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Taking innovation to 4 dimensions: EY, Nottingham Spirk and the metaverse

In mid-February, TBR met with EY-Nottingham Spirk Innovation Hub leaders and learned further details about the goals and operations of the relatively new center. The EY team included Greg Sarafin, EY’s Global Alliance and Ecosystem leader; Jerry Gootee, EY’s Global Advanced Manufacturing Sector leader; and John Nottingham, cofounder and copresident of Nottingham Spirk. Three weeks later, Gil Forer, EY’s Digital and Business Disruption leader; Woody Driggs, EY’s Americas Consulting Digital Transformation wavespace leader; and Shubhra Kathuria, Metaverse, NFT and Foundry Leader at EY wavespace, walked TBR through how EY has been delivering wavespace sessions in the metaverse. On the surface, EY presented approaches with stark contrasts between “not much that can’t be made here” and “mapping a client’s journey to the metaverse.”

EY-Nottingham Spirk: Commercialization at speed and innovation with partners

Since TBR’s visit to the grand opening of the EY-Nottingham Spirk Innovation Hub in October 2021, the pace of engagements has stayed consistent with EY’s expectations, steadily increasing as the firm’s leadership, technology partners and clients appreciate the potential for taking innovation straight through to commercialization at scale. According to Gootee and Nottingham, many industrial clients have come to the Innovation Hub looking for both a strategy reset and guidance on how to innovate differently. Nottingham said manufacturing clients, in particular, have been “firefighting” through the current market due to supply and demand imbalances and a generally turbulent environment. Even while focused on operational challenges, these clients continue to be interested in looking to the future and understanding emerging opportunities. Gootee reinforced that EY’s role remains convening a value chain that can drive innovation for clients.

Both the EY and Nottingham Spirk professionals remain committed to commercialization at speed and scale, as well as strategies and business model transformations, product innovation and immersion, and the future of technologies and markets. Gootee, in particular, re-emphasized many of the priorities and characteristics described in detail in October. TBR asked specifically about the role of EY-Nottingham Spirk’s technology partners, such as Microsoft (Nasdaq: MSFT) and SAP (NYSE: SAP), which led Gootee to note that ideally three-quarters of the clients coming to the Innovation Hub will be led through by EY, while the remaining quarter will be shepherded by technology partners. In TBR’s analysis, no other IT services vendor or consultancy has a similarly tightly intertwined engagement structure, which allows and even encourages technology vendors to lead clients through this kind of digital transformation and innovation space.

Wavespace metaverse: Building trust through familiarity and faces

Over the last seven or eight years, TBR has visited more than 30 innovation and transformation centers, soaking in the immersive experiences and trying out the funky chairs. The COVID-19 pandemic forced IT services vendors and consultancies to shift to entirely virtual engagements, and TBR has been predicting an evolution toward hybrid sessions since the start of 2021. Over the last year, TBR has attended some virtual analyst sessions, which included avatars and kind-of-still-beta versions of the metaverse. Just as the EY-Nottingham Spirk Innovation Hub broke new ground in innovation and transformation centers, EY’s wavespace metaverse is breaking new ground in an entirely new space.

Amid a sea of portfolio offerings, Accenture’s TS&A practice helps the company translate tech into business outcomes

Accenture’s TS&A practice provides path into re-architecting clients’ DT programs 

Accenture’s value proposition continues to revolve around the company’s ability to deliver services through integrated scale, addressing clients’ pain points across the various stages of the advise-build-run life cycle. In mid-December TBR had a chance to hear from the leaders of Accenture’s Technology Strategy and Advisory (TS&A) practice, which, in TBR’s view, has been one of the industry’s best-kept secrets as it provides a bridge between the various parts of Accenture’s organization. Launched following the company’s pivot to the Next-Gen Growth model in March 2020, the TS&A practice is part of Accenture’s Strategy & Consulting business, which is focused on architecting and translating the value of technology to both tech and business clients.

TBR estimates Accenture’s IT consulting revenue, which we believe largely maps to the TS&A practice portfolio, grew 30% year-to-year to $4.7 billion in 2021. Backed by over 4,000 dedicated practitioners across seven capability groups — Cloud Acceleration and Innovation, Data-led Transformation, Enterprise Agility, Future Tech, Technology Value Realization, Trust and Security, and Tech Mergers and Acquisitions. Accenture Cloud First is a significant contributor in the TS&A’s performance.  

