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Digital Transformation Continues End-to-End Journey in 2018

 

To date, many digital transformation initiatives have been primarily focused on customer-facing technologies. Changing customer preferences and the rise of new digitally native competitors have driven incumbent firms to see customer experience as a source of competitive advantage or as table stakes to maintain relevance. In NelsonHall’s recent survey of IT service buyers across 18 sectors, 61% identified both improved customer experience and increasing average revenues per customer as highly important business priorities.

These business priorities are primarily being addressed through digital initiatives, and 73% of buyers identified improving customer experience and customer service as a highly important benefit of digital.

But companies are also increasingly looking beyond the customer experience for digital initiatives. It should be no surprise that other business priorities identified as highly important by a significant portion of IT services buyers include increasing rate of automation (72%) and digitalizing their operations (67%).

These initiatives are increasingly looking at digital as an end-to-end operational transformation which enables the realization of other key benefits, including reducing operating costs and improving service fulfillment and turnaround time (each highly important to 73% of buyers).

While this has always been a focus area for sectors such as manufacturing and energy, it is also being prioritized increasingly in consumer-facing sectors. Companies are recognizing that the customer experience goes beyond the digital channel and spans the entire customer lifecycle, hence the importance placed on service fulfillment. Objectives being sought by consumer-facing sectors reflect this focus, expanding beyond customer experience to end-to-end digital transformation. Specific objectives cited by consumer-facing sectors include:

  • Increasing rate of automation in operations. This is being prioritized by more than 70% of organizations across retail, healthcare provider, travel & transport, retail & commercial banks, and media
  • Digitalizing operations, cited by ~78% of organizations across travel & transport, retail & commercial banks and media
  • Reducing service turn-around time, cited by 53% of organizations across healthcare provider, media, travel & transport, retail & commercial banking, and retail.

To achieve these defined objectives, consumer-facing organizations are targeting digital initiatives in non-customer-facing functions. Specific industries that have highlighted digitalization of end-to-end functions as a priority include:

  • Travel & transport: transforming supply chain and improving real-time asset tracking are the two most commonly identified digital initiatives by travel and transport companies. IoT/sensor-based applications is the most commonly cited digital technology and acts as the primary avenue for addressing these initiatives, a high priority area for nearly one in three organizations
  • Healthcare providers: while primary focus has been on patient care, including patient self-service, the second highest priority area is revenue cycle management, the end-to-end process from scheduling to payment, highlighted by 55% of organizations as being pursued currently. This primary internal focus is on the financial processes that support the end of the payment cycle
  • CPG: with 64% placing priority on the order management function, CPG companies, which sit at the intersection of manufacturing and consumers, are looking at optimizing the supply chain through broader integration and cloud-based applications. CPG companies also identified IoT/sensor-based applications as the most commonly implemented digital technology, with a primary focus on using IoT in manufacturing, procurement/supply chain, and warehouse management
  • Retail: improving and expanding integration across the supply chain is a key focus area for retail. Implementing IoT/sensor-based applications is the most common avenue for addressing this, a high priority for more than 40% of retail companies. IoT/sensor-based applications initiatives are primarily focused on addressing these supply chain improvements through improving warehouse management and logistics.

Consumer-facing industries have been undergoing significant digital disruption and are looking to transform interactions with their customers. While that continues, companies are increasingly focusing on how operations beyond the customer interface impact the customer experience. In 2018, this focus on improving end-to-end operations to improve customer service will continue apace. 

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