after and see how the ecosystem will evolve as the outcome-based pricing model changes across the board.

Patrick: Right, Alex. He just laid down a lot of landmines for you to kind of walk around, or maybe step on. Because I think the challenge that Boz just presented was to the companies that you cover, can they actually change their business models and their commercial models, or does it need to go the other way, that the IT services companies need to learn how to be more, I don’t want to say commoditized but learn how to sell at a subscription or retainer kind of model.

Boz: Yeah, that’s the flip side, yeah.

Patrick: So, what do you think Alex?

Alex: I mean, as far as commercialization goes, you know the consumption method has definitely proven to be the, you know, the go-to as far as AI is concerned. There is one software vendor that is doing outcome-based pricing that I’ve come across. I think it was Zendesk.

Patrick: Okay.

Alex: I think Zendesk is doing outcome-based pricing. I really should be double checking that.

Boz: We they sell it directly or sell it with partners?

Alex: I have to double check on that and get back to you,

Boz: Okay, just curious.

Alex: But it’s rare. It’s definitely-

Patrick: Yeah.

Alex: It’s definitely not something that we’re seeing broadly, broadly adopted. And like one of the other things that that caught my ear while Boz was talking was just this idea of these- where are these AI first vendors going to look at, we know that they are, they’re probably being built right now. You know, they probably exist out there. They probably haven’t risen in terms of like the spotlight that all the major incumbents still have. But at the end of the day, Salesforce, which was this massive disruptor back in its time, is now the incumbent, 

Patrick: Right.

Alex: And now it’s going to be the target of disruption and you know, getting to- like bringing back to this idea of like the opinionated service provider. Getting their opinion on, you know, a Salesforce is much simpler than understanding what they’re looking at as far as these up and coming AI first companies. 

Patrick: Right.

Alex: And so it’s going to be a constant challenge for us to be intellectually agile to, you know, hear and figure out sort of what they’re looking at and being able to keep up with them. Because it’s not something that’s necessarily being projected outward, they’re much more vocal around those major, those really large incumbent and those partnerships.

Patrick: Right.

Alex: But understanding who they are placing early bets in and these like AI native companies, that’s something that’s going to be challenging and an outstanding question.

What comes next: Companies, questions and data cuts

Patrick: So, when you think- so, Alex, put yourself in the same seat in a year from now. What are some of the questions you think you’re going to be answering then or is it different from what you just said or, and maybe even what are some of the companies since you mentioned these sort of the up and comers, what are some of the companies that you imagine a year from now we’ve got in the ecosystem intelligence reports mix? I keep asking you for specific companies. 

Alex: I know. *laughs*

Patrick: And it’s not fair, but you know, putting you on the spot.

Alex: I know it. You know this isn’t a good example, but one that I do think is a name that everyone’s familiar with, OpenAI. 

Patrick: Yeah.

Alex: You know, Satya Nadella had a podcast that was pretty widely dispersed where he said OpenAI is not a model company anymore. They are a product company.

Patrick: Right. 

Alex: ChatGPT is the product, you know. ChatGPT is a product, it’s a great product and all a lot of these model companies have done a really good job of productizing their investments already. You know, Anthropic has done a good job with it. Perplexity, there’s a lot of these tools that are, you know, sort of, were born sort of in the consumer because, you know, it was sort of these online platforms that anyone could go access — but look at PwC: Like PwC was one of the first companies to go out and make it an enterprise-wide tool and be a reseller and a service provider delivering ChatGPT to the enterprise. 

Patrick: Right

Alex: So, you know even these well-known AI model providers, you know, those are names that now that they’re turning these product companies, could become more relevant to us as that goes.

Patrick: Yeah, and then Boz, from your perspective, I know a year from now you could say, okay, we’ve got ServiceNow we’re looking at 10 IT services companies and consultancies. So, a year from now you can say we can look at ServiceNow and 20. That’s the easy answer, give me the hard answer which is, you know, what are the other kinds of things you think are going to be different a year from now.

Boz: Yeah, the expansion of the partnerships absolutely. And I think what I just started, I think it’s kind of like got my, you know, attention as well as I’m thinking about that coverage expansion is, you know, drawing parallels to the way cloud first came around, right? And everyone was building cloud trained personnel.

Patrick: Right.

