According to Gartner,
Inc., more and more opportunities are opening up for service providers which
means that they should begin to align their business structures and
capabilities in order to thrive in the digital era.
Those businesses which
don’t prepare to help organisations with the innovations necessary to transform
into a digital company will lost market share, the analysts say. The research
house predicts that by 2017, 60% of Global 1000 organisations will "execute on
at least one revolutionary and currently unimaginable business transformation
effort” and further to that, by 2023, those with superior digital capabilities
will reposition their brand promise or build new brands.
opportunity arising from broad technology changes is creating a digital
business opportunity that is forcing a restructuring in strategy, talent,
portfolio and organization within services providers," said Susan Tan , research
vice president at Gartner.
"In the past 12
months service providers have taken explicit steps to prioritize the pursuit of
digital business opportunities ranging from restructuring and realigning their
organization to forming entirely new business units or subsidiaries. They have
announced new digital leaders and investments to organically build or acquire
digital skills/assets and many have launched innovation centers to serve as
client development labs. The restructuring and new digital business units and
leadership are needed to focus investment and develop resources for applying
digital technologies to realize business value."
This serves as an
indicator when it comes to predicting the business impact on service provider
and the threat posed to more traditional business.
In order to ensure
their slice of the market is stable and can experience growth, service
providers should invest time in planning for the future. This should include an
investigation into how prepared businesses are for digitally propelled
expansion and whether restructuring is necessary.
Once this has been
done, it will then be necessary to look at establishing digital leadership
skills and hiring the right talent. The analysts also say that service
providers must also be prepared for the fact that current delivery models may
be outstripped by new demands in the fast-paced digital environment.
The researchers have
further identified two key areas in which service providers should understand
in order to "shape the future of client strategies”.
complementary IT spending priorities and "bimodal IT”. The former addresses
recent research on CIOs which shows that a lot of new spending goes on the
improvement of existing systems as well as new technologies. For service
providers, this means that rather than just selling new services, providers
should position their offerings in "a digital business context for clients' IT
When it comes to
bimodal IT, Gartner has put it forward as a concept which addresses how
organisations need to operate when it comes to capturing digital opportunities.
This means that CIOs need to act with speed, innovation and uncertainty. This
means that they will have to be flexible in in their working of IT,
concentrating on two modes of enterprise tech. These are the more conventional
approach alongside a more experimental approach which is naturally fast
enablement will span six domains, requiring service providers to realign their
core competencies toward a new vision, investments and offerings for a
portfolio that delivers innovation, transformation and industrialization for
buyers' digital businesses," said Ms. Young.
"With the broad
range of services and equally broad array of digital strategies of providers,
it is critical that service providers clearly define their own portfolio and
focus, and identify the targeted buyers appropriate for their selected
and analysis is available in the Gartner report What Service
Providers Must Do to Succeed in the Digital Era .