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Rise of Premium Boutique IT firms

Devendra Deshmukh Aug 12, 2016

SME ISVs Digital Technology

Digital technology is rapidly transforming the way industries function and how leaders and organizations can respond. Selling on value over price is therefore going to drive next wave of outsourcing. Premium boutique IT service companies are uniquely positioned on exactly this model. Many top high-performance companies consciously consider building supplier portfolio of boutique IT services than run of the mill system integrators mainly because it can save significant amount of costs on certain types of engagement and services.

We are witnessing faster growth rates for premium boutiques as compared to large & bottom-feeder vendors. Chief Digital Officers prefer such vendors for their specialized skills and small sized innovation with faster delivery.

A boutique vendor who can deliver quality work has a stable and productive team with great communication skills and good business ethics will surely stand out in the chaotic IT services market, and can therefore demand a premium price. These kinds of vendors do not cease to prove a point that a lower rate isn’t actually cheaper if it takes twice as long to deliver, and with poor quality. Challenge for boutique IT vendors is to keep laser beam focus on emerging technologies and maintain culture driven work-environment that delivers value at higher scale.

Big firms struggle to meet this current changing dynamics of market. Such large ISPs are typically not driven and motivated to build capabilities that fuels innovation.

Challenges faced by large enterprise IT services providers (ISPs)

Today large enterprise ISPs are facing the heat as these ISPs are constantly facing challenges on many fronts in today’s complex and volatile market condition such as:

  • Operating on higher costs and failing to control it due to huge facility, management and logistics.
  • Disconnected from the evolving dynamics of fast paced market trends.
  • Dysfunctional and highly complex organizational structures that eat up fast decision making.
  • Misalignment with customer's changing needs.
  • Lack of agility to transform and adapt to next generation technologies.

These large enterprise ISPs are very comfortable with high-revenue-large-multi-million enterprise technology driven projects which makes them underperform in projects which require smaller size innovation and projects managed with agile processes. Premium Boutique vendors fill this gap very successfully.

Why go with Boutique consulting firms?

Unlike bigger firms who resist change, small to medium boutique firms typically have the following characteristics:

  • Very lean organization structure that makes them flexible and nimble.
  • Highly agile engagement model that ensures client intimacy.
  • Stay vested in future capabilities and strategic reserves.
  • Infused with innovation-driven work environment.
  • Advantage of strategic local offices.
  • Focus over emerging technologies.
  • Sell on value rather than price.

All these above reasons points towards raising shift from large IT firms to smaller ones as a partner of choice for IT consulting and co-partnered project work.

Potential saving and value addition resulting from building a portfolio of boutique IT firms within your supplier mix is worth the extra effort.

e-Zest is a leading digital innovation partner for enterprises and technology companies that utilizes emerging technologies for creating engaging customers experiences. Being a customer-focused and technology-driven company, it always helps clients in crafting holistic business value for their software development efforts. It offers software development and consulting services for cloud computing, enterprise mobility, big data and analytics, user experience and digital commerce.