The IT services market has evolved substantially over the past few years, with the pursuit of digital transformation (DX) by a growing band of organisations being the primary driver.
The emergence of new buyers, new service providers, and new service offerings has fuelled significant disruption across industries and led to an increase complexity for IT buyers.
As the centre of gravity for IT spending shifts away from the IT department and toward the business buyer, new requirements for greater speed, agility, and clear business outcomes have emerged.
IT strategies that leverage “cloud-first” and “mobile-first” capabilities are becoming increasingly mainstream to support initiatives such as the Internet of Things (IoT), hybrid cloud deployments, IT ecosystem expansion, and the introduction of artificial intelligence (AI) into business process automation.
Never has there been a more critical time for IT and the business to work strategically together to achieve critical goals and avoid troublesome roadblocks.
And the IT department must evaluate what can be moved to various cloud models to free itself from expensive, legacy, and time-consuming activities, as well as flexibly support new initiatives around big data and analytics, IoT, and cognitive systems.
DX success requires a strategic approach, and the vast majority of buyers will look to partner with services providers that offer a life cycle of services to supplement their skills.
IT teams must work more closely with their business counterparts than ever before and the business must also be given reason to view the internal IT department as a viable and valuable partner.
As spending and decision-making increasingly shifts toward the business, the boundaries of IT will be pushed and complexity will increase.
In this scenario, lines of business (LoBs) and IT must act as one in a symbiotic relationship, maintaining a strategic focus on the implications for the entire organisation.
This will inevitably have a disruptive impact on the supply side of the market, with the leading systems integrators (SIs) in the DX era set to be those that deliver service and business application integration that aligns with business processes, rather than technology and infrastructure software integration.
The effect on partner ecosystems brought about by this combination of increasing LoB purchasing autonomy and DX implementation will be felt until 2020.
Typical SI activity aligned to infrastructure services will likely transform with the effect of DX services into less “build” and more “leverage” of standards-based platforms common throughout the industry.
The association of partner DX services with vendor hardware/software stacks will limit buyer choices and influence their selection processes.
Already, IT sourcing strategies are changing due to DX, involving more outsourced functions, third-party cloud adoption, and spending on external consultants.
As hyperconverged platforms and hosted cloud services reduce the demand for hardware and software installation, configuration, testing, and management services, the ecosystems of some services partners will be weakened until transformation of those partners’ capabilities to a DX portfolio is complete.
Services providers that have invested in digital strategy, customer engagement and experience transformation, business process redesign, and data-driven decision-making will be the most useful partners for organisations looking to successfully execute their DX projects.
As LoBs take more control of digital transformation, they will compensate for any skill shortfalls by expanding and deepening executive relationship with services firms that are more aligned to their needs.
And as digital-related services become embedded with marketing, commerce, supply chains, and other business functions, the relationships between organisations and their numerous service providers will inevitably become more complex.
The complexity of these relationships will demand that close executive attention is paid to any relevant IT and data governance requirements, with a particular eye on how the selected providers intend to deliver upon them.
Given the sheer breadth of skills necessary to span IT, business, and change management in this new world order, very few providers of DX services will be able to assume a lead role in DX projects, with most organisations engaging multiple partners to cover all their bases.
As the pursuit of digital transformation continues to gather pace, the IT services landscape will continue to evolve as providers look to address the constantly changing needs of a growing band of different LoB users.
And with the stakes so high, those in charge of making the buying decisions must carefully evaluate the IT, business, and DX strategy skills of any potential partners or run the risk of derailing their digital transformation efforts altogether.
The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC). He can be contacted via Twitter @JyotiIDC. Content for this week’s feature leverages global, regional, and local research studies undertaken by IDC.