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As more and more organizations are advancing on their sustainable transformation journey, their efforts are becoming increasingly complex. Sustainability considerations are becoming more integrated in different functions, and ESG (Environmental & Social Governance) performance must be monitored and reported more continuously. IT has become a critical enabler of these transformations as ESG performance monitoring and management process has evolved from an entirely manual exercise to a much more data-intensive process, necessitating the integration of large-scale data models and management platforms.

Since their maturity levels regarding sustainable transformation are generally still relatively low, many organizations also require a significant amount of help from professional services providers regarding their sustainable business and IT strategy setting, reporting, implementation of enabling technologies, etc. This has led to numerous partnerships between professional services and IT providers that have created joint solutions and go-to-market strategies focusing on generating positive financial and non-financial ROIs for their clients and helping them up to speed on their sustainability journey. Recent IDC data shows that many organizations still struggle with a lack of understanding of available sustainability-focused IT, and with making tangible progress in solving the ESG data challenge. This, in hand with professional services firm’s lack of proven tech-enabled sustainability services, has led to users taking smaller, less impactful steps in their sustainable transformations, thus lengthening the time to transform, and increasing resource costs.

Despite the recent political backlash against ESG, the topic remains a top business priority for business decision-makers globally. For instance, we asked the following question in our annual Future of Industry Ecosystems global survey: considering the collective capital among your partners (people, financial, asset, operational), what are the most important collaborative initiatives? The top answer for three years running, whether you are a CxO (CEO, CIO, CTO, CFO, CDO), business line manager, IT leader, supply chain, or customer-facing executive, is sustainability, or environmental, social, governance (ESG).  Organizations want to and need to work closely with ecosystem partners in support of ESG because this is too complex an issue to address on their own.

In support of these efforts, IDC believes that major global organizations that typically orchestrate industry ecosystems will increasingly form cross-ecosystem teams dedicated to ESG activities and task them with facilitating the resulting sustainable practices throughout the ecosystem and their organizations. In our 2023 Future of Industry Ecosystems FutureScape, we predicted that organizations would begin to build sustainability teams consisting of ecosystem partners: By 2025, 60% of G2000 organizations form cross-ecosystem ESG teams that are accountable for sharing of data, applications, operations, and expertise that facilitates sustainable ecosystem practices. Our recent research shows that this approach is well on its way.

Forming dynamic and reconfigurable cross-ecosystem teams that can quickly adapt new business demands to their industry environment promotes trust, cooperation, and solidarity among industry ecosystem participants. Further, working on ESG within an ecosystem consortium enables companies to collaborate with partners, suppliers, advisors, and regulators in the development, tracking and management of industry-specific standards, performance metrics, and targets. Having a cross-ecosystem team dedicated to the stewardship of ESG standards and practices allows partners to not only share development costs and risks but also address issues with a united front and communicate clearly to all stakeholders.

The Most Advanced With Ecosystems Are Most Advanced With ESG

In our Future of Industry Ecosystems MaturityScape Benchmark report (April 2023), we asked about the ecosystem maturity approach with environmental sustainability, and what this entails. An analysis of survivors (those at levels 1 or 2) and thrivers (those at levels 4 or 5) shows that thrivers go one step beyond meeting regularly with partners to ensure sustainability; they create formal teams of leaders across the ecosystem, that share data, applications, operations, expertise, and knowledge as needed to advance their approach to environmental sustainability.

Collaboration With Industry Ecosystem Partners for ESG a Critical Focus

Which statement best describes your organization’s environmental sustainability strategy and approach to your industry ecosystem?

2024 Multi-Client ESG Ecosystems Research Study

During the first half of 2024, IDC will be fielding a study on ESG best practices and plans with ecosystem partners, including a perception element of current IT and services providers.  We are currently accepting sponsors of this study – which we will look to for guidance on the questions and topics that matter most to you and your business. Contact us to learn more: jhojlo@idc.com, bstengel@idc.com, dversace@idc.com

Contributing authors: Dan Versace and Bjoern Stengel

The Best of Times

For Apple, it is the best of times, thanks to the way it has consolidated its position in its traditional markets and raised its game above that of Android in higher price segments.

In 2023 it became the world’s largest phone maker by volume, surpassing Samsung according to IDC’s Worldwide Quarterly Mobile Phone Tracker.