Boz: You know they had a big announcement. Now we’re seeing everyone is training GenAI, AI training, data and AI practices are expanding, certain goals, yada, yada. So, naturally the next evolution will be how many people you have vertically around OpenAI, around Anthropic’s Claude, around Gemini. You know all these pieces now, when you develop a community are you are you focused on, you know, having model trained personnel, that is part of, you know, the joint go to market efforts, or it’s for more your own proprietary kind or partner enabled, you know, accelerators. So that’s kind of the thing that’s just a natural evolution of the discussion because AI essentially becomes the new cloud discussion from a business layer perspective and how companies organize. So that makes perfect sense, what he’s discussing that it’s going to be about a year from now or two years from now in terms of like, started building out the same way we’ve been building out the cloud practices and the ISV practices for those SIs. But I can see that being naturally kind of the next wave of, you know, the ecosystem intelligence reports moving forward and understanding. 

Patrick: Right.

Boz: I think that’s where really the big commercial model, pricing model will come into play of how those companies will be the key focal point discussion. In terms of the current coverage and thinking about what next, I think naturally the questions we usually get from clients are around the industry vertical intersection. So, I mentioned we’re starting with the geographic expansion of the Cloud Ecosystem report. Naturally, we’re going to build into similar kind of data cuts within the existing other reports within that on the application side. 

Patrick: Right.

Boz: So that geo breakouts are the natural one. And then the next one will be to start adding the industry vertical. You know understanding, okay, can we give us, you know, the top six, top eight industry verticals by practice area by partner, you know. So, essentially again thinking, let’s say Capgemini this time with Microsoft, what are Capgemini and Microsoft’s top six or top eight verticals? 

Patrick: Right.

Boz: And obviously the bundle of all will be like the- another intersection of industry by geo, but that’s something that we could do, it just take so much more of the research and the- but it’s certainly it’s on the road map, the internal road maps, but it’s certainly something that you know just will take a little more time.

Multi-party alliances

Patrick: So, let me paint a picture that’s going to be either wildly optimistic or just insane. Or both. So right now, if you took all 200 companies that TBR covers and justice put them in a big matrix, we can fill in a lot of those squares, like the relationship between, you know, Microsoft and Deloitte, the relationship between KPMG and SAP. You know, we can fill those boxes in with data, with analysis. 

Boz: Yeah. 

Patrick: What we have now, we’re now expanding to say, you know, let’s look at that by geo. Let’s look at that by service line. Okay, that’s a two by two where you’re filling in all those boxes. Now let’s take the next step and say what about multi-party alliances? Let’s put together the SAP, EY and Infosys relationship. 

Boz: Yeah.

Patrick: How does that look? Can you imagine- how soon are we going to be able to say here’s the three-dimensional, four-dimensional view of the ecosystem?

Boz: I think it’s certainly in the near future, right? But I think what starting point before that prerequisite as you said it, made me think about another set of conversations we’ve been having about the expansion of the portfolios around workloads. 

Patrick: Ah.

Boz: So, I think this is kind of where we started thinking about the multi-party alliances and understanding, take for example Microsoft Stack, right, Microsoft Azure, and understanding what’s the composition of workloads? SAP, Oracle, Salesforce, whatever ISV you can just put and then start there thinking about from that and then cut across, or put across I should say, vertically against the stack the other GSI, right? 

Patrick: Okay.

Boz: So then start thinking from through that angle. So that’s the, you know, understanding the workload distribution across hyperscalers, I think because the hyperscalers are essentially the backbone-

Patrick: They’re the backbone of

Boz: Of all this work all right.

Patrick: Sure, yeah.

Boz: So, you need to start from there and then really understand how it stacks up and then understand who are, which are the channel partners that drive the most of that workload from the GSI and the consulting perspective.

Patrick: Yeah, okay. That makes a lot of sense. So, we’d be looking at, we’d be looking at the multi-party alliances not by which of the companies are forming together to solve a particular problem, but saying this particular problem exists as addressed by this workload. So, within that within, I keep trying to draw, as though people can see this. I’m like using my hands like-

Boz: Yeah, we’re, drawing, yes.

Patrick: But, in that stack of this particular workload. 

Boz: Yeah.

Patrick: Different percentages of that work is being driven by different companies and how those pieces all fit together, 

Boz: Yeah.

