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Market Analysis

by David McIntire

published on Oct 11, 2018

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Report Overview:

NelsonHall’s market analysis of UX-UI Services consists of 49 pages (plus detailed appendices). 

Who is this Report for:

NelsonHall’s “UX-UI Services” report is a comprehensive market assessment report designed for:

  • Sourcing managers investigating sourcing developments within the use of vendors for UX-UI Services
  • Operational decision makers exploring the benefits and inhibitors of undergoing UX-UI initiatives
  • Vendor marketing, sales and business managers developing strategies to target UX-UI opportunities
  • Financial analysts and investors specializing in the IT services sector, including UX-UI Services. 

Scope of this Report:

This report analyzes the market for UX-UI Services. It addresses the following questions:

  • What is the current and future market for UX-UI Services?
  • What are the customer requirements UX-UI Services?
  • What are the benefits/results which vendors have been able to achieve for their clients?
  • What UX-UI Services are organizations buying from IT services vendors?
  • What is the size and growth of the UX-UI Services market?
  • Who are the leading vendors within UX-UI Services?
  • What are the vendor selection criteria, challenges, and critical success factors for vendors targeting UX-UI Services? 

Key Findings & Highlights:

NelsonHall’s market analysis of UX-UI Services consists of 49 pages (plus detailed appendices).

While digital transformation consulting services are expected to grow by ~13.9% CAAGR through 2022, NelsonHall expects UX-UI services to grow slightly faster at ~15.4%. This is driven by the increasing recognition of the importance of experience in digital transformation, including the rising use of UX-UI consulting to address internal system transformation and internal end to end service design.

Facing disruption from new digital competitors and evolving customer and employee expectations, IT service vendors are placing significant emphasis on building UX-UI capabilities as a differentiating asset. Frequently, vendors are acquiring to quickly add capabilities rather than building organically; 63% of IT service vendors analyzed had an acquired design company to build UX-UI skills.

IT service vendors are also investing in locations to deliver these services from, with 75% of vendors having built at least one dedicated design studio location from which it can deliver design thinking and collaborative design sessions with clients.

In parallel the primary focus of UX-UI services has evolved. Historically, it has been on external-facing digital properties such as e-commerce sites, customer portals and partner portals. Over the course of 2017 and 2018, this shifted as more companies looked to transform internal systems with a goal of increasing productivity, employee satisfaction, and employee retention. Going forward this will continue to shift with internal facing initiatives representing an increasing proportion of the UX-UI work. By 2020, NelsonHall expects an equal focus on internal and external as external programs are re-evaluated to incorporate new and emerging technologies such as voice and AI.

Historically, experience has been a relatively intangible quality. While companies capture customer and employee satisfaction, a direct quantifiable benefit may not be captured. To aid clients in this, vendors are increasingly focusing on defining quantifiable business cases from the on-set of new UX-UI consulting services engagements

As the scope of UX-UI services engagements has broadened, vendors have also had to broaden the KPIs and metrics used to measure an engagement’s success. As the scope of engagements increases to include overall service design, metrics will also evolve to include broader business metrics such as fulfillment time.

To deliver these services, IT service vendors are investing in both new offerings and expanding delivery capabilities. These investments are primarily focused in three main areas:

  • Building new offerings incorporating emerging technologies such as conversational and voice UI, AR/VR and AI
  • Expanding the breadth of capabilities and maturing and growing existing delivery team skills
  • Opening new design studio locations.