With tools such myNav, myDiagnostic and Transformation Office at its disposal, TS&A, in TBR’s view, has an opportunity to further accelerate its performance, provided the practice’s account management does not overlap with that of other parts of Accenture’s business, especially as the unit also targets Accenture’s traditional buyer personas, including the CIO and chief technology officer (CTO). Accenture sees CIOs and CTOs as the “new corporate rock stars,” which is a logical position considering Accenture’s established enterprise footprint and decades-long relationships with these personas.

TS&A strives to elevate the value of Accenture’s portfolio around its ability to include innovation while also supporting CIOs and CTOs in, as Accenture calls them, the “5Rs”: Resilience, Restructuring, Reinvention, Reskilling and Reduction. We see Accenture bringing innovation into these discussions in two ways: by embedding and relying on its network of luminaries, who can infuse cross-industry use cases to support engagements; and by utilizing its global network of innovation hubs.

With Accenture again investing in physical centers, including the recent openings of a smart-city-centric hub in Singapore; Innovation Center for Cloud in Indonesia; Advanced Technology Center in Thailand; Innovation Showcase at Expo 2020 in Dubai, United Arab Emirates; and Interactive Studio in Munich, Germany, we believe TS&A has a new set of opportunities to increase awareness of the practice across the company’s broader portfolio, especially as the practice seems to have been withstanding the industry trend of increased employee turnover, with flat attrition over the past year. (See TBR’s Innovation and Transformation Centers Market Landscape for additional details.)  

TBR views Deloitte Digital as the most direct competitor to TS&A; however, Deloitte’s member firm structure often challenges Deloitte Digital to execute on a cohesive strategy, creating an opening for TS&A. Relying on industry- and function-specific playbooks, which Accenture updates as often as every six months, also helps the company stay abreast of new trends and support clients through their transformation agendas. Additionally, the exclusive alignment of TS&A’s portfolio capabilities with partner offerings enhances the practice’s value proposition.

For example, TS&A aligns with Amazon Web Services, Google Cloud and Microsoft Azure for industry solutions; with Atlassian for enterprise agility; with Celonis, ServiceNow and Splunk for data-driven transformation (since we spoke with TS&A’s leadership, Accenture has expanded its relationships with Celonis and Splunk and recently launched the Accenture Splunk Business Group); and Apptio for technology value. This strategy could disrupt Accenture’s partner model if it scales up, especially as the company continues to tout vendor agnosticism. In the long term, though, we believe as services vendors retune their partner messaging and go-to-market efforts to meet enterprise buyers’ expectations, pivoting from being vendor agnostic to capability aligned will help separate winning vendors from laggards. Accenture is in its typical market-making position, and the TS&A practice could signal the company’s plans to make a market-leading change once again. ​ 

TBR covers Accenture’s financial and go-to-market strategies extensively throughout our Services, Digital, Cloud and Telecom research streams. Please see the author of this blog for further questions on Accenture’s TS&A practice.  

PwC’s The New Equation: Convening leadership to build trust and drive sustainable outcomes

A strategy to replace Vision 2020 and underline everything with trust  

In October TBR met with PwC’s JC Lapierre, chief strategy and communications leader; Shannon Schuyler, chief purpose and inclusion officer leader; and Joe Atkinson, vice chair and chief products and technology officer. In a wide-ranging discussion that built on previous briefings and TBR’s continued analysis of PwC, TBR questioned the three specifically on The New Equation, PwC’s long-term global strategy announced earlier this year. Among the highlights:

  • PwC hopes that after it has fully executed against The New Equation people will consider the firm to be the most significant conveners of those who can lead and are leading to change.
  • The internal organizational changes for the U.S. firm that are necessary to implement The New Equation started years ago and will continue to be refined, but The New Equation does not merely equal organizational change.
  • The newly launched PwC Trust Leadership Institute may prove to be a significant differentiator at a time when the Big Four firms appear to be increasingly alike.
  • PwC’s approach to technology, even with the advent of PwC Products and tighter alliances with technology giants like Microsoft (Nasdaq: MSFT) and Google (Nasdaq: GOOGL), remains rooted in people and business challenges; technology alone cannot transform companies and drive sustainable outcomes.
  • Everything circles back to trust, the most raw and simple value driving PwC’s relationships and underpinning the firm’s purpose.

