Phil Fersht — CEO and Chief Analyst, HFS Research[00:21]
My name is Phil Fersht. I’m the CEO and Chief Analyst at HFS Research. And with me is Jo Debecker, or Yo Debecker, as you’ve got a promise called. Yeah, that’s right. Everyone in America calls you Joe because a bunch of fellow stars.
Jo Debecker — President and CEO at Akkodis[00:36]
I’ve been named Yo, Joe, Joe, John. I’ve been named everything, so that’s fine. No worries.
Phil Fersht — CEO and Chief Analyst, HFS Research[00:41]
And you’re now at the Akkodis business. Yeah, that’s right. But what I think would be good to start is tell everybody a little bit about how Akkodis was founded, where it’s going, and just a little bit about the business so people more understanding of what you guys actually do.
Jo Debecker — President and CEO at Akkodis[00:57]
No, very good. So Akkodis, Phil, is a merger of AKKA, which is a core engineering company. I’ll talk about that more later. And also Modis, which is more a digital company, IT, digital services, where you and I know each other from. And so the merger has created what I would call a digital engineering company. And so here we are working on planes, we are working on cars, we are working on medicines, and here we do a lot of IT. And the world of engineering is becoming much and much more digital. And of course, AI is a dominant topic across both. And so with Akkodis, our strategy is to create a world-leading digital engineering company. There are not too many engineering companies that are separate out there. I mean, you’ve got the Accentures and the Capgeminis, and then it’s pretty much us. So I would say we’re the number four in digital engineering in the world right now. Wow. And you’re about 4 billion euros. Yeah, roughly 4 billion euros and about 50,000 engineers working for us every day.
Phil Fersht — CEO and Chief Analyst, HFS Research[01:49]
So it’s quite a force. So tell me a bit about the business model, like are you like trying to scale extraordinary talent like Palantir or something, what’s the business model that you’re pushing? So…
Jo Debecker — President and CEO at Akkodis[02:00]
Sure, sure. So for us actually we are helping accelerating innovation at our clients, right? So you know in IT and in digital you’re more alongside the business process, I would say. In engineering you’re in the process, you are part of the business of the client, and so you try to innovate faster and you try to basically get time to market quicker and so on and so on. I’ll give you one example. You know, we’re building simulation software. They need to build 800 planes a year. And so they’re just assembling planes from all kinds of suppliers. Of course, every configuration is different. Our simulation software basically takes that configuration and tests the plane before it even exists. So it’s allowed to fly. So the time to market is much quicker because of our simulation software. That’s a nice example of innovation accelerating the business, right?
Phil Fersht — CEO and Chief Analyst, HFS Research[02:48]
So when you say simulation software, is that part of a platform that you create to sell your services in a sort of platform model? Yes. So we have, so of course we build…
Jo Debecker — President and CEO at Akkodis[02:57]
simulation software for the client and it’s their IP, but in the car industry, for instance, we have a platform called AIcore, and that is basically doing the same. We do full variant model, we do basically full vehicle development for our clients, and we do this on our platform, right? Because as you know, our services are getting more and more software, and it’s more and more software, and of course one of our strategies in Akkodis is, you know, to have an acceleration program, an IP program, and a product program, because it’s basically accelerating our time to market and it’s also creating frankly stickiness of our services to the clients if we can deliver it via software.
Phil Fersht — CEO and Chief Analyst, HFS Research[03:32]
Got it. Interesting. Yeah. So, you know, you obviously come out of a traditional staffing background. Yes. So how do you get away from it? I’m sure the last thing you want is clients coming to you saying, “I want those three engineers over there. How much am I going to have to pay for them?” How do you get away from that conversation to more of a paying for outcomes, paying for ongoing expertise? Absolutely.
Jo Debecker — President and CEO at Akkodis[03:55]
What we need to do and the journey I’m on, Phil, is to basically transform my own sales organization. I’ll give you an example. I went into one of our big clients in the US, with one of my best sales managers. We go into their building. My sales guy knows the receptionist, tick in the box, can have a personal conversation. We go into basically the guy that buys the service from us and he starts explaining, oh, I have a lot of problems. I have budget cuts. I need to still do the same. What shall I do? My sales team, their initial reaction was, how many people do you need? Which is classical staffing business. I need to educate them to ask the questions, what’s behind your request? Shall we maybe consolidate suppliers? Shall I give you an SLA? Shall I do a work package? So that kind of conversion is, I think, one of our biggest challenges in transformation we’re doing. And so converting your front line into being able to ask the right questions so that we can do work packages and outcome-based services, I think that is a big challenge I have.
