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Looks like it’s time to acknowledge the move to digital

From Wells Fargo IT/BPO Services Weekly – Thought of the Week:
Separating From the Pack. This week highlighted that while discretionary demand remains strong, particularly in “digital” (e.g., omni-channel, mobility, analytics, etc.) areas, not all providers are benefitting from it equally. Those doing well have been ahead of the curve in investments (both organic and inorganic) to reposition their businesses to these emerging areas of demand and are led by Accenture (ACN) and Cognizant (CTSH), in our view. After two years of uneven discretionary spending, clients appear to have placed a higher priority on digital initiatives and have become more consistent in their deployment of budget dollars. Much of the current digital work is helping clients to “digitize” their existing systems, architectures and processes, along with some digital front-end development and agency/creative work. While clearly requiring foresight and investment from providers to position their businesses (both with the right skillsets and appropriate demand-creating front-end resources), digital enablement seems to us to be a natural evolution of IT services work as technology architectures evolve. It is the next phase of digital (for clients: allowing them to explore new business models and turn the significant amount of data now being captured into a business advantage; for providers: building increasingly IP-enabled [intellectual property] solutions) where we believe there will be even more separation amongst providers as a new approach will be required, in our view.

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