Patrick: determine like what that multi-party ecosystem alliance is.

Boz: And the biggest question will be is that, are those workloads being driven by the hyperscaler directly, direct sales of the hyperscaler, or the GSI?

Patrick: Or somebody else.

Boz: Right, that’s the- or the direct sale of the ISV provider. So how- who actually is the leading, who’s the orchestrator, who’s the management you know and that stuff.

Patrick: And then there’s the companies coming in underneath and saying you’re doing this inefficiently. Here’s where we can, you know, provide fin-ops and make it work better for you. So, there’s that too.

Boz: Yeah, that too, plus there’s one group, one more group of vendors that we have not touched upon that’s in the Voice of the Partner, is the OEM providers. The infrastructure providers, they’re as critical as the hyperscalers and everybody else in the ecosystem, right.

Patrick: Right. 

Boz: So, we need to account for their implications and know sometimes you know, oh yeah, if it’s an infrastructure provider, you know, it’s a kind of a given, right? 

Patrick: Right.

Boz: No, they also do look through that workload, especially when you take the AI discussion we just had a moment ago and thinking about the workloads on-prem versus in the cloud, right? How do they then think about their partners and who actually thinks about it through that lens as well, because that adds another dimension in the ecosystem reports.

Where will workloads live

Patrick: Alex, it sounds like it’s a lot more work for you, is what it sounds like, because you’re coming at it from the workloads 

Alex: Yeah.

Patrick: That’s your, that’s your space. 

Alex: Yeah, right. Yeah. I mean, where the workloads are going? Yeah, that’s something that we spend a lot of time with, especially in our customer research and trying to understand, you know, we had this big wave of cloud repatriation, which I look at, you know. How you can take costs out of your IT procurement and whether that is something that is going to be a long term headwind to cloud growth. I- we tend to be of the mind that, you know, the cloud is still the final destination for a lot of these workloads. But when you bring in AI and you start talking about latency requirements and security requirements, it definitely shakes up- it shakes up the puzzle, and there’s definitely gives and takes, and it’s going to be probably determined around, you know, the specific use cases that the customer is focusing on, you know. When we talk about like a manufacturing or a health care where there’s more OT angles, you know, and latency becomes mission critical, then yeah, we think more about on-premise AI deployment. But I still think that with how much data and the innovation that people get access to when they deploy in the cloud, there’s still going to be a large chunk of the pie that ends up that ends up there.

Patrick: Yeah. Yeah, I think you’re right. And that repatriation story was kind of a spike early on with GenAI when there was the when the-

Alex: Yeah.

Patrick: The excitement over what it could do was met by the bill that came with it, and then it’s like well, so we can- what can we repatriate. 

Final thoughts

Awesome discussion. This was really good. We covered a ton of ground. I’m really glad we’ve got these reports coming out in the near term and what I think we should do is in the next- in season 4 of the podcast, we’ll sit down again, because by then you’ll have the Voice of the Partner reports out. We’ll have the latest ecosystem reports out and we will have had feedback from our clients on what really resonated and what kind of questions they had after that. So, let’s plan on chatting again. Boz, Alex. Thank you very much.

Boz: Thank you. 

Alex: Thank you.

Patrick: Next week I’ll be speaking with Boz Hristov and Kelly Lesiczka about Big Four firm EY’s people advisory services. Don’t forget to send us your key intelligence questions on business strategy, ecosystems and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies large and small answer these questions with the research data and analysis my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR, thanks for joining us and see you next week.

TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms

Join TBR Principal Analyst Patrick Heffernan weekly for conversations on disruptions in the broader technology ecosystem and answers to key intelligence questions TBR analysts hear from executives and business unit leaders among top IT professional services firms, IT vendors, and telecom vendors and operators.

“TBR Talks” is available on all major podcast platforms. Subscribe today!

Global Trade Concerns: What’s Driving Labor Force Rationalization?

TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
TBR Talks: Decoding Strategies and Ecosystems of the Globe's Top Tech Firms
Global Trade Concerns: What’s Driving Labor Force Rationalization?
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In this episode of “TBR Talks,” Principal Analyst Boz Hristov and Senior Analyst Kelly Lesiczka join Patrick for a discussion on the challenges occurring amid reductions in force and labor rationalization across the global tech marketplace.

