New innovation projects, designed to grow businesses, are doing so by improving customer engagement, a new report by Gartner says.
The findings, based on a poll of 501 TSP (Technology and service provider) CEO from North America and Western Europe, were unveiled during the Gartner Tech Growth & Innovation Conference. These CEOs run businesses with annual revenue from $10 million to more than $1 billion.
New products and / or cost-saving measures are still being implemented, but more investment is going into front-facing roles and sales.
"Customer engagement received the highest investment from an innovation standpoint with 42 per cent of TSP CEOs listing it as one of the top two priorities, ahead of new products and services and significantly ahead of internally focused activities,” said Todd Berkowitz, research vice president at Gartner.
Just like every other CEO, those from technology and service providing businesses are aware of the opportunities digital transformation can bring. However, they don’t see this digital transformation as simply new channels to push their business through, or new ways to drive down costs. TSP CEOs see it as an opportunity to enter new markets and industries, as well.
They said they’re using digital to ‘create revenue/customer value’ (43 per cent in top three expected outcomes) and ‘cross-industry boundaries’ (40 per cent).
Cost reduction (33 per cent) and driving business through digital channels (30 per cent) have been left behind.
“With only five per cent of technology vendors very or extremely effective at differentiating themselves, differentiation continues to be a major issue for TSPs, and it's even harder when the differentiation is tied to product features and capabilities," said Mr Berkowitz.
"Superior customer engagement, which leads to a superior customer experience, can be a powerful source of differentiation, although only when based on real proof, versus simple claims."
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