Digital disruptions are just that — disruptions to the status quo of how a company operates, similar to hitting a pothole while driving. Although you may have driven a road hundreds of times, potholes can suddenly appear, disrupting your normal travel path. You can either try to fix the pothole or find an alternate route.
TSPs haven’t figured out how to rise above the noise and capitalize on the value that disruption can bring
Digital disruptions are no different. They can lead to advancements and opportunities for those willing and able to seize the day. Gartner Tech Growth & Innovation Conference presenter and Gartner research vice president David Yockelson outlines some of the key ways digital disruptions are impacting technology service providers (TSPs).
Digital disruption affects every organization differently. How are TSPs impacted?
TSPs have an opportunity, really a duty, to understand not only how their own market(s) may be disrupted or how they can disrupt their particular segments, but also what disruption can mean for their customers. The latter is key for their ability to differentiate and explain their value propositions.
What impact have digital disruptions had on the TSP sector?
A variety of disruptive technologies — IoT, blockchain, artificial intelligence and machine learning — have invaded and pervaded TSP offerings, whether on the product or service side of the equation. Customers are in varying states of demand for these technologies, depending on their maturity, risk aversion, strategic planning, innovative natures or their own disruptive thoughts.
Certain disruptive capabilities might dramatically shrink time to value or optimize key processes for customers
There may be disruptive business models or delivery methods (think freemium in the past or cloud marketplaces now) that providers use. However, TSPs haven’t figured out how to rise above the noise and capitalize on the value that disruption can bring to their customers.
How can TSP leaders use such disruptions to create value within their business models?
It depends. Certain disruptive capabilities might dramatically shrink time to value or optimize key processes for customers, enabling a TSP to price its services very differently from traditional market structures.
Consider a service as a service offering, which provides elastically priced services on an as-needed basis
On the flip side, a TSP can take a disruptive approach with its go-to-market components, whether that is with respect to channels, delivery models or societal impact/awareness. Consider a service as a service offering, which provides elastically priced services on an as-needed basis rather than forcing a customer to agree to pay a yet-to-be-determined price upfront. Alternatively, using a marketplace as a way to more effectively enter new segments or introduce new products is a potential solution for some companies.
If there’s one thing TSP leaders need to get right, what might it be?
Differentiation and with it, differentiated value. Of course they must have a business strategy that works, but in terms of succeeding with buyers, the one thing that TSPs consistently have the most trouble with is effectively differentiating themselves.