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Trends And Disruptions In 2019 For Third-Party Services

06/04/2019

Originally published by Forbes 


Bumpy Roads in Digital Transformation

This year has been a move from digital transformation pilots to programs, which led to a full-on wave of IT modernization to support transforming to digital operating models. The question we must examine going forward is whether this wave will survive a recession.

It seems likely that the global economy will slow and even the US economy will come down off its heavy heights. If this happens and the economy decelerates, less capital and less discretionary funding will be available to fund companies’ modernization goals. If this happens – and the question is not if it will happen but when – I think it’s likely that it will start to happen in 2019.

I think the forces driving modernization will be sufficient to maintain this work. However, as the economy slows and/or moves into recession, I think the nature of IT modernization will shift more towards cost savings more than speed, agility and flexibility. I also think the pace of this work will slow because there will be less discretionary money to fund it.

I anticipate the lower availability of capital will have less of an impact on business transformation than on modernization. I think there may be a slight pullback but not to the same extent as in modernization work. In fact, we may see companies accelerate their move to business transformation to gain competitive advantage or match another company’s competitive advantage. The CEO imperative for these initiatives will be much greater.