Volumes and unit share have been creeping up since 2019  (Chart 1 below), and the value of iPhone shipments has close to doubled in a decade.  Various factors have helped Apple achieve this.

Apple increasingly takes the top of the market, creaming off well-heeled consumers in affluent countries for its premium phones. (Chart 2 below)

More specifically, Apple has ridden a wave of consumers preparing to put more money down for their phones and the iPhone 14 and 15 series have resonated with consumers.

The consumer willingness to pay more has pushed Apple even further ahead of its competitors in value terms, and the most expensive Pro models in the new ranges have become the most popular models in its flagship lineup.

Behind Apple’s rising trend are also familiar reasons like the impact of the coronavirus crisis, during which consumers got used to spending more on devices given how much more people use them. 

Apple also continues to leverage mobile operators to great advantage.

In Apple’s top 20 markets by share, nearly two-thirds of iPhones are sold through the telco channel, according to IDC data, a figure which has hardly dropped in the last five years.

Their postpaid financing and trade-in deals drive a lot of the iPhone’s volumes. IDC’s Final Tier Mobile Phone Tracker shows that in the US 88% of iPhones are sold through operator postpaid. Generous buyback offers encourage consumers to trade in for the latest iPhone model, knowing that they will get a good price when they repeat the trade in a couple of years.

These deals have helped Apple in those top 20 markets to increase its share in Price bands above $650 to over three quarters.

Serendipity has played a role in Apple’s rise too – Apple’s share in China jumped after US sanctions in 2019 stopped Huawei from accessing US components necessary to make 5G smartphones, essentially knocking Huawei out of the smartphone race.  Since then, Apple has more than doubled its share in China and became number 1 for the first time ever in 2023. 

A less talked about factor is that Apple has reached this position without much change in its geographical focus. Outside of its growth in China, the majority of its sales remain skewed to the richer parts of the world.  The Top 20 Apple markets by units share account for more than half of total iPhone shipments, but they account for less than 10% of the global population.

Also, four-fifths of iPhones are priced above $800 (Chart 3 below). Catering to richer markets and more affluent consumers also made Apple more resilient to the current macro crisis. The strength of Apple’s ecosystem, its walled garden of apps, its family of devices, and its well-renowned focus on user experience, also helped maintain demand for Apple during recent challenging years.  As did the iPhone’s stronger resale value throughout its life cycle.

Apple has also done well in supply: its superior navigation of the supply chain crisis from Covid-19-related lockdowns enabled its production to escape relatively unscathed, unlike some other industry players.

The Worst of Times

For Samsung on the other hand, it seems like the worst of times in the phone market. It has lost its position as number one in units, a position many in the phone business saw it retaining longer.

As the world’s everything everywhere brand in the phone market, many of Samsung’s difficulties in the last few years have to do with parts of the world, that is most of it, where the iPhone is an aspiration much more frequently than a possession.

It’s not just Samsung which is in the doldrums, it is the global Android market; global Android shipments shrank around 5 percent in 2023 and a total of 20 percent over the last five years.

There were some specific reasons why 2023 was a bad year.

While in the richer world affluence and postpaid deals gave many consumers the choice to ignore the wave of inflation and cost of living pressures, that was far less of an option for vulnerable poorer consumers, who reined in spending on Android smartphones.

So Android sales contracted in many countries, including those of Samsung, since two-thirds of its volume are low-end devices below $400 (Chart 3)

The economic situation in China as it emerged from the coronavirus lockdown dragged down the local market for one and had a knock-on effect on the global market.

But there are more general factors at play.

The motors of the Android market are also much less dynamic than they were. The Chinese 5G boom was over two years ago, and the Indian smartphone market is no longer growing so rapidly or consistently.

The market potential of some emerging markets remains long term, for instance, Africa – where despite smartphone penetration of around 40% according to the GSMA mobile trade body, the market is essentially flat.

Africa has been hit by the global downturn, with falls in several local currencies and new laws imposing import restrictions crashing certain large markets. Emerging markets often suffer badly in a global downturn.

So where has this left Samsung?

In terms of the Android players, it is not doing badly. It has retained its unit market share in Android, in fact it has been level-pegging for several years now.

It has also regained some of the premium smartphone share it lost when it stopped producing its Note series, and it leads in foldable. It has simplified and rationalized its model portfolio, increased its focus on the premium market, and gained 7pts in share from Apple over the last two years (Chart 2).

