NelsonHall recently completed an in-depth analysis of advanced digital workplace services, in which we spoke to multiple leading IT services vendors and their clients. This blog looks at some of the key themes from this research, the investments vendors need to make to meet client demand, and how the market will evolve over the next 12-18 months.

The four overarching themes from this study were:

• Applying a human-centric approach with employee experience at the center
• Enhancing digital support through AI
• Increasing focus on sustainability
• Ramping digital re-skilling and up-skilling.

Employee experience at the center

Clients continue to utilize digital workplace services as an enabler for hybrid workplace transformation and to improve the overall employee experience. There is a greater focus on hyper-personalization through a consulting-led approach. This includes the implementation of DEX and DEM platforms to measure the experience by persona, including device and sentiment analysis. There is also more commitment to total experience (TX), a combination of employee and customer experience. Over the next 12 months, the focus on proactive experience centers will increase, supported by SRE teams looking at every aspect of experience and real-time monitoring of users as they engage across services.

We expect to see a greater focus on experience performance indicators (XPIs) supporting XLAs to measure experience outcomes. Vendor examples include:

• DXC Technology provides managed service experience and deploys XPIs in client engagements. Through its Experience Cube, DXC mixes experience, technology, and operational data, feeding this into reporting and analytics to understand perception and sentiment
• Compucom is also evolving XPIs into XLAs, working jointly with clients on business outcomes
• Infosys has developed a Key Experience Indicator (KEI) framework to help clients define XLAs through a five-step process over 15 weeks
• Unisys has also developed an experience governance board (XGB) with clients to manage the lifecycle of XLAs and, as the XLAs plateau over time, uses the XGB to focus on the next XLAs in line with business imperatives.

Enhancing digital support services through AI

The most significant impact on digital workplace services in the next 12 months will be AI and predominantly GenAI. Vendors are running multiple POCs with clients across Copilot for Microsoft 365 to augment service desk agent capability, create knowledge base articles, and identify gaps in KB articles. It also enables agents to focus on experience as opposed to tasks; in addition, providing expert connect capabilities in the field for problem management with AI-enabled root cause analysis and assisted insights with GenAI responses.

Examples include:

• Cognizant recently purchased 25k M365 Copilot seats for its employees with plans to deploy it to 1m users within their global 2000 clients across 11 industries
• TCS has launched TCS WisdomNext, a platform that integrates multiple GenAI services into a single interface to expedite adoption at scale
• Kyndryl recently partnered with NVIDIA on GenAI, integrating NVIDIA with its Kyndry Bridge platform to enhance AI and automation capabilities in support of digital workplace services.

We expect vendors to utilize smaller LLMs, using proprietary data to solve vertical or industry-specific problems. Vendors need to focus on organization change management (OCM), which will play a key role in driving the adoption of GenAI technologies and using AI with OCM to drive a greater focus on persona preferences. There will be a greater focus on AIOps and ML for intelligent event management and trigger automation to auto-remediate and fix issues and drive real-time insights and recommendations across the workplace.

Supporting clients’ ESG and sustainability goals

Vendors are deploying IP and third-party tools to support clients’ ESG and sustainability strategies through Evergreen devices and PCs as a service. ESG management and reporting with analysis through hyperscalers (e.g., ServiceNow) providing custom ESG analytics and dashboards. Vendor examples include:

• Infosys, which provides infrastructure in carbon-neutral regions, services, and resources with a low carbon footprint
• NTT DATA also offers open API integration into cloud carbon footprint data from hyperscalers
• TCS takes a two-pillar approach to sustainability, including Greening of IT (reducing IT's carbon emission and footprint across infra, platform, data, and apps) and Greening by IT (solutions to decrease emissions and resource consumption while allowing for growth)
• Atos is also contracting on decarbonization-level agreements.

Over the next 12-18 months, vendors need to increase the use of green apps and gamification to allow employees to measure and reduce their carbon footprint across the hybrid workplace.

Digital re-skilling continues at pace

We continue to see traction in digital re-skilling initiatives and hyperscaler certifications supporting digital workplace services. New skill sets are emerging, including machine coaches developing algorithms for AIOps and automation, AI architects supporting GenAI, and experience and innovation leads. Vendors are developing specific power programs to enable freshers to become full-stack engineers and up-skill industry-specific skill sets through domain SMEs, dedicated automation, and experience CoEs.

Vendors need to expedite resources building automation, GenAI use cases, and AI leads by client account. This includes developing industry and business-specific LLMs, both IP and open source. They must also enable a real-time data insights-driven approach supported by site reliability engineers (SRE) approving machine recommendations.

Outlook

The most significant impact over the next 12-18 months will be AI, with multiple GenAI POCs running across Copilot for Microsoft 365, for example, to augment agent capability, improve KB articles and conversational AI in the field, and GitHub Copilot to improve developer experience and drive legacy modernization. Also, there will be greater leverage of hyperscaler AI capabilities across ServiceNow, Amazon Q, Google Gemini, and Open Source LLMs. However, OCM will play a key role in driving the adoption of these technologies, with greater use of AI in OCM to drive personalization.

Vendors must focus on an experience management office (XMO) approach to drive and measure total experience across client organizations. Digital re-skilling will continue focusing on AI specialists, platform SMEs, and business value specialists. This includes building SRE CoEs in support of delivery locations.

Sustainability and ESG will be key drivers over the next few years, with clients utilizing Evergreen services, including DaaS, to manage device lifecycle, PCaaS, and circular computing. There will also be more focus on employee empowerment through gamification and green apps, and greater use of cloud to reduce carbon footprint and SMEs providing infrastructure in carbon-neutral regions. We expect vendors to increase their GTM and joint IP with hyperscalers and key ecosystem partners to support hybrid workplace transformation in the next 12-18 months.