Chapters, playbooks and constructs: Physical images for The New Equation

Using a five-chapter book as a metaphor, PwC’s leaders said the firm’s new global strategy included choices around trust and sustained outcomes, investments to help the firm better serve clients, a rewiring of the organization and how PwC works to better serve its clients, enhancements to the firm’s people experience, and extensions into the larger community — essentially an explicit understanding of the obligations and responsibilities PwC takes on across its entire ecosystem.

Of these five “chapters,” PwC’s leaders explained that the third and fourth — how PwC works and the employee experience — shifted the most from pre-pandemic plans and idea to their current form in The New Equation strategy. In both areas, the realization that “taking care of people” had to be a fundamental aspect of the firm’s larger purpose became clearer when the pandemic focused attention on employee safety, health and well-being.

EY remakes the innovation space

From process to people to place, EY has crafted something unique

Every consultancy has its own process for digital transformation: a mix of design thinking, agile methodologies and sprints, usually starting with a business problem and resulting in application of a new technology-enabled solution (i.e., the “digital” in digital transformation). And nearly every consultancy and IT services vendor brags of end-to-end capabilities, from identifying the business issues to implementing a solution. EY’s Innovation Hub at Nottingham Spirk, however, does something: It actually delivers on that promise.

EY and Nottingham Spirk’s immersive process (enabled by wavespace), honed pre-pandemic and deployed throughout with virtual sessions, unpacks clients’ most intractable business problems and identifies potential pathways to resolving those issues, taking into account change management, technology enhancements and business model implications. Where a wavespace team — or similar group at a peer’s innovation and transformation center — would then hand off the client for the next steps, including innovation around technology changes and minimum viable products, in Cleveland the EY wavespace team simply walks the client downstairs to the Innovation Hub, where the next steps in the process begin immediately. And when the client’s needs include any kind of physical construction or prototyping, the rest of the Nottingham Spirk facility comes into play.

Critically, EY and Nottingham Spirk include every human professional involved in the process at every point in the process. A Nottingham Spirk designer and a Microsoft-certified developer participate in the wavespace engagement at the start, and the wavespace consultants follow the client through their entire journey, bringing life to “end-to-end.” In TBR’s view, combining the innovation process with the technological and physical capabilities of EY and Nottingham Spirk and capturing everything — and everyone — under one roof portends a sea change in how innovation and transformation centers will be run going forward. 

While extending innovation from business challenge consulting sessions into implementation of technology and physical solutions requires a commitment from EY firm leadership and business model shift for EY, the physical space EY and Nottingham Spirk have created warrants attention as a blueprint for future center construction.

Nottingham Spirk contains a maker’s dream space, with the tools, equipment and supplies to craft and test virtually anything. The main floors boast product engineering labs and countless examples of previous work taken from idea to commercialization. Attached to Nottingham Spirk’s manufacturing innovation paradise, EY built an IT innovation hub, outfitted with the latest tools from partners like Microsoft, SAP, Nokia and PTC, and key contributors such as GE Digital, PROS, Simio, and Blue Yonder. On the second floor of the innovation hub, EY’s latest wavespace offers room for large discussions or more intimate problem-solving sessions. Literally atop a hill and graced with a belltower, the facility allows clients, partners and employees to feel adequately physically removed from day-to-day concerns and fully focused on innovation. A visit to the Cleveland facility reinforces TBR’s view that innovation and transformation centers benefit from being physically separated from the vendor’s home offices.

EY-Nottingham Spirk Innovation Hub: To mark the opening of its first Innovation Hub and latest wavespace location, as well as its partnership with Nottingham Spirk, EY hosted a ribbon-cutting ceremony and daylong event for local civic and business leaders, clients in the manufacturing space, and technology partners. TBR attended and spoke with EY leaders, attendees from EY’s technology partners, and multiple EY professionals, including Jerry Gootee, EY Global Advanced Manufacturing Leader (and EY-Nottingham Spirk Innovation Hub visionary); Greg Sarafin, EY Global Alliance and Ecosystem Leader; John Nottingham, Nottingham Spirk Co-Founder and Co-CEO; and Regan Grant, EY Global Advanced Manufacturing & Mobility Marketing Leader.

