Over the past three months at PAC, we have embarked on one of the most ambitious studies into the ServiceNow services ecosystem in Europe, examining the overall capabilities of leading firms in the space, as well as their capacity to deliver value across specific workflows – from core IT and CSM modules, to the rapidly evolving creator workflows space. Over the next few weeks, we will publish a series of blogs digging into findings.
While the market continues to evolve, the overarching dynamics have changed relatively little in the past few years. The space is as lucrative as it is competitive, with many of the leading IT Services giants building out the brains and brawn needed to tap into strong enterprise demand for the platform. Demand that many expect will see triple-digit percentage revenue growth over the coming years.
Taking a top-level view of the overall results, it's clear to see many of the leading firms in the space pushing hard to differentiate in some of the more mature workflows. In the IT and CSM space, in particular, many top firms are positioned close to many of their core competitors as the market becomes dominated by core fundamentals – like certified talent pool, proof of delivery, and accelerators. To an extent, in these workflows, enterprises know what they want – and are looking for partners who can bring a solid bench and decent IP to either shrink mean-time-to-value or bring in some fresh thinking to the engagement. This is a market where many of the leading IT Services giants thrive. Accenture has a strong track record in the space and continues to bring fresh ideas to clients, even the highly mature IT and CSM markets.
So too do many of its core competitors. Indeed, the space is primarily dominated by the large system integrators and IT outsourcers – such as Infosys, Wipro, and Cognizant. But in this brutally competitive market, it's becoming hard to stand out from the crowd.
Standing out is hard-fought but somewhat easier in some of the newer patches, such as GRC and Security. And we can see some solid development roadmaps and strategic investments to build out capability in evolving workflows – such as TCS' push to build out compelling security offerings.
For several of these firms, the route to rapid growth has been inorganic. Cognizant added a significant talent pool through the acquisition of Linium. This process has seen the firm build out the most extensive global pool of certified talent in several areas, particularly the high-potential creator workflow space. Similarly, Infosys built out its European delivery through the acquisition of Guidevision. And NTT DATA picked up Acorio, one of the largest pureplay ServiceNow consultancies in the market.
Internally, many are implementing and enhancing internal talent management initiatives. Fujitsu is a prime example of a firm with a robust internal program that identifies high potential talent from across the firm's sprawling service desk business, pulling in identified candidates to training programs that will help them build a career in the firm's growing ServiceNow practice.
We're also starting to see the large consultancies take a bigger swipe at the market. Deloitte has the longest track record in the space overall and boasts one of the largest global talent pools. But KPMG and EY are swiftly catching up, each anticipating strong growth and piling in investment to develop practices. Governance, Risk, and Compliance workloads are natural playing fields for consultancies who bring their audit expertise to supplement engagements. HR transformation, too, is an area we can expect solid growth, with many enterprises looking for guidance and solutions to make sense of the post-COVID workplace.
Crucially, Europe is not a homogenous market – and several leading firms are focusing their strategic investments on solving highly specific regional challenges. T-Systems is a strong example of this, with a 'Made-in-Germany' approach to the market that enables the firm to target highly regulated industries in the region and offer unique hosting solutions that break down barriers to entry for many organizations in the area. Devoteam is another firm with a compelling regional strategy; the firm has developed robust talent pools across Europe and continues to funnel investment to bring the services and solutions craved by businesses across the continent.
Despite differences in approach, the leading firms assessed in the study effectively agreed on one thing – unprecedented investment in their ServiceNow practice is the order of the day. Indeed, many anticipate a lively and lucrative market across Europe as enterprises emerge from the immediate impacts of the pandemic with plans to transform their business altogether. With many looking to ServiceNow to become a core digital platform driving business workflows.
In blogs to come, we will dig deeper into the dynamics driving the market – and how these investments from leading firms will likely impact the space over the next two years.