Two Back, Three Forward: How will this pandemic change digital transformations? A few early signs

In our new weekly blog series Two Back, Three Forward, we look at two numbers in TBR reports from the prior week as well as three numbers from our upcoming reports, highlighting the analysis TBR provides and the vast amount of data — the numbers — we’re working with every day. It’s all about the data and what that data means to you.

Two Back

508,572, Accenture’s global headcount, as of FY2Q20. Investing in a local presence could pay off significantly for Accenture as COVID-19 sweeps across the globe and makes travel nearly impossible. As TBR Senior Analyst Boz Hristov pointed out in TBR’s initial response to Accenture’s earnings last week, 60% of Accenture’s workforce in India and the Philippines is already working remotely, a number expected to rise in coming weeks. For both local and global clients, the company’s massive scale and proven connectivity should lessen the strains on sustained operations through the pandemic.

12%, TBR’s estimate of Dell Technology Services’ contribution to overall company revenues. With Services far outpacing the growth rate of corporate-level Dell Technologies (5.5% year-to-year in 4Q19 in contrast to 0.8%), TBR expects Services to increasingly become both a lead-in for Dell Technology engagements and an area where the company invests, including through acquisitions and headcount growth. As TBR Senior Analyst Kevin Collupy noted last week, “Dell Technologies Services’ profitability remains above the overall company figure, highlighting the importance of repeatable and standardized services to the company’s profitable growth expansion, and their criticality in offsetting commoditizing core product areas.”

Three Forward

55.7%, IBM’s management consulting 2019 revenues, according to TBR estimates, in three industries likely to be hit hard by COVID-19 fallout. As detailed in our upcoming Management Consulting Benchmark Profile: IBM, the company earned nearly 60% of its 2019 revenues from the banking, consumer goods and manufacturing verticals. Defaults and bankruptcies, supply chain chaos, and depressed consumer spending in a global recession will negatively impact those clients. Spending on consulting may stay constant or even grow — confusion breeds consulting opportunities — but more likely these clients will not be contributing such a large percentage of management consulting revenues by the end of 2020.

6, habits of digital transformation leaders, according to EY’s Tech Horizon survey. TBR analysts previewed the survey findings with EY and noted the substantial shift by EY itself from a firm with technology capabilities to a firm deeply rooted in delivery technology solutions to clients. The six habits were not surprising (they echoed findings in our December 2019 Digital Transformation Insights Report: Voice of the Customer), but in an upcoming special report, we will be highlighting specific findings that resonate most with consulting clients and the consultancies themselves.

$3.67B, annual revenue generated by Egyptian ICT sector exports. According to the Egyptian Information Technology Industry Development Agency (ITIDA), the country’s IT sector has become a substantial part of the overall economy, contributing both jobs and export revenues, primarily from software, app development and maintenance, and technical support services. Why is this important? First, because TBR will be meeting with the ITIDA later this week to learn more. And second, because this global pandemic will force companies to rethink their supply chains for everything, including outsourced IT services, potentially creating opportunity for Egypt’s IT sector to continue growing. Much more to come on this.

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