ISG Provider Lens™ Digital Business Enablement and ESG Services - Sustainability and ESG Services - U.S. 2022

In the U.S., the focus is now on being digital

The renaming of this study to Digital Business Enablement and ESG (Environmental, Social and Governance) Services reflects that digital transformation is now a necessity for enterprise clients across industries. The market trend has completely shifted from doing digital to being digital. At the same time, ESG services are now being seen as one of the most important requirements for enterprise clients and have become a critical component and a differentiator in the digital transformation services offered by providers.

The term enablement represents the maturity and complexity that digital transformation requirements have reached in the last 24 months. To further penetrate the market, providers must not only depend on their robust portfolio of services but also demonstrate their expertise in implementing digital technologies such as AI, analytics, security, IoT and AR/VR. Providers also need to offer strong digital and customer experience (CX) governance frameworks. In addition, they must provide digital tools that support both industry and function transformation, work closely with regional partners and have a strong innovation roadmap that involves clients and partners in developing new and niche capabilities.

Digital reality services present a major opportunity for digital transformation in which enterprise clients explore new ways of collaboration, learning, training, product design and creating hyper-personalized experience.

In the U.S., the complexity of digital transformation requirements has increased drastically in the last two years. For successful digital transformation, it is very important for providers to show a strong understanding of modern technologies; be focused on innovation; demonstrate thought leadership in advising clients on the latest IT, market and industry trends and offer references on successful implementation.

Continuous IT advancements have resulted in a significant uptake in the use of digital services, tools and frameworks by enterprises in the U.S. Enterprise digital leaders are deploying AR/VR/MR with the goal of creating more immersive experiences for employees and customers, enhancing data visualization, and improving manufacturing and maintenance processes. Enterprises in the U.S. will be more dependent on digital service providers for building and refining digital business models, fostering a culture that prioritizes experimentation and using technology and data to establish competitive advantages.

Analysis of the data shared by providers as well as in-depth briefings reveal some notable digital transformation and enablement trends in the U.S.

• Providers are now highly focused on offering a more human-centered approach to creating experiences based on the principles of experiencefirst design for offering a seamless, cohesive omnichannel experience. This includes robust expertise in qualitative research and analysis, ideation, concepting, product strategy, prototyping and validation, agile design and innovative products and services that assist clients in building better digital solutions to address their customers’ needs.

• CX is a key focal point for most businesses across all industries in the U.S. It is a determining factor in driving customers’ decisions toward the business outcome that defines their journey. By understanding customers’ behavior and assessing their requirements, organizations can design an interaction path that influences customer decisions to choose a brand or to buy a product or service.

• Providers continue to invest in building in-house digital tools. The combined use of tools and accelerators for digital services as well as ready-to-deploy platforms helps providers position themselves distinctively in the market. They are investing in building industryspecific tools with proven use cases and function-specific solutions. These tools help providers create the required differentiation in the competitive digital business transformation services market.

• A data-driven transformation approach remains a major requirement from enterprise clients and for a majority of the work that providers have delivered. Clients in the U.S. seek support for decisionmaking that is highly informed, prescriptive, driven by data and augmented by AI, machine learning (ML) and digital twins for driving tangible business value. Providers are making significant effort into offering analytics services that generate prescriptive, explainable recommendations to optimize business outcomes in less time and with lower cost and risk.

• Digital technologies continue to have a major impact on digital transformation, and they act as the biggest enabler to support clients in their digital journey. AI, IoT, AR/ VR, cybersecurity and the cloud are being adopted rapidly to modernize and optimize processes and become digital native. Next-gen customer relationship management (CRM) systems enabled with IoT capabilities are helping businesses in the U.S. offer more personalized and connected experience, and providers have started building their capabilities across CRM systems.

• Clients’ requirements for digital business model transformation and optimization of digital operations capabilities and services have grown as pandemic-driven structural changes have become permanent. Clients are looking for providers that can assist them by consulting and offering digital technologies and approaches to enable fundamental changes in their business model, optimize their operations and make them more cost-efficient.

• Self-monitoring, reporting and forecasting models such as predictive analysis are used to detect, contain and solve problems, often with built-in machine learning. To trace and improve forecasts or automate methods and improve the quality of a service, results and reports are stored and shared with involved parties by applying AI inputs to selected relevant employees. This is now of major importance in the supply chain and manufacturing areas.

• In the U.S., enterprise digital leaders are deploying AR/VR/MR with the goal of creating more immersive experiences for employees and customers, enhancing data visualization and improving manufacturing and maintenance processes. Clients in manufacturing, automotive, energy and utilities and aerospace have already implemented digital reality services at large scale. Healthcare and banking are the next major areas of focus.

• As per the Star of Excellence™ 2021 findings, clients in the U.S. are specifically choosing providers that can blend technology expertise, digital services, tools and talent to help them with digital transformation. They need strong, local and experienced resources that understand the nuances, trends and compliance needs of the local market, as well as provide reference use cases, core platforms, industry expertise and strong product and innovation roadmaps to guide them.

Services from the roadmap strategy through to the realization of digital transformation goals are now mainstream both in the U.S. and globally. It is essential to obtain the correct stakeholder involvement within the enterprise and to find the best consultancies, service providers and ICT companies to provide the support required, execute the implementation and enable large-scale digital transformation.

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