Table of contents:

Table of contents:

  • UX-UI services enable clients to transform how they interact with customers and employees to generate added value
  • 1. Changing Shape of UX-UI Services
  • UX-UI services use research and design thinking to help clients transform their customer or employee digital interactions…
  • …but is shifting to experiences driven by emerging technologies and end to end service design with a quantified value realized
  • 2. Customer Requirements
  • UX-UI Services are evolving from customer-facing web to conversational interactions and service design
  • Past
  • Present
  • Future
  • ~65% of clients engage vendors to support specific identified objectives
  • Benefits sought from engaging a vendor for UX-UI services primarily focus on customer satisfaction and retention with increasing customer base or revenues growing in importance
  • Now and in the future, clients’ primary focus is on a vendor’s onshore design consulting, tailored frameworks and templates and hosting and delivering design thinking sessions
  • Clients are seeing UX-UI services drive improved customer satisfaction scores and improving online conversions
  • Adoption of UX-UI services are inhibited by limited visibility to value realized and time commitments
  • The greatest uptake of UX-UI Services is in consumer-facing industries
  • Mphasis transformed a travel insurance app for a large global insurer to increase conversions by 25%
  • Grow adoption of travel insurance through transformed app
  • Virtusa transformed a restaurant’s mobile ordering app improving NPS by 91 points
  • Restaurant group growing business through mobile ordering
  • NTT DATA’s Digital Entity group help an Italian fintech build a new digital payments business
  • Building a new business through the use of digital UX
  • Foolproof transforms End to End B2B process for Oil Major, reducing cost $7.5m, and improving customer satisfaction
  • Enterprise transformation to drive better user experience
  • 3. Market Size and Forecast
  • Market for UX-UI consulting & implementation services is poised to grow ~15.4% CAAGR to reach $10.8bn by 2022
  • North America places the greatest importance on UX-UI design services today, though APAC and Latin America will grow faster
  • Broad-based growth is led by consumer facing industries such as retail, healthcare, BFSI and transport through 2022
  • 4.1 Vendor Market Shares
  • The global UX-UI services market is led by Accenture, IBM, TCS, NTT DATA, and Infosys
  • 4.2 Vendor Market Shares by Geography
  • The North American UX-UI services market is led by IBM, Accenture, TCS, Infosys and NTT DATA
  • The EMEA UX-UI services market is led by IBM, Accenture, NTT DATA, TCS and Infosys
  • The APAC UX-UI services market is led by Accenture, TCS, NTT DATA, and IBM
  • 5. Vendor Offerings & Targeting
  • The early focus on external facing UX initiatives is evolving and will see an equal number of internal initiatives by 2020
  • As client interest in UX-UI services grows, vendors are helping clients better quantify the value realized from the investment
  • Key business case factors
  • As the scope of UX-UI services grows and evolves, it is increasingly delivered as a bundle with other services
  • Looking beyond customer interface, clients are increasingly looking for vendors to support a full service design transformation
  • Vendors are also engaging to build client’s own internal capabilities in addition to delivering projects
  • 6. Vendor Delivery
  • Vendors are using design thinking processes to collaboratively develop solutions with users and stakeholders
  • User research to inform design process aligns stakeholders with user and customer needs
  • 75% of vendors have invested in dedicated design studios to drive the facilitation of client workshops
  • Vendor design thinking spaces include open collaboration spaces and specialized usability testing rooms
  • Vendors are building UX-UI design capabilities proximate to their clients, and are supported by both local and remote developers
  • Close client and user collaboration drives a majority of UX-UI services to be delivered from client proximate locations
  • IT service vendors are primarily using commercially available tools to support UX-UI services, in particular Adobe
  • 56% of vendors have acquired design agencies to build UX-UI consulting capabilities
  • Investment focuses include UX offerings for emerging areas such as AR/VR and voice and expanding delivery capabilities
  • 7. Challenges and Success Factors
  • Vendors need to be able to quantify the business value of intangible customer or user experiences
  • Developing a Quantified Business Case for UX-UI Services
  • Design agencies and creatives have different culture and priorities than IT service acquirers
  • Integration of Creative Services
  • Key success factors to deliver UX-UI services include a design studio network and service design mindset
  • Appendix I
  • Vendor Investment Priorities
  • Vendors are looking to expand emerging technology, including AR/VR and conversational and voice UI offerings
  • Appendix II
  • Vendor Design Studio Locations
  • Vendor Design Studio Count by Region
  • Appendix III
  • Glossary and Definitions
  • Glossary of Terms
  • Appendix IV
  • Vendors Researched
  • Vendors Researched for Analysis

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