In the big mid-market economies which are key to the Android market outside China and India – Brazil and Mexico, Thailand and Malaysia – Samsung has in the last couple of years held its own, as it has in larger and poorer Indonesia and the Philippines, and of particular note in India.

Furthermore, Samsung has pushed up its ASP in many of these markets, despite bringing 5G rapidly to lower price points in its portfolio.

So Samsung is not that badly placed if Android-focused markets begin to grow again

These markets are more dependent on the economic cycle than Apple’s key markets, but the economic tide will turn.

Samsung may need to focus its competition in richer Apple markets on foldables, where Apple currently has no product, and reorientate its other flagships towards price brackets affordable in middle-income countries.

Apple meanwhile still faces the challenge of renewed competition from Huawei in China and how to expand into more countries without compromising the premium position of its products.

While Apple has pulled ahead of Samsung in unit sales, for now, they remain close rivals. It is a lopsided contest, in that Apple has the advantage of its own and compelling OS ecosystem while Samsung is limited by Android.

But Samsung is a feisty company, a global consumer electronics player with a worldwide presence, and not about to take playing second fiddle to Apple lightly.

Looking back at 2023, various factors and events come to mind that encapsulate the year: challenges such as economic slowdowns, soft recessions and flat GDP, rising interest rates, and inflation, which, in the tech industry would reflect focusing on controlling costs in areas such as cloud. Geopolitical tensions also surged, sparking new conflicts across global regions, while the relentless impacts of climate change continued to fuel natural disasters.

However, amidst these difficulties, there were also positive strides. COP28’s landmark agreement marked a pivotal shift away from fossil fuels, signaling a collective commitment to combatting climate change. Additionally, the WHO declaration of the end of the COVID-19 global emergency unblocked key trade and economic areas. Scientific and technological advancements were abundant, with the standout being the explosive rise of Generative AI, profoundly influencing investment plans, not just in the tech industry, but permeating other sectors, governments, and institutions. We are entering the AI-everywhere chapter in the Digital Business era.

IDC is not in the business of looking at the past, but rather analyzing how past and ongoing events shape the future digital landscapes. Keeping in mind the main highlights of last year, let’s take a look at the key macro events that are going to shape digital agendas in 2024:

