There are competing forces at work in the Technology services channel as we see a greater fragmentation of offerings, capabilities, and solutions against a backdrop of significant consolidation of providers. This all makes the modern CIO and business leader’s job even harder when looking to embark on (and de-risk) large-scale digital transformation projects.
The specialisation in areas such as core business applications (ERP/CRM), cyber security, data and AI no longer fit neatly into boxes like “infrastructure” and “software”. Almost every organisation today is faced with some level of complexity as they seek to replace ageing legacy, on-premises infrastructure and systems to gain efficiencies, reduce ongoing costs, and leverage emerging technologies.
Services providers are increasingly targeting this market. Larger multinational technology services firms are growing additional service arms, while the ‘Big 4’ accounting firms are deepening their technology services offerings—bringing their offerings further down market.
This is all leading to a homogenisation of service offerings and dilution of an already small talent pool. Consequently, there is a diminishing pool of large, broad-capability, end-to-end technology service providers. At the same time, a class of highly specialised and focused service providers is emerging, offering deep expertise in critical areas of technology.
So, what to look for when choosing technology partners, and is a “one throat to choke” or “one size fits all” mentality relevant anymore?
Nowhere is this more relevant in the cyber security space, where incumbent technology providers are facing scrutiny from specialist cyber security organisations. These specialists are brought in to audit the architecture and environment that the providers have implemented and continue to maintain. CIOs and business leaders now see the clear value in engaging with these focused and specialist cyber organisations, as their tolerance for any security risk is virtually zero.
As business leaders now seek to understand and determine cogent AI strategies, they are inundated with the same incumbent technology providers claiming innovation and deep capabilities so they can broaden and defend their engagement. There is even vendor self-interest when it comes to driving internal technology strategies. Surprisingly, some vendors still approach technology strategies by placing infrastructure as the foundational layer.
Our position is that data is the new foundational layer for a modern technology strategy. If data is accepted as the cornerstone of any AI strategy, the conversation will quickly turn to the systems of record, operations, and transactions that generate the bulk of this data. Solutions like enterprise resource planning (ERP) and customer relationship management (CRM) will drive much of the population of data, ultimately driving innovation and efficiency with emerging AI technologies.
Choosing the right partner for your ERP project may not involve the same considerations as choosing the right data partner or the right cyber partner. Your ERP partner must understand and challenge the tactical execution of your data and security strategy. In a single vendor environment, this execution becomes linear and subject to a single motivation.
At some point, each of these core areas will be at some degree of (healthy) tension with each other. Should your AI strategy inform your ERP strategy, or should it be the other way around? Can you innovate with AI before you have a solid and reliable set of data and systems to capture and drive this data? Do you trust a single vendor to navigate and execute your strategies across these highly specialised areas?
In the local market, we are seeing the emergence of specialist boutique partners who collaborate to provide best-of-breed advice across these areas. At iCatalyst, as business application specialists, we work with specialist security and data advisors to exploit the healthy tension between the technology strategy pillars and implement core systems of record for our customers.
