Automation has been the core focus surrounding the IT systems over the past 20 years. The whole focus of these IT systems was to make enterprise's operations efficient, reduce cost, increase productivity etc. So while Enterprises have invested in these IT systems and have received dividends, it has not resulted in building sustained differentiation for them. For example, while ERP implementation has automated the processes, brought in operational efficiencies, helped in metrics tracking and monitoring, they have not become a source of competitive differentiation for the companies implementing them. That is because, literally every company in that industry has implemented the same or similar ERP Systems for their business process automation. Organizations today are investing in Digital Transformation and customer centricity because they believe it will lead to fundamental competitive differentiation for them.

The 2 key themes where Digital Transformation has the potential to make a lasting impact are "Customer Experience" and "Business Efficiency". Many Industry pundits believe that the age of Information that we had witnessed for the last decade or so is over, and we are transitioning into the "Age of the Customer". Herein, customer experiences will be defined and differentiated by:

- Personalization of variables like content, experience, pricing, recommendation, service, etc.
- Real-time and aware applications that create differentiation by leveraging preferences, insights, context & location awareness.
- Deeper & on-going Customer Engagement to build higher affinity, loyalty and advocacy.
- Omni-channel support to give flexibility to customers to leverage the channel of their choice.

The Business efficiency theme in Digital Transformation focuses on creating differentiation through one or more of the following:

- Helping organizations become more agile and responsive in their ability to identify trends and opportunities or to protect their interests. Many a time the constraint is not their ability to decide on what needs to be done but in getting it done quickly due to the rigidity and monolithic nature of the current systems.
- Take cost optimization to the next level by further operating mundane and routine tasks that can be more efficiently handled by intelligent systems.
- Decision making that is powered by data & insights rather than intuition.

Implication for the IT Service Providers

Companies in the IT industry need to be mindful of these changes and should adapt quickly, otherwise their businesses could be severely impacted. Because of the reasons mentioned above, the end user enterprises would clearly like to invest a lot more in the emerging areas like the Digital Transformation and in the customer centricity space. The challenge however is that given the current business and economic environment, the overall IT budgets are likely to be either flat or marginally up. Hence these Enterprises will be forced to save more on their current IT Operational expenses to create funding for their strategic initiatives. Hence, there will clearly be a lot more pressure on IT Service Providers who are focusing on keeping the "lights-on" kind of services for their customers. This also means that there will be a lot more focus on automation of mundane things.

Over the last couple of years, companies like IPsoft are catching the attention of end-user and IT Services organizations to automate routine tasks through use of Automation & Artificial Intelligence technologies. This approach will end up freeing up bandwidth of people, as well as create savings that can be channelled to newer areas. IT Providers who are not going to be able to adapt to this changed reality will find themselves under immense pressure.

Additionally the IT Providers would also have to contend with some new realities. Selling to business stakeholders and clear articulation of business impact of the solution will become an important prerequisite. They would also have to focus on certain niches in the market by resorting to specialization and micro-segmentation.

Hence, the next few years present tremendous opportunities and also real threats for IT Service providers. The ones who will be pro-active and adapt quickly, are likely to monetize this opportunity and make a name for themselves.