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Transformation Focused on Customer Experience Crux of Enterprise Digital Strategy

peter oluka

Digital Transformation (DX) has been identified as a key growth driver of the services market, requiring business and IT to work together toward shared goals.

According to IDC Asia/Pacific’s latest research titled “Analysis of Services Deals Signed in Asia/Pacific (Excluding Japan) Region: 'Transformation' with Focus on Customer Experience Emerges as the Crux of Digital Strategy”, "Transformation" as a part of an enterprise digital journey is emerging as the top theme requiring significant change across the board, including alteration of business processes, infrastructure, applications, and datacenter environment.

Furthermore, DX deals are getting smaller in nature because they need to be agile and create opportunities for enterprises to strengthen their relationships with customers, flatten organizational structures, and redefine traditional industries. Business leaders are challenged to move their enterprises to the next level by employing digital technologies coupled with organizational, operational, and business innovation engagements to create new ways of operating and growing their company.

“As digital strategy picks up pace in the region, there is an increasing number of digital-related engagements being signed with focus on transformation, including expansion into new markets, and driving innovation throughout the organization,” states Sherrel Roche, Business and IT Services Senior Market Analyst, IDC Asia Pacific. “With the growing importance of DX, service providers need to continue to focus on solidifying their advisory, consulting, integration, and automation skills.”

The outsourcing services market will continue to be challenged by a combination of more players, fluctuating economy, new delivery models, and increasing pressure on customers to do more with less.

These changes will involve shifts in annual contract value, annual contract length, and activity metrics.

Furthermore, the rate of substitution of cloud services for traditional outsourcing-managed services is accelerating among enterprises. There is a growing preference for bundled cloud services with traditional capabilities or “Hybrid” services as part of a single outsourced-managed services engagement.

“IT executives are struggling to manage their traditional IT infrastructure as demand for delivering higher service levels and new technology capabilities as well as accelerating application delivery while controlling costs keeps increasing,” adds Roche. “End users are demanding not just traditional (more labor-oriented) services but also cloud-based (more automated) services, including 24 x 7 operations of IT environments, modernization, and transformation of infrastructure and applications.”

Service providers and systems integrators must position themselves as value-added cloud integrators, emphasizing on managed and professional services as their value propositions. In addition, service providers must focus on growing wallet share within the key existing clients and provide clear roadmaps to buyers to leapfrog to the next-generation technologies.

“Analysis of Services Deals Signed in Asia/Pacific (Excluding Japan) Region: 'Transformation' with Focus on Customer Experience Emerges as the Crux of Digital Strategy” provides an analysis and assessment of the business and IT services and cloud services deals signed in the region based on a rolling four-quarter view from 3Q11 through 2Q16 (period ending June 30, 2016) by leveraging IDC's BuyerPulse Services Deals Database, which currently houses 68,000 deals and is the most comprehensive offering of services deals in the market.