IDC says business sentiments in Asia/Pacific excluding Japan (APeJ) was much more positive and leading the recovery journey, leveraging technology to transition to the next normal has become the standard. The firm noted that reliance on IT and Business service providers grew consistently.
"2020 was characterized by investment in business continuity and an acceleration on the execution on digital strategy for most of Asia/Pacific markets. Consequently, we saw the impact of the pandemic on services sourcing," said Linus Lai, vice president for Software and Services Research at IDC Asia/Pacific.
2021 predictions for 2021
By 2025, 50% of organizations looking to drive revenue growth will only select vendors that can offer a portfolio of strategy, design, and technology services.
By 2024, over 60% of firms will have utilized platform-as-a-service (PaaS) as the primary application development platform to develop custom applications and drive DevOps maturity deeper through their application portfolios.
Topics like multi-cloud management, automation, use of PaaS and growing maturity of DevOps and agile development were highlighted by the analyst.
Rijo George Thomas, senior market analyst, the lead analyst for enterprise application services commented that as enterprises in APeJ turned to new ways of working and serving customers remotely, application service providers were quick to help enterprises remain resilient during the pandemic disruptions.
“Although the challenges are expected remain in 2021, service providers are taking this opportunity to showcase their value proposition that goes beyond cost and labour arbitrage by pivoting to a business model that is centred around customer success, time to value, and experience transformation," he added.
The COVID-19 pandemic really tests the resiliency of all organizations, including service providers themselves. Cathy Huang, associate research director for Services and Security at IDC Asia/Pacific added that: “Over the years, many IT Service Providers may have sounded alike in their offerings, frameworks, and huge investments (platform, automation, and risk management), but the reality is that customer experience on the service delivery, quality, and support during the pandemic will set them apart.”
IDC predicts that by 2023, 70% of A2000 organizations will have incorporated service delivery resilience assessment and assurance into over 75% of their externally sourced business and IT services.
As the disruption brought about by the pandemic accelerates structural changes that were already underway, it infused a sense of urgency and reprioritization into the enterprise transformation agenda.
IDC revealed that by 2024, over 90% of organizations will implement some level of automation across multiple processes to drive a higher level of process optimization and to free up operational cash.
“Intelligent Automation has shot up the enterprise priority list as a mechanism not just to improve operational metrics, but as a mechanism to improve agility and resilience across the breadth of an enterprise’s operation," said Pushkaraksh Shanbhag, senior research manager and lead analyst for Asia/Pacific Analytics and Intelligent Automation Services research at IDC Asia/Pacific.
2020 emerged as an inflection point for many organizations in their digital transformation journey. IDC predicts that by 2022, just over 80% of organizations with more than 1,000 employees will accelerate their digital transformation (DX) projects (as 47% are accelerating now), making the remaining firms increasingly disadvantaged.
”Businesses are waking up to a new reality, where adoption of business models and operation processes anchored on strong digital strategies are no longer a luxury reserved for a few, but a critical imperative for growth and existence in the coming years,” concluded James Sivalingam, research manager for IDC Asia/Pacific Services & Security.