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Nearly Half of All Sourcing Investments Leave Enterprises Unsatisfied | Press Release

By | Press Releases, Uncategorized

But in performance rankings, TCS, Cognizant, HCL, Accenture and L&T Infotech are honored for creating best ‘overall experience’ for clients

Despite large-scale investments by service providers, 48 percent of enterprises surveyed by Everest Group are not satisfied with their service provider’s performance. In particular, service providers are performing poorly as “strategic partners” for enterprises and score an average rating of five on a scale of one to ten.

There are also significant gaps in enterprises’ expectations and service providers’ performance with respect to innovation, creative engagement models and day-to-day project management.

“Most service providers are perceived to be technically competent, but technical expertise and domain expertise are considered ‘table stakes’ by enterprises across industries,” said Chirajeet Sengupta, partner at Everest Group.  “Enterprises now expect their service providers to move beyond day-to-day delivery and focus on larger strategic business issues. Unfortunately, service providers still have a long way to go to meaningfully engage clients and become strategic partners, and that is a significant concern for the industry. This research signals the wake-up call and offers service providers guidance on how to strategize their engagement approach and prioritize investments to meet mounting customer expectations.”

In general, enterprises believe that mid- and small-sized service providers bring considerably more innovation and engagement flexibility than their larger counterparts. In fact, enterprises believe some large service providers have become lethargic and complacent and are indifferent to client requirements.

In contrast to these sentiments, five predominantly large service providers received the honor of creating the best “overall experience” for clients, based on client commentary and weighted aggregate ratings given by interviewed enterprises on key assessment dimensions.

  • Accenture: Accenture is perceived to bring market-leading domain expertise to solve complex problems and drive business outcomes.
  • Cognizant: Clients appreciate Cognizant’s approach to becoming their strategic partner as well as its flexibility in commercial constructs.
  • HCL: HCL is perceived to be extremely flexible in commercial models and strong in retaining key talent in its client accounts.
  • L&T Infotech: L&T Infotech is perceived to provide strong commercial flexibility as well as domain competence in the specific industries it operates in.
  • Tata Consultancy Services: Enterprises appreciate TCS’s technical capabilities and initiatives to drive strategic partnership with clients.

These results and other findings are explored in a recently published Everest Group report: “Customer (Dis)Satisfaction: Why Are Enterprises Unhappy with Their Service Providers?” The research summarizes over 130 interviews conducted with enterprises across the globe regarding the capabilities of their service providers with respect to applications, digital, cloud and infrastructure services. The report also details the technology investment priorities of enterprises and opportunity areas for service providers.

***Download Complimentary High-Resolution Graphics***

Key takeaways from the research findings are summarized in a set of high-resolution graphics available for complimentary download here. The graphics may be included in news coverage, with attribution to Everest Group.

The graphics include:

  • (I Can’t Get No) Satisfaction: Nearly half of all enterprises are dissatisfied with their IT service providers
  • Enterprises’ technology investment priorities largely focused on innovation
  • IT service delivery: performance versus value
  • Size matters in selecting an IT services provider
  • The top 5 IT services providers

Everest Group Announces Winners of 2017 IT Service Provider of the Year Awards | Press Release

By | Press Releases

Accenture, Cognizant, IBM, TCS and Wipro again top the list of IT service providers who consistently place among top performers in Everest Group’s PEAK Matrix™ reports.

Everest Group—a consulting and research firm focused on strategic IT, business services and sourcing—today announced the winners of the 2017 PEAK Matrix Service Provider of the Year™ awards for IT services. The awards, now in their second year, recognize IT service providers who have demonstrated consistent leadership in the PEAK Matrix reports issued by Everest Group in the previous year.

In 2016, Everest Group published 21 PEAK Matrix reports, evaluating a total of 73 service providers in various segments of the IT services market. Twenty of the 73 providers are recognized in the 2017 PEAK Matrix Service Provider of the Year Awards.

