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IT Service Buyers in 2019: Four Key Trends

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NelsonHall has recently completed compiling and analyzing data from a survey of over 1k IT services buyers globally. This research is being published in a series of sector reports (all are available to subscribers here), spanning the 18 sectors analyzed, with geographic breakdowns incorporated within each.

While completing these individual reports we noted several themes that were fairly consistent regardless of sector or geography represented. In this blog, I look at four key trends pulled from this data that IT service vendors can use to better position their offerings to these buyers.

Digital Initiatives Get Specific

Finding: Sixty-nine percent of respondents globally identified digital initiatives as highly important to their future IT strategies. As a data point this may not be surprising, given the ubiquity of ‘digital’ and ‘digital transformation’ in business today, but in the previous round of this research, completed ~18 months ago, that proportion was 82%. Is digital really less important today to a significant proportion of IT service buyers?

NelsonHall’s perspective is that the overall aims and initiatives falling under the digital transformation umbrella have only increased in importance to buyers, but that there are two key take-aways from this change:

  • Buyers have frequently not seen the intended business value from early digital transformation initiatives. Broadly defined initiatives with indirect business cases may not have achieved the desired outcomes, particularly given the frequent investments required in foundational activities (such as data clean-up and digital core migration), thus leading to doubt as to the value of these initiatives
  • Buyers are more sophisticated and are focusing on specific digital initiatives and technologies rather than broadly defined ‘digital transformation’. As an example, manufacturing companies may not place as much priority on ‘digital transformation’ but they do place high priority on implementing IoT on the shop floor to enable predictive maintenance.

Vendor response: When communicating with clients and potential clients about digital initiatives, vendors should focus on specifics. This includes clearly defining the roadmap of initiatives to be pursued and quantifiable value that can be achieved.

Clouds Are Still Gathering

Finding: While ‘cloud’ is nearly as ubiquitous as ‘digital’ in today’s business lexicon, we estimate that only ~30% of large enterprise workloads reside in cloud environments. Despite the rapid growth of leading public cloud providers such as AWS, Azure, and Google, we further estimate that only 12% of large enterprise workloads reside in public cloud environments. When it comes to large enterprises, cloud adoption still has a long way to go.

This low adoption to date also translates into significant plans for investments in cloud adoption going forward. By 2020, companies globally are looking to increase the proportion of their workloads in clouds to ~35%. This will be primarily accomplished through greater public cloud adoption, projected to rise to ~17% of workloads in parallel. To fuel this rise, IT service buyers project their spending on cloud infrastructure to rise by more than 6% on average globally.

Vendor response: Vendors should not only recognize that their client base may be slower on the cloud adoption journey than expected (and tailor messaging to reflect this) but should also focus on helping clients understand the breadth of options for expanding adoption of cloud. This includes focusing on accelerators to simplify and de-risk cloud migration as well as building capabilities to support alternative paths to expanded cloud footprints: a majority of buyers place high priority on a vendor’s cloud-native development capabilities, and increasing use of SaaS was the most commonly identified sourcing change planned.

The Need for Speed

Finding: While digital transformation initiatives have a breadth of benefits highly important to companies, including reducing service delivery cost, increasing revenues, improving customer experience or improving competitiveness, the most commonly cited high priority benefit focuses on accelerating delivery of services. For the business side of companies this includes launching new products and services, a high priority for more than 80% of companies, and achieving levels of straight through processing and turnaround times, a high priority for ~60% of companies.

IT departments are also looking to accelerate services, with reducing new application time to market identified as a high priority by more than 90% of companies globally. To achieve this, companies are also prioritizing increased digitalization of operations and adoption or increased use of DevOps.

Vendor response: When defining the business case benefits for new initiatives, vendors should focus on speed, and how it fuels other benefits such as improved customer experience and competitiveness to drive incremental revenues. Initiatives and investments should also reflect this priority, such as focusing on end-to-end service design and expanding use of agile development and DevOps for both customer and internal-facing digital initiatives.

Know Me – or No You

Finding: When IT service buyers were asked what characteristics they most prioritize in vendors with whom they work, the answer was industry knowledge, a high priority to more than 75% of companies. Given the benefits being sought from digital initiatives, including improved customer experience and increased competitiveness, an understanding of the key service features unique to that industry is imperative. This prioritized knowledge extends to an understanding of sector-specific applications that can be applied to address particular needs.

Secondarily, buyers are looking to work with vendors who not only understand them but can also help them to understand their own customers. The next most commonly prioritized characteristic was UX consulting and design, reflecting the priority companies are placing on tailoring their offerings to the unique and changing demands of their customer base.

Vendor response: Vendors need to demonstrate their deep understanding of a client’s industry, including their business challenges and potential applications designed to address its unique requirements. Having a workforce that understands and can speak to client needs is important. Additionally, vendors need a dedicated UX capability to drive the process of understanding customer expectations and experiences and then tailoring offerings to those needs.


The priorities of IT service buyers are evolving, and vendors need to ensure their offerings and messaging align with these priorities. The clear take-away from our research is that vendors need to focus client messaging on the specific digital initiatives to be pursued; help clients in adopting cloud through a variety of avenues; focus on speed as a key benefit of digital initiatives; and ensure that they possess an understanding of industry imperatives.

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