According to IDC, the Asia/Pacific excluding Japan (APeJ) region’s economic outlook for 2023 is relatively pessimistic compared to the global average. Businesses in this area have maintained stable IT spending plans throughout 2022 while making investments to become digitally ready. Moving forward, organizations will emphasize their digital transformation projects and partner with reputable IT service providers to ensure successful outcomes of these initiatives.
In the APeJ region, businesses have identified Environmental, Social, and Governance (ESG) as a requisite for risk mitigation and long-term viability. Therefore, the upcoming years will see corporate entities focus more on ESG investments to build sustainability into their brand identity. Consequently, there is an increasing need for IT Services vendors who can provide expertise in this area.
Enterprises are now seeking IT service providers with the agility to stay ahead of the ever-evolving business environment. Their success will be measured not only on technical capabilities but also upon their capacity to proactively anticipate and overcome challenges that arise from volatile and uncertain conditions, finds IDC.
Top 10 IT and business services trends and opportunities in APeJ
- Acceleration of cybersecurity measures: As businesses push their digital transformation initiatives forward, they are recognizing the need to bolster cybersecurity measures. By 2025, three-quarters of companies will be seeking outside assistance with these strategies to ensure security and maximize the business value generated by new technologies.
- DX becomes a digital business: Large enterprises will realize the need to increase their resilience. As a result of this pressing demand, many enterprises worldwide will expand into digital business models and construct new digital offerings – representing up to 40% of service providers’ overall revenues by 2026.
- Rising importance of crisis management: Organizations are beginning to see the importance of proactively managing crises and preparing for potential upcoming disruptions through crisis management strategies. By 2024, 40% of organizations will have a plan that provides ongoing intelligence capability and enables rapid responses in turbulent economic conditions.
- Attrition/skills gaps will spawn M&A: The drive for digital transformation will prompt enterprises to turn towards increased outsourcing to compensate for the lack of skilled labor and mitigate employee attrition. By 2025, enterprises will be paying service providers a 10% premium on all contracts.
- Ecosystem control plane services: By 2027, 70% of organizations with significant digital ecosystem involvement will have internal teams relying on control planes to maximize value for their business.
- Skills gaps leading to technology vendor/advisory partnerships: By 2025, 50% of large enterprises will be looking to strategically partner with tech vendors and advisory firms to bridge the gap between current workforce skillsets and demanded abilities. This collaboration will ensure that businesses remain competitive by leveraging technological advantages for their employees in the present and future.
- Off-/near-/right-shoring evolves given inflation: By 2024, 70% of companies will adjust their IT delivery model to increase automation and right-shoring for reducing costs and leveraging experienced talent.
- Hybrid cloud disrupts industry: The hybrid cloud market is projected to experience tremendous growth in the coming years, with spending likely to surpass $10 billion by 2026. This is because enterprises are shifting their sourcing strategies towards public clouds as primary providers.
- ESG adds managed services: As the demand for ESG data and analytics increases among large enterprises, by 2025, 40% of ESG business services projects will include managed services. Organizations are increasingly recognizing the need to acquire external assistance due to a lack of internal expertise.
- Joint creation of IP: By 2027, 30% of IT services providers will join forces with enterprises and technology vendors to develop innovative industry-specific niche products/intellectual property that will be jointly commercialized globally.
By leveraging today’s predictions of the future industry landscape, technology executives can develop creative strategies to remain competitive in an ever-changing business environment.
Source: IDC
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