“Our PEAK Matrix reports evaluate market success—using factors like revenue growth, deals won or renewed, margins generated, and so forth—as well as service capabilities, where the emphasis is on innovation, because that is how providers are differentiating themselves in the eyes of enterprises today,” said Jimit Arora, partner at Everest Group. “Throughout the year, Everest Group examines what providers are investing in, what type of intellectual capital they have, how they’re devising their sourcing strategies, and whether they are experimenting with new service models or engagements with their customers. By taking all of that into account, these PEAK Matrix Service Provider of the Year awards recognize the IT providers that truly set themselves apart.”

The 2017 PEAK Matrix Service Provider of the Year Awards for IT Services comprise:

  • The ITS Top 20 list—recognizing the top 20 providers of IT services (ITS) based on a consolidated scoring of rankings within the 2016 PEAK Matrix reports.

Accenture, Cognizant, IBM, TCS and Wipro won the top five spots (in that order). Accenture (which held the second position in 2016) has moved to the top of the list above Cognizant.

  • Top Leaders and Star Performers—Awarded to IT service providers who appeared in “Leader” or “Star Performers” positions most prevalently within five market segments: IT Services (overall), Healthcare and Life Sciences (HLS); Banking, Financial Services and Insurance (BFSI); Cloud and Infrastructure Services (CIS); and Application and Digital Services (ADS).

Companies recognized either as Leaders of the Year, Star Performers of the Year, or both, include Accenture, Atos, Capgemini, Cognizant, HCL, Hewlett Packard Enterprise, IBM, Tata Consultancy Services, VirtusaPolaris, and Wipro.

Accenture had a dominant presence in the 2017 honors, claiming the No.1 spot in the ITS Top 20 list as well as being “Leader of the Year” in the Overall IT Services and ADS categories. Accenture shared “Leader of the Year” honors with Cognizant in the HLS category.

Cognizant once again made a particularly strong showing, earning the No. 2 spot in the ITS Top 20 list as well as sharing “Leader of the Year” honors in two categories: BFSI and HLS. In addition, Cognizant was named “Star Performer of the Year” in the ADS category.

Capgemini and VirtusaPolaris shared the Star Performer of the Year award in the Overall IT Services category.

Five service providers improved their rankings:

  • Accenture moved from #2 to #1
  • Atos moved from #15 to #10
  • Capgemini moved from #9 to #7
  • CSC moved from #10 to #8
  • VirtusaPolaris moved from #16 to #15

New entrants to the ITS Top 20 list include Syntel (#17), Hexaware (#18) and NTT DATA (#20). Conversely, Fujitsu, Luxoft and Unisys dropped out of the Top 20 leaderboard.

***All winners are listed in the report, “2017 PEAK Matrix Service Provider of the Year Awards” available for complimentary download here.***

“Today’s enterprises must navigate a complex landscape of next-generation and legacy technologies, a global business footprint, and a complex provider portfolio,” said Abhishek Singh, practice director at Everest Group. “The PEAK Matrix Service Provider of the Year Awards are designed to help enterprise buyers identify the best of the best – the IT service providers with strong, broad-based capabilities and successful service strategies that align well with the evolving enterprise IT demand.”

Everest Group Launches Dedicated, Digital Services Research Agenda in Response to Growing Enterprise Needs in IoT, AI, Design and Digital Innovation | Press Release

By | Press Releases

Enterprises, service providers see themselves as digital innovators, but most have only scratched the surface; Everest Group’s Digital Services research practice to identify, inform digital disruptors

Many of the world’s leading enterprises and service providers see themselves as digital innovators whose applications of digital concepts and technologies are cutting edge, when, in fact, these organizations have merely scratched the surface of digital’s disruptive potential, according to Everest Group, a consulting and research firm focused on digital services, strategic IT, business services and sourcing.

To guide organizations in the transformative adoption of the digital ecosystem, Everest Group today announced the formation of a dedicated team and a comprehensive research agenda devoted entirely to digital services. The new Digital Services research practice will address growing enterprise needs for data-based insights into Internet of Things (IoT), artificial intelligence (AI), digital design and innovation, and successful business strategies based on digital concepts.

“Since Everest Group began covering digital services in 2013, the rate of enterprise adoption of digital technology has multiplied,” said Yugal Joshi, practice director at Everest Group. “However, the digital journey is about more than the technologies alone; it is also about the people, processes, design, and innovation philosophy of an organization.