Humble, focused and ambitious: Infosys’ story in Europe sets the stage for sustainable growth

Infosys’ localization initiative pays off as Europe-based clients opt-in for price-competitive services that are aligned with their overall vision

Hosted at Infosys’ Design and Innovation Studio in London, the Infosys Leadership Forum provided attendees with a glimpse into how Infosys is taking an active role in shaping “digital Europe” from both a skills and capabilities perspective.

While North America remains Infosys’ main hub in revenue-generating opportunities, comprising 61.9% of Infosys’ total sales in 3Q21, Europe’s performance over the past several quarters, including the signing of the largest deal in company history with Daimler AG, highlights Infosys’ relentless execution around the pillars of its Navigate Your Next strategy. Localization is fueling much of this success as more than 70% of Infosys’ talent in Europe are local hires.

Infosys’ Europe sales increased 22.8% year-to-year in 3Q21, marking the third consecutive quarter of double-digit growth, a trend we believe will continue at least through the end of FY22 (March 31, 2022). Additionally, high-quality price-competitive proposals enabled by its large deals team and backed by a rightsized and right-skilled bench helped Infosys expand its share of large deals. Infosys has added two new clients within the $50-plus million category and five new clients within the $100-plus million category since 3Q20.

Infosys realizes the value of being local and continues to invest in regional resources and infrastructure, including the opening of a Cyber Defense Center in Romania and a Digital Innovation Studio in Germany as well as the acquisition of Czech-based ServiceNow shop GuideVision over the past couple of years. The company’s success in Europe is no surprise given regional clients have been warming up to outsourcing as they seek cost-efficient modernized IT infrastructures and business processes. Infosys’ ability to stay true to its core value proposition on the services supply side paired with its aforementioned investments in innovation, talent and portfolio offerings, including Infosys Cobalt, and ability to manage its partner ecosystem has set the stage for the company to expand regional market share.

Investments in environmental, social and governance (ESG) initiatives also help Infosys win regional clients’ mindshare as buyers increasingly seek external support to implement government-mandated decarbonization frameworks. As with any new technology and/or a framework, use cases provide invaluable benefit for all parties. According to Infosys the company became carbon neutral in 2020 — well ahead of many of its peers and partners — and we believe the company can use its own experience as a customer zero use case for enterprise buyers seeking to embark on their sustainability initiatives.

With Infosys already executing on its ESG 2030 vision centered on the theme of “Driving profit with purpose,” the company is also seeking to build trust in the circular economy by retuning its mindset and approach to balancing shareholder and stakeholder priorities, with the latter group increasingly challenging the status quo, compelling Infosys and its peers to pay closer attention to investing in portfolio, skills and partner offerings.

Daimler AG mega deal provides a use case around business transformation delivered at scale

Customer panels and use cases amplified Infosys’ value proposition during both the analyst and advisory meetings as well as the main parts of the leadership forum throughout the day. While this customer insight was relevant and connected to the theme of the event, a discussion around Infosys’ deal with Daimler AG stood out.

Infosys Leadership Forum Europe: Infosys held its first in-person forum after an almost two-year pause caused by the pandemic. The company also made the event available virtually, setting the stage for what might become the norm moving forward for such experiences. During the daylong event, thought leaders, government appointees, client executives, analysts and advisors listened to presentations, panel discussions and client stories centered on the theme Acceleration, Inclusion and Transformation. With ever-important topics around skills, digital transformation, sustainability and innovation, Infosys and participants had thought-provoking discussions punctuated by use cases and client stories that highlighted the company’s capabilities as well as its value proposition as being among the key players able to operate and execute in a post-pandemic world.

Innovation, Amsterdam and an arena: How KPMG teams excel at transformations and technology

After KPMG highlighted the firm’s relationship with Johan Cruijff Arena in Amsterdam at a recent analyst event, TBR requested a follow-up discussion to better understand how the innovation team at the arena had been excelling at many of the key characteristics TBR has identified in consultancies’ and IT services vendors’ innovation and transformation centers around the world. TBR met with Sander van Stiphout, the arena’s innovation lead, and Wilco Leenslag, the KPMG partner leading his firm’s efforts with the arena.