Phil Fersht — CEO and Chief Analyst, HFS Research[04:48]
Interesting. So does this change the types of skill sets you need to work with your clients directly so you can shift this model?
Jo Debecker — President and CEO at Akkodis[04:58]
It changes the skills of the salespeople, right? It’s no longer time and material, you know, kind of onesies and twosies, but it’s basically building solutions, building services back to our client, put an SLA underneath it. And then, of course, hopefully have a multi-year contract. So it does require a conversion of your portfolio in long-term deals, but also requires a conversion of your sales force to be able to sell your new services. Right. So it’s actually quite a transformation.
Phil Fersht — CEO and Chief Analyst, HFS Research[05:24]
Yeah. Again. Yeah, because good engineers don’t necessarily make good salespeople. That’s actually right.
Jo Debecker — President and CEO at Akkodis[05:28]
I mean, if you look at our website initially, it was built by engineers and for engineers, but not for salespeople. So that’s one of the things we have changed.
Phil Fersht — CEO and Chief Analyst, HFS Research[05:36]
Right, right. Okay. So in terms of scaling this type of business, you’ve got the Palantir model at one end, which is taking a small number of experts and scaling them over a period of time with a client, which might not be a very sustainable model. No. Right. Versus how do you scale ordinary skill set people at a rate that isn’t just per seat, but it’s more paying by outcome.
Jo Debecker — President and CEO at Akkodis[06:03]
Sure, sure. So one of the things we’re doing and one of the elements we have in Akkodis is the Akkodis Academy. This is basically the kind of training and upskilling service that we sell to our clients.
Phil Fersht — CEO and Chief Analyst, HFS Research[06:15]
So for instance, AI Academy is part of the Akkodis Academy,
Jo Debecker — President and CEO at Akkodis[06:18]
where we basically are training and upskilling the people of our clients. We’re using, basically, we’re drinking our own champagne. We’re using the AI Academy to upskill our own people in order to become more outcome-based, less time and material. You do require project management. You do require soft skills. You do require commercial acumen. You do require contractual knowledge, legal. So that’s kind of all the different hard and soft skills that we put our people under so they can become, basically, advocates of services and make engineers into maybe more salespeople. That’s right.
Phil Fersht — CEO and Chief Analyst, HFS Research[06:51]
So how do you manage the economics of this new model? Right. Because you’ve got your traditional business, which obviously is being disrupted, but you don’t want to just destroy that overnight. No. And then you’ve got the new business where you’re trying to sell more platform-based services, more outcome-based services. So how do you, it’s like changing the wheels of a car while driving.
Jo Debecker — President and CEO at Akkodis[07:10]
How do you do that? It actually is changing, you know, one wheel at a time, to be honest. And for us, you know, in engineering, yes, we have a big platform play. Yes, we are building IP together with our clients, but also our own IP. But it’s not an or story. For us, it’s an and story. In engineering, you are so deeply entrenched in the business process and you are part of the business, you will always need an element of human in there. So for us, the story is about building the software to accelerate, building the software to create the stickiness, building the software to do the innovation. But there will always be what I would call a human in the loop. So the more you go into engineering and you put the digital part in there, which is more on the software side, but you still need a lot of the human ingenuity together. So for us, it’s basically a story of building both and not just saying that I will fully convert into a software. Akkodis will never be a software company. We’re not in the business to sell software, but software is an enabler for us to deliver our services. And of course, the software part versus the human part, that balance will change, but there will always be a human component for us.
Phil Fersht — CEO and Chief Analyst, HFS Research[08:14]
Right, right. But we’re starting to see some of the services firms, particularly the large-scale ones, launching their own platform businesses. Yes. I think HCL did it with a lot of the old IBM equipment. Of course, yeah. That’s what they did. Other big services brands, you know, TCS, Cognizant and Co., they’re all looking to do similar things.
Jo Debecker — President and CEO at Akkodis[08:34]
It was his bright eyes. Yeah.
Phil Fersht — CEO and Chief Analyst, HFS Research[08:36]
And part of it is because investment analysts don’t like services very much.
Jo Debecker — President and CEO at Akkodis[08:40]
I know. And the multipliers for software are much higher. So we try to build a bit of somewhere in between.
Phil Fersht — CEO and Chief Analyst, HFS Research[08:45]
So you’re trying to go somewhere in between. Yeah. But do you think investors are understanding the model? There’s a Services-as-Software model which is taking the best of both worlds?
Jo Debecker — President and CEO at Akkodis[08:54]
I hope they do. And I think the more examples we give, the more it becomes understandable. I’ll give you an example in my area, which is software-defined vehicle and building automated driver-assisted systems. That’s a lot of software, but you still need humans in the loop there to build it, to validate it, and to do things like human reinforcement learning, which is very hot in the world of AI, but in the world of building ADAS, it’s actually the same. So the more examples we can give like this, the more people understand that it is a balance. Yes, you know, the pendulum will go more into the software part, but you always need a human component in the services that we deliver.
Phil Fersht — CEO and Chief Analyst, HFS Research[09:29]
Right.
Jo Debecker — President and CEO at Akkodis[09:29]
And it’s also a component, a feel of trust, I would say. I mean, the more you automate, you know, let’s say you automate the lowest level, you might have like a control point at the lower level. At a certain point in time, you will trust the outcome of the software or the AI. Right. You might build your control point at a level higher. And so the higher you go on the stack, of course, the less human intervention you need, but you will always need to control. My view. What they say in German is, Vertrauen ist gut, aber Kontrolle ist besser. So trust is good, but control is better. So there’ll always be a little bit of a control point in there. And that is to instill trust with our end users and with our clients.
Phil Fersht — CEO and Chief Analyst, HFS Research[10:03]
Right, right. So which industries do you feel are moving faster with this? Because you’ve sort of got the why and the what of AI, and before we even get to the how, I think we’ve got something I’m calling the when. Yes. Which is you don’t always want to be the first mover. No. Right. Sometimes it’s good to watch everybody else do…
Jo Debecker — President and CEO at Akkodis[10:20]
your research for you. Yes, you want to be a fast follower. Yeah, so you want to be a fast follower, I want to be a fast follower, I think it’s good to be a fast follower. I mean, I like to be a bit of a pioneer as well, but pioneering comes at a certain cost, as you said, so you need to be a fast follower. There are certain industries that are going very slowly, you know. Our third biggest industry is defense. So on defense and AI, I think it’s a complicated story. It’s getting there. I mean, the way drones are being now simulated, I mean, there’s a lot of AI in there, but the sovereignty and the privacy and the regulation is actually quite important. Aviation, I would say, is like the second one where, of course, lots of human lives are at stake. Then we’ve got automotive. And then, of course, we have everything related to BFSI, insurance, even healthcare. I mean, I was on a healthcare symposium earlier today, and I told them the same story about human in the loop, and they said, Jo, don’t worry. We just have too many jobs we can’t get filled. Just automate everything. Just get it all done. Let it all be done by AI. So I would say that they are slowly but gradually coming at the forefront of AI, and although trust is important there as well.
Phil Fersht — CEO and Chief Analyst, HFS Research[11:22]
Yes, that’s right. I mean, we did some research recently that shows 51% of employees working in AI are still scared stiff of working in AI. So how do we create more of a safe space for them to work in, where they’re free to experiment, do more mass automation of work, that sort of thing? How do we get to that point, do you think?
Jo Debecker — President and CEO at Akkodis[11:43]
I think we need to change the narrative to start with. AI will not replace you. The guy who knows AI might replace you. It’s a classic. But it’s true. And so I’m personally not a big fan of all the announcements that some of the tech companies in California make around, you know, stop hiring humans, start hiring AI. I believe fundamentally AI is a human technology and will always require humans. And I think we need to change the storyline to say, you know, AI is an opportunity and not a threat. You go and get yourself trained on AI, it will be an opportunity for you. And we should not say if you’re not getting yourself trained, you will get fired. And it’s basically the fear that is paralyzing all the people right now. And I think it starts with ourselves. You know, as leaders, you need to show and you need to give the right message and you need to lead at the front. So I try to use AI myself a lot and show the way saying, guys, this is helping productivity. It is helping, you know, my everyday life. And then you in your job can focus on what really matters, which is the client, which is the customer, which is the end user, which is the quality, et cetera. And I think we need to change the storyline. Otherwise people will always be afraid and the adoption will be done to them and not with them. And that would be a tremendous loss.
Phil Fersht — CEO and Chief Analyst, HFS Research[12:51]
Yeah, I think that’s very wise. It’s taking the personal experiences and translating them to the business experience. As we can say, the Sunday experience to the Monday experience when you go into the workplace. But if you can demonstrate as individuals how more skilled we’re getting at making AI help ourselves do our own jobs. Absolutely. Then why do I accept the fact that I go into work and I got SAP over here, salespeople over here. Absolutely. None of these systems talk to each other.
Jo Debecker — President and CEO at Akkodis[13:16]
Phil, think about the following. Whenever a new technology was introduced, it displaced quite some roles. But if you look at the mid to long term, it actually created more roles than it displaced. I mean, the internet was the end of retail, supposedly. The laptop was the end of the secretaries and the clerks. It actually created more work. So actually, you need to look at it as an opportunity rather than a threat. Of course jobs will be different, but it’s an opportunity. And by the way, if you would map out the months of a new technology coming in, a laptop, internet, a smartphone, AI, the curve is exactly the same, number of months versus number of changes or number of jobs it displaced, plus what it created. The graph of AI, I’m not sure you’ve seen that, the graph is exactly following the same sequence as any other major technology introduction. I think that’s the message we should get out there.
Phil Fersht — CEO and Chief Analyst, HFS Research[14:04]
Yeah, yeah. So we’re taking work away from areas that just don’t need, yes, those labor points, creating more there. So it’s about…
Jo Debecker — President and CEO at Akkodis[14:11]
creating new opportunity. It is. Every new technology, every major technology breakthrough has done
Phil Fersht — CEO and Chief Analyst, HFS Research[14:16]
exactly that. That’s right. Going back to the advent of the internet in the 90s where we had brick versus click and it took 15 years to get to proper e-commerce. Yeah. And then now we have a balance between physical and digital e-commerce. So I think with AI, it’s going to be very similar.
Jo Debecker — President and CEO at Akkodis[14:31]
It’s going to be very similar. And actually, if you look at the trajectory of this AI right now, it’s following exactly the same initial trajectory already.
Phil Fersht — CEO and Chief Analyst, HFS Research[14:38]
Right, right. So where does it lead for a company like yourselves in terms of where do you think this is heading in the future? Are you just going to keep growing and getting bigger and more profitable? Or do you think you have to go through some different iterations?
Jo Debecker — President and CEO at Akkodis[14:50]
So I think if we talk about, you know, AI for the digital and engineering and for any company, I think 2026 is the year, and this is very controversial, of less AI. And what do I mean with that? It’s let’s do less use cases. Let’s do more implementations. Let’s do less hype and let’s do more impact. And so for us, what we did last year and many companies, just give me all the use cases. Just paint, paint, you know, AI across your organization and see what pops up. This year is going to be the year of doing a few use cases. Which industry use cases do we want to be known for? Or, you know, which industry or use cases for practice do we want to really be known for? Two or three per industry and then really go very hard and very deep. So less wide and more deep. And I think, you know, if you look at, you know, here at Davos, it’s all around, you know, AI and does AI give its promise? And I think we should all say, okay, we do less, but we focus more. And then we’ll get the real ROI and the value.
Phil Fersht — CEO and Chief Analyst, HFS Research[15:47]
And that’s going to be the same for Akkodis. Wow. Interesting. So final question, do you feel you have changed more as a leader just in the last six
Jo Debecker — President and CEO at Akkodis[15:54]
months than you ever have in your career? Yes, I have. I’ll give you an example. What I’ve learned is, I think the biggest lesson I’ve learned in the last six months, Phil, is, you know, if you want to go fast, and usually I want to go fast, as you know, you go alone. If you want to go far, you go together. And with Akkodis, I want to go far. So I always try to make sure that the entire team is with me so we can go
Phil Fersht — CEO and Chief Analyst, HFS Research[16:20]
together. That’s great. I like that. Keeping everybody on the journey. I’d like to say I’ve had a similar experience myself, but
Jo Debecker — President and CEO at Akkodis[16:30]
it’s good to hear from you, Jo. Likewise. Thank you very much. It was wonderful. I really enjoyed the time. Thank you very much. Thank you.
