As the temporal nature of digital transformation becomes completely foundational to future business, the proportion of “digital related” consulting engagements will increase from about half of all business and IT consulting engagements in 2013–2015 to approximately 70% of all engagements in 2020 or 2021, driving the total market for digital strategy and agency services well over $100 billion in opportunity worldwide by 2021.
[Source: IDC Worldwide and U.S. Digital Strategy and Agency Services Forecast, 2017–2021]
Digital is not any one technology or any one particular skill. To be relevant in the digital era, corporations need soft skills, design skills, multi-technology skills and most importantly, strong domain skills.
As firms look to connect and integrate every moment of the digital customer journey — particularly web, mobile, and social — they are looking for digital integrators that can better support experience and engagement delivery across digital touchpoints.
Why digital integrators?
Companies undergoing a digital transformation need an end-to-end partner to help create an engaging customer experience, build the right technological foundation to support it, and enable the integration into existing technologies and systems. Traditional solutions-delivery approaches (i.e. System Integrators serving the CIO typically, Digital Agencies serving the CMO typically) are no longer sufficient to overcome the challenges associated with developing a digital customer engagement strategy.
Delivering personalized engagement experiences across channels/touchpoints, multiple screens/devices requires a unique set of skills:
- customer experience strategy,
- customer journey mapping,
- user experience (UX) design,
- implementation of key marketing/sales/service/commerce platforms,
- front-end development, and
- customer analytics and optimization.
The digital integrator is a transformation agent. They have to work with firm to constantly redefining the experience for today’s user. What’s new today becomes legacy quickly in digital. For instance, yesterday’s web-only sites have become today’s mobile-first, data-driven digital experiences.
Digital is a broad term that emcompasses a lot of different elements. It might be useful to define different aspects of digital.
- Digital Business – an organization that incorporates digital technology to create revenue and results via innovative strategies, products, processes and experiences.
- Digital Transformation – the use of technology to radically improve performance or reach of enterprises.
- Consumerization – is driving a convergence of communication, marketing, commerce, and technology.
- Digital Integration – a cohesive blend of customer experience, business strategy, process transformation, and system integration skills.
The shift to digital business is disruptive to marketing, operations, and technology management. As a result, there is growing demand for a new breed of digital integrator that blends design, innovation and software engineering to harness the potential of emerging technologies for clients.
Emerging Digital Integrator Market Opportunity
Over the last several years, a number of emerging technologies and related market trends, including mobility, Internet of Things (IoT), cloud computing and software as a service (SaaS), gamification, social media, and Big Data analytics have emerged that are revolutionizing the way end-users and consumers interface with information technology and are reshaping the business and competitive landscape for enterprises.
These innovative technologies are empowering end-users and forcing enterprises to engage and collaborate with consumers/customers in new ways that place the end-user squarely at the center of their business. We believe that these changes are resulting in a paradigm shift in the technology services industry and are creating a demand for service providers that possess a deep understanding of the following emerging technologies and related market trends.
Digital Integrator Market Opportunity is Large
Digital Integrator is a strategic partner to help clients succeed their own transformation. The accelerated adoption of the emerging technologies suggests that demand for IT services focused on these technologies is likely to grow at rates that outpace the growth of the overall IT services market worldwide.
The addressable digital market size is enormous. Consider the following statistics.
- According to IDC, the IT services market worldwide was estimated to be $855.2 billion in 2011 and projected to grow to $1,071.9 billion by 2016, representing a five-year CAGR of 4.6%.
- According to IDC, worldwide spending on professional services related to implementing cloud services was $5.5 billion in 2011 and is expected to increase to $20 billion by 2016, a five-year CAGR of 29.2%.
- According to IDC, the mobile enterprise application platform (MEAP) market was $1.2 billion in 2011 and is expected to increase to $3.7 billion by 2016, a five-year CAGR of 24.1%.
- According to Gartner, worldwide social media revenue (consisting of revenues from advertising, gaming and subscriptions) was estimated at $11.8 billion in 2011 and is expected to grow to $33.5 billion by 2016, a five-year CAGR of 23.0%.
The growth in demand for technology services by enterprises seeking to adapt their business models to these emerging technologies and related market trends represents our market opportunity.
Emerging Digital Technologies
|•||Mobility has become a preferred option for audiences to consume and generate data and access content in the cloud, across multiple platforms and devices, creating a new channel for enterprises to engage and interact with end-users and attract new clients.|
|•||Cloud-computing and SaaS is a new model for consuming and delivering business and consumer products and services, using Internet-based computing, storage and connectivity technology to house content distributed to an increasing variety of devices. Cloud computing/storage and SaaS is expected to foster the development of new applications and devices that can access cloud-based software.|
|•||Social media technologies are fundamentally changing traditional one-way communication over the Internet into interactive dialogue among individuals, communities and organizations. Enterprises must change the way that they collaborate, communicate and share information with clients, employees and partners.|
|•||Big data, which refers to the proliferation of data that enterprises are experiencing is driving demand for enhanced business analytics to enable them to identify patterns, gain deeper insights into their customers and operations, and make better decisions.|
Business and Market Trends
|•||Multi-channel User experience — The gap between online and the physical world has blurred considerably. Consumers are demanding richer, more interactive experiences at every touchpoint that they visit and applications that they use. To attract new clients and retain existing ones, enterprises must create websites and applications that deliver intuitive and tailored user experiences irrespective of the channel.|
|•||Consumerization of IT increases as consumers continue to adopt emerging technologies into their personal lives, and come to expect the same experience, communication and features from business applications. Employees and enterprises are leveraging tools that originated in the consumer world to communicate, collaborate and share knowledge in the workplace, as well as with clients.Personalization technology enables Internet pages and search results to be customized based on the user’s implicit behavior, preferences and tastes. By applying predictive analytics and data mining technologies to the user’s “social graph,” browsing history and other criteria, enterprises can tailor their offerings and provide richer, more user-centric online experiences.|
|•||Millennial Engagement involves applying new techniques like gamification to non-game environments such as innovation, marketing, training, employee performance, health and social change. Gamification is being used by enterprises to achieve higher levels of employee and client engagement, change behaviors and stimulate innovation.|
We believe that enterprises seeking to adapt to these emerging technologies and related market trends represent a significant growth opportunity for digital integrators.
However, in order to effectively capture this opportunity, digital integrators require a new set of skills and capabilities — domain knowledge, a deep understanding of emerging technologies and related market trends and the ability to integrate creative capabilities with engineering rigor.
Historically, traditional IT services providers have focused on optimizing corporate processes and developing internal IT for their clients. For the most part, traditional IT services firms have specialized in delivering custom applications based on clearly defined specifications provided by their clients. Alternatively, digital agencies have historically focused on creativity but without the depth of engineering expertise or ability to scale.
We believe that these dynamics have created a need for a new breed of digital integrator with superior innovation capabilities supported by highly evolved methodologies, engineering capabilities and talent management practices, and a strong culture.
CMOs and CIOs need an accelerant to realizing and delivering full digital transformation capabilities. Digital integrators will increasingly drive front-office transformation and digital customer engagement by starting with end-to-end strategy, target user experience, technology execution, change management as well as business process optimization initiatives— an approach that most closely matches the need of CMOs and CIOs struggling with digital disruption.