Enterprises are adopting new approaches as software and user experience become keys to product differentiation, ISG Provider Lens report says
The digital revolution in products and development processes is driving many U.S. enterprises to embrace digital engineering services for both technological and business transformation, according to a new research report published by Information Services Group, a leading global technology research and advisory firm.
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“Digital engineering is essential to creating maximum value and differentiation.”
The 2023 ISG Provider Lens™ Digital Engineering Services report for the U.S. finds that a growing number of organizations, especially in the U.S., are shifting away from traditional hardware-focused engineering approaches as digital user experiences become more central to products and services.
“Much of what enterprises are selling today is defined by software and connectivity,” said Gaurav Gupta, partner and global head, ISG Digital Engineering. “Digital engineering is essential to creating maximum value and differentiation.”
For example, vehicles are now judged as much for the information and entertainment experiences they offer as for traditional driving performance, ISG says. Automakers stand out by designing, delivering and supporting outstanding digital experiences — a process that may be informed by best practices in the development of mobile apps and services.
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This transition is global but is particularly advanced in the U.S., due to its outsized role in fields such as software, semiconductor and algorithm development, ISG says. While about 40 percent of U.S. manufacturing companies have not yet adopted digital engineering, U.S. industries are warming up to it. In Europe, engineering remains more strongly influenced by traditional industries such as manufacturing.
U.S. enterprises are seeking scalable, cloud-based digital engineering platforms that enable efficient development of applications, user experiences and ongoing operations, the report says. While elements of these platforms can be applied across multiple industries, leading providers are tailoring them to the needs of specific sectors and clients.
Digital engineering service providers are helping enterprises explore new ways to understand customer expectations and to prototype, test and update products, the report says. The accelerating pace of competing product introductions requires continuous, rapid innovation. Because engineering processes are often deeply ingrained in company culture, change management is a crucial part of many client engagements.
“Digital engineering requires a long-term strategy,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Service providers are demonstrating solid business cases for making it a sustained practice.”
The report also explores several other digital engineering trends in the U.S., including the growing importance of engineering for sustainability and the potential of the metaverse for developing user experiences and testing prototypes.
For more insights into the digital engineering challenges faced by U.S. enterprises, along with advice on how to overcome them, see the ISG Provider Lens™ Focal Points briefing here.
The 2023 ISG Provider Lens™ Digital Engineering Services report for the U.S. evaluates the capabilities of 34 providers across four quadrants: Design & Development (Product, Services and Experiences), Integrated Customer/User Engagement, Platforms and Application Services, and Intelligent Operations.
The report names Accenture, Capgemini, Cognizant, GlobalLogic, HCLTech, Infosys, LTTS, TCS and Wipro as Leaders in all four quadrants. It names Hexaware and LTIMindtree as Leaders in three quadrants each and Harman DTS and Persistent Systems as Leaders in two quadrants each. Cyient, IBM and Tech Mahindra are named as Leaders in one quadrant each.
In addition, Happiest Minds is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in three quadrants. Persistent Systems is named as a Rising Star in two quadrants, and Harman DTS and Infinite Computer Solutions are named as Rising Stars in one quadrant each.
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