Pandemic Changes Boost US Demand For Digital Business Services To Improve Operations, Customer Engagement
ISG Provider Lens report sees more U.S. enterprises partnering with service providers on digital transformation goals spanning remote work, supply chains and sustainability
Changing business priorities in the face of the COVID-19 pandemic have significantly increased demand among U.S. enterprises for digital transformation services, according to a new research report published by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
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The 2021 ISG Provider Lens™ Digital Business Solutions and Services report for the U.S. finds the pandemic has accelerated digital transformation by three to five years after companies had to quickly implement enhancements to virtual collaboration, online customer engagement, supply chain management and other changes in the way they do business. In the U.S., there is more growth to come from the migration of legacy systems and the addition of edge computing, ISG says.
“Enterprises in the U.S. now see technology and service providers as key partners in reaching their digital transformation goals,” said Prashant Kelker, partner and Americas lead for ISG Digital. “Their objectives now extend to making exponential changes in supply chain, customer and employee experience and sustainability.”
As U.S. companies continue pandemic-driven projects to enable remote work and streamlined operations, they are shifting from reactive mode to more strategic digital transformation initiatives, the report says. Enterprises want to build IT ecosystems that are secure, agile, cost-effective and capable of driving growth and innovation and expect providers to play central roles in the process.
To support digital transformation, more U.S. companies are adopting agile and DevOps practices, investing in agile management tools and forming multidisciplinary agile teams of employees from various business functions, ISG says. These far-reaching initiatives make effective change management programs essential to ensure the entire organization benefits from the new, agile business model.
More U.S. enterprises also are turning to low-code platforms that enable rapid development of workflow, customer engagement and line-of-business applications and quick integration of automation, the report says. These platforms can also help organizations modernize their legacy applications and move workloads to the cloud.
The use of blockchain services has gradually increased in the U.S. in 2021 as enterprises launch proof-of-concept and pilot projects and even move blockchain applications into production, according to ISG. Use cases in fraud management, identity management, pharmaceutical supply chains, energy management, sustainability and other categories have led the way.
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Among providers, the use of outcome-based pricing models has grown significantly in the U.S., the report says. Amid huge growth in demand for these models, approximately 10 to 15 percent of provider contracts now use outcome-based pricing. Providers are also investing in industry-specific tools with proven use cases to differentiate themselves. They are also responding to growing demand for sustainability with specific offerings for assessing, measuring and reducing clients’ carbon footprints.
The 2021 ISG Provider Lens™ Digital Business Solutions and Services report for the U.S. evaluates the capabilities of 48 providers across five quadrants: Digital Business Consulting Services, Digital Customer Experience Services, Digital Supply Chain Transformation Services, Blockchain Services, and Sustainability and Decarbonization Services.
The report names Accenture, HCL, IBM and Wipro as Leaders in all five quadrants. It names Cognizant as a Leader in four quadrants and Infosys as a Leader in three quadrants. LTI, TCS and Tech Mahindra are named as Leaders in two quadrants each. BCG, Capgemini, Deloitte, EY, GEP, Hexaware, McKinsey, Mindtree, Publicis Sapient, PwC and Zensar are named as Leaders in one quadrant each.
In addition, LTI is named as a Rising Star – a company with a “promising portfolio” and “high future potential” by ISG’s definition – in two quadrants. UST and Zensar are named as Rising Stars in one quadrant each.
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