The pair, who specialize in digital transformation, ecosystems and management consulting research, also look at the trends and predictions TBR’s teams noted in 2023 and continue to observe in 2025 regarding anticipated reduction in and optimization of the labor pyramid within professional services and IT services vendors.

Listen and learn with TBR Talks!

Submit your Key Intelligence Questions for Patrick and his guests

Connect with Patrick on LinkedIn:

Connect with Kelly on LinkedIn

Connect with Boz on LinkedIn⁠⁠⁠⁠⁠⁠⁠

Learn more about TBR at ⁠⁠⁠⁠⁠https://tbri.com/⁠⁠⁠⁠

TBR Talks is produced by Technology Business Research, Inc.

Edited by Haley Demers

Music by Burty Sounds via Pixabay

Art by Amanda Hamilton Sy

Global Trade Concerns: What’s Driving Labor Force Rationalization?

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem, from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors and chip manufacturers to value added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors.

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about the potential labor pyramid collapse with Boz Hristov, Principal Analyst for TBR’s Digital Transformation practice, and Kelly Lesiczka, Senior Analyst for TBR’s Professional Services practice.

Kelly and Boz, welcome back to the TBR Talks podcast. Great to see you both.

Bozhidar Hristov, TBR Principal Analyst: You as well. 

Shifted thinking around the potential labor pyramid collapse

Patrick: What we want to talk about today is something we’ve been talking about for two years now, which once generative AI became the biggest story of 2023 early on, and once we started to understand how the companies that we cover. So, the IT services companies and the consultancies, once we thought about how they were going to adopt generative AI and some of the use cases that they would use internally, we started imagining a collapse of the traditional labor pyramid. That is, rather than having to hire lots of people at an entry level and use an apprentice model in the consulting world and just use a sort of up and out model in the IT services world. And have those people eventually get whittled down to that top of the pyramid. Instead, the sort of two sides of the pyramid would evaporate, because you could use generative AI to do so much of that entry level kind of work. That was our thinking in 2023, and I would say we still are thinking in 2024 now, early mid 2025, what are we thinking? Are we seeing that coming to bear or is it something different. Boz, I’ll let you go first. 

Boz: Sure. I think you use a very interesting word, imagine, right. When it came to what we were anticipating that may be happening in the world of professional services, professional IT services. So, the ebbs and flows of the headcount distribution for all the IT service and professional services vendors, is not a new phenomenon. We saw a lot of those, and all that anticipation and back in, 5 or 7 years ago when RPA first came around and obviously the AI and the GenAI has put a little bit more of a pressure and it’s pressure testing the employee pyramids of many of the IT services and consultancies. But I think before any of that can happen, I think what many of those vendors have been experiencing in the last 24 to 30 months, has been they came off the high hiring and recruiting after the pandemic. Right. So, everyone pretty much up there, recruiting and increasing their headcount, 25%/30%. The demand, though, started to cool off much sooner, much faster than, you know, than anyone was anticipating. So, what we saw in late 2023 and through 2024 was a decline in headcount. And that was actually- we track the headcount distribution as part of our Global Delivery Benchmark. And this benchmark has been going on for over the last 15+ years. And that was the first time we saw the companies that were within the benchmark, the average headcount contracting, which kind of gave an indication. Okay, is this the moment, an inflection point in time when vendors will actually look into their business models and try to look into their headcount a little bit through a different lens? And so, trying to answer the question was are those companies reducing the headcount as a result of AI because they’re starting to feel the pressure of AI, or because the demand was slowing down. Our initial indication and estimates are suggesting that the decline in headcount was largely because of slower demand, less of AI. If we had to put a number behind, probably no more than 10% to 15% of the headcount decline was a result of AI pressure. The other 80%/85%+ was as a result of slower demand and vendors just being, you know, over hiring. Now fast forward into 2025, we start to see in the late in the 3Q and the 4Q in 2024, actually, which is the numbers have been reported in the first quarter into 2025, vendors are starting to hire back again which suggests again, that that anticipation and imagination in terms of like where those companies labor pyramids are maybe going to look like, was just a temporary blip. For most vendors, some vendors are still kind of in that adjustment mode, and they’re trying to think about what it all means to them moving forward. I think the net new additions in the late 2024, early 2025 are largely because there was an uptick in signings in early 2024, in large and mega deals for a lot of the IT outsourcing companies and as we know, those types of contracts, typically the revenue recognition cycle takes a little bit longer than the traditional consulting model. So, there’s been that kind of a delay in hiring. But certainly, when there’s a start to hiring back again. Now, will they hire at the same pace as they were doing in 2021, 2022, 2023? Probably not. They are very careful. They are very strategic in terms of who they hire, and how they’re hiring, in terms of the scale of it. Acquisitions still remain a piece of the puzzle, allowing vendors to get the more on-demand skills as well as capture new business that way along the way. So, bottom line, the decline has rebounded. And I think, certainly will pressure test again. You know, those company’s business models moving forward because now we’re starting to see actually, AI and GenAI kind of picking up. So, we’ll start to see how much that will impact actually their hiring plans and into late 2025 and 2026. 

Patrick: So, Kelly, I’ll come to you on the management consultancies. But first, a couple clarifications, Boz. 

Boz: Yeah.

Patrick: So, when you talked about the headcount decline, what was striking about it was the growth was still happening for those- revenue growth was still happening. So, there was a real disconnect there between the two, right?

Boz: Initially there was, that was the anticipation when they were hiring at such a pace. But the demand started to slow down, the demand for consulting work,

Patrick: Right.

Boz: I should say that to be more specific. The demand for consulting work really cooled off, and the demand for consulting work, which needs like an immediate excuse to be deployed for ad hoc projects, kind of cooled off. And those companies had really over-hired essentially because there was such a high demand for consulting in the 2021, 2022 period. So, it’s starting in 2022, 2024. You know, the demand for consulting cooled off, largely because AI started to come around. 

Patrick: Right.

Boz: So, there was that, you know, pivotal discussion between the demand for consulting versus demand for IT outsourcing services. 

Could the collapse still happen?

Patrick: So, you made a point though, that the AI adoption is accelerating now. So, is it possible that our read, our analysis of what was happening in 2023 and the collapsing of the pyramid that we were predicting was simply two years too soon? 

Boz: It is possible. It is possible, you know, what is the first phrase a dead cat bounce, you know, from a headcount perspective. 

Patrick: Yeah.

Boz: Yeah. So, we could be experiencing some of that. And I think some of the vendors, they’re a little bit more- the less tech heavy, the less offshore heavy, I should say. They might be a little better positioned. Just thinking about, you know, how they’re thinking and positioning their portfolio. But then again, I don’t think most of the vendors will say no to IT outsourcing work, regardless of how much demand AI is in, and yes demand for AI is picking up. But the actual revenue, the actual dollars, the hard dollars, are much smaller in terms of the award size than traditional IT outsourcing.

Patrick: Right. And so, then the margins are not as good because you-

Boz: I would say margins are on par right now with the traditional IT services and they’re no- they’re not bigger. So, you have a smaller scale awards with the same margin. So, you need to kind of start thinking about different ways and whether you, you know, deploy and mobilize your resources. What actually you make good profit.

Could the management consultancy’s labor pyramids collapse?

Patrick: Right. So, Kelly, from your perspective, looking at a lot of the management consultancies, do you think there’s going to be that collapse of the pyramid and that maybe we’re just two years ahead of ourselves on this? And I’m thinking in particular about the Big Four firms and the McKinsey, Bain and BCG that really do have that apprenticeship model where they need to hire lots of people at an early part in their career, so they can either build them up to be a partner level or find somewhere else for them to go. But with AI, can you sort of eliminate all those, not all, some of those entry level positions? 

Kelly Lesiczka, TBR Senior Analyst: Yeah, I think it really depends on how the companies are approaching. I think we saw a lot of, at least among the strategy firms, a lot more attention to who- what type of competition they had of talent. So what people were actually working on, the type of projects that they were doing, I think we saw a lot more, I guess attention from a lot of the higher ups on what projects were being worked on. I know McKinsey definitely had a stronger eye on what projects they were engaging with. Not just a lot of the same project, but it was more of a selective process. And I think that’s also been reflected within the talent. So, what type of talent do you need? And I think they’ve had to shift more towards technology, which has been more difficult from the traditional, more old school models coming from like a BCG, for example. I think it was more difficult for them to shift into technology to begin with and integrating those skills with their existing consulting. So, I think that was kind of a big shift for them. And I think that’s something we’ll continue to see is how they’re doing it. You know, where it was so, like within disparate pieces before, I think it’ll be more challenging for them to have a more comprehensive, and I don’t want to use the word holistic, but to bring it all together. 

Patrick: Right.

Looking at the India-centric vendors

Kelly: I think the India-centric vendors, I know you asked about consulting, but I think they’re worth noting, too, it’s just how they’ve looked at hiring and how that’s shifted. I mean, think about how many more people they have based within the US as opposed to contracted. If you were to look at those numbers from five years ago, it’s much different. So, I think just seeing how all of these vendors are hiring, who they’re hiring and where they’re hiring is definitely different from where it was five years ago, even a year ago. It’s not quite the same type of people. Not even for the same positions. I think those have kind of changed a bit more. Some of it is probably bolstered by AI, but I wouldn’t say AI is taking over. I think it’s more adjusting the roles a little bit and giving them more resources in a sense, as to how they can do their job and what more they can do using those tools. 

Patrick: Right. And it’s fascinating, too, because if I understood you right, around the management consultancies like there’s greater emphasis now on ensuring that they’re hiring the right people and making sure they’re taking on the right projects. And we always thought of, I have always thought of consulting, the basic business model is you hire smart people and throw them on a problem. You could also say it used to be in terms of data, you just gather all the data you possibly can. And I think AI, and generative AI in particular, forces you to actually care about what data you’re getting. And maybe it’s forcing the consultancies to care even more about which kinds of people they’re recruiting and which kind of people they’re promoting, because it’s no longer just, get smart people and throw them at a problem and the smartest ones stick around.

Specific approaches that will succeed

So, speaking of specific companies now, Boz I’ll come back to you. Are there- are certain companies that in your coverage or that your focused on as an adjacency, like a Microsoft or an SAP, that you think given the generative AI age we’re in and where we think things are heading now that you would sort of say these are the companies that are sort of in the best position to take advantage of what’s changing in the market in 2025?

Boz: I can’t just single out a company or a few of those. I think it’s about how companies approach overall and from a culture perspective, from a training perspective, from a portfolio perspective, and pricing, commercial, and partnerships, alliance partners perspective, because those are all these pieces that are evolving at different speeds, right? And we’re starting to see some companies being a little bit more stuck in the, you know, the old ways of like, let’s just make sure we capture as much business as possible, you know, on the traditional way. Others are a little bit more aggressive in terms of like adopting AI for internal use and deploying and trying to deploy to customers and experimenting with new commercial and partner models, others, third groups that are really trying to upend, you know, traditional like, outsourcing services and, you know, we’re actually starting to hear kind of on the edges of companies that are trying to disrupt the larger vendors as well, more mid-size companies that really have a little bit less risk, associated with this disruption, internal disruption perspective then external. So, it all boils down to culture, vision of the leadership, really the risk profile and the risk management that those companies are willing to take on. Public versus private companies. That is also a factor when it comes down to the changes in the preparation. There’s certainly a lot of fear among all companies of like what could happen and, you know, and we can- we see it in the market across many of the IT vendors, not just in the services side, but on the tech side, on the software side, on the infrastructure side. One day they make a big, bold, investment announcement, the next day they scale down or scale, they- employ levels. So, there’s like this ongoing adjustment. 

My cynical view, if I could share it for a moment, is that if the demand starts to rebound, the- more of the discretionary spent and whatnot, I would say probably 8% of the companies that may be thinking about that will be disrupted, they’ll probably start deploying resources to hire again to capture that demand. And, while they may not forget entirely for AI and GenAI, that immediate impact, they may kind of put it a little bit on the side burner, not on the back burner but the side burner, and trying to continue to experiment because you have to remember the enterprises too, the buyers, are also not just pouring money into AI and GenAI. So those companies, actually they have a chance to control the narrative of the scale and the adoption which can also impact their, you know, how they think about their employee pyramid. So, data services business, so, it’s all about people. But, you know, that’s something that, you know, they will need to think a little bit more strategically as they think about the evolution of their commercial models and develop different career paths, different pyramids or other forms, shapes of, you know.

