Time for Companies To Create Future Business Models

As the demand for business resiliency increases, the need to create new digital products and services is becoming increasingly pertinent. Today’s companies can no longer afford to rely on the same traditional business models for success and must begin to think about what their future business models should look like.

IDC’s recent report Worldwide Services 2023 Predictions – APeJ Implications, outlines the expectation that by 2026, 40% of service providers’ revenues will be derived from digital business models and products/services. This highlights the importance of preparing for the future by developing innovative solutions that address customer needs, preferences, and behaviors.

With economic expectations in the APeJ region remaining moderately pessimistic, companies should prioritize long-term investments that will enable them to stay competitive. This means identifying future trends and opportunities, tracking emerging technologies (e.g., AI, IoT, etc.), and leveraging solution-oriented IT services for digital transformation projects that can future-proof their business.

Key findings

According to IDC, IT spending plans in APeJ are expected to remain stable throughout 2022 as companies continue investing in digital readiness. IT projects will renew their focus to continue contributing to organizations’ digital business agenda by engaging with competent IT services vendors for closely tracked digital transformation projects.

Furthermore, the region’s emphasis on ESG initiatives will drive the demand for business services around sustainability. By making such investments, companies can ensure that their corporate/brand identity reflects a strong sense of purpose by making sustainability an integral part of business operations.

Business continuity and crisis management will become increasingly important as organizations must be prepared for potential shocks and disruptions. As a result, 40% of organizations are expected to have developed a crisis management strategy with continuous intelligence by 2024.

The never-ending talent crunch

Digital talent and attrition rates will continue to be a challenge. As the digital skills gap widens, there will be an increasing demand for experienced and specialized IT skills. As a result, IDC expects enterprises to increase outsourcing and pay higher service provider premiums to ensure a continuous flow of digital talent.

In the same vein, IDC anticipates that by 2025, half of all organizations will form associations between IT providers and advisors to develop strategies and utilize technologies to reduce existing and future skills gaps.

As inflation rises, off-/near-/right-shoring is predicted to keep up. In 2024, 70% of companies will be forced to adjust their IT delivery model to save costs and utilize experienced skillsets more effectively; this includes increasing automation and right shoring.

Other trends

With the emergence of technology comes the need for increased cybersecurity measures. By 2025, it’s estimated that 75% of businesses will take on help to prevent any vulnerabilities created by new technology investments.

Hybrid cloud services is another trend on the rise. IDC forecasts that by 2026, managed hybrid cloud services spending will exceed 10 billion USD as businesses shift to public cloud providers.

Finally, a joint creation of IP is expected to be a major trend moving forward. By 2027, researchers forecast that 30% of IT service providers will join forces with technology businesses and enterprises to develop groundbreaking market-specific products/IPs capable of being sold worldwide.

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