Framed within the context of TBR’s recently published Innovation and Transformation Centers Market Landscape, three key elements of van Stiphout’s work at the arena stood out

Trust is crucial  

First, the arena’s innovation team works with external clients on a subscription basis, a business model rarely deployed by consultancies and IT services vendors. The arena’s clients, which include startups and enterprises testing new technologies and means of enhancing the customer experience, have to fully trust the arena’s innovation team will deliver value for the investment they are paying in subscriptions. TBR believes this business model may be directly related to the unique nature of an arena but could be replicated by a consulting firm or IT services vendor that is willing to bet on collaboration consistently leading to valuable, and deployable, innovation.   

Make your pitch and test your tech  

A second key element that stood out was how the Johan Cruijff Arena serves as a test bed in multiple ways, benefiting the arena’s clients that are startups and the arena itself. Startups not only test their technology solutions in a real-world environment with continuous access to all the variables found in any sporting or entertainment event, but van Stiphout noted that startups also pitch the solutions to internal operational professionals at the arena. For example, the arena’s marketing department must approve a marketing solution prior to testing, enabling startups to pitch and refine solutions with a real-world client before taking it to other clients.

Innovations, particularly from startups, often stall when they meet real-world requirements and clients making investment decisions beyond prototypes. By creating a stage for startups to test run both their product pitch and their product, the Johan Cruijff Arena innovation team helps these companies overcome that innovation roadblock. Additionally, this prototyping method helps to overcome issues associated with the traditional engagement model of working with clients’ innovation departments on pilot projects. Specifically, TBR often hears of emerging technologies becoming “stuck in pilot mode,” a challenge that we feel is directly related to the sheer number of ecosystem participants that are required to scale a solution after proving its value to a client. With the arena-led engagement model, ecosystem entities must first work together ahead of a live trial in the arena, addressing the issue of scaling before testing, not after. 

Innovation delivered at scale shapes the course of KPMG’s next chapter

Relying on strong governance capabilities to bridge relationships between IT and business will enable KPMG to drive new opportunities in the ESG domain

With KPMG CEO Bill Thomas kicking off the two-day Global Analyst Day it was evident that KPMG’s approach to clients’ changing business models due to COVID-19 has compelled the firm to also transform its own operations to better protect and expand client mindshare. KPMG’s internal transformation began well before COVID-19 when in 2019 the firm announced a $5 billion investment in technology, people and innovation.

Two years and a pandemic later, KPMG is accelerating this transition with the latest examples focused on expanding cloud, environmental and social capabilities, bringing the latter two under one umbrella and committing to zero emissions by 2030. With KPMG working toward establishing a bridge between business and IT stakeholders, the firm also continues to invest in its global team of data and analytics professionals, many of whom focused on translating the business value of IT using low-code and no-code technologies. The strategy — folding analytics within its core offerings — reflects strategies of the Big Four and some of its multinational peers.

But KPMG has an opportunity — and a responsibility — to carve a niche in emerging areas developing frameworks for clients that do not report against financial metrics, particularly within the environmental, social and governance (ESG) domain. With KPMG relying on its robust governance, risk and compliance legacy capabilities, the firm is now focused on the “E” and “S” parts of the three-legged framework, and its clients’ stories provided strong examples of how well the firm handles the change and expectations, from finding the right partners to introducing the most suitable solutions, among others.

Clients are eager to innovate; KPMG knows this and executes against it

With innovation — amplified through KPMG’s global network of Ignition Centers — becoming the connective tissue between the firm’s legacy and new business model, KPMG now has the opportunity to drive change at scale. Peers have often pursued acquisitions that have served as the catalyst of change (think Accenture’s purchase of Fjord and PwC’s buy of BGT that later led to the launch if PwC’s BXT framework). KPMG, however, relies on its organic investments, suggesting the firm is taking a measured but strategic approach, trusting that its own capabilities and culture are strong enough to affect change. A successful execution of this strategy requires broader buy-in across all stakeholders, especially member firm partners who are closer to retirement age and might be more resistant to change.

One group of stakeholders that is open to change is KPMG clients, especially those that are also facing pressure from their end customers that have largely been impacted by the advent of digital. According to TBR’s May 2021 Digital Transformation: Voice of the Customer Research, COVID-19 accelerated demand for services supporting both ongoing and new programs. As cloud continues to be the main technology driving digital transformation investments, buyer-vendor relationships are entering the next phase, where parties must account for new ways of engaging and delivery and opportunities are pivoting from projects to products.

