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The Trinity of Challenges for IT Industry as Customers Shift up the Digital Maturity Curve
The Trinity of Challenges for IT Industry as Customers Shift up the Digital Maturity Curve

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At a glance

  • Major customer segments are moving up the digital maturity curve rapidly
  • Highlights of the NASSCOM Avasant Digital Enterprise Maturity report
  • IT industry’s challenge: managing the trinity -improving employee productivity, reducing attrition, and meeting rising customer expectations
  • Customers expect IT industry to be co-innovators and tech partners
  • Digitalization of opportunity-to-cash and NPD workflows is key to meeting the trinity of challenges

 

We now have a perfect storm of disruptions caused by the Covid-19 pandemic, climate change, and geo-political conflicts.

The IT industry is a key enabler and an agent of transformation in businesses, institutions, and in the way we communicate, learn, work, entertain, and travel to cope with the above disruptions.

Those who are riding the waves of the changes can see that businesses and institutions are figuring out ways to enhance their resilience to deal with the new normal of continuous shocks and disruptions. Unsurprisingly, businesses and institutions have turned to technology for this.

The requirements like work from home, remote delivery of services, reducing dependence on frontline people, reconfiguring supply chains, and shifts in consumer demands have forced industries and institutions to deploy various technologies like digital, cloud, AI \ ML, IoT, cybersecurity, etc.

The IT industry, which creates and implements the above technologies, is also affected by them.

Spoiler alert

Operational processes have become strategically important for the IT industry.

Before we discuss the implications of the ‘perfect storm’ mentioned above for the IT industry, let us take a look at the changes taking place in its customers’ businesses.

At the NASSCOM Tech Innovation Conclave 2022 held on July 20th, 2022, The NASSCOM  Avasant report DIGITAL ENTERPRISE MATURITY 3.0 - BOOSTING BUSINESS RESILIENCE THROUGH TECHNOLOGY was unveiled by Achyuta Ghosh, Senior Director and Head- Insights, NASSCOM. Shivani Kumar Co-Founder and Head Marketing ProductDossier Solutions was also present along with Avasant team during the unveiling ceremony.

The report brings out the dramatic shifts in the way companies are conducting their businesses. This report surveys the internal maturity of enterprises on the following parameters -digital strategy, and investments, technology, adoption, and digital talent. The digital maturity levels are mapped along these five levels -beginners, followers, strangers, accelerators, and transformers.

Highlights of NASSCOM-Avasant Digital Enterprise Maturity 3.0 report

There is a faster move up the digital enterprise maturity curve across all industry sectors after the pandemic as seen after analyzing 550 global enterprises across 11 major sectors and 4 major geographic regions.

Between 2019 and 2022, the number of companies in the top transformer category increased by more than 2 times. Their primary goal is to acquire business resilience by adapting technology.

The global digital economy is likely to make more than 50% of the global nominal

GDP at $ 53 trillion. Digital revenues for service providers constituted more than a third of the total revenue up from a fifth or a fourth in just two years.

Globally, the need for digital transformation is driven because of a shift from a CX (customer experience ) only model to CX + EX, based model ( customer experience + employee experience).

The proportion of business workflows being done digitally has been going up strongly. This is the key to improving business resilience.

The report finds that increasing digital maturity strongly correlates with maturing ESG practices.

Implications for the IT industry

Firstly, the opportunity for the IT industry is huge over the medium and long term and it keeps getting bigger. Secondly, the competition is getting fiercer. Thirdly, customers naturally expect their IT vendors to have enhanced capabilities for delivering insights, solutions, and services. Indeed, as the report points out:

“The expectations from solution providers have expanded beyond delivery to co-innovation, and responsible technology partners as this study reveals”

60% to 65% of enterprises indicate employee attrition and employee health and safety (EHS) as strategic business risks that they aim to mitigate through the use of technology. These are critical issues for the IT industry as well.

There is a pushback from employees to return-to-office moves by the IT industry. While there is a valid concern that some employees  slack off in work from home environments, arguments like waste of time in commuting and expensive rentals can not be brushed aside either.

Companies that have digitalized their business workflows report that their employees feel that the ease of work has improved.

How to meet the trinity of challenges?

The IT industry faces the challenge of managing the trinity -improving employee productivity, reducing attrition, and meeting rising customer expectations.

Those in the project business need to fully digitalize all opportunity-to-cash workflows. These purely operational processes in the IT industry are now strategically crucial for improving the CX+EX. Internal projects like New Product Development (NPD) also need digitalization for meeting execution and budget requirements. End to end digitalization with common repositories for resources, tasks, and accumulated learning improves collaboration, productivity, customer, and employee experience. It

General purpose enterprise automation solutions or patchworks of standalone solutions aren’t enough to meet the above challenges. IT companies need to look at Professional Services automation software (PSA) that has opportunity-to-cash and NPD workflows and project financials built-in.

The PSA should be easily configurable and quick to implement. Fortunately, such PSA software solutions exist and have been well accepted by the companies who have deployed them. IT companies need to evaluate the available PSA solutions, deploy the chosen one, and build project management culture to meet the above trinity of challenges.

Sandeep Kumar

Founder & Chief Executive Officer

ProductDossier Solutions

About the Author: Sandeep Kumar , He is the founder & CEO of ProductDossier, an enterprise software product company. Prior to founding ProductDossier, he worked with Geometric Software (now acquired by HCL) and Tata Research Center. He is an alumini of Indian Institute of Science, Bengaluru.

you can reach him at skumar@productdossier.com

 


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