Australian IT services revenue stagnated in 2018: IDC

Australian IT services revenue stagnated in 2018, posting a lower year-over-year growth rate.

A report from market research provider IDC said revenue increased 2.3 percent to $19.27 billion in 2018, a decline from 2017’s 2.8 percent growth rate.

However IDC ANZ market analyst Chayse Gorton said growth rates will improve with the popularity of co-creation partnerships.

"IT service providers that are effective in helping organisations break down barriers between IT and line of business (LOB) teams will be in prime position to win new business," Gorton said.

"IT service providers are helping organisations break down silos through co-creation partnerships, as these partnerships often see staff from multiple departments come together in one environment."

Gorton added siloed sourcing among departments would often result in inefficiencies as IT staff and LOB staff tend to prioritise different IT initiatives. Improved relationships between departments help organisations address strategically aligned.

Partnerships also enable providers to better understand their clients' operating models while also exposing and addressing inefficiencies.

"The trend of forming co-creation partnerships is forcing IT service providers to expand upon their existing capabilities; such as sensing skills, cross-disciplinary skills, and design thinking," Gorton said.

IDC expects more providers and technology buyers will form strategic partnerships in 2019 and help boost IT services revenue growth while simplifying an organisation’s planning and implementation experience.