In a use case discussion centered on KPMG’s work at the Johan Cruijff Arena in Amsterdam, TBR heard echoes of similar digital transformation engagements, which encompass innovation, emerging technologies and ecosystem collaboration all within a constrained environment but with implications and lessons for smart city transformations. Arenas can provide a useful test bed for emerging technologies, new business models and digital transformations given the mix of activities that take place inside, the opportunities for customer engagement — from before people arrive through to when they leave — and, of course, the opportunity to gather massive amounts of data.

KPMG’s role, as explained by Sander van Stiphout, head of innovation for the Johan Cruijff Arena, included orchestrating the ecosystem by helping the arena find suitable technology partners; ensuring compliance, particularly around the General Data Protection Regulation (GDPR); and providing staff as the arena’s innovation team grew. Most notably for TBR, van Stiphout said KPMG also helped his team create a “new value model,” to include turning the stadium into “a platform for innovation.”

In TBR’s view, shepherding a client’s innovation and digital transformation so successfully that the client becomes an innovation hub for others sets this engagement apart. Van Stiphout added that the arena and KPMG’s partnerships with the city of Amsterdam had been critical to the transformation’s success, and his team and KPMG were now helping Amsterdam officials “get the learnings in place, pave the way for scaling in other cities.” With “lots of demand for an ecosystem approach,” van Stiphout said the arena could now offer consulting to other stadiums on how to run more efficiently, create an environment, and then take transformation to scale.

Turning back to his own staff and echoing a detail provided by Red Hat in TBR’s most recent Innovation and Transformation Centers Market Landscape, van Stiphout noted that his employees now constantly interact with new technologies on a daily basis, which changes their mindset. In TBR’s view, this kind of change, coupled with new and innovative business models, serves KPMG well in describing the impacts the firm can have on clients’ digital transformations.

KPMG 2021 Global Analyst Day: In early June KPMG hosted analysts, clients and executives for two 90-minute virtual sessions during which KPMG demonstrated its evolving value proposition toward becoming a technology-enabled consultancy backed by its ability to trade on trust. KPMG used the time allocated for the presentations wisely and amplified its messaging through four client use cases that not only told the “Why KPMG?” part of the story centered on innovation but also connected to broader societal implications including ever important topics around environmental

EY maintains track record of accurately forecasting and then delivering on the future of blockchain

Paul Brody reiterates past predictions and paints the picture of what he sees on the horizon

It is difficult not to come away from a Paul Brody dissertation on blockchain more excited and optimistic about the transformative power of the technology than when you went in. Compounding the difficulty with taking a contrarian view of Brody’s assertions is the simple fact that he has been right in his predictions from prior years much more often than he has been wrong. The EY partnership seemingly shares this view based on Brody announcing the firm had committed to investing $100 million into his operation to facilitate making his vision a reality.

Highlights from his highly engaging 45-minute opening discussion at EY Global Blockchain Summit 2021:

  • EY made the right bet on public blockchains, which explains why those who embraced private chains earlier on had more highly publicized use cases and why those use cases have seemingly led to the trough of disillusionment.
  • Ecosystem business models are the future. Hub-and-spoke market actions to accelerate adoption do anything but that.
  • Disruption is coming to finance and regulation, and it is coming hard.
  • Programmable money, with Ethereum as the clearing mechanism, will enable the merging of supply chain blockchains with financial transaction chains.
  • Privacy remains a hot-button issue, particularly among the extreme advocates who are not necessarily considering the enterprise requirement for on-chain, permissioned information sharing.
  • Progress will be made; cost optimizing innovations simply cannot be thwarted; they have to be embraced, and blockchain strips cost out of numerous elements of legacy commercial activities across the three pillars of consumers, businesses and governments.

