How do they do it in the western part of the world?
World practices of digital transformation: how is this market developing outside of Ukraine?
We became interested in the world trends of digital transformation not only for the sake of researching the experience of our international colleagues. The main reason was to find a variety of ways to enter the international market. Yes, we do want to enter international arena and ultimately start selling our services to international clients.
In the step of entering the international market, the growth model is vital in order to ensure the success of the project. The following questions arise: How exactly does it need to be done? Perhaps, entering a variety of tenders as a sole player is a way? Maybe, through the partnerships with other international agencies or through the aggressive promotion of your services?
We have decided that partnership model is the way to go. First of all, we have conducted a market research on companies that use Digital transformation around the world. We have been looking at main players, and we have conducted a research on their business models, as well as analyzing their portfolios. In our research, we took into account the area of business that they operate in and their attitudes towards digital transformation.
According to the conjoint research of World Economic Forum and Accenture, in the next 10 years, the digital transformation will create a big market. The approximate market size will be valued at 100 trillion U.S Dollars. There will be following main innovation business areas that will play a particularly important role in the growing market — Artificial Intelligence (AI), self-driving transport, Big Data, 3D printing, internet of things (IoT), robots, drones, social networks and online-platforms
“Nowadays clients require the highest level of service and guaranteed results. The time when clients required just products and services are gone.”
In order to survive, companies need to find new business models. By the year 2020–30% of the profits will derive from new business models. Companies that incorporated digital transformation into their business are getting 26% higher profits.
The main providers that are using digital transformation are consulting firms, IT companies, and digital agencies. However, in the case of digital agencies, we have only included the companies that adopted their expertise and turned into digital transformation agency.
Consulting companies are dominating the digital transformation market. Most known companies are IBM iX (a subdivision of IBM), Ericsson, PwC, Bain, Atmosphere, Econsultancy, Cognizant and Microsoft.
Ericsson, Bain, and PwC are using digital transformation in addition to the main services of strategic consulting. These companies transfer the development of technical solutions and products to their partners. IBM iX and Microsoft are using technocentric models. They offer solutions that are based on the usage of their own technology. Econsultancy and Atmosphere approach digital transformation from the educational side, they are training employees of their client companies. Their clients are global brands from the different business areas.
A good example of the IBM iX digital transformation is Atlanta Falcons and Mercedes Benz project. Within the 6-weeks session, consultants were interviewing fans of the football club. After analyzing the needs of the football fans, IBM iX proposed installing 2000 screens around the stadium, as well as creating 3 different mobile apps. This allowed the audience to feel like they were a part of the game.
IT-outsource companies, particularly, Harman, To the New, Proventa and Software AG, are using digital transformation as an upper layer for software development services. They are focusing on technical solutions rather than customer research and audience engagement. In addition, some of this companies also offer strategic consulting.
The main characteristic of the digital agencies — SapientRazorfish, Hello Future, Made by Many and others — is that they have critical attention to the customer engagement. Their competitive advantage is a deep expertise in researching the needs of the target audience of the client.
The case of Sapient and Audi shows us how using technology can solve the problem of limited space for the car dealership store. In addition to increasing sales by 70%, increasing profit margin from each unit sold by 30% and increasing Audi cars sales without test drive by 65%. Lastly, within the timeline of this project, 90% of buyers purchased Audi for the first time.
In conclusion, the market of digital transformation is still relatively small, however, the turnover of individual providers is really impressive. For example, the turnover of SapientRazorfish in the UK market is almost £198 million. In order to survive, companies, including advertising agencies, need to change. We at Skykillers choose our own way — to actively develop our company in the direction of digital transformation.