From AI Ambitions to Actions: If 2023 has signaled the beginning of the AI everywhere chapter, 2024 is expected to be its consecration, or is it? The transition from AI aspirations to practical implementation is hindered by many factors: critical infrastructure and skills shortages, rising implementation costs, and rapidly changing infrastructure and data strategies; yet businesses are eager to progress.
The IT Industry AI Pivot: Tech providers are shifting R&D, staffing, and CAPEX investments to AI/automation. This creates a fascinating challenge for IT companies, where possessing the solution allows them to dictate prices, creating a competitive race between cloud, SaaS, major consulting firms, and key infrastructure players in determining the direction of the industry. It will be interesting to see how the 2023 investments will come to fruition in 2024, also in terms of new use cases, applications, and innovations; and, how Technology providers will react to the initial adoption challenges and show the potential of business value to end-users.
The Elections’ Year: EU elections, general elections in the UK and the US, and more than 60 other general elections worldwide are poised to shape the future guidance of global equilibria. These will have repercussions on the digital landscape: a shift in political powers in key regions might cause the readjustment or the halt of ongoing national plans and new priorities in countries’ digital agenda – green initiatives, international relations, investments, and regulations.
Inflation Evolution: the normalization of inflation rates towards the 2% target is likely to have to wait some more time. Despite some positive signs of deflation in the second half of 2023, prices rose again towards the end of the year. As a result, it seems we reached the peak of the interest rate raise, but it’s still uncertain whether we’ll see some cuts in H1 2024 or later on in the year. Ongoing disruptions in supply chains pose an increasing threat to the oil and energy sectors, and in many regions, IT product and service supply chain issues will also continue to affect costs and access to innovations.
Digital Regulations: In 2024, significant developments in IT regulations are anticipated, particularly on AI, with Europe taking the lead through the EU AI Act. This legislation will impact global players, although its effects may not be fully evident until later. The year will be crucial for gauging the timeline, initial consequences, and the enforcement approach of Member States. Other global players are engaged in the race to regulate AI, including the US with its executive order on AI and various legislative proposals in Congress, China and its draft rules on Gen AI, and Brazil’s somewhat EU-inspired rules. Other digital regulations are also going to be key this year, including the EU’s Digital Operational Resilience Act and the CSRD, data privacy regulations in various US states from California to Texas, and more.
Sustainability for Real: after the historic COP28’s agreement on fossil fuels, 2024 marks a pivotal year for sustainability reforms, also in the face of the increasingly frequent natural disasters – directly linked to climate change – that have been affecting the whole world in the last 12 months. Europe is poised to step up, as stringent regulations will be enforced in the region; in the US, the incentive-based approach with the Inflation Reduction Act (IRA) is finally expected to have a greater impact in 2024 and the SEC rules on climate disclosure; China’s strategic emphasis on its green industry to gain competitive advantage in global markets; some APAC countries have stringent climate and ESG regulations, like Australia and South Korea. Digital transformation and technologies will have a key role there, leveraging IT solutions to carry out green initiatives, but also by making the IT industry itself more sustainable and greener. VC funding for climate tech and sustainability innovations slowed down in 2023, but the newly established fund by COP28 will set precedence for further acceleration in this space. 2024 will also be the year when countries and organizations start linking AI investment decisions to the positive and negative implications of meeting sustainability goals.
Ecosystem Evolution Scenario: China’s supply and economic recovery plays a pivotal role in shaping global dynamics. The continued growth and resilience of China’s supply chains have far-reaching implications for the global economy, as the country remains a key player in various industries. As China attempts to recover from economic challenges and adapts its ecosystem, the implications can reshape global trade and IT market dynamics. The rise of digital sovereignty and protectionism, in general, is already redefining global trade and technology markets. Countries are focused on securing their technology supply chains, resulting in heightened competition for critical materials and a push for technological self-reliance. This trend, driven by concerns over national security and economic interests, could fragment the global tech supply chain and reshape the balance of power in emerging industries.
Continued Geopolitical Tensions: The ongoing conflicts in strategic global regions – the invasion of Ukraine and in the Middle East – continue to affect the markets in terms of investments, supply chain disruptions, and volatile oil prices. As we have been increasingly learning in the past couple of years, the IT market is not immune to these shocks: critical data centers are affected, talent is displaced or relocated, and key components procurement flows are disrupted. The supply chain deserves a spotlight, specifically related to disruptions in key worldwide shipping channels that are affected by ongoing conflicts. As things stand, most of the most critical conflicts happening worldwide are unlikely to be resolved in the short term, and their continuation can amplify their unsettling outcomes.

It’s essential to monitor ongoing macroeconomic events and be ready to assess and adjust strategic plans in the face of unexpected shocks. We follow all of this and more in our Digital Economy Strategies research. Get in touch to discover how IDC can support you in this continuously changing environment.

We continue to reside in uncertain economic times. Whether you look at geopolitics, like the situation in Israel and Ukraine, or you consider volatile energy prices, the long-tail effects of the COVID-19 pandemic, higher inflation and its direct impact on the tech industry, or even the quickly approaching 2024 U.S. election, all these factors continue to have an effect on the economy and ultimately on the predictability of services providers’ (SPs’) businesses. However, while market conditions will eventually wane and course-correct, a different challenge facing services providers continues to progress and is unlikely to resolve without decisive action — the erosion of services providers’ strategic value.

Faster. Cheaper. Fewer, and with less influence. These are just a few of the many forces at play in today’s services markets. Services customers want more for less, with less risk, faster proof of value, more risk sharing, and costs that are directly tied to outcomes through value-based pricing. Provider adoption is also consolidating, with companies now using fewer providers for core services.

Companies have become very comfortable utilizing third-party services firms and providers to support many core facets of their business, both business process-based and technology-focused. The approach of utilizing multiple providers to hedge corporate risk is still a critical part of a firm’s sourcing strategy, but there are signs that firms will be reducing the portfolio of vendors on which they rely.  As the value and trustworthiness of utilizing external providers for core services have proven increasingly safe and reliable, companies are now shifting their third-party services strategy toward simplicity and cost-effectiveness over and above diversification and redundancy. As companies seek help accelerating digital transformation and building resiliency, they have become markedly more comfortable doing all this with a smaller number of providers.

