Service providers key to success in the digital era: Gartner

BANGALORE: As enterprises move to become digital businesses, opportunities are arising for service providers to play a crucial role in the digital era, said IT advisory firm Gartner. Service providers should begin to align and adapt their organizational structure, capabilities, offerings, and engagement and delivery models to thrive in this new digital environment.

"All signs suggest that organizations have just begun to tap into the potential of digital business; however, organizations that don't accelerate their digital business transformation will lose market position," said Allie Young, vice president and distinguished analyst at Gartner. "Service providers can help organizations with the innovation and industrialization required to transform into digital businesses over the coming decade."

Gartner predicts that by 2017, 60% of global 1000 organizations will execute on at least one revolutionary and currently unimaginable business transformation effort and that by 2023, superior digital business capabilities will lead four out of five industry leaders to reposition their brand promise or build new brands.

"The market 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."

Gartner interprets this as an indicator of the magnitude of the business impact services providers already see in their client organizations as well as an impending threat to their traditional businesses. It also demonstrates a focused commitment and investment to ensure relevancy to current and future customer sets as digital business adoption accelerates.

Services providers should invest executive time in strategy planning and visioning for the future, focusing on how to close capability gaps, how to optimize organization structures, what intellectual property (IP) to invest in and what go-to-market models are new imperatives. This should determine if the current organization structure and leadership will support digital business expansion, or if reorganization or realignment of current organization structures is needed. Once this is complete it is essential to establish digital leadership skills, and acquire or hire the right talent, including capabilities in design, user experience, digital technologies and business consulting.

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