Workforce investment is key to building a resilient enterprise with modernisation

Modernization has become a strategic means of powering organizational growth transformation and catering to new-age customer demands. As the adoptions are set to accelerate, thanks to the maturing legacy IT landscape, newer challenges are evolving beyond technology related to skills and operating models.

As per Infosys’ Modernization Radar 2022, 70%-90% of the existing legacy estate is slated to modernize in five years, creating acute demand for modernization skills and talents. No wonder more than 50% of CIOs worry about the lack of skills and talent as significant deterrents to modernization. While most adopters acknowledge these challenges, many ignore that modernization is not one-size-fits-all. Different enterprises need different sets of skills and talents, an adaptive workforce, and a customized ‘change management strategy’ based on the business model, organization structure, and modernization approach.

To build an adaptive workforce, one needs to create a balanced mix of build and buy talent strategy aimed at people, processes, and technology. Enterprises can create a hybrid community of practice, including both in-house and external workforce. One must also weigh factors like time, cost, and predictability to measure the ROI.

In short, a receptive and skilled workforce is the cornerstone of modernization success, for which enterprises need to focus on three key factors.

Building a skilled workforce organically

Enterprises that consider modernization a strategic step and want to reduce dependency on service providers or increase their in-house workforce capabilities can develop a build strategy. They can invest in upskilling existing employees, acquiring niche skills, or leveraging the gig economy. But this approach is often time-consuming and requires a strategic budget allocation.

For upskilling and reskilling existing employees through continuous learning, enterprises can design specialized training programs in collaboration with academia. A strategy must be developed by identifying critical needs in the workforce versus the supply gap.

For most CIOs, the scarcity of niche skills is a bigger pain point than the risk of business disruption due to modernization. Modernization demands continuous and, in some cases, complete upgradation of the existing legacy applications. Next-gen technologies like AI/ML, APIs, microservices, and LC/NC enable enterprises to plug and play different systems together, creating the best solutions to fast-track the transformation.

For enterprises seeking niche, specialized skills without the trouble of creating their own workforce, gig workers offer an effective option for both temporary and permanent roles. However, this approach demands flexibility in enterprise culture and is suitable for a more flattened, democratized organizational structure.

Leveraging the partner ecosystem

In a scenario where a digitally laggard but well-established enterprise with limited time needs to modernize, upskilling the workforce organically may not work. Additionally, deep-rooted corporate cultures, acquaintance with the existing technology, and hierarchical organizational structures resist change. This is where focusing on a buying strategy to forma skillful workforce can be chosen with ‘as-a-service’ models and outsourcing.

Enterprises can work with global service integrators (GSIs)and independent software vendors (ISVs) to leverage the former’s domain knowledge and the latter’s product expertise and best practices to build a robust workforce.

Another way can be outsourcing architects who have a holistic view of a system's lifecycle and follow an architecture-driven technique to define the best-fit modernization approach and solutions.

A successful modernization requires changes to the people and processes alike. But, at present, modernization is seen more as a change in technology in use than as an advancement of the associated workforce. The reason behind this is resistance to change, which if not handled well can lead to modernization failure.

Following the right change management strategy for an adaptive workforce

Choosing a suitable change/program management strategy is critical. Enterprises can follow the philosophy of micro-change management by letting the workforce be introduced to change incrementally. Enterprises should invest in constant experimentation and learning from modernization-driven changes to refine the execution approach for minimizing transitional risk and employee resistance.

The modernized IT and business environment can be piloted among small user groups. Learning from the pilot can refine the overall change management strategy and project management approach. A central transformation steering committee of technical experts, business practitioners, and domain specialists can be formed to implement, observe, and create best practices, and help adapt to modernization-driven changes.

Encouraging or rewarding the workforce to adopt the changes goes along way. Professional certifications and awards provide motivation. A clearly defined growth-centric career path according to the acquired skills creates loyal and resilient workforces.

Enterprises that harmonize the right workforce investment strategy and balance their operating model achieve sustained agility and exponential growth. As per Infosys Agile Radar 2021, a product-centric value delivery with autonomous, cross-functional teams of technical practitioners, design thinkers, and business executives can increase growth by as much as 63%.

In a nutshell, cross-functional teams with knowledge of next-gen technologies and niche skills are essential to creating a productive, efficient, and competitive enterprise to stand their ground with the digital native competitors and realize modernization's value.

Authored By: Gautam Khanna, Vice President and Global Head - Modernization Practice, Infosys