“Unfortunately, many enterprises are pointing to their piecemeal application of digital technology—using a mobile app to engage with employees, for example—and equating that with digital leadership when, in fact, digital leadership is less about these application instances and more about leveraging the interplay of digital concepts and technologies to fundamentally change the structure of their business and even the industry,” continued Joshi. “Our goal is to elucidate this distinction and provide the fact-based analyses and insights that guide enterprises and service providers to move beyond ‘look at our cool technology’ to ‘look at our cool use cases.’”

Everest Group has planned a robust 2017 research agenda focused on digital services, including deep-dives into topics such as IoT, digital marketing, mobility, next-generation and conversational analytics, platforms and disruptive start-ups. Also, Everest Group’s Digital Innovation Index and PEAK Matrix™ assessments will provide insights into the comparative market position of enterprises and service providers in terms of digital innovation.

Furthermore, through fact-based research that imparts reality, the new Digital Services research practice will explore how enterprises and service providers are tapping the interplay of technologies to drive innovation and disrupt their industries.

“Our dedicated Digital Services research program will better serve clients not only by examining a broader scope of digital services but also by zooming in on how these are being used to support business objectives,” said Gunjan Gupta, practice director at Everest Group. “Take, for example, the application of artificial intelligence. Our research will be instrumental in more clearly defining hazy terminology, such as what it truly means to have an AI solution. It will also separate the wheat from the chaff—revealing what works and what doesn’t. And, most importantly, our analysis of market leadership in digital services will clearly distinguish between organizations using AI to simply crunch data versus those using AI to truly support a business objective or drive Transformation with a capital T.”

***Click here for more information about Everest Group’s Digital Services research practice.***

Internet of Things Services Market Will Double by 2020 | Press Release

By | Press Releases

Accenture, Atos, HCL Technologies and IBM are named Leaders in Everest Group inaugural PEAK Matrix™ list of top Internet of Things service providers

Given the huge potential of the Internet of Things (IoT)—most of which is yet to be realized—enterprises are making significant investments in partnership with key service providers to explore new growth areas. As a result, Everest Group expects that the IoT services market will more than double in the next three years, reaching US$18 billion by 2020.

Enterprises are exploring ways that IoT can be used to achieve higher efficiency, enable data-driven decision-making and develop new revenue opportunities through customer-centric products and services.

**Read more about how enterprises are “Seizing the IoT Opportunity”**

With enterprises and service providers considering IoT as their next big opportunity, Everest Group has identified intriguing trends that are emerging from the current adoption pattern:

  • Eighty-seven percent of enterprises are optimistic about the returns on their investments in IoT.
  • The percentage of IoT projects moving from pilot to production has jumped four-fold from 2014 to 2016.
  • All industries are gearing up for IoT adoption, with manufacturing leading the way with 36 percent of IoT adoption across all industries.
  • Developing a strong partner ecosystem is extremely complex and requires disruptive vision.

“Enterprises are increasingly adopting IoT to improve operational efficiency and create disruptive business models,” said Chirajeet Sengupta, vice president at Everest Group. “A number of players across the IoT stack are making huge investments to grab a larger share of the pie, but most fall short on expectations of a transformation partner. Service providers can use this opportunity to draw on their engineering and services expertise and embrace new engagement models to help enterprises with long-term innovation.”

The current use cases of IoT are dominated by the need of enterprises to drive operational efficiency. However, we do expect enterprises to leverage IoT to fundamentally transform their business going forward. In fact, Everest Group has identified four distinct classifications of enterprises based upon the business objectives they hope to accomplish through their IoT initiatives:

  1. Engagers: Engagers represent 17 percent of IoT adopters; these enterprises drive IoT adoption largely for customer engagement and creation of experiences.
  2. Optimizers: Optimizers (63 percent) adopt IoT mainly to solve operational issues and improve internal efficiencies.
  3. Integrators: For Integrators (14 percent), the objective of IoT adoption is growth for the entire enterprise ecosystem.
  4. Innovators: IoT adoption by Innovators (6 percent) results in transformative disruption and “unthinkable” business models.

“Enterprises should adopt IoT across all categories, which will lead to new revenue streams and adoption of new business models,” added Sengupta.

