Digitalization has been a highly central theme in business development and within companies for years. For many companies, this is accompanied by the transition to digital processes and automation. Start-ups with new digital business ideas enrich the market with their innovative solutions. This has led to (almost) every company embracing the cloud. Artificial intelligence and intelligent tools like ChatGPT are revolutionizing both business and daily life. In the era of Big Data and the continuously increasing volume of data, data protection and security are high on the agenda. All these developments have resulted in the business field for IT companies and service providers of all kinds growing enormously and becoming more complex. Even in the midst of the 2020 COVID-19 pandemic, which led to an economic downturn of 4.6 percent, IT service providers, according to Lünendonk, were able to increase their revenues by about 5 percent. In 2022, the average revenue growth was even 13.2 percent, according to the latest Lünendonk study, with a tendency for further increase.

Of course, all these developments bring a variety of challenges that have a direct impact on business fields and future developments. The conflict between Russia and Ukraine has revealed dependencies and unstable supply chains, while rising inflation and the associated uncertainty concern both individuals and companies. Additionally, competitive and cost pressures have increased significantly. These facts prompt companies and service providers to operate even more efficiently and to clearly highlight or sharpen their own unique selling propositions (USPs) to stand out from the crowd. This is happening against the backdrop of a persistent shortage of skilled professionals, particularly in the IT sector, which partly limits the scope for action.

Being sustainably successful becomes a fundamental challenge – both economically and ecologically. This includes, more than ever, acting sustainably and complying with the many newly established legal climate protection and ESG regulations. This not only benefits the circular economy, climate balance, and energy efficiency but also reflects companies placing sustainable actions on their agenda based on their own understanding. The digitalization itself supports resource-efficient actions, as it allows business operations to be made "leaner" through IT support. The increased data processing by IT systems requires additional energy. To achieve companies’ climate goals, the implementation of sustainable concepts is necessary. This includes the entire supply and value chains. Suppliers and service providers, such as IT companies and data centers, can make a significant contribution to the overall balance on the path to climate neutrality by meeting the required sustainability criteria.

Given these demands and conditions, various questions arise, including: How can IT service providers overcome these challenges? How can they align their business model with the future, expand their core business, and continue to grow successfully despite the scarcity of resources?

Some approaches to these questions will be addressed in the upcoming two posts in the blog series on the digital revolution. The next post will focus on the topic of skills and resource shortages and the advantages that IT outsourcing can bring in this context.