Spotlight

Report:

The Forrester Wave™: Digital Transformation Services, Q4 2023

How does Forrester define the Digital Transformation Services market in 2023?

Enterprises face an increasingly volatile macro environment and changing client expectations requiring organizational transformation. Digital transformation initiatives historically show disappointing results, making clients seek multidisciplinary service providers that can orchestrate value-aligned change roadmaps while lowering implementation risk. Service providers have responded by adding diverse skill sets, investing in verticalized transformation playbooks and accelerator assets, and increasingly tying remuneration to measurable client outcomes. Successful providers must maintain versatile transformation playbooks, influence the entire C-suite to foster cross-silo collaboration, and actively promote flexible pricing schemes including outcome-based and risk-sharing contracts.

Key Facts for The Forrester Wave™: Digital Transformation Services, Q4 2023 in 2023

How did the Digital Transformation Services market evolve in 2023?

What product features are required to be included in this year's evaluation?

What are the common features of top products in the Digital Transformation Services space?

No common features specified.

Scope Exclusions

Inclusion Criteria

Vendors must, among other requirements:

Offering Strengths — Relative Weighting

Strategy Strength — Relative Weighting

FAQs

Q: What does this research cover?

A: This research covers a 21-criterion evaluation of 15 digital transformation services providers across three high-level categories: current offering (business strategy consulting, technology transformation, organizational transformation, and transformation delivery), strategy (vision, innovation, global delivery strategy, partner ecosystem, talent strategy, and pricing flexibility), and market presence (revenue, number of customers, and number of projects).

Q: Who should use this research?

A: Transformation leaders should use this research to select the right digital transformation services provider for their needs. The report helps buyers understand each provider's strengths and weaknesses, evaluate vendors based on their specific requirements, and compare providers across key criteria. Organizations can use the Excel-based vendor comparison tool to adapt criteria weightings to their individual needs and make informed purchasing decisions in the digital transformation services marketplace.

Q: What are the mandatory features of vendors included in this market?

A: All vendors included must offer comprehensive digital transformation services spanning technology transformation, organizational transformation, and transformation delivery dimensions, along with related capabilities and assets for delivering holistic digital transformation services to clients. They must generate over $1 billion in service revenue and have established Forrester mindshare with recognition among competitors and clients.

Q: What are some reasons for not being included in this report?

A:

  • Service revenue below the $1 billion threshold
  • Incomplete offering that does not cover all three required dimensions of digital transformation services
  • Lack of sufficient market presence or Forrester mindshare
  • Insufficient recognition among competitors in the digital transformation services market
  • Limited client feedback or engagement history with Forrester research interactions
  • Declining to participate in the full Forrester Wave evaluation process

Q: What should buyers consider when evaluating products in this market?

A:

  • Maintain a repository of versatile transformation playbooks that can be adjusted to company specifics, drawing from verticalized and maturity-adjusted approaches
  • Ability to influence the entire C-suite and foster collaboration across organizational silos to turn isolated digital initiatives into enterprisewide transformation plans
  • Willingness and ability to actively promote flexible pricing schemes including time and material, fixed-price, outcome-based, or risk-sharing contracts
  • Capacity to balance speed to value with risk appetite and investment capacity
  • Track record of adjusting engagement terms during times of uncertainty and constrained budgets
  • Capability to support both core digitization for efficiency and customer experience-driven rapid innovation depending on organizational needs

Q: How has the Digital Transformation Services market evolved in 2023?

A:

  • Enterprises learning that there is zero intrinsic value in modern technologies alone
  • Technology modernization must be paired with modern ways of working, change-confident culture, new talent strategies, and fluid organizational structures
  • Service providers adding diverse skill sets to orchestrate multiple dimensions of required change
  • Heavy investment in verticalized transformation playbooks and accelerator assets to increase speed to value and lower risk
  • Increasing trend of tying remuneration to measurable client outcomes, with some providers taking on 100% of execution risk
  • COVID-19 pandemic as a defining moment for service provider relationships based on flexibility and willingness to adjust engagement terms
  • Growing emphasis on outcome-based pricing and risk-sharing contracts
  • Movement toward seamless transitions between time and material, fixed-price, outcome-based, or risk-sharing contracts

Q: What differentiates Strength of Offering vs. Strength of Strategy?

A: Current Offering (vertical axis) evaluates the strength of existing capabilities including business strategy consulting, technology transformation, organizational transformation, and transformation delivery - focusing on what vendors can deliver today. Strategy (horizontal axis) evaluates forward-looking elements including vision, innovation, global delivery strategy, partner ecosystem, talent strategy, and pricing flexibility - focusing on the vendor's ability to sustain and evolve their position in the market.

Reference

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