Announcing the IoT Services Market Leaders

In its inaugural Internet of Things PEAK Matrix assessment, Everest Group explores the vision, services suite, scale of operations and domain investments of 16 IoT service providers. Everest Group has identified the following Leaders, Major Contenders and Aspirants:

  • Leaders: Accenture, Atos, HCL Technologies and IBM
  • Major Contenders: Cognizant, EPAM, HPE, L&T Infotech, NTT DATA, TCS, Tech Mahindra and Wipro.
  • Aspirants: CGI, Infosys, Luxoft and Prodapt

***Download Complimentary 4-page PEAK Matrix™ Preview Here***

Trends in the IoT services market as well as detailed insights into each of the 16 providers listed above are provided in the 92-page report, “Internet of Things Services — PEAK Matrix™ Assessment and Market Trends — IoT: Bigger Than the Hype.”  A preview report is available for complimentary download here.

*** Download Publication-Quality Graphics ***

High-resolution graphics illustrating key takeaways from this report can be included in news coverage, with attribution to Everest Group. Graphics include:

  • Internet of Things Adoption is Led by “Optimizers”
  • The Internet of Things Technology and Services Provider Ecosystem
  • Internet of Things Adoption Trends
  • Internet of Things and the Transformation Agenda
  • Internet of Things Adoption: A Definitional Framework

About the PEAK Matrix™

The Everest Group PEAK Matrix is a proprietary framework for assessing the relative market success and overall capability of service providers based on Performance, Experiences, Ability and Knowledge. Each service provider is comparatively assessed on two dimensions: market success and delivery capabilities. The resulting matrix categorizes service providers as Leaders, Major Contenders, and Aspirants. Companies that demonstrate strong upward movement in successive reports are recognized as Star Performers. Everest Group recently announced a recalibrated methodology, in which innovation, intellectual property and technology take center stage.

Insurance IT Outsourcing Market Falls to Lowest Point Since 2011, but Demand for Digital Will Turn the Tide | Press Release

By | Press Releases

Market uncertainty reduced insurance ITO new deal activity by 30 percent in 2015, but demand for digital technologies is expected to increase by 15-20 percent going forward.

The number of new application outsourcing (AO) deals in the insurance sector have fallen precipitously for two straight years, with year-on-year losses of 14 percent and 30 percent in 2014 and 2015 respectively. The total contract value (TCV) of large deals fell in 2015 to $820 million, the lowest level since 2011, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing.

But the demand for digital will turn the tide. Everest Group predicts that demand for digital technologies will increase by 15-20 percent as insurers look to address the evolving customer needs for digital experiences, and this demand will reenergize a long-stagnated insurance ITO market.

“Over 90 percent of insurers agree that adoption of digital technologies is a priority as they seek to grow, optimize and defend their business,” said Jimit Arora, partner and leader of the IT Services research practice at Everest Group. “Digital technology is vital to understanding customer data, improving customer engagement and loyalty, and launching products and services faster than the competition. Unfortunately, 90 percent of insurers also cite significant restraints to digital adoption such as limited budgets, security concerns and a lack of organizational preparedness. The impetus to overcome these constraints will only become stronger as insurers face a ‘disrupt or be disrupted’ ultimatum in the marketplace.”

These findings and more are explored in Everest Group’s recently published report, “IT Outsourcing in Insurance – Annual Report 2016: Disrupt or be Disrupted.” The report analyzes the current market trends and their implications for application services outsourcing in the global insurance sector. Topics include industry challenges, key investment themes, market dynamics and the outlook for 2017.

*** Download Complimentary Abstract ***

Other key findings:

  • In 2015, insurers increased overall offshoring for IT delivery to support their cost-containment efforts. Asia still continues to be the most cost-effective option for application outsourcing services delivery.
  • North America continues to be the most dominant sourcing geography in terms of number of deals.
  • Around 76 large AO insurance deals with TCV of US$9.29 billion are coming up for renewal (2016 to 2020).
  • In 2015, 35 percent of new deals included digital services in their scope of work. Mobility and analytics are the most in-demand technologies, as clients look to adopt digital technologies to differentiate themselves and enhance distribution, product, and core insurance processes.
  • Market uncertainty prompted insurers to adopt input-based pricing models for large AO deals in order to get flexibility in their IT spending.

