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The impact of digital disruption on ICT companies

Technology firms are being forced to reinvent themselves in the digital era

By Mpumi Nhlapo, Head: Demand Management at T-Systems SA

  • ICT firms are, ironically, among the most affected by digital disruption
  • Hyperscale Clouds have ‘commoditised’ many traditional ICT services
  • Tech companies must move up the value chain and provide a new set of services to stay relevant

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As a technology company, we spend a vast amount of our energy on advising our clients, in various sectors, on the ways that they can smartly adopt new technologies, business models and mindsets in order to survive the onslaught of digital disruption.

It seems that almost every industry is in a state of flux – pushed in new directions by the likes of artificial intelligence, high-speed connectivity, scalable Clouds, smart devices, data analytics, distributed ledgers and more. These technologies are certainly no longer buzzwords, or futuristic concepts. They’re having a direct impact on business, right here and now.

But while we may be the ones talking about the impact of digitisation on different industries, the irony is that ICT firms are also navigating their way through a major transition. Traditional ways of providing technology solutions become increasingly irrelevant in the modern era.

In fact, a recent survey* by Russell Reynolds Associates placed technology and telecoms as two of the industries under the biggest threat of disruption (joining financial services, media and retail in the top five).

Cloud commoditises almost everything

ICT companies are being asked to reinvent themselves as a number of different forces converge, whipping away some of their most stable revenue streams – particularly in the realms of ICT services and desktop support.

Perhaps the biggest factor is the commoditisation of IT services, driven by hyperscale datacentre players, which leverage massive Clouds to provide a vast range of enterprise tech services across the globe.

When this is combined with rapid advances in industrial-grade connectivity, local businesses are suddenly able to access new applications, platforms and infrastructure literally at the click of a button.

Local technology firms must adapt with agility – working with these platforms (rather than against them) to migrate complex enterprise applications into these new Cloud environments. From there, the value lies in orchestrating services from various Cloud platforms, giving clients a single point of contact to manage all their Clouds while guiding them on all the compliance, legal, and data security considerations.

Another way to ride the wave of Cloud disruption is to extend and customise Cloud services to suit specific local market needs. With this kind of deep specialisation – into specific verticals and regions across the continent – ICT firms can effectively move up the value chain and become true strategic partners to their clients.

Exponential technology

Tomorrow’s winning ICT players will be those that apply exponential technologies to local markets, changing their clients’ businesses for the better.

For instance, our work with other technology partners at a large client demonstrated the possibilities when we combined big data with high-speed connectivity, Cloud platforms, modern ERP solutions, and connected devices. The client  now boasts an optimised operational environment, with everything managed by a central control centre, and exciting new innovations (such as drone and sensor technology) ushering in an entirely new era.

But it’s not just about the technology itself. The resourcing model for ICT firms will also shift as we dive further into the digital future. Instead of stacking teams with predominantly permanent staff (often deployed to client sites for extended periods of time), the new model will harness the flexibility of the so-called ‘gig economy’.

Forbes** predicts that by 2020, 50% of the U.S. workforce will be freelancers, in some capacity or another. “The instant gig economy is moving more towards independent professionals that are using mobile platforms and technology to create ecosystems of work they enjoy,” states the article.

For tech firms, the trick will be to harness the pool of talent (both within the organisation and outside its boundaries), matching key skills for specific projects and needs, composing, rotating and dissolving these ever-changing virtual teams to best serve the client’s needs.

Disruptive technologies are affecting every business, including technology players themselves. It’s only by embarking on ambitious, well-considered transformation strategies that a tech firm can expect to stay relevant over the coming years.

*https://hbr.org/2016/03/the-industries-that-are-being-disrupted-the-most-by-digital

**https://www.forbes.com/sites/brianrashid/2016/01/26/the-rise-of-the-freelancer-economy/#2f0b7cf3bdfb

T-Systems in South Africa:

Communications Specialist

Thamsanqa Malinga

Thami.Malinga@t-systems.co.za

+27(11)2547400 (Phone)

+27(0)833017878 (Mobile)

About Deutsche Telekom

Deutsche Telekom is one of the world’s leading integrated telecommunications companies with around 151 million mobile customers, 30 million fixed-network lines and more than 17 million broadband lines (as of December 31, 2014). The Group provides fixed network, mobile communications, Internet and IPTV products and services for consumers and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in more than 50 countries and has approximately 228,000 employees worldwide. The Group generated revenues of EUR 62.7 billion in the 2014 financial year – more than 60 percent of it outside Germany.

About T-Systems

Deutsche Telekom considers the European business customer segment a strategic growth area. Deutsche Telekom offers small, medium-sized and multinational companies ICT solutions for an increasingly complex digital world. In addition to services from the cloud, the range of services is centred around M2M and security solutions, complementary mobile communications and fixed network products, and solutions for virtual collaboration and IT platforms, all of which forms the basis for our customers’ digital business models.

With approximately 47,800 employees worldwide, T-Systems generated revenue of around EUR 8,6 billion in the 2014 financial year.

Since the inception of T-Systems in South Africa in 1997, the company has cemented its position as one of the most successful T-Systems companies outside of Europe. A leading ICT outsourcing service provider locally, T-Systems offers end-to-end ICT solutions in both the ICT Operations and Systems Integration markets. Their extensive portfolio of services covers the vertical, horizontal, IT and TC space. T-Systems South Africa’s head office is located in Midrand with another major office in Cape Town, and 20 further representative offices in locations throughout southern Africa.

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