EY’s future-back approach to innovation aligns better to technology adoption than executing against the increasingly anachronistic enterprise-first mentality

“Underneath the business value of blockchain, however, is a rather significant bet to be placed on either deploying public (Ethereum) or private (Hyperledger) blockchains. At the core of this debate rests two issues: the speed of innovation, and the level of security and trust that can be ensured. Innovation, EY argues, happens faster on public networks even if that innovation ameliorates what bad actors inject into the network. In theory at least, even bad actors have a role to play in accelerating innovation by essentially forcing the issues and speeding the time to resolution.” EY blockchain strategy: Betting on public chains with EY advisory for risk mitigation, April 2018

Recent TBR research focusing on blockchain-based supply chain applications indicates blockchain in this context is in the middle of a trough of disillusionment. Brody outlined this idea by way of explaining what EY chose not to do in the past several years. The enterprise-first mentality was a legacy industry success factor when the cost of compute was the limiting factor on digitizing business activity. Continued commoditization and software abstraction increasingly tilts business purchase criteria from infrastructure to productivity gains that software adoption can bring.

Going for large enterprise operating cost improvements led early large-scale initiatives to bet on private chains such as Hyperledger. It followed, in many respects, the Electronic Document Interchange (EDI) playbook of the 1980s and 1990s, called hub-and-spoke, which netted out that the hub could set the standards and the spokes would have no recourse but to follow suit.

EY cited market survey data it believes indicates that private chain had 0.5 participants excluding the founding entity. Additional survey questions stated that 63% of respondents had concern about getting locked into private chains, while 54% believed their existing supplier and service networks were not sufficiently competitive.

Compare and contrast the rollout and now quiet periods for consortiums such as the IBM-Maersk joint venture called TradeLens that took on the monolithic set of interconnected processes that is global trade, and the EY and Microsoft Joint Venture around Royalty Payments that started small, hardened the technology layer, and now provides tangible reference points as they seek to apply this royalty payment shell to multiple use cases. EY states this tracking system for developer royalty payments for games sold through multiple channels has reduced administration costs by 40% and provided a 99% improvement in traceability, from 45 days to less than four minutes, which has enhanced overall community satisfaction.

EY Global Blockchain Summit 2021: TBR has watched the EY Blockchain events blossom in five years from a small coterie of the curious to an army of the passionate. This year’s event had the usual fascinating presentation by EY Blockchain Leader Paul Brody on the current and future state of blockchain’s market maturity that was then reinforced with detailed, technically nuanced breakout sessions that were repurposing of the internal EY Blockchain education modules.

Digital twins, innovation and Godzilla: 3 IT services trends for the rest of 2021

Digital twins, supply chains and IoT fuel near-term opportunities

Increasingly in 2021, IT services vendors and consultancies will expand their offerings around digital twin solutions, reacting to both the maturation of the technology enabling digital twins and the heightened awareness, brought on by the pandemic, of the value of digital twins, particularly in the manufacturing space. Vendors that have acquired manufacturing sector expertise or can build on legacy capabilities around product engineering services should be best positioned to expand within existing clients and grow market share.

As digital twins become part of the supply chain, consultancies will likely use IoT-enabled solutions to mitigate some of the challenges brought forward in the pandemic, when manufacturers over-rotated on supply chain optimization without sufficient consideration for broad-based ecosystem risk. As technology vendors, such as Microsoft (Nasdaq: MSFT), strike new partnerships to bring cloud-enabled analytics to shipping, opportunities for IT services vendors and consultancies will expand for interoperability across supply chains, orchestration of technologies and data, and change management. This will be especially true as manufacturing clients with legacy machinery look to move to the cloud following the pandemic-induced stampede by all industries to cloud.

Key marker for TBR as 2021 unfolds: The number of IT services vendors’ and consultancies’ SAP-specific engagements in the manufacturing sector

Notable recent vendor activities:

