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Channel must also start to digitally transform

As customers start to transform their businesses Gartner has raised warnings that service providers must also change their approach

Service providers are coming under increasing pressure to keep up with customers as they are asked to support business transformation demands.

Most customers have by now got the message about the need to use technology to change their business processes and that message is being repeated fairly regularly by leading figures in the industry, including only yesterday by Microsoft's CEO Satya Nadella.

As vendors promote the technology they have developed to help customers digitise their operations and get more real time business insights the assumption has largely been that the channel can step in and help deliver those solutions.

But not all service providers are moving quickly enough according to Gartner, with the analyst firm warning that users are looking for 'bimodal' providers that can service existing IT as well as drive the business forward with new solutions.

"Confronted by digital transformation IT leaders recognize the need to innovate more, manage uncertainty better and establish more agility," said Claudio Da Rold, vice president and distinguished analyst at Gartner.

"We anticipate that three out of four organizations will be at some level of bimodal maturity by 2017. Unfortunately, the same can't be said for providers' ability to aggressively transform into organizations that are able to respond to the needs of agile, bimodal enterprises," he added.

The advice is for the service provider to mirror the journey that the customer is going on and increase their own move towards different working styles, with all the technological and cultural implications that will have on the business.

"The speed of digital business not only is dictating a new speed for IT, but a new pace for providers' own internal innovation if they want to remain relevant and competitive," added Da Rold. "While a few service providers have begun to employ bimodal capabilities in some business units, they face substantial cultural and mind-set challenges in scaling this across the organisation."

The analyst house is warning that over the next couple of years supplier relationships will be reassessed and those that fail to demonstrate they can deliver will lose out on the business transformation budget and be left competing for traditional business.

Most of the speech from Nadella at Microsoft's Envision event was directed at customers and he urged them to adopt more digital processes to ensure they could get the most out of technology.

"It is clear that technology is playing an increasing role in everything that we do,” he said “Technology can truly shape growth and how we can use technology to change and stint the landscape of the industries we participate in."

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