Tag: Business models

Everest Group Advocates New Paradigm for IT—’Systems of Growth’—A Platform-based Model Centered on Revenue Enablement

With increasing disruptions to traditional business models and the rapid adoption of exponential technologies such as Web 3.0, the metaverse and 5G, enterprises need a new technology strategy to compete in the market.


DALLAS, November 1, 2022 — The role of an IT team is no longer as “simple” as keeping the infrastructure running efficiently; today, IT organizations also are charged with driving business growth, change and innovation and meeting sustainability targets. To be able to innovate and differentiate at enterprise speed and scale, IT organizations must adopt Systems of Growth thinking, according to Everest Group.


What is Systems of Growth thinking?

Systems of Growth thinking is when both enterprise and IT leadership view the role and scope of the IT organization as a vehicle to fuel, manage and/or respond to disruption at enterprise scale and speed. An IT organization that adopts Systems of Growth thinking strives not only for operational efficiency, but also to contribute directly to business growth. Within a System of Growth, IT doesn’t just run applications; it manages platforms. An IT System of Growth doesn’t merely “own” the infrastructure, it orchestrates it. An IT System of Growth focuses on being a revenue enabler rather than a cost center.


“As organizations across industries claim to be technology firms, CIO and IT leaders are getting a seat at the table to shape the organization’s growth strategy,” said Ronak Doshi, partner at Everest Group. “A platform-based operating model that measures the platform for its growth and experience outcomes is at the center of the Systems of Growth thinking.”


“Traditional enterprise budgeting methods look at IT spend as a percentage of revenue to account for upkeep and maintenance of systems, and this leads to a constant struggle to find budgets for change initiatives,” said Nitish Mittal, partner at Everest Group. “An organization with a Systems of Growth mindset looks at IT spend as a lead indicator for future growth, and its IT funding model is based on growth and experience return on investments.”


“IT organizations struggle with legacy applications and siloed systems,” said Chirajeet Sengupta, partner at Everest Group. “Systems of Growth thinking helps them break enterprise siloes and use the power of hybrid cloud infrastructure, the enterprise data lake and AI/ML to orchestrate platforms that drive revenue expansion.”


Why is a Systems of Growth mindset critical today?

With increasing disruptions to traditional business models and the rapid adoption of exponential technologies such as Web 3.0, the metaverse and 5G, enterprises need a new technology strategy to compete in the market. Systems of Growth strategies are vehicles to fuel, manage and/or respond to disruption at enterprise scale and speed.


To remain competitive, enterprises using Systems of Growth thinking will:


  • Track and respond to the technological disruption that is happening both inside and outside their defined industry boundaries. (Most disruption elements permeate industry boundaries.)
  • Balance their “change versus run” priorities.
  • Enable collaboration with a broad set of ecosystem participants, which could be internal and/or external to the enterprise. In fact, most use cases will be inter-enterprise and/or inter-industry implementations, with a few contained intra-enterprise use cases serving as the exception.
  • Adopt a platform-based operating model to orchestrate technology and the ecosystem. This model is designed with software at the center and services wrapped around it to deliver each transaction.


Systems of Growth thinking will result in product, channel and business model innovation appropriately shaped by the nature, scale and complexity of disruptions.

In its Digital Services State of the Market Report for 2022, “Systems of Growth – Building a Platform-based Operating Model to Innovate and Differentiate at Enteprise Speed and Scale,” Everest Group investigates the reasons why enterprises should adopt a Systems of Growth strategy, which involves investments in data, platforms, customer journeys, process maps and ecosystems.

***Download a complimentary abstract of the 2022 Digital Services State of the Market Report***


About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

The Best is Yet to Come in Services … or is It? | Sherpas in Blue Shirts

My wife and I are like the service industry, particularly the arbitrage-based talent service industry – maturing rapidly. These days, while we think about how we’re moving into our golden years with the prospect of being surrounded by loved ones and hopefully grandchildren, I think the prospect for the service industry is quite different. Sure, our income slows as we age. But we’re aging gracefully, and my wife seems to get sweeter every year. But I feel the prospect for the service industry is different.

There is no doubt that, as the service industry matures, there are some very unpleasant aspects. We see profit margins being squeezed, particularly as they face the difficult challenges of shifting to different business models, driven by digital and automation. We’re seeing signs that the Indian service providers that have been flexible and highly attentive are now displaying less-pleasant attributes. Facing slowing growth and shrinking margins, they are pushing back on their clients and adopting some of the less-savory attributes of their more mature cousins, the MNCs. Their behaviors remind of a line in the Dylan Thomas poem – “Rage, rage against the dying of the light.”

I think all industries struggle when they start to mature. But automation technologies will have a huge impact on the service industry and force it into a different service model. My wife and I in old age face less vigor and a series of challenges. But we view this period in our lives similar to lines in a Robert Browning poem: “Grow old along with me! The best is yet to be ….”

So is the best yet to come in services? The industry’s challenges are substantial, and it remains to be seen whether, like a butterfly, the industry can go into a cocoon and come out as a different business model. That is what we hope for. However, any kind of metamorphosis is painful and difficult. That level of metamorphosis is not done easily, and we now see the early stages of the industry wrestling with this challenge.

I think the twin forces of markets maturing and disruptive technologies forcing changes point to a turbulent and painful few years ahead.

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