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U.S. Firms Shift to Digital Engineering to Speed Development

Enterprises are adopting new approaches as software and user experience become keys to product differentiation, ISG Provider Lens™ report says

The digital revolution in products and development processes is driving many U.S. enterprises to embrace digital engineering services for both technological and business transformation, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2023 ISG Provider Lens™ Digital Engineering Services report for the U.S. finds that a growing number of organizations, especially in the U.S., are shifting away from traditional hardware-focused engineering approaches as digital user experiences become more central to products and services.

“Much of what enterprises are selling today is defined by software and connectivity,” said Gaurav Gupta, partner and global head, ISG Digital Engineering. “Digital engineering is essential to creating maximum value and differentiation.”

For example, vehicles are now judged as much for the information and entertainment experiences they offer as for traditional driving performance, ISG says. Automakers stand out by designing, delivering and supporting outstanding digital experiences — a process that may be informed by best practices in the development of mobile apps and services.

This transition is global but is particularly advanced in the U.S., due to its outsized role in fields such as software, semiconductor and algorithm development, ISG says. While about 40 percent of U.S. manufacturing companies have not yet adopted digital engineering, U.S. industries are warming up to it. In Europe, engineering remains more strongly influenced by traditional industries such as manufacturing.

U.S. enterprises are seeking scalable, cloud-based digital engineering platforms that enable efficient development of applications, user experiences and ongoing operations, the report says. While elements of these platforms can be applied across multiple industries, leading providers are tailoring them to the needs of specific sectors and clients.

Digital engineering service providers are helping enterprises explore new ways to understand customer expectations and to prototype, test and update products, the report says. The accelerating pace of competing product introductions requires continuous, rapid innovation. Because engineering processes are often deeply ingrained in company culture, change management is a crucial part of many client engagements.

“Digital engineering requires a long-term strategy,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Service providers are demonstrating solid business cases for making it a sustained practice.”

The report also explores several other digital engineering trends in the U.S., including the growing importance of engineering for sustainability and the potential of the metaverse for developing user experiences and testing prototypes.

For more insights into the digital engineering challenges faced by U.S. enterprises, along with advice on how to overcome them, see the ISG Provider Lens™ Focal Points briefing here.

The 2023 ISG Provider Lens™ Digital Engineering Services report for the U.S. evaluates the capabilities of 34 providers across four quadrants: Design & Development (Product, Services and Experiences), Integrated Customer/User Engagement, Platforms and Application Services, and Intelligent Operations.

The report names Accenture, Capgemini, Cognizant, GlobalLogic, HCLTech, Infosys, LTTS, TCS and Wipro as Leaders in all four quadrants. It names Hexaware and LTIMindtree as Leaders in three quadrants each and Harman DTS and Persistent Systems as Leaders in two quadrants each. Cyient, IBM and Tech Mahindra are named as Leaders in one quadrant each.

In addition, Happiest Minds is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in three quadrants. Persistent Systems is named as a Rising Star in two quadrants, and Harman DTS and Infinite Computer Solutions are named as Rising Stars in one quadrant each.

Customized versions of the report are available from Hexaware, LTTS and Persistent Systems.

The 2023 ISG Provider Lens™ Digital Engineering Services report for the U.S. is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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