Patrick: Right

Boz: That they may have to think about, you know, the scale of their workforce but again, culture and risk tolerance are the big factors right now.

Patrick: Right. And we’re such a long way from where we were two years ago, where you just said, you know, the enterprises are now pouring money into AI. And yet a couple of years ago, every announcement was a billion, 2 billion, 3 billion, into AI initiatives. 

Specific companies that will succeed 

Kelly, are there any companies that stand up for you when you think about who or which companies have the right pieces in place for what’s happening in the market? 

Kelly: I think EY is probably a good example in this case. I think how they were over the past few years with their investments that encompassed their own employees and their partnerships and their portfolios. I think the approach they had positioned them a little bit better to have a stronger platform around AI. I know they have the EY AI platform, and I think just the way that they’ve approached integrating it within their employee base but then also how they’re creating more tools, not necessarily larger platforms, because I do think we’ve seen more of an acceptance across, from vendors and their clients on, you need to find a way to work with AI to avoid as Boz was talking about, being disrupted. So, I think making it more of a piecemeal approach. So approaching AI in a smaller way, not necessarily a whole wide scale change, but just simply starting to use like the Outlook tools or the Google Cloud. Using all those little tools that are smaller on the smaller scale as opposed to a widespread embedding this down below, it’s more- and again, you’re building the skills around AI as well. Which you have to start somewhere. You have to have those skills. 

Patrick: Right. And to- yeah. And the folds in nicely with Boz’s point about adoption is slow. And so, if you’re building up those skills, using it in small pieces, you’re getting the kind of expertise and knowledge that will be applicable.

Fujitsu and Deloitte

I want to wrap up by asking you about two particular companies, Fujitsu and Deloitte. And the reason that those two are on my mind in particular, is because when we’re talking about the staffing pyramid and the business model, there are fewer companies that have sort of played with that more than Deloitte over the last few years. And the way that they’re part of the Big Four, but they’re very much like Accenture. So, they have always pushed the, sort of, the limits of what’s possible in the consultancy Big Four model, versus the IT services company model. And then Fujitsu because I know about a year ago this time, we were meeting with them. They were telling us all about amalgamated AI, and they seem to have one of the better, more comprehensive, broader AI stories. And so, while everyone else was chasing the GenAI, you know, the flashing lights, they seem to be a lot more focused on, well, AI is a lot of things. It’s not just this one GenAI kind of thing. So, I wonder if you could each speak for a moment. Obviously, Kelly, you cover Fujitsu, Boz you covered Deloitte. So, I wonder if we could just wrap up with just a couple thoughts on where you see those two companies going in 2025. Boz, again, I’ll start with you.

Boz: Yeah. As you mentioned, I mean, Deloitte has certainly stretched the limits of their business model, including their resource pyramid, as they have started to look and feel and do business more like Accenture than McKinsey although they are a Big Four, essentially. Investing a lot more heavily into offshore resources. Building, like their outsourcing, they call the Deloitte Operate business as well as a key strategic initiative. So, in terms of where do we see Deloitte, how do I think about Deloitte moving forward? I would say Deloitte, at least for the foreseeable future like the next 12 to 18 months/24 months, I don’t expect Deloitte resource management strategy to change much. I would suspect them to double down more on the offshore nearshore resources for their consulting and IT services, given the strategic imperative around Deloitte Operate. And the need for supporting and capturing that many services business, and potentially use that as a door opener for consulting, kind of like that back door consulting opening and can use their stickiness with their clients and trying to increase the presence and have the different conversation as they’ve been on client site doing their managed services for a year or two and then identify new opportunities to bring in their consultants. So, that’s what I think is going to happen. Or now it might be some other as we know they’re going through a major, you know, realignment of the service lines. And that has started about a year ago and going through- should be wrapping up by the end of this fiscal year on May 31st. So I would expect to see more calibration on their audit side as a result of using AI. If we’re to see a company that has more of an impact and on the commercial side on the commercial model and just the business model overall, I would say the audit and assurance that part of the business is much more ripe for disruption at scale because of the way the technology works in the audit clients preparation and whatnot. I suspect, you know, Deloitte will continue to use more labor-based arbitrage for their IT services out of the house and consulting side than the audit side. Just by the nature of the way they’ve been evolving their portfolio and the long-term goal of Deloitte Operate to be on client side.

