We’re in the midst of a business revolution, as we transition to an application economy. Software defines the customer experience and that, in turn helps fuel business success.
This shift is having a profound impact on service providers—many of whom face significant challenges along the way—but those organizations that can respond quickly in this dynamic market will be better positioned to capitalize on significant opportunities for growth.
A recent survey conducted by CA Technologies, “Emerging Trends and Opportunities for Service Providers in the Application Economy,” revealed the top critical challenges service providers face. They include:
1. Service Providers need to move up in value chain to thrive in the application economy.
When asked about the types of services offered, as well as those they plan to offer, respondents provided a vivid, before-and-after picture of how the service provider market is evolving in the emerging application economy.
Traditional infrastructure-focused offerings represent the most common service types, with IT monitoring; storage, backup and disaster recovery; and help desk representing the categories with the highest response rates.
However, when it came to planned services, the picture was very different. The planned services that rated the highest were focused on helping customers adapt and thrive in the application economy. Services relating to the Internet of things (IoT), mobility management, big data, security and identity and access management, and cloud services represented the top five rated categories respectively.
2. Balancing profitability while facing increasing pressure to support more services.
While there’s a clear shift to support new services that are continuously being added to the mix, respondents made clear that traditional services aren’t going away. Consequently, service providers are tasked with profitably supporting a growing number of services as indicated by the following:
- More than half (55 percent) of respondents indicate that their organizations support more than 10 services, and one-third support more than 16 services.
- 66 percent indicated that they plan to add one or more services to their portfolio.
- Two-thirds of respondents agreed that increased demand for services is a key trend, the second highest-rated category.
As a result, the vast majority (78 percent) are facing more pressure to launch new and existing services.
3. Addressing market demands places a premium on efficiency.
Service providers are clearly being tasked with doing more. What’s also clear is the realization among respondents that these expanding capabilities can only be realized through efficiency gains. When asked about their business priorities, “Increase efficiency of service delivery operations and customer management” was the number one response (73 percent).
4. Service Providers are impeded by current approaches and technologies.
As businesses look to expand their capabilities while maximizing efficiencies, many are hindered by their service delivery approaches and technologies. When asked whether they were using a service delivery platform to automate and speed service delivery, a significant number (35 percent), responded no. Of the organizations that were employing a platform, 68 percent were using a home-grown solution.
Organizations with home-grown tools are clearly at a disadvantage, as the vast majority of these respondents were lacking an array of capabilities essential in streamlining the order-to-cash cycle. For example, 74 percent don’t have a services-ready catalog; 70 percent don’t have capabilities for usage metering and billing; and 66 percent lack end-to-end automation.
Conclusion
More than ever, customer success is tied to the speed and efficiency of the applications delivered. The faster apps can be developed to innovate, the faster they can respond to changing customer demands, emerging opportunities and competitive threats. When providers are able to deliver the services that speed application innovation, organizations can then begin to address their most urgent requirements—and capitalize on a rapidly expanding market.
In responding to these opportunities, it is recommended that you look to connect with a vendor who offers a breadth of best of breed solutions and resources, to help accelerate all phases of business execution, deliver greater value and fuel rapid growth for customers’ success.
To learn more about the survey’s results, and what they mean for your business, visit here.
Ken Vanderweel is a senior director of service provider solutions marketing within the CA Technologies Global Partner Organization.