At the same time, the order in which various types of third-party vendors are engaged is beginning to shift, resulting in services providers slipping backward in their proverbial “place in line.” Services providers have historically led strategic technology discussions and then worked with clients to bring in the technology providers that are needed. The opposite is beginning to occur, which has resulted in customers now turning first to technology firms and public cloud providers. You can read more about this trend in another recently published IDC report found here.

IDC’s Services Path program, an annual global survey of 2,600 companies, has also confirmed this shifting to be true. When companies were asked what sources of information they primarily utilize to select various types of firms, the number 1 source of information was cloud services providers (e.g., AWS, Azure, Google, and IBM), followed in second place by sourcing arms of consultancies (e.g., PwC, Deloitte, EY, and KPMG). In addition, when companies were asked what type of vendors they believe are best suited to help them with digital transformation, the top answer was IT infrastructure providers (e.g., HPE, Dell Technologies, and Cisco), with business or IT consultancy firms (e.g., Accenture, Deloitte, PwC, EY, and McKinsey) placing second.

Public cloud providers and technology vendors are now often taking the lead in strategy discussions, only to then bring in traditional services providers later when needed. This modified approach is further contributing to why traditional pure services providers are becoming viewed as less influential.

How Services Providers Fight Back

IDC has just published a report examining this phenomenon, which includes a deeper discussion of these trends, along with advice for services providers on how they can fight back against this strategic challenge.  The full report can be found on our website, but here are a few highlights and findings from the study.

Leveraging AI Everywhere

Just like the long on-prem software implementations of yesteryear were sent by the wayside with the advent of cloud, the same will happen to traditional services delivery models as AI matures and becomes more reliable and accepted. Companies have less patience for long transformation projects and lengthy deployments. As more service offerings become asset-based, self-service, and AI-driven, the days of long, expensive, human capital–intensive service engagements will dwindle.

IDC predicts that by 2025, 40% of all services engagements will include GenAI-enabled delivery (see IDC FutureScape: Worldwide Services 2024 Predictions). This is further supported by the results of IDC’s Services Path program, which found the top 3 business priorities for companies today are increasing productivity, improving operational efficiency, and improving talent performance, all of which are expected to be directly enhanced by the adoption and advancement of GenAI. Likewise, businesses are heavily focused on bringing in services providers that excel in AI expertise above and beyond any other new technology. IDC’s Services Path found proficient AI skills to be nearly twice as important as any other new technology skill set when businesses are selecting which services firm they want to engage.

Reducing Barriers To Success

IDC’s Services Path respondents were asked what characteristics their vendors demonstrated that became barriers to success for their organization. The top 3 responses, in order, were “vendor is unable to meet service levels/requirements;” “inability to support more complex needs;” and “vendor can’t adapt quickly enough to changes in requirements.”  Part of traditional services providers fighting back against their waning strategic positioning needs to include rapidly recognizing and removing these barriers to success for their customers.

ABC, Talent, Pricing and more

There are several other notable topics that services firms will need to further address to fight back against current market trends, some of which include expanded use of asset-based consulting, developing more flexible pricing structures that are closer aligned with value delivery, counteracting the talent squeeze (both for themselves and their customers), and further optimized and self-service driven managed service offerings.  

The full report discusses all these topics in more detail, but there are a few important things for services providers to keep in mind:

Differentiate based on pricing flexibility and risk sharing.   IDC’s Services Path found the most important metrics used by companies to shortlist services vendors are their ability to provide compelling proof of ROI, offer multiple pricing options, and provide flexible pricing terms.
Partner with technology vendors to utilize their SaaS platforms and co-develop ABC offerings.  Not only will this save both upstart time and required investment, but partnering with an already industry-leading company is the fastest way to establish credibility and reduce barriers to entry.
Reskilling labor will be a vital component of meeting the impeding demand for AI-centric services.  For example, IDC predicts that by 2025, 40% of organizations will re-skill their customer care agents to take up different roles to deliver better business value, largely driven by the adoption of GenAI in the contact center.

Companies today are looking for strategic partners that can be utilized broadly across the life cycle from consulting to managed services, can understand the nuances of their business, have deep expertise in their industry, and can provide fast proof of value beyond simply helping cut costs. Ultimately, services providers that can help businesses harness innovative technologies, link them to their business processes, and connect their strategy to their tactical needs to drive top-line growth are the firms that will solidify a long-term seat at the head of their client’s strategy table.

In a situation where attention spans are fleeting and competition is fierce, the strategic use of storytelling emerges as a force in successful value-based selling. Sales enablement stories, when crafted with finesse, have the power to captivate, persuade, and ultimately drive conversions. If you find yourself questioning how to create high-value sales enablement content, consider these three pivotal elements that elevate sales enablement stories into high-impact narratives, seamlessly integrating the principles of value-based selling and a strategic sales enablement strategy.

1. Be Authentic

The era of scripted pitches is long gone. Modern buyers crave authenticity—they want to connect with real people and real stories. Embedding authenticity into your sales enablement story involves showcasing genuine experiences, challenges, and triumphs. Whether it’s a customer testimonial or a personal anecdote from a team member, the authenticity of your narrative establishes trust and resonates with your audience on a human level.

In the pursuit of authenticity, sales teams can leverage a powerful tool: the buyer conversation guide. This guide serves as a roadmap, empowering sales professionals to navigate conversations with a personalized touch. By providing a structured yet flexible framework, a buyer conversation guide ensures that the sales narrative aligns seamlessly with the unique needs and challenges of each prospect. This not only enhances the authenticity of the interaction but also enables sales teams to actively listen and respond to the specific concerns of the buyer.

A well-crafted buyer conversation guide goes beyond the traditional script, encouraging dynamic and meaningful exchanges. It equips sales professionals with the knowledge to ask the right questions, uncover pain points, and showcase how their product or service adds tangible value to the buyer’s journey. This personalized approach transforms the sales conversation from a mere transaction to a consultative dialogue, fostering trust and building a foundation for a long-lasting customer relationship.

View example Buyer Conversation Guide

2. Focus on your Persona

Every great story follows the classic hero’s journey, and your sales enablement story should be no different. By casting your customer in the protagonist role, you create a narrative that is relatable and emotionally compelling. This approach aligns seamlessly with the principles of value-based selling, where the focus is on solving the customer’s problems and adding tangible value to their journey.

A high-impact sales enablement story is not a one-size-fits-all affair. Recognize the diversity of your audience and tailor your narrative to resonate with different segments. This requires a keen understanding of your buyer personas and the ability to adapt your story to address their specific needs and challenges.

Digital coaching and sales mastery classes emerge as indispensable tools in this quest for knowledge. These modern methods of learning provide interactive, real-world scenarios, allowing sales teams to immerse themselves in the shoes of the buyer. Through simulated experiences, they gain insights into the intricacies of the buyer’s decision-making process, honing their skills to address objections and deliver compelling value propositions.

Credit: IDC Digital Coaching

3. Create a Visual and Interactive Story

In the age of information overload, visuals are the unsung heroes of effective communication. Incorporate visual elements into your sales enablement story, such as infographics, videos, or interactive presentations. These not only enhance the overall engagement but also make complex concepts easier to understand. A well-crafted visual narrative can significantly boost the memorability of your message, making it a valuable asset in your sales enablement strategy.

View example of a motion infographic.

Rather than presenting a one-way narrative, build your sales enablement strategy around a framework that encourages interactive engagement with your audience. Incorporate elements that invite participation, such as polls, quizzes, or interactive simulations. This not only keeps your audience actively involved but also provides valuable insights into their preferences and pain points. The interactive nature of your sales enablement story transforms it from a passive presentation to an engaging conversation, fostering a deeper connection between your brand and potential customers.

However, the effectiveness of interactive engagement also hinges on the tools at the disposal of the sales teams. To truly empower sales professionals to engage in more impactful storytelling, it’s imperative to ensure they are equipped with cutting-edge interactive tools. The value of interactive selling tools lies in their ability to guide prospects through a personalized journey and facilitate a two-way conversation. By tailoring the narrative to the specific needs and interests of each prospect, sales teams can effectively demonstrate the unique value proposition of their offering.

In the dynamic landscape of sales enablement, where innovation is key, the art of crafting high-impact stories becomes a potent weapon. By embracing authenticity, visual storytelling with interactive engagement, and adaptability, you can elevate your sales enablement strategy to new heights. These elements, when seamlessly woven together, create a narrative that not only sells but resonates, leaving a lasting impression in the minds of your audience.