  • As cloud becomes Accenture’s (NYSE: ACN) de facto technology driving services opportunities, the company is also building relationships with local leaders to create alternatives to widely adopted supply chain channels that COVID-19 highly disrupted. For example, the purchases of REPL Group and GRA will bolster Accenture’s supply chain consulting and operations capabilities across the U.K. and Australia. At the same time, Accenture collaborated with data intelligence vendor Ripjar to jointly support Royal Dutch Shell’s efforts to enhance its supply chain screening capabilities.
  • In 1Q21 Tata Consultancy Services (TCS) launched the Autoscape Autonomous Vehicle (AV) Solutions suite, which provides data services and tools to accelerate AV development for OEMs, startups and other players in the AV ecosystem. Establishing itself as an innovative partner in spaces such as AV development and leveraging deep domain expertise help TCS pursue high-value business advisory services.
  • Enterprises in the manufacturing sector weathered the worst of the pandemic at the beginning of 2020 and made the necessary run-the-business operational changes to improve operational efficiency and reduce costs. As such, Atos (Nasdaq: ATOS) evolved its relationships and is currently working with clients to ensure their IT environments and workforce processes are modernized, secure and digitally enabled, and their operations are resilient. Atos is offering the benefits of cloud infrastructures through the Atos OneCloud portfolio initiative aimed at modernizing clients’ applications and improving business processes through industry-specialized cloud solutions and acquisitions, such as that of Maven Wave, which added cloud and technology consulting capabilities, notably around Google Cloud, and Miner & Kasch, which added AI and machine learning capabilities.

For additional information, see TBR’s upcoming IT Services Vendor Benchmark in June, which will contain a special section on manufacturing, as well as TBR’s quarterly reports on the vendors mentioned above.

Give me innovation, not transformation — or maybe the other way around

As dramatic operational fluctuations stemming from the pandemic — with companies scrambling to first ensure employee safety and well-being, then secure productivity and push for a return to growth — begin to level off and move into more normal cadences and reliably predictable financial performances, enterprises forced to be resilient and innovative in 2020 have begun expecting increased innovation and transformation from their IT services vendors. Run-the-business and cost-cutting engagements, paired with cloud adoption, drove revenues through the second half of 2020; innovative strategies to take advantage of a massively disrupted market and transformation to take advantage of the cloud will drive revenues through 2021.

After a year of risk and worry and a period focused on optimization and stabilization, enterprises have returned to pilot projects aimed at internal disruption and capturing new market opportunities. This trend increases consultancies’ stickiness with clients in the short term, while opening those consultancies to risks of losing market share as more technology-centric IT services vendors use cloud and an entry to IT transformation. In the words of one IT services vendor senior executive, “Innovation is strategy; transformation is a repeatable framework. Get the expensive consultants for innovation and the cheaper offshore-centric services vendor for transformation.”

Every quarter, TBR’s Professional Services and Digital Transformation teams consider trends across the IT services industry, expected impacts on leading vendors, and opportunities for further competitive differentiation and separation. We then fold these trends into our ongoing research and examine how each vendor responds, often through speaking directly with the vendors to assess their positioning against these trends and expected opportunities.

Quantum market awareness at the top of the stack spurs business innovation to capitalize on anticipated systems innovations

Key findings

Customer engagement increases

Services vendors have increasingly shifted their focus and activities from engineering teams to IT shops, deploying workshops for “ideation” sessions designed to outline critical business pain points. IT decision makers can then tie business needs to certain algorithms once quantum performance specifications have been achieved. To date, activity persists primarily in the financial services, healthcare and pharmaceutical sectors.

Infusing legacy applications with quantum insights will not pose a major hurdle

Prioritizing use cases and mapping them against the viability of current and future quantum system performance poses a greater challenge than actual integration. Numerous firms, including startups, are working on the standard building blocks for these integrations. Basic API connections into legacy applications will allow for the quick exploitation of quantum-generated insights once the science and engineering yields system performance capable of executing the algorithm with the appropriate speed and accuracy.

Logical or virtual circuits build on years of lessons learned in the industry

Logical circuits decouple algorithm development from the actual systems. Noisy quantum systems operate similar to a carbureted combustion engine with various tuning deployed to optimize the actual quantum circuits for the specific application. In addition to heavily capitalized vendors such as IBM and Microsoft, numerous startups such as QCWare, 1QBit, Zapata and Cambridge Quantum Computing have materialized, specializing in quantum algorithm development. Some, such as QCWare, provide a brokering platform to distribute the algorithm workload requests to a multitude of different cloud-based quantum systems as they come online.

TBR’s Quantum Computing Market Landscape, which is global in scope, deep dives into the quantum computing-related initiatives of key players in the space. It lays out the vendor landscape, details current leaders and laggards, and discusses the differing strategies of vendors in the market. The report discusses alliances as well as the tie-ins between quantum computing vendors and their nonquantum computing counterparts. Predictions around use cases and workloads that will benefit initially from quantum computing are explored as well as current customer sentiment around the technology.