IT consulting and IT services are enjoying increasing demand. German companies across all sectors are looking to drive the digital transformation forward, but they often require external assistance to do so – a development that also poses new challenges for IT service providers. This study surveyed 78 service providers on this point.
Why IT service providers are among the key partners to German companies today
The Lünendonk® 2018 study: “The market for IT consulting and IT services in Germany”
High growth causes change within the sector
From the deployment of artificial intelligence to UX design and automation processes such as chatbots, digitalization has long since arrived in the German business world. Automakers, banks, public bodies and insurers all benefit from state-of-the-art technology. But not every company has the specialists required for a seamless transformation. As a result, the vast majority of companies need to collaborate with an IT service provider. This phenomenon is leading to huge growth in the IT sector. Often, however, service providers are unable to cover demand, or the service portfolio does not match the expertise customers want. Because of this, the IT service sector needs to change. Mario Zillmann and Christina Rauch from Lünendonk® even believe that IT service providers themselves are in the midst of a digital transformation process.
The study contains
- detailed figures on the growth of the IT sector and the most sought-after services,
- an assessment from 78 IT service providers on the changes the sector is undergoing,
- the Lünendonk® list of leading IT consulting firms and systems integration companies in Germany,
- tips from German user companies on the role if IT service providers as key partners, and
- crucial hypotheses on the future development of the sector.
Read the study to find out how significant the growth potential for IT service providers really is (only available in German).
The study was carried out by market research and consulting firm Lünendonk & Hossenfelder in collaboration with Lufthansa Industry Solutions.
You can read up on all study results and assessments in the Lünendonk® 2018 study “The market for IT consulting and IT services in Germany,” which you can download for free (only available in German). Below are some of the study’s most relevant insights.
Particular demand for automation processes
User companies that are looking to drive forward their digitalization journey require support in a wide range of areas. The highest level of demand is in automation processes. That is hardly surprising, as the use of artificial intelligence and the digitalization of routine tasks can increase efficiency to an enormous extent. The integration of digital solutions into back-end IT and the use of cloud services are also key issues. IT service providers should not underestimate the role of security, which user companies are viewing through an increasingly critical lens. There is also huge demand for advice here.
Sales and market volume rise
In 2017, growth (13.5 percent) was already exceeding expectations (10.8 percent) within the IT sector. That is one reason to be optimistic about the future. The companies surveyed anticipate sales growth of 11.6 percent in 2018 and 11.0 percent in 2019. The remarkable thing about these figures is that the IT service providers estimate that their own growth will exceed market growth (6.7 percent in both 2018 and 2019). This implies that companies expect to gain market share.
User companies want to focus on new business applications
German companies will invest more heavily in digitalization processes going forward. For IT service providers, knowing exactly where the money is going is therefore essential, since it is the only way to adapt their service portfolios to customer requirements. To capture this, the Lünendonk® study surveyed user companies as well as IT service providers. Ultimately, 71 percent named the introduction of new business applications as a major focal point. Reorganizing the application landscape and connecting digital stand-alone solutions is also an area of focus. There is much less interest in orchestrating cloud and on-site solutions – something only 16 percent believe they need to invest in.
Not all planned IT projects are implemented
Of course, implementing IT projects poses challenges. Not all projects are realized in the end, not least because of the often insufficient expertise at companies. The figures here point to significant support requirements. Thirty-two percent of the companies surveyed are unable to implement up to 10 percent of digitalization projects. At 38 percent of the companies, up to 20 percent of projects in this area end in failure. Only 10 percent of companies report no problems of this kind. This also demonstrates the growth potential of the IT service sector.
To find out the exact results of this and other questions, download the Lünendonk® study as a free PDF here (only available in German).