Life & Pensions Insurance BPO Market Expected to Grow 10-12 Percent as Political Climates Stabilize | Press Release

By | Press Releases

‘Outsourcing is one of the most effective options L&P insurers are pursuing to make their operations cost effective.’

The global life and pensions (L&P) insurance business process outsourcing (BPO) market will grow at 10-12 percent in the next few years, reaching US$2.3 billion by 2017, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing. As political environments in the US and United Kingdom stabilize, new contract signings are expected to experience revival. Also, contracts worth approximately US$450 million will be up for renewal over the next three years.

Amid political uncertainties in the United States (due to the presidential election) and the United Kingdom (due to Brexit), the year 2015 witnessed a lower number of new contract signings compared to 2014; nevertheless, the market continued to expand steadily, driven by scope expansion of existing contracts.

In the future, evolving buyer demands will shape the market as buyers seek more efficient operations—both for cost control and compliance reasons—and more sophisticated digital services for consumers. In response, service providers will differentiate themselves by offering efficient platforms for policy administration, strengthening capabilities around digital customer acquisition, and leveraging robotic process automation (RPA). (Everest Group reports that RPA can yield incremental cost reduction that can range anywhere from 15 percent for offshore operations to as high as 45 percent for onshore operations.)

“Outsourcing is one of the most effective options L&P insurers are pursuing to make their operations cost effective,” said Skand Bhargava, practice director, Business Process Services, at Everest Group. “Outsourcing also helps insurers strengthen their presence in the digital space in order to meet the demands of the modern-day consumer.

“Buyers are looking for one-stop solutions, so service providers with the capabilities to offer end-to-end coverage of the value chain will gain momentum. In addition, buyers are looking beyond just the bottom-line impact and are focusing on top-line performance. Service providers that can help buyers improve their top-line and act as business-transformation partners will remain differentiated in the market.”

These results and other findings are explored in a recently published Everest Group report: L&P Insurance BPO – Annual Report 2016: Breaking New Grounds.”

This research examines the global non-voice, third-party L&P insurance BPO market. It provides detailed analysis of market size and growth, solution characteristics, emerging trends and the service provider landscape.

Other key findings in the report:

  • North America and the United Kingdom continue to be key geographies in the L&P insurance BPO market, with the majority of growth coming from the North American region.
  • Increasing adoption of automation, along with higher adoption of platform-based solutions within L&P insurance contracts, is reducing the FTE-intensive play in rule-based processes such as policy servicing.
  • Providers are strengthening capabilities around value-added services such as RPA, digitalization and analytics via organic and inorganic routes.
  • Regulators across the globe have been enacting a spate of laws, thereby causing a massive upheaval in the insurance sector. Insurance companies need help in setting up the systems required to support compliance with these regulations, which creates an opportunity for insurance BPO providers.
  • Adoption of outsourcing continues to increase among small- and mid-sized buyers, driven by two key reasons: (1) small- and mid-sized buyers typically lack technology platforms for L&P insurance operations, and (2) small- and mid-sized buyers seek cost-effective solutions for running operations in order to remain competitive in the market.
  • Small- and mid-sized buyers now account for more than half of the contractual activity in the L&P insurance BPO market, both by the number of contract signed and by the average contract value (ACV) of signed contracts.
  • Policy servicing and reporting continues to account for the bulk of processes managed by service providers. Claims process remains the second most dominant portion.

Healthcare Providers Will More Than Double Their Spending on IT Services in 2017, Says Everest Group | Press Release

By | Press Releases

New MACRA policies will stimulate IT investments as healthcare providers seek to document quality of care and ramp up patient engagement under new Medicare reimbursement model.

By 2020, healthcare providers will more than double their spending on technology services, which represents an incremental opportunity of over US$9 billion dollars for the healthcare IT outsourcing (ITO) market, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing. The healthcare provider segment is poised to be one of the fastest growing segments in the healthcare IT services market in coming years.

Accelerated IT investments on the part of healthcare providers will be driven in large part by new reimbursement policies taking effect under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Under MACRA, providers will earn more or less depending on the quality and effectiveness of the care they provide. As a result, healthcare providers will continue investing heavily in technology that supports initiatives such as compliance, legacy modernization, electronic health records (EHR) and patient engagement.

“MACRA encourages ongoing technology adoption by US healthcare providers by mandating specific tech-related measures,” said Abhishek Singh, practice director of Information Technology Services at Everest Group. “This will translate directly into four IT investment trends we’ll see develop over the course of the next 24 months. First, performance improvement and cost takeout will be a strategic focus; both are critical for compliance and to raise capital from the market. Second, patient engagement will drive the differentiation strategy. Third, we’ll see a growing urgency for data security. And, finally, we’ll see a market crying out for interoperability, nimbleness and innovation with respect to EHR.”

These results and other findings are explored in a recently published Everest Group report: “IT Outsourcing in the Healthcare Provider Industry – Annual Report 2016: The Big Bang MACRA-economic Theory of Provider IT Transformation.”

The full report provides an overview of the ITO market for the healthcare provider industry, which comprises large health systems, stand-alone hospitals and clinics, pharmacists, physician practices and diagnostic laboratories. Everest Group analyzes the current trends and future outlook of large, multi-year ITO relationships in the provider market, covering market dynamics, the current state of the market, and the future state of the provider IT industry.

Other key findings:

  • The global healthcare (payer and provider combined) ITO market is expected to grow at 12 percent CAGR during 2014-2020, reaching US$68.3 billion in 2020.
  • Demand in the provider ITO market has been concentrated in the larger health systems.
  • Currently, application, development and maintenance (ADM), testing and network services rank highest among the IT services included in ITO deals within the provider segment.
  • Given the consolidation and convergence tailwinds in the market, systems integration (SI), testing and asset rationalization work streams are expected to get a boost in 2017.

Recruitment Process Outsourcing Market Remains Hot, Posting 17 Percent Growth Rate in 2015 | Press Release

By | Press Releases

New deal activity tops 18 percent growth as service providers from all backgrounds, diverse regions taste success in highly competitive, fragmented RPO market.

The global Recruitment Process Outsourcing (RPO) market continued to remain one of the fastest growing single-process HRO markets. Buoyed by a resurgence of growth in the North American market, RPO posted a strong growth rate of 17 percent in 2015 over 2014 and touched the US$2.4 billion mark. A majority of the global growth is attributed to new deal activity, which grew at a rate of more than 18 percent year on year.

From a regional perspective, the United States, United Kingdom and Australia are the relatively more mature and bigger RPO markets, and they account for a large chunk of the global deal activity. Nonetheless, many countries in different regions across the world are emerging as strong RPO markets on their own, particularly in Latin America, Continental Europe and Asia Pacific.

“Across the globe, the key challenge in today’s recruitment landscape is the need to find and engage the required talent, especially for high-skilled roles, and buyers are expecting greater proactiveness and innovation from service providers in that regard,” said Arkadev Basak, practice director, Business Process Services, at Everest Group. “Providers are responding to this opportunity by developing niche areas of expertise, adding talent advisory capabilities, and improving their internal efficiencies, by leveraging technology, providing targeted training, and addressing division of labor fundamentals.”

Over 40 percent of RPO deals are bundled with a technology capability. In particular, many service providers are making dedicated investments in developing bundled RPO offerings that include advanced analytic services.

“Service providers are using technology as a productivity lever as well,” adds Ranjan. “For example, we are beginning to see providers adopting Robotic Process Automation to improve efficiency and save on costs, and we expect RPA adoption to rise rapidly in the future.”

These and other research findings are explored in a recently published Everest Group report: Recruitment Process Outsourcing (RPO) Annual Report 2016 – Opportunities Abound in a Buoyant Market.

This report provides comprehensive coverage of the RPO market across dimensions such as market overview, key business drivers, buyer adoption trends, solution and transaction trends, emerging themes and areas of investment, and service provider landscape.

Other key findings in the report:

  • Single-country RPO accounts for a majority of the deal activity. Interest in Multi-Country RPO (MCRPO) engagements is high; however, the size and scope of such deals is witnessing a downward trend. In fact, very few incidents of global mega-sized deals were witnessed of late.
  • Emerging RPO markets, such as India, China, Poland, and Colombia, which were mostly included as part of multi-country deals earlier, are now increasingly witnessing greater single-country deal activity, characterizing the growing maturity of RPO in these markets
  • While cost reduction is an important RPO driver, operational scalability and flexibility is what most buyers, especially the large ones, seek from an RPO engagement.
  • With growing maturity of the RPO market, inclusion of value-added services, such as employer branding, talent communities, workforce planning, etc., has almost become table-stakes in RPO, especially among second- and third-generation buyers
  • Service providers are increasingly offering separate, more targeted offerings around niche areas such as veterans, diversity hiring and outplacement. Not only does this trend help address buyer needs better, it also provides differentiation for the service provider
  • Almost all major RPO service providers are investing in developing talent advisory capabilities. Such services bulk up the value proposition of existing RPO offerings, especially among the first-time buyers, and can also act as potential door openers for new business opportunities

The RPO market continues to remain intensely competitive and fragmented. Providers from all backgrounds (including staffing, broader BPO, and pure-play RPO) have tasted success in this fast-growing market

Everest Group Expands Research Practice to Meet Rising Demand for In-depth Insights to Navigate Political Uncertainty, Changing Technology | Press Release

By | Press Releases

Global Sourcing executives demand fact-based analyses to remain competitive in environment of rapidly evolving business models for IT, Business Services and Sourcing

Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing, is expanding its research practice in response to increased demand for services in the wake of rising political and technological uncertainty and change. To date, the expansion features office and staffing additions; three new research offerings; and a major redesign of the firm’s digital service platform.

Staff Additions

In 2016, Everest Group has opened a new office in Bangalore, moved to larger offices in Delhi, and expanded its research staff by 26 percent, including the addition of five senior-level practitioners to its leadership team:

  • Patricia Blair, vice president, Digital Strategies, manages the digital business operations for Everest Group, which includes delivering exemplary user experiences via the firm’s digital properties. Most recently, she was with Fossil Group.
  • Gunjan Gupta, practice director, Information Technology Services, is a leader in Everest Group’s Application & Digital Services subscription offering, driving syndicated as well as custom research. Prior to joining Everest Group, Gupta was with CEB.
  • Julian Herbert, vice president, Information Products, provides leadership to Everest Group’s subscription and custom research and leads the firm’s benchmarking offerings in Europe. Herbert most recently ran a business that tracked large construction, infrastructure and oil and gas projects.
  • Anil Vijayan, practice director, Business Process Services, is a leader in Everest Group’s HR Outsourcing (HRO), Recruitment Process Outsourcing (RPO) and Managed Service Provider (MSP) offerings. Prior to joining Everest Group, Vijayan was with Ernst & Young.
  • Megan Weis, vice president, Business Process Services, heads local market efforts in North America, providing leadership in the delivery of custom projects and syndicated research. Weis was with Accenture before joining Everest Group.

New Research Offerings

Everest Group’s research practice continually tracks 200+ global cities, 150 service providers and 44 sourcing functions across Business Process Services and Information Technology Services. In the past year alone Everest Group has released 40 PEAK Matrix reports—highly anticipated assessments of the relative market success and overall capability of service providers based on Performance, Experiences, Ability and Knowledge—and hundreds of other research reports. To this rich research portfolio, Everest Group added three new offerings in 2016:

  • Service Optimization Technologies: analyzes service optimization technologies and their impact on the global services market. Technologies covered include those that have the potential to significantly enhance or augment services and/or disrupt the market. Examples include analytics, the Internet of Things (IoT) and Service Delivery Automation (SDA), including both robotic and smart process automation.
  • Healthcare & Life Sciences BPO: comprehensively analyzes the key dynamics of the high-growth healthcare market, focusing on the business processes specific to these industries.
  • IT Services Forecaster™: examines industry growth trends and compares performance among major IT services providers. In partnership with DeepDive Equity Research, Everest Group has developed a systematic methodology to conduct extensive analysis of true growth (organic, constant currency) across 19 IT services market segments.

Enhanced Digital Services

With a treasury of original research, thought leadership and case studies to offer, Everest Group embarked on a website redesign project in 2016 to make relevant data easily accessible and actionable in just a few clicks. The new website and reports portal design, launched in September, features a powerful search function, viewing features and collaboration tools.

Business leaders and sourcing executives today are sailing on turbulent seas and are in dire need of sound data and analysis to help them find their way,” said Eric Simonson, managing partner, Research, Everest Group. “This has been a banner year for our research practice at Everest Group, not only in terms of delivering the fact-based research and analysis our clients need to support their critical decision-making processes, but also in terms of proactively expanding what we have to offer—our research offerings, digital access to our data and insights, and, most importantly, the talented team that makes it all possible.

Surge in Onshoring Shapes Global Sourcing Market | Press Release

By | Press Releases

Despite macroeconomic uncertainties and reduced investor confidence, global sourcing industry witnesses stable growth in 2016

The global sourcing industry has experienced a surge in setup activity in onshore locations, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing. The proportion of onshore versus offshore delivery centers jumped from 45 percent in 2014 to 52 percent for the period of 2015-H1 2016.

Onshore setup activity increased among the top 20 service providers, with North America’s share surpassing 2012 levels after experiencing significant declines in 2013 and 2014 due to a global slowdown. North America is the most favored onshore location followed by Continental Europe.

According to Everest Group, the factors contributing to this rise in onshoring include:

  • a need for a deeper talent pool to support complex services,
  • the desire for easier coordination and better alignment/training with clients,
  • new data security regulations
  • tier-2 onshore locations gaining credibility for service delivery.

Overall, the global services market grew at a rate of 8-10 percent in 2015, reaching US$161-166 billion, a slight slowdown compared to the 9-11 percent growth rate of 2014.

“We expect that the global services market growth will be lower in 2016—likely 7-9 percent—due to the overall macroeconomic slowdown, currency fluctuations and volatility in equity and investment markets,” said Anurag Srivastava, vice president and director of the Global Sourcing practice at Everest Group. “Political instability associated with Brexit in the United Kingdom and the Trump presidency in the United States will continue to affect the growth rate as well.”

Global technology spending remained flat in 2015, a statistic that obscures the impact that new technologies are having on the industry.

“Going forward, countries such as India are expected to witness a slowdown in the growth of IT services exports, although digital services will continue to grow at a fast pace,” added Srivastava. “Analytics will be one of the key contributors of growth in the BPS segment; conversely, adoption of technologies such as automation will result in a decline in contract sizes and revenue growth.”

These findings and more are discussed in Everest Group’s recently published report “Global Locations Annual Report 2016: Persistent Growth in Uncertain Times.” This research offers insights into the size and growth of the global services market, global services exports by regions and country, an update of locations activity by region and country, and trends affecting global locations (changes in investment environment and exposure to various risks). It also provides industry-leading comparison and analysis of key changes in maturity, arbitrage and potential of global delivery locations through Everest Group’s unique MAP Matrix™ analysis.

Other Key Findings

  • Asia-Pacific (APAC) share of market has been consistently declining since 2012 but continues to constitute more than 60 percent of the share of the global services FTEs. India and the Philippines account for more than 90 percent of the share in the APAC region. APAC also holds the largest share (more than 70 percent) of the global services market in terms of revenue.
  • India and the Philippines retained their leadership status in the global services market, continuing to hold more than one-third of the share in new delivery center setups globally.
  • Nearshore Europe witnessed strong growth in activity during the period of 2015-H1 2016, emerging as the second largest region after Asia Pacific, with the majority of new center activity in Poland, Ireland and Romania.
  • New center setup activity increased in 2015, surpassing pre-2013 levels and reaching a new high since 2011.
  • All locations witnessed a decrease in GIC activity during the period of 2015-H1 2016. In total, global in-house center (GIC) setups continue to outnumber service provider setups. In terms of percentage share, service provider setups exceeded GIC setups for the first time during H1 2016 since dropping below in 2013.
  • Among all regions, Nearshore Europe witnessed the largest increase in new center setups in 2015 compared to 2014.