Patrick: Right. I hate to say this, Boz, but I think everything we’ve heard from Deloitte and from KPMG and PwC and EY, we’re going to have to have a podcast episode about audit before the end of this year.

Boz: Yup.

Patrick: Which is going to be painful. 

So, Kelly Fujitsu- so, it’s not that- I was thinking as Boz was talking about consulting, it’s not just the AI story from Fujitsu that’s interesting. It’s the Uvance story where they’re trying to build up this consultancy practice a little bit more significantly than they have in the past. I mean, how do you how do you look at Fujitsu now? Where do you think you see them at the end of the year? 

Kelly: I think Fujitsu is definitely a company to keep an eye on. I think a lot of times they’re overlooked because they’re so heavily based within Japan.

Patrick: Right

Kelly: I think a lot of companies don’t really think of them as a threat.  Over the past few years, they’ve definitely created stronger sightlines between, you’d call them satellite locations, however you want to do it, in the Americas and in EMEA. And even in Australia and New Zealand, they’ve been on quite the acquisition streak. So, I think they’ve definitely strengthened their overseas presence. Not really comparable to its peers, but I think it’s definitely better than it was. And the way that it’s connected with, Japan in general. 

Patrick: Right

Kelly: But I think it’s also reflected in a lot of their investments. Just thinking about consulting, a company that was very tech focused in their approach to consulting, they knew you can’t just become a consultant. And so, the way that they’ve been doing it, bringing in different consulting firms, through acquisitions, but also hiring and training, I think they’ve done a good way of building it up from zero as opposed to just running forth with it. They’ve done- the way that they’ve approached integrating it throughout and keeping it separate. Even with how they do their earnings, the way that they’re positioning it within the firm is still separate, which I think definitely gives them a leg up. But it is coming from a technology perspective as well. I think their investment in quantum, which has- it’s been more forthcoming in the past ten-ish years.

Patrick: Right. 

Kelly: I think that’s something we didn’t see from a lot of the other IT services vendors; was how strong of a base they had in quantum. And granted quantum is in a different position than AI, but I think it definitely helped them have more of that technical knowledge and a lot more of the capabilities for its AI, and the amalgamated AI.

Patrick: Right, right. So, I think what’s going on with, and I’m glad you brought up quantum, because I think what’s going on with Fujitsu, with Atos, with IBM around quantum, that’s a season four episode that we’re going to have to do in order to talk about quantum.

Final thoughts

So, I want to end by just asking you a question you’re not prepared for. Both of you are experienced travelers for both business and for pleasure, for family trips. I’m curious. Tell me a place you’ve not yet been to that you really want to go? Not for work, but for like a family trip or a fun trip. One place- and it can’t be, you know, Hampton, New Hampshire and Newbury, Massachusetts or anywhere else. It has to be somewhere a little bit exotic, I think. Or maybe you have a good reason to want to go to Ames, Iowa. But tell me, where is it that you want to go? Boz, I’ll start with you. 

Boz: I’ll go with three places. 

Patrick: Three places? 

Boz: Yeah.

Patrick: Okay.

Boz: Alaska. Argentina. Australia. 

Patrick: Okay. All the A’s, just going to go right through the alphabet.

Boz: Yeah.

Patrick: Alaska, Argentina and Australia. Yeah. Okay. All right. Kelly?

Kelly: I didn’t think of Alaska before you said it, but I definitely do want to go to Alaska. And I feel like the other one is Scotland. I’ve never been but I love how it’s- there’s the animals everywhere. It’s so peaceful. I’ve heard idyllic is a nice way to describe it. 

Patrick: Of Scotland. And they have good whiskey so. 

Kelly: *laughs* Yes, they do. 

Patrick: Yes, they do. Excellent. Thank you two very much. We will chat again soon. 

Boz: All right. Thank you.

Patrick: Next week I’ll be speaking with TBR Principal Analyst Boz Hristov and Analyst Alex Demeule about TBR’s family of ecosystem research. Don’t forget to send us your key intelligence questions on business strategy, ecosystems, and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies large and small answer these questions with the research, data and analysis my guests bring to this conversation every week.

Once again, I’m your host Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us and see you next week.

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