Organizations in every industry continue to focus their next chapter of digital transformation on ecosystem expansion; we hear this from organizations in every industry. Working more closely with partners in and outside your core industry to support multiple use cases and initiatives is critical for success. However, it’s not always easy. 

Knowing which use cases and initiatives to focus on is often not immediately evident, and resources, processes, and tools are disparate and misaligned.  Our recently published IDC MaturityScape Report provides a framework for guiding organizations. Within this, we defined five key dimensions, and related sub-dimensions, that organizations and their partners must consider to be successful:

People: Culture, Collaboration, and Leadership
Process: Platform, Intelligence, and Metrics
Technology: Shared data, Shared applications, and Blended digital/physical
Operations: Availability, Governance & Trust, and Environmental sustainability
Innovation: Rate, Management, and Openness

For details regarding each dimension and sub-dimension, see Table 1 in IDC MaturityScape: Future of Industry Ecosystems 1.0.

In this age of AI and generative AI, let’s talk about people.  The people dimension was one of the most mature of industry ecosystems, according to our Future of Industry Ecosystems MaturityScape Benchmark Survey report (April 2023).  This is where organizations start their journey of industry ecosystem expansion. 

As they “design” which partners they should work with on which use cases and initiatives, establishing a robust culture of collaboration and innovation among industry ecosystem partners that is supported strongly by leadership is the top priority. 

A primary reason for this focus is the extensive skills gap that exist in every industry, across multiple domains.  These domains include IT, supply chain, production, service, and operations (IT has the biggest digital skills and resource gap consistently across every industry).  Filling these digital skills and resource gaps is one of the top reasons why organizations are expanding and opening their industry ecosystems. Essentially, they are looking for “access to on-demand capital”, a top-two use case focus per figure 1:

The primary difference between thrivers (those organizations advanced in their approach in working with their partners), and survivors (those early in their ecosystem development) within this realm is that thrivers have strong leadership driving an open, extended ecosystem strategy, and their collaboration is diverse and more commonly extends beyond their core industry. 

Survivors tend to have leadership that is risk averse and tactical when working with industry ecosystem partners, often settling on a standard set of pre-determined partners.  An open, diverse, dynamic ecosystem culture is still weaving its way through ecosystem survivor organizations. Thrivers are quite the opposite, working very strategically with their industry ecosystem partners. 

AI & GenAI for Skills & Knowledge Augmentation

With the current AI and GenAI hype, it is only natural to consider whether developing high-performing ecosystems is more about scale and having the right set of real humans working together well, or well-placed and well-used AI tech.  We think it is optimally a balanced mix of both. Respondents to our recent Future of Industry Ecosystems Global Survey agree, with 36% investing or planning to invest in the near term in AI and ML in support of ecosystem initiatives.  The top reasons for this, according to wave 6 of our Future Enterprise Resiliency Survey (July 2023) are as follows:

Anticipating/Predicting Customer Needs
Identifying Shared Data Monetization Opportunities
Improving Supply Chain Efficiency

Industry ecosystems thrive with a diverse set of people from different backgrounds, expertise, and industries. Decision making, innovation, and efficiency are improved by taking an on demand, as needed approach to working with various resources from your partner ecosystem.  However, the opportunity for knowledge, digital skills, and resource augmentation through AI and generative AI are undeniable.  Some of the ways (not an exhaustive list) that ecosystems can benefit are shown in table 1:

AI use cases for Industry Ecosystems will continue to develop, as ecosystem data models become larger and more diverse, and initiatives increase in complexity and scale.  As enterprises are seeing the benefits of augmenting processes, collaboration, and innovation with AI and generative AI, so will ecosystems.  This is one of the reasons why, according to the IDC ICT (Information & Communications Technology) Spending Guide (July 2023), that AI Platforms have seen 37% growth over the past year, far surpassing the average ICT spending of 4%.

Strive for Flexibility through Industry Ecosystems

Wherever your organization is on the ecosystem digital transformation journey, consider the approach to working with partners on a continuum. There may be times when a simple, small team of ecosystem partners is working on a specific, short-term project, and other times when big challenges like environmental sustainability, game-changing innovation, or quality and safety require a diverse number of partners to come together as a single team for an extended period of time. 

This flexible, dynamic, on-demand approach to working with industry ecosystem partners (complemented by AI) is critical to ensure the long-term viability and growth of every organization.