Category: Press Releases

Healthcare Industry Veteran Frank Mueller joins Everest Group | Press Release

Mueller brings 30-plus years of multi-national healthcare information technology and business process experience to firm

Press release: February 1, 2011 ─ To address healthcare business leaders’ increasing need for insight on how to tackle a growing number of cost and performance challenges, Everest Group, an advisory firm on global services, has added depth to its team with the appointment of Frank Mueller, partner.

“Mueller brings more than 30 years of multi-national healthcare industry strategic consulting, IT and business service delivery, operations and senior management to Everest Group,” said Peter Bendor-Samuel, chief executive officer, Everest Group. “His experience and leadership will help our healthcare clients address their growing pressures, which include the rising cost of health services, increasing regulatory issues within an unsettled political environment, desire to improve efficiency across their organizations and accelerating number of mergers and acquisitions.”

Prior to joining Everest Group, Mueller was a partner and senior executive at Accenture for six years. One of his most expansive engagements involved assisting a large Integrated Delivery Network, or IDN, with outsourcing its primary information technology functions and implementing a clinical transformation with the medical and clinical staff as part of a long-term transformational outsourcing engagement.

During his 17 years at First Consulting Group, later acquired by CSC, Mueller held a several senior executive roles. As vice president managing the firm’s outsourcing consulting practice, he was responsible for establishing policies and procedures for successful transition and management of 12 major contracts with 32 hospitals and total contract value of more than US$750 million. While serving as the managing director of European engagements, Mueller established the firm’s consulting practice in the United Kingdom, which grew to more than 150 consultants across five countries in three years, opened six offices, acquired two consulting companies and integrated experts from the American and European practices. While at First Consulting Group, Mueller was also involved in assisting non-healthcare companies enter the healthcare field, such as financial organizations offering advanced technology to hospitals and clinics and airline companies providing supply chain technology-based tracking systems to major teaching hospitals.

Before First Consulting Group, Mueller was chairman and CEO of Healthserv, Inc., a start-up company that developed expert systems to integrate into existing applications, primarily as a tool for hospitals and physicians to increase payments and reduce denials from Medicare and Medicaid. Earlier in his career, Mueller was a national healthcare partner for Laventhol & Horwath, an international accounting firm, and a sales representative for Burroughs Corporation.

Mueller earned a master’s degree from California State University at Long Beach and holds an undergraduate degree from the University of Southern California.

Evaluating the Dynamics and Impact of the Global RPO Service Provider Landscape | Press Release

RPO Service Provider Landscape and Capability Assessment Released: Everest Group PEAK Matrix Leaders Announced

Press Release: January 31, 2011 – The Recruitment Process Outsourcing (RPO) market has quickly moved beyond the pioneer phase of the market maturity curve and now is firmly in the rapid growth phase. The RPO service provider landscape also continues to evolve rapidly. While new service providers continue to enter the market, established service providers are trying to increase their market share and build new capabilities through various organic and inorganic routes.

This new study, RPO – Service Provider Landscape and Capability Assessment, gives an overview of the market and the service providers, analyzes the key areas in which service providers are creating differentiation, and provides a comparative assessment of delivery capabilities of 23 leading RPO service providers. These include: Accenture, Adecco, AMS, Aon Hewitt, Caliber Point, CDI World Concert, Futurestep, Hays, Hudson, Hyphen, IBM, Infosys, KellyOCG, Kenexa, Manpower, Ochre House, PeopleScout, Pinstripe, SourceRight Solutions, Talent2, The RightThing, Wipro, and Yoh Solutions.

Some of the findings gathered in this research are:

  • The 20+ established RPO service providers are creating differentiation along numerous dimensions, such as geographic coverage, industry focus, technology offering, process delivery, type of hiring, and global sourcing approach
  • Our assessment shows marked differences in overall RPO delivery capability of service providers along four key dimensions: scale, scope, technology capability, and geographic delivery footprint
  • The Everest PEAK matrix categorizes RPO service providers into leaders, major contenders, and emerging players based on their market success and overall RPO delivery capability. 2010 leaders are: Manpower, The RightThing, Adecco, Kenexa, SourceRight Solutions, KellyOCG, Hays, and AMS
  • In 2010, several service providers made significant progress over their 2009 position on the Everest PEAK matrix. for example, SourceRight Solutions moved from the major contenders category to the leaders in 2010; Ochre House and Aon Hewitt moved from the emerging players category to major contenders in 2010

To read an extract of RPO – Service Provider Landscape and Capability Assessment, purchase the report, or inquire about other research services, please visit research.everestgrp.com, email [email protected] or call +1-214-451-3110.

Additional recommended readings:

Everest Group research: Global lending BPO is a US$21-23 billion market only 12 percent tapped | Press Release

DALLAS, January 19, 2011 ─ Global lending Business Process Outsourcing (BPO) is a US$21-23 billion market that is only 12 percent of an estimated US$190-194 billion market potential, according to a Financial Services BPO research study by Everest Group, an advisory firm on global services.

Everest Group’s study, Global Lending BPO Across Credit Cards, Consumer Loans and Commercial Loans finds the United States accounts for more than 50 percent of the market, followed by the United Kingdom, with financial services firms leveraging third-party service providers, shared services/captives or both models for business acquisition and account servicing of credit cards, consumer loans and commercial loans.

The Everest Group study includes analysis of market size and potential of global lending BPO by business segment and function; adoption trends measured across buyer size and geography; prevalence of various sourcing models; maturity of lending BPO sub-functions across business segments; and the service provider landscape across business segments. The analysis coverage spans across third-party outsourcing and shared services/captives and leverages information from about 6,000 financial service organizations with assets over US$1 billion; interviews with executives of leading financial organizations and coverage across more than 30 lending BPO service providers.

“The top 100 financial services organizations are mature clients of lending BPO with well-established models,” said Saurabh Gupta, vice president, Research. “Organizations with assets between US$10-500 billion represent the most attractive segment going forward due to relatively limited outsourcing penetration and significant scale of operations for a viable sourcing business case.”

Smaller organizations with less than $10 billion in assets, which account for nearly 75 percent of all financial services firms across the globe but control less than 10 percent of total assets, represent a fragmented market segment.

Other study findings include:

  • Asia Pacific is one of the emerging markets for lending BPO with India showing a strong appetite for adoption; meanwhile adoption in Rest of Europe is challenging due to lack of uniformity in laws, languages, processes and culture.
  • Consumer loans BPO, including mortgages, represents the largest lending BPO segment accounting for nearly 50 percent of the market, followed by credit cards at more than 30 percent and commercial loans accounting for less than 20 percent.
  • Account servicing comprises nearly 80 percent of the market and business acquisition accounts for the balance 20 percent.
  •  There is nearly a 50-50 split between shared services and third-party providers serving the lending BPO market.

“Concerns about perceived risk, loss of control, and complexity often lead an organization to leverage the shared services model,” said Rajesh Ranjan, research director and co-author of the report. “Drivers for sourcing a third-party provider include cost reduction, productivity and effectiveness gains. Many large firms leverage a combination, or hybrid, to gain benefits from both models, maintain flexibility and track market evolution.”

Utility-based service providers, including FIS, Fiserv, LPS, First Data, and TSYS, dominate the lending BPO market with nearly 90 percent market share of the US$11-12 billion lending BPO third-party market. The current share of BPO-centric service providers, including Genpact, HP, Tata Consultancy Services, ACS-Xerox and others, is currently only at around 10 percent but they are growing nearly three times faster.

For more information about the report, Global Lending BPO Across Credit Cards, Consumer Loans and Commercial Loans or other Financial Services BPO reports and research services, please visit research.everestgrp.com, email [email protected] or call +1-214-451-3110.

Additional Everest Group research reports with insights on this topic or complementary content that may be of interest include:

Everest Group research: Large North American buyers – not small buyers – leading cloud computing adoption | Press Release

DALLAS, January 12, 2011 ─ Defying the earlier expectations of small buyers driving cloud growth, large buyers are spearheading cloud business growth with North America leading adoption, according to an IT outsourcing research study by Everest Group, an advisory firm on global services.

Everest Group’s study, Service Provider Cloud Strategies – “As Unique as Everyone,” predicts cloud adoption and growth will be led by development of private cloud environments and, several years later, ‘verticalization’ focusing on key vericals or services will follow.

The Everest Group study includes an overview of cloud computing capabilities; adoption trends in terms of geography, buyer size, and industries; buyer adoption drivers; service provider challenges and predicted services driving future adoption; and strategies for major service providers.

“CIOs are continuing to take a ‘quick ROI’ view about cloud computing, denoting early stages of cloud evolution and a lack of overarching cloud strategy,” said Ross Tisnovsky, vice president, Research. “Security still tops the concerns for CIOs, followed by the unique integration challenges in a cloud service environment. As cloud adoption is at a very early stage, businesses haven’t moved critical workloads to the cloud, and simpler workloads don’t require complex integration with legacy systems. However, we believe both of these factors will gain prominence once cloud computing makes more inroads.”

Other study findings include:

– Most service providers are targeting their strategic client base, traditionally from North America, where they are achieving significant traction.

– Offshore and MNC (multi-national company) service providers are witnessing largely consistent adoption of cloud services across industry verticals.

– Offshore and MNC service providers see different revenue contribution from different cloud layers. Offshore service providers are seeing more contribution from SaaS (Software as a Service), whereas, MNCs are generating more revenue from IaaS (Infrastructure as a Service).

– CIOs believe that cloud computing has a significant role as BPaaS (Business Processing as a Service); however, service providers expect growth from SaaS and IaaS in the foreseeable future.

– Offshore and MNC service providers are focusing on orchestration and provider capabilities to tap the cloud ecosystem; however, their relative focus is different.

“While buyers show concerns, and providers have their own apprehensions about cloud services, it seems even a preliminary cloud discussion makes service providers upbeat about the certainty of cloud adoption,” said Tisnovsky. “To tap the cloud opportunities, service providers need to change their organizational strategy and philosophy. This includes changing the traditional sales and delivery mindset in terms of pricing, sales approach, target clientele, and competence needed.”

For more information about the report, Service Provider Cloud Strategies – “As Unique as Everyone,” or other ITO reports and research services, please visit research.everestgrp.com, email [email protected] or call +1-214-451-3110. 

Everest Group: Recruitment Process Outsourcing Market Projected To Grow Up To 30 Percent In 2011 | Press Release

DALLAS, November 18, 2010 ─ The Recruitment Process Outsourcing (RPO) market is projected to grow about 25-30 percent in 2011 following the market’s rapid growth in 2010 that saw deal signings double over the previous year, according to a research study by Everest Group, an advisory firm on global services.

The RPO market is estimated at about US$1.1 billion in annual contract value (ACV) and is projected to reach between US$1.38 to 1.45 billion in ACV in 2011, according to Everest Group’s Recruitment Process Outsourcing Annual Report 2010 – A Year of Rapid Growth and Intense Competition. The annual report is the first of a three-part series focusing on RPO with RPO Supplier Compendium and RPO Supplier and Capability Assessment reports to be released early next year.

“While we’re seeing explosive growth in new deal signings this year, deal sizes are smaller with buyers taking a selective approach along with lesser number of hires per deal,” said Rajesh Ranjan, research director. “Beyond direct cost impact, we expect to see more buyers look to achieve business impact by taking a more strategic approach with RPO and look for total workforce solutions, but adoption will be gradual due to lack of integrated solution availability. While the market is dominated by large buyers, we expect the mid-market to grow as these buyers look to scale up in an improving economy.”

Although traditional drivers such as cost reduction and scalability continue to be important, especially for first generation buyers, second generation buyers are increasingly looking for higher business impact from RPO such as better quality of hires, according to the report.

Other report insights include:

  • North America continues to lead RPO adoption, representing more than half of all deals; however, adoption in Continental Europe is rising.
  • In 2010, North American multi-national companies (MNCs) drove adoption in other geographies; United States and European MNCs continue to drive adoption in Asia Pacific.
  • Most RPO deals continue to be single country, and there was a perceptible increase in this trend.
  • A lack of comprehensive global RPO offerings led to a large percentage of buyers adopting a multi-vendor strategy.
  • Adoption of global sourcing saw a gradual increase in 2010, although it still lags behind significantly compared to more mature HR Outsourcing (HRO) processes.
  • Manufacturing continues to lead adoption with rapid growth occurring in the services sector that is comprised of verticals such as professional services, hotels and education. Healthcare, high-tech and telecom saw a dip in adoption.

Intense competition exists among RPO service providers with Manpower, The Right Thing, PeopleScout, