While 2016 is shaping up to be the banner year for Digital Transformation (DX) to take root in many organisations across the region, innovation accelerators such as the Internet of Things, cognitive computing, robotics and 3D printing are widely expected to accelerate this transformation in years to come.
According to IDC‘s latest services survey, that majority of APeJ enterprises are claiming to have DX projects in some form or another.
As a result, the analyst firm believes it is becoming a competitive requirement and the source of a “massive wave of new investments” in services to support changes to business operations and customer experiences.
“Getting on board the DX train is going to be fraught with challenges, starting with the ability to define DX,” says Linus Lai, the Research Director, IDC’s Asia/Pacific Services Research Group.
“Most early stage projects involve experience transformation but little attention is being paid on the other dimensions like information governance and work-source, which often leads to disillusionment on the benefits of DX.
“As part of enabling enterprises on its DX journey, service providers need to emphasise their ability to bring a full suite of services capabilities that includes integration of cloud, cognitive, mobile and analytics delivered ’as a service’.
“In addition, industry expertise can offer functional insights which are also needed.”
Progressive adoption of 3rd Platform technologies in the region is not only driving demand for related services, but is also fundamentally changing the way they interact with their broader ecosystem.
“This year's Services predictions highlights ‘Cloud-first’, suggesting 33 percent of Asia/Pacific Enterprises will pursue a ‘Cloud first strategy’,” adds Cathy Huang, Research manager, Services and Cloud Research Group, IDC.
“The switch to cloud-first/cloud-only points to two opportunities in the APEJ services market. Enterprises are looking for differentiated capabilities or cost competitiveness based on cloud-based offerings.
“In addition, it also means sourcing strategies in the past may be incompatible as organisations leverage a cloud-first strategy.”
Furthermore, Huang believes 2016 will witness the full impact of 3rd Platform technologies and innovation accelerators such as IoT and next-generation security.
As a result, Huang predicts that more focus on governance between the IT organisation and the lines of business (LOB) is demanded to ensure risk, supplier choices, fail-over, innovation, and agile development is understood between both parties, and the value of integration, management and security is brought to the front.
IDC reports that the rest of the predictions for the fast-evolving Services market for the next three to five years include the following:
In total, 33 percent of Asia/Pacific enterprises will pursue a “cloud first” strategy and the share of overall IT budgets dedicated to cloud services will increase to 26 percent by 2016.
XaaS substitutes for managed services:
By 2016, 50-55 percent of traditional outsourcing managed services will have a cloud delivery model.
By 2016, 65 percent of APeJ enterprise strategies will include a significant “digital transformation” component.
By 2018, 80 percent of major IT decisions will involve a partnership between the IT organisation and LOBs.
Software-defined IT infrastructure:
By 2016, 30 percent of enterprises will implement software-defined infra in their data centre.
Platforms from Digital Disruptors:
By 2018, 20 percent of all enterprises will be leveraging digital platforms from such firms as WeChat, Uber, GE/Predix and PTC to achieve the DX goals.
Ecosystems of Engagement:
In 2020, in excess of 75 percent of Ideas, Talent, and Innovation will be sourced through ecosystems of engagement.
Next-gen Security Management:
By the end of 2017, 55 percent of enterprises will rely on third-party management of their security infrastructure.