Trends in Third-Party Service Providers Transitioning To Digital Services

Third-party service providers are redefining how they compete in the new digital world. The pressure to gain market-leading positions intensifies as the new digital business model threatens to shift market share and upend existing market leaders. At the heart of this new business model is a shift away from labor arbitrage and its FTE pricing to a software-defined model and consumption-based pricing. It’s a new world, and I believe it’s important for companies seeking to buy services to be aware of how service firms are investing to position themselves for the digital market.

Here are important questions in selecting providers for digital services: Is this firm just washing its products in digital technologies but has yet to reinvent its business model? Are you partnering with the provider to help you solve problems and use the best technology to solve those problems? Or are you partnering with the provider because it has the best technology for your problem? Although the two choices may seem very similar, they are quite different. Let’s look at the impact of the providers’ decisions based on investing in digital capabilities and how they are managing talent issues.

Read more in my Forbes blog: