Category: Press Releases

Outsourcing by Banking, Capital Markets, and Insurance Buyers Shows 25 percent Decline in Total Contract Value in 2012: Everest Group Report | Press Release

Economic, Competitive, Regulatory Forces Lead to Rising Investments in Technology; Next Generation IT Solutions are a Key Investment Priority

DALLAS, July 3, 2013 — A declining market for Banking, Financial Services, and Insurance (BFSI) deals masks a fundamental shift in how large application outsourcing (AO) deals are procured and managed, according to a report just released by Everest Group, an advisory and research firm on global services.

The report, IT Outsourcing in Banking – Annual Report 2013, provides an overview of the AO market for the banking industry, through an analysis of AO contracts over US$25 million in total contract value and more than three years in duration. The report analyzes key trends in market size and growth, demand drivers, adoption and scope trends, emerging priorities of buyers, key investment themes and outlook with regard to large banking AO deals.

In 2012, BFSI buyers continued to remain under pressure to increase revenue, enhance customer experience, reduce costs, replace legacy systems, and meet regulatory requirements. To address these challenges, most banks focused on investments in next-generation technologies such as social media, mobility, big data and analytics, and cloud computing in order to enhance customer experience while simultaneously reducing their operational costs, better managing risk, and improving shareholder returns.

“As financial institutions gear up for new changes, they are making investments in next-generation solutions that enhance customer intimacy and drive efficiency,” said Jimit Arora, vice president of Everest Group. “As technology transformation becomes a key priority for financial institutions, the nature of AO contracts in this segment is witnessing a steady evolution.”

Findings in the report include:

• The US$100-110 billion BFSI ITO market continues to be the largest industry segment of the global ITO industry. While the number of BFSI outsourcing transactions remained flat, total contract value (TCV) witnessed a 25 percent decline as compared to last year.
• A majority of BFSI ITO deals originated from EMEA (Europe, Middle East, and Africa) while North America witnessed continuous decline in BFSI ITO deals over the past three years.
• Bucking the trend in the broader BFSI market, TCV specific to the Banking segment was at its highest level in three years despite flat transaction volumes. Outsourcing activity in retail and commercial banking declined in 2012. Outsourcing in the cards and lending business segments increased.
• Increasing profitability and improving customer experience are the most important objectives impacting the IT investment strategy for the banking industry in 2013.
• Social media, mobility, analytics, and cloud computing emerged as key technological themes for banks for the next 12-18 months.

Innovation through Cloud in Enterprise Awards to Honor Companies with Transformative Cloud Strategies | Press Release

Award Nominations Are Open; Seeking Companies That Have Unlocked New Opportunity, Value Through Cloud

SAN FRANCISCO and DALLAS, June 27, 2013 — Companies with documented success in cloud computing deployments are being nominated for the first-annual Innovation through Cloud in Enterprise (ICE) Awards, produced by Cloud Connect and Everest Group and taking place at Cloud Connect, held October 21-23 in Chicago.  For more information or to submit a nomination, visit: https://www.everestgrp.com/news-events/ice-awards-program/.

The ICE Awards will recognize companies with demonstrated success in leveraging cloud computing to do more than reduce costs. Winners will have transformed business processes and unlocked new value by successfully implementing cloud strategies.

The awards are produced through a collaboration between Cloud Connect and Everest Group. Everest Group is an an advisory and research firm on global services and business transformation through cloud computing. Cloud Connect is a global cloud computing conference and exhibition focused on implementation use cases with annual events in Silicon Valley, Chicago, Mumbai and Shanghai.

The ICE Awards will select winners across a range of industry sectors, including consumer goods and retail, financial services, healthcare and media and entertainment. Additionally, a “Viewer’s Choice” award winner will be selected from among conference attendees via social media at the event in Chicago.

Award Criteria

Qualifying organizations must have at least 2,500 employees with operations in North America or Europe that are consumers of cloud services. Service providers and vendors are encouraged to apply on behalf of their clients and customers. The cloud solution should have resulted in one or more of the following:

• Striking business impact in terms of revenue, costs, pricing, reduced time to market
• Notable technology transformation leading to process simplification, new feature functionality, flexibility, business agility
• Significant positive effects on stakeholders, improved customer satisfaction, improved collaboration, reduced resource consumption footprint
• Achievement of organizational transformation

Companies meeting the criteria should complete the online application. There is no fee to apply. The deadline for submission is 9 p.m. EST, July 26, 2013. Finalists will be announced on August 16, and winners will be invited to share their stories at Cloud Connect Chicago via video and selected main-stage presentations, with details to be announced.

Supporting Quotes

“Our goal is to identify and highlight the most compelling and transformative use cases for cloud computing in the enterprise. The ICE awards gives us an opportunity to collect and share best practices, so that the business agility value of cloud can be better understood and implemented across an array of industry segments.”

— Eric Simonson, managing partner, research, Everest Group

“We’ve seen cloud emerge as much more than an opportunity for cost compression. By launching the first annual ICE Awards at Cloud Connect, in partnership with Everest Group, we are giving enterprises concrete examples of how they can achieve profound and sustainable competitive advantage through the adoption of cloud strategies.”

— Steve Wylie, general manager of Cloud Connect

About Everest Group

Everest Group is an advisor to business leaders on the next generation of global services serving Global 1000 firms. Through practical consulting, original research and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies and management approaches. www.everestgrp.com.

About Cloud Connect

Cloud Connect, produced by UBM Tech, is the defining event of the cloud computing industry. As both a conference and an exhibition, Cloud Connect’s goal is to chart the course of cloud computing’s development by bringing together enterprise IT professionals, developers, infrastructure and service providers and cloud computing innovators. UBM Tech has produced cloud events that define and frame cloud computing discussions since June 2008, including Cloud Summit Executive and Enterprise Cloud Summit at Interop. Cloud Connect is a one-of-a-kind event that encompasses the entire cloud computing ecosystem featuring a full conference program, IT & Developer workshops and an expo.  www.cloudconnectevent.com.

Procurement Outsourcing Market Poised to be Among Fastest-Growing BPO Segments: Everest Group Report | Press Release

Solutions to Traditional Challenges in PO Market Emerge as Buyer Sophistication, Service Provider Capabilities Mature 

DALLAS, June 26, 2013 ─ The Procurement Outsourcing (PO) market is poised for continued double-digit growth as investments in new technologies and buyer appreciation for the unique challenges of PO emerge, according to a new research study by Everest Group, an advisory and research firm on global services.

Since 2007, the PO market has maintained an 18 percent compound annual growth rate in terms of Total Contract Value (TCV), and service providers are embracing expertise and technology driven strategies to maintain that double-digit pace.

To draw higher value from second and third generation PO engagements, traditional penetration models such as increasing the depth and breadth of service coverage are being augmented by new modes of scope expansion, including expansion into other geographies and/or business units, downstream F&A processes and adjacent supply chain activities.

The report, Procurement Outsourcing Annual Report, presents in-depth information on deal volume, contract value, service provider strategies and trends driving the market. Key topics include:

• The PO market grew at 10 percent in 2012, reaching US$1.72 billion in annualized contract value representing US$220 billion in terms of managed spend.
• Consumer goods and manufacturing continue to be the largest adopters of PO. Adoption in financial services and hi-tech & telecom increased significantly in 2012.
• Contracts serving buyers in multiple continents are on the rise. Thirty-eight percent of the new TCV signed in 2012 has a global spread.
• The drivers for PO vary by process scope. Spend reduction is the main driver for outsourcing upstream sourcing activities while operational cost reduction is the main driver for the more transactional Procure-to-Pay scope.
• Starting a PO relationship with spend analytics is an increasing trend. Analytical tools are also being leveraged for minimizing payment errors and improving planning/forecasting.
• While PO continues to focus on indirect spend, inclusion of direct spend category has witnessed significant increase. Consequently, outsourcing Maintenance, Repair Overhaul (MRO) spend and tail-end spend is on the rise.
• IBM and Accenture continue to lead the PO market with more than 50 percent market share (by ACV).
• Accenture, GEP, IBM, Infosys, Procurian, and Xchanging, accounted for nearly 90 percent of the TCV added in 2012.

“Arbitrage-led operating efficiencies account for only 15-20 percent of the overall savings potential from PO,” said Saurabh Gupta, vice president at Everest Group. “A majority of savings in PO is derived from procurement spend reduction and compliance. This only now is becoming efficiently enabled by indirect category expertise and access to new technologies that service providers are now beginning to invest in. With the success and growth that PO has had over the last few years, it provides new lessons in value creation to the entire BPO industry.”

For more information about the report, Procurement Outsourcing Annual Report, or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

Everest Group Report Reveals Stabilization, Risks in Global Services Marketplace | Press Release

Gradual economic recovery counterbalanced by uncertainty surrounding regulatory reform. 

DALLAS, May 30, 2013 ─ Economic recovery brought stabilization to the global services marketplace in Q1 2013, with deal volume and size similar to 2012, according to a new research study by Everest Group, an advisory and research firm on global services.

However, pending regulatory reform, particularly in the U.S., could have a significant impact on the extent of recovery in the global services marketplace as well as the continued evolution of sourcing models moving into the second half of 2013 and 2014.

The report, Market Vista: Q1 2013, presents detailed industry information, including trends and service providers profiles. Key topics include:

• The global services market is showing early signs of recovery, with the number of transactions up slightly from Q3-4 2012, bolstered by revenue and operating margin growth among major service providers.
• Although still in flux, proposed U.S. visa regulations would have an onerous impact on Indian IT service providers, with adverse impacts on the onshore portion of the global delivery model.
• Europe is the preferred destination for a growing number of offshore delivery centers. This investment signals an expectation that growth in Europe will follow both the region’s economic recovery and favorable government incentives.
• A review is presented of current best practices among market leaders regarding reduction of location concentration risk.

“There appears to be a gradual, cautious and thoughtful recovery underway in global services,” said Eric Simonson, managing partner at Everest Group. “Market leaders are making strategic and careful investments in geographies where evidence suggests new demand will develop over the remainder of the year and into 2014. Risks remain, however, and this may be a key reason why the recovery is tepid.”

For more information about the report, Market Vista: Q1 2013 or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

Stream the Market Vista: Q1 2013 Webinar

A replay of the May 23 webinar presenting the Market Vista: Q1 2013 report can be streamed from the Everest Group Website. Visit Market Vista: Global Services Developments in Q1 2013 Webinar to view.

High Buyer Satisfaction and Demand for Analytics and Technology Highlight State of the Global FAO Market | Press Release

US$4.3 Billion Market Sees 10 Percent Growth and Strong Contract Renewals

DALLAS, May 21, 2013 ─ Nearly two-thirds of the annualized contract volume growth in 2012 was contributed by contract extensions and renewals of existing Finance and Accounting Outsourcing (FAO) deals, according to a new research study by Everest Group, an advisory and research firm on global services.

The high levels of buyer satisfaction supporting this trend meant that only 10 percent of the deals that came up for renewal were terminated and mostly not because of lack of performance. The FAO market continues to witness dominance by three large firms, Accenture, Genpact, and IBM. However, competition is intensifying, with market share of the top three providers declining from 68 percent in 2002 to just under 50 percent in 2012.

The report, Finance and Accounting Outsourcing (FAO) – Annual Report 2013, also highlights how demand for new technologies is rising, driven by buyers wanting to unlock additional engagement value. More than half of the contracts signed in 2012 included add-on tools and technologies, such as Business Process as a Service (BPaaS) and other cloud-enabled offerings, especially in the SMB segment. Demand for mobile F&A solutions and dashboards, as well as FP&A (financial planning and analytics) and operational analytics also is increasing.

“We’re seeing technology, global delivery and vertical industry specialization continue to bring innovation and new value to buyers in the FAO segment,” said Saurabh Gupta, vice president at Everest Group. “These dynamics are preserving a highly competitive environment, one where incumbent players are continually challenged by the agility and specialization smaller service providers.”

The global multi-process FAO market witnessed a moderate growth of 10 percent in 2012, showing signs of a mature and stable market. Beyond the desire for cost reduction, process improvement, standardization, and scalability/flexibility drove FAO adoption, emphasizing a cost-plus-value proposition.

With an increasing FAO market maturity, the approach towards F&A transformation has become more sophisticated and practical. A “world-class lift-shift-and-fix” approach is becoming prevalent where the service provider focuses on improving business outcomes vis-à-vis best-in-class benchmarks. At the same time, buyers prefer a more risk-averse “phased or incremental” approach as opposed to the “big-bang” approach.

The report analyzes the global multi-process FAO market, focusing on:

• Market size and buyer adoption
• Value proposition and client satisfaction assessment
• Solution characteristics across contract size, process scope, technology, industry alignment, global sourcing, pricing structures, and performance metrics
• FAO service provider landscape covering service providers’ market share and areas of investments

The report is designed to help key stakeholders (buyers, service providers, and technology providers) identify trends and provides an outlook for 2013. Further, the report also provides a comprehensive coverage of the global FAO market including detailed analysis of market size and growth, buyer adoption trends, FAO value proposition, and client satisfaction, solution characteristics, and service provider landscape. Additional report findings include:

• Europe witnessed the maximum increase in FAO adoption. Share of mid-market and small buyer segments also increased significantly in 2012
• Buyers are increasingly adopting non-advisor-led competitive bidding route for sourcing F&A services
• Service provider performance is up-to-the-mark against the metrics important to FAO buyers, resulting in high satisfaction levels. However, buyer organizations have highlighted some areas of improvements for service providers to work upon
• With respect to the industry alignment, F&A services are increasingly getting industry-specific
• India continues to be the predominant hub of offshore delivery, providers are striving to build a balanced onshore-nearshore-offshore model
• 70 percent of contracts in 2012 included an end-to-end scope as opposed to functional piecemeal approach

For more information about the report, Finance and Accounting Outsourcing (FAO) – Annual Report 2013, other Finance and Accounting Outsourcing reports, or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

Upcoming FAO Report

In June, Everest Group will publish the FAO PEAK Matrix and Service Provider Landscape report, which will classify providers into Leaders, Major Contenders, and Emerging Players based on market success and delivery capability.

M&A Activity Driving But Not Defining the RPO Service Provider Landscape | Press Release

Fragmentation remains due to highly specialized providers’ continued success

DALLAS, May 13, 2013 ─ Merger and acquisition (M&A) activity in the recruitment process outsourcing space is at odds with the ongoing success of smaller, niche players, according to a new research study by Everest Group, an advisory and research firm on global services.

Recent mergers — including Aon and Hewitt, Allegis Group and Talent2, Randstad and SFN Group, ADP and The RightThing, and most recently, IBM and Kenexa — are setting the stage for continued consolidation and economic scale in the industry. At the same time, providers focused on delivering specialized services rather than a comprehensive solution continue to win deals and market share.

“The market continues to sort itself out,” observed Rajesh Ranjan, vice president at Everest Group. “The economic scale made possible through M&A activity will clearly benefit a segment of buyers, but there remains significant value among niche players, as evidenced by the number of deals they’re winning.”

The report, RPO Service Provider Landscape with PEAK Matrix Assessment 2013, looks at how a significant slowdown in hiring volume led to lower than expected growth over the past year. On the back of improving hiring volume, Everest Group expects the 2013 market to grow by 12-17 percent.

To succeed in the US$1.5 billion RPO market, service providers differentiate their offerings by specializing across geographies, industry verticals, job families, and buyer segments. Service providers also offer strategic value-added services and technology-based services, such as analytics and mobile recruiting, in addition to managing their internal recruiter talent to attract new buyers and retain existing ones. Buyers need to understand the service provider’s value proposition in its entirety, while taking a holistic view of their own requirements, to create an effective and successful engagement.

In the report, Everest Group analyzes the global RPO service provider landscape across the following dimensions:

• Market overview and service provider landscape
• 2013 RPO PEAK Matrix and Star Performers
• Key insights into PEAK Matrix dimensions
• Key areas of differentiation and specialization

Findings revealed in the report include:

• RPO market continued its growth in 2012 with record new deal signings
• However, due to a decrease in hiring volumes in North America and Europe, the growth rate moderated to 12 percent
• Everest Group selected RPO Star Performers for 2013 based on the relative year-on-year movement of each service provider on the PEAK Matrix
• Key insights on comparing the top quartile performers and other performers on delivery capability dimensions:
• Market success: Top quartile performers have not experienced runaway success due to the difficulty in creating a “one-stop-shop” for different buyer segments
• Buyer satisfaction: Top quartile performers are significantly better in relationship management
• RPO providers differentiate themselves along multiple dimensions – geographic coverage, industry and buyer size, strategic value-added services, type and source of hires, technology strategy, global sourcing, and internal talent management

The PEAK Matrix scores service providers on criteria that include market success, scale, scope of capabilities, technology capabilities, delivery footprint and buyer satisfaction. Based on the PEAK Matrix evaluation framework, the 25 established RPO service providers evaluated are segmented into three categories – Leaders, Major Contenders, and Emerging Players.

Leaders identified in the PEAK Matrix including Alexander Mann Solutions (AMS), Kenexa, an IBM Company (Kenexa), ManpowerGroup, Pinstripe, Pontoon Solutions, Randstad Sourceright, and The RightThing.

Major Contenders include: Accenture, Advantage xPO, Allegis Group Services, AON Hewitt, Capita Resourcing, Futurestep, Hays, Hudson RPO, KellyOCG, Ochre House, Peoplescout, Resource Solutions, Talent2, and Wilson HCG.

Emerging Players include: Neeyamo, Peoplestrong, Seven Step RPO, and Yoh.

Everest Group also identified the following providers as Star Performers based on their year-on-year movement on the PEAK Matrix (in alphabetical order): AMS, Allegis Group Services, Capita Resourcing, Futurestep, Kenexa, Pinstripe, and Randstad Sourceright.

For more information about the report, RPO Service Provider Landscape with PEAK Matrix Assessment 2013, other RPO or Human Resources Outsourcing reports, or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

Buyers Increasingly Seek to “SMAC” Up the Multi-Process HRO Market by Demanding Value-Added Services | Press Release

Modest Growth in Selected Geographies Overshadowed by Buyer Demands for New Capabilities Enabled Through Social, Mobile, Analytics and Cloud

DALLAS, May 9, 2013 ─ Buyers of Multi-Process HRO (MPHRO) services are looking to “SMAC” as one means of driving value-added services from their service providers, according to a new research study by Everest Group, an advisory and research firm on global services.

SMAC, an acronym for Social, Mobile, Analytics and Cloud, is a nascent but accelerating trend seen in the MPHRO market, where deal volume and transaction value growth are settling into the single digits. Some buyers and service providers see SMAC as a way to extract new value from MPHRO engagements.

The report, Multi-Process Human Resources Outsourcing – Annual Report 2013, looks at the outsourcing of multiple HR functions, called multi-process HRO defined in a value stack that ranges from HR strategy at the top, through higher-level functions such as employee relations, regulatory & compliance, performance & succession, down through transaction-intensive functions such as recruitment, benefits, payroll and finally support infrastructure such as information systems and contact centers.

“Interest around social and mobility solutions to enhance employee productivity and engagement is increasing,” said Rajesh Ranjan, vice president at Everest Group, “On the other hand, HR stakeholders are increasingly looking for analytics services such as business analytics and big data applications, coupled with SaaS applications accessed in a multi-tenancy cloud environment for better decision making at an optimal cost. It can also give service providers the means to deliver new and valuable capabilities, leveraging the sizeable technology investments required across many engagements and driving attractive economics. Beyond the ERP-based platforms, in recent times, we see high interest around MPHRO constructs on third-party SaaS-based solutions such as Workday.”

Buyers also seek seamless experience, better stakeholder management, and other value-added services beyond the SMAC trend. On the other side, service provider landscape continues to undergo major flux with newer entrants, provider exits and a high M&A activity. In such a dynamic space, providers need to align their offerings and capabilities to “up” the buyer experience and satisfaction levels.

Overall, the MPHRO market witnessed a single-digit uptick in new deal signings in 2012 compared to 2010-11, with increased momentum from emerging markets such as Asia Pacific and the mid-market in North America.

The report provides a comprehensive coverage of the 2012 MPHRO market and analyzes it across various dimensions such as market overview and key regional trends, buyer adoption and solution trends, and service provider landscape. Additionally, it includes predictions for the 2013 MPHRO market, and some findings include:

• While the new deal volume is up compared to the last two years, the market grew at a modest pace of ~2% in 2012
• Though the developed markets (North America and Europe) are still underpenetrated, the emerging markets (especially Asia Pacific) are growing faster
• Similar trend is observed in the large market (>15,000 employees) vs. mid-market (3,000-15,000 employees) where mid-market is growing faster though there is ample head room for potential growth in the large market
• Buyers approach HRO in a phased manner from a process scope perspective. Talent management components are often included in the second phase of the MPHRO arrangement
• The MPHRO space was a hotbed for mergers and acquisitions in 2012

For more information about the report, Multi-Process Human Resources Outsourcing (MPHRO) – Annual Report 2013, other Human Resources Outsourcing reports, or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

Recruitment Process Outsourcing (RPO) Seeing Interesting Dichotomy of High Adoption but Diluted Growth According to Everest Group Study | Press Release

RPO Market Projected to Grow 12-17 Percent in 2013

DALLAS, March 20, 2013 ─ The Recruitment Process Outsourcing (RPO) market is projected to grow 12-17 percent in 2013 following the market’s significant slowdown in 2012 due to a dramatic decrease in hiring volumes, according to a new research study by Everest Group, an advisory and research firm on global services.

The RPO market growth slowed to about 12 percent in 2012 and is currently estimated at about US$1.5 billion in annual contract volume (ACV), according to Everest Group’s report, Recruitment Process Outsourcing Annual Report 2013: Dichotomy of Market Exuberance and Subdued Economy. On the other hand, new buyers continue to enter the market at a rapid pace and the market grew by around 50 percent in terms of new deal signings in 2012.

“A significant increase in new RPO deal signings in 2012 had the potential to contribute 25 percent to the market size assuming deals were similar in size in terms of annual hires as in previous years, but the slowdown in hiring sapped the market,” said Rajesh Ranjan, vice president, Everest Group. “Decreased hiring activity affected sizes of both new and existing RPO contracts, thus impacting the overall growth of the market. Despite the economy’s negative affect on the RPO market, buyer interest remains strong, so it stands to reason the RPO market will regain its more aggressive growth pattern when hiring returns to more normal levels.”

Other report insights about the RPO market include:

• Continental Europe and Asia Pacific witnessed a large surge in new deal activity, while the more mature North American and United Kingdom markets settled into a more steady growth pace.
• Strong contract activity in Europe and Asia Pacific lead to a decrease in North America’s dominance over the RPO market.
• RPO drivers differed across regions, posing different challenges and necessitating differing solution elements.
• After rapid growth for two years, adoption of multi-country RPO was moderate in 2012.
• Mid-market companies increased adoption in recent times, signaling RPO is no longer a large market play.
• The competitive environment remains intense with several providers competing fiercely to gain market share but clearer segmentation based on value proposition is starting to emerge.

The research report was based on analyzing over 900 RPO deals and executive level interviews with several RPO buyers and service providers. Service providers covered in the report include Accenture, Advantage xPO, Alexander Mann Solutions, Allegis Group Services, Aon Hewitt, Capita Resourcing, Futurestep, Hays, Hudson, IBM Kenexa RPO, KellyOCG, Kenexa, ManpowerGroup, Neeyamo, Ochre House, PeopleScout, PeopleStrong, Pinstripe, Pontoon Solutions, Randstad Sourceright, Resource Solutions, Talent2, The Right Thing, Wilson HCG and Yoh.

For more information about the report, Recruitment Process Outsourcing Annual Report 2013: Dichotomy of Market Exuberance and Subdued Economy, other RPO or Human Resources Outsourcing reports, or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

Everest Group Market Vista Reports Q4 2012 Global Sourcing Market Transaction Activity Breaks Six-Quarter Slide | Press Release

Webinar on Feb. 6 to Address Review of 2012 and Outlook for 2013

DALLAS, February 5, 2013 ─ The global services market saw transaction volumes increase in the fourth quarter of 2012 compared to the third quarter, ending a trend of declining transaction activity seen over the previous six consecutive quarters, according to Market Vista: Q4 2012, a quarterly market report by Everest Group, an advisory and research firm on global services. A one-hour webinar will be held Feb. 6, at 9 a.m. CST, during which Peter Bendor-Samuel, founder and chief executive officer of Everest Group, will share his perspectives on the state of the global services industry in 2012 and outlook for 2013.

Market Vista: Q4 2012, which analyzes global outsourcing and offshoring activity and contracts irrespective of contract value, found 2012 fourth quarter transactions and annual contract volumes increased 6 and 47 percent compared to the third quarter of last year, respectively. The market saw 401 outsourcing deals signed with an annual contract value (ACV) of approximately US$2.1 billion. Compared to the third quarter, fourth quarter transaction volume and ACV for IT Outsourcing (ITO) deals rose and Business Process Outsourcing (BPO) deals saw similar transaction volumes but a sharp increase in ACV.

“Pent up demand usually propels third quarter activity, but this activity spike occurred during the fourth quarter and ended a six-quarter slide of declining market transactions,” said Eric Simonson, managing partner of Research. “The market at the end of last year was largely driven by ITO activity in the public sector and BPO activity in the BFSI (banking, financial services and insurance) sector. The fourth quarter also saw significant increases in Global In-house Center (GIC) activity and new delivery centers.”

Other fourth quarter 2012 findings include:

• There were 47 major deals reported in the fourth quarter, each valued at over US$50 million in total contract value (TCV), of which one was a mega deal valued at over US$1 billion in TCV.
• The BFSI sector held about 19 percent of total market volumes, similar to the previous quarter, but the MDR (manufacturing, distribution and retail) sector saw sharp increases in both transaction activity and ACV.
• Transaction volumes remained steady in North America while Europe witnessed an increase in activity over the previous quarter.
• The GIC market saw 18 new set-ups, compared to 15 in the third quarter, and one divesture.
• Location activity increased with 45 new delivery centers set up across GICs and service providers. Unlike the second and third quarters last year, the fourth quarter saw more activity in tier-1 locations than in tier-2/3 cities.
• Service providers’ consolidated revenues decreased in the third quarter of 2012 compared to the previous quarter but margins increased during the same period (Financials lag other service provider activity by one quarter).

Everest Group’s quarterly Market Vista reports provide data and analysis of deal trends in the outsourcing and offshoring market, the GIC landscape, and current and emerging locations, as well as key service provider intelligence insights. Everest Group’s industry trends research complements the Market Vista reports through quarterly updates focused on industry-specific global sourcing data, developments and insights across the BFSI, MDR, public sector, healthcare, energy and utilities, technology and telecom sectors.

The report also includes these focus sections:

• Emerging geographies: analysis of labor arbitrage sustainability, operating costs, wage inflation, arbitrage sustainability and currency trends. Cities profiled include Johannesburg, South Africa; Ho Chi Minh, Vietnam; Port Louis, Mauritius; Bangkok, Thailand; Montevideo, Uruguay; Bogota, Colombia; Casablanca, Morocco; and Cairo, Egypt.
• Location optimization insights include focus on impact of recent adoption of data privacy laws in Philippines and Malaysia; United Kingdom contact data center work moving to north of England and nearshore locations; sizeable GCC outsourced contact center market growth and trends; and developed infrastructure and government incentives fuelling growth in tier-2 cities in China.

Quarterly Market Vista reports comprise key developments among 20 leading global service providers. Traditional service provider profiles include Accenture, AON-Hewitt, Atos, Capgemini, Convergys, CSC, Dell Services, HP, IBM, Unisys and Xerox. Offshore-centric service provider profiles include Cognizant, EXL, Genpact, HCL, Infosys, Mahindra Satyam, Tata Consultancy Services, Wipro and WNS. 

The webinar will be held Feb. 6, at 9 a.m. CST; 3 p.m. GMT Summer Time. To register, please visit: research.everestgrp.com/Events/Webinars. 

Market Vista is a subscription service with four reports published per year, including location datasets, Breaking Viewpoint briefings, Market Vista Primer and Global Locations Insights newsletter. For information about the Market Vista: Q4 2012report or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

Everest Group to Present State of Global Services Market and Predictions for 2013 in Webinar on Jan. 23 | Press Release

Accelerated Cloud Adoption and ‘Verticalization’ and Will Drive 2013

DALLAS, January 22, 2013 ─ Everest Group, an advisory and research firm on global services, will present a review of 2012 followed by the firm’s viewpoint on 2013 trends and predictions for the global services market in a one-hour webinar on Jan. 23.

Everest Group’s research analysts will present insights in the following areas:

• Cloud/IT Services
• Business Process Outsourcing (BPO)
• Global Sourcing
• Pricing

“Headlining the global services market in 2013 will be the accelerated adoption of cloud services. We have observed strong buyer satisfaction, which we expect will lead to actual service adoption,” said Eric Simonson, managing partner of Research. “We also expect to see continued ‘verticalization’ across IT services and BPO, increasing complexities in the delivery models clients are using, and service providers leveraging M&A to expand capabilities. Pricing levels will also be affected and we do have some viewpoints to share on this as well.”

“While the market always evolves and buyers’ objectives change, organizations will always look to extract more value from their sourcing models and solutions to improve efficiencies and drive profits,” said Simonson.

Moderated by Katrina Menzigian, vice president, Research Relations, analysts presenting viewpoints and answering questions will be Jimit Arora, vice president, IT Services; Rahul Gehani, practice director, Pricing Assurance; H. Karthik, vice president, Global Sourcing and Rajesh Ranjan, vice president, BPO.

For information about Everest Group’s research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110. To register for the webinar, to be held Jan. 23 at 9 a.m. CST (8:30 p.m. India Time and 3 p.m. GMT Time), please visit: research.everestgrp.com/Events/Webinars.