There is no stopping the progress of digitalization at German companies. Supply chains and production processes are benefiting from greater efficiency, and the Internet of Things is connecting people and machines. Today, marketing is also largely digital. These changes call for expertise that even the in-house experts themselves do not always have, increasing the demand for IT services and advice.
Expertise is essential to rapid digitalization
Companies that want to continue serving the market in the future and improve their own position need to confront digitalization head-on. According to Mario Zillmann from Lünendonk & Hossenfelder GmbH, they face innovation and digitalization pressure. To withstand this pressure, more and more companies are turning to IT service providers for help. Yet the rapid growth is also having consequences for the service providers themselves, forcing them to expand their portfolios and constantly enhance their own expertise.
As part of this study, Lünendonk & Hossenfelder spoke to decision makers from leading IT companies about the development of the market and the latest challenges.
The full 2019 Lünendonk® study “Der Markt für IT-Beratung und IT-Service in Deutschland” [“The Market for IT Consulting and IT Services in Germany”] is available for download as a free PDF (only available in German).
The study contains:
- Insights from leading IT service providers on the changes within the industry
- The Lünendonk® study lists on the 25 leading IT companies and the 20 largest SME consultancy firms in Germany
- Overviews of the most in-demand IT services and their development
- Detailed figures on sector- and technology-related sales performance trends over the past few years
- A look at the latest IT strategies and forecasts on the future of the market
- Client companies’ own assessments of their digital expertise, needs and future IT budget
Lünendonk® 2019 study “The market for IT consulting and IT services in Germany”
pdf, 2 MB
Read the study for more information on the changes in the IT service market.
The study was conducted by the market research and consultancy firm Lünendonk & Hossenfelder GmbH.
Read the Lünendonk® study for more on the findings as well as additional opinions and interviews with various experts. The study is available free of charge. See below for a summary of selected key findings, facts and figures.
Demand for back-end IT solutions and agile application development is rising
Services related to back-end IT and agile application development were in particularly high demand in 2018. This demand looks set to continue unabated in the years ahead, according to service providers. In fact, 85 percent of the companies surveyed believe that agile software development will have a significant impact on their business development. That number rises to 89 percent when it comes to back-end IT. Artificial intelligence (AI) has seen the sharpest rise. While just 45 percent of companies recorded strong demand for AI-related services in 2018, 75 percent now expect client businesses to rely on the support of external service providers in the years ahead.
Industrial sector accounts for lion’s share of sales
In particular, the industrial sector stands to benefit from the possibilities offered by digitalization and the associated technologies – which is why it has the greatest demand for external service providers. IT companies were able to generate a whopping 34 percent of their overall sales within the industrial sector. At 16.4 percent, the automotive industry stands out and accounted for the lion’s share of that total. However, this dependency can have a negative impact in times of economic turmoil. The financial services sector and the public sector followed the industrial sector on the list, accounting for 25.2 percent and 9.5 percent respectively.
Room to grow at client companies
The study surveyed IT service providers as well as the client businesses themselves to find out more about their digitalization processes. Of the companies surveyed, 57 percent said they had a moderate level of digital expertise, with 36 percent saying they had a high level of digital expertise. Still, businesses appear to be hard at work further improving these findings and driving forward their own development. In fact, 39 percent said their level of digital expertise had improved since the year prior to the survey.
Business applications at center of planned investments
For IT service providers, it is essential to know what exactly their clients plan to invest in moving forward. Of the companies surveyed, 64 percent envision a significant need to invest in the rollout of new business applications. In particular, they hope that their path will lead them away from standard solutions and on to state-of-the-art software. Automating processes is a top priority for 59 percent of companies, which is why this field has become an investment focal point. From accounting to marketing, a wide range of different applications is imaginable.
For more findings on this topic and many more, read the Lünendonk® 2019 study “The market for IT consulting and IT services in Germany,” available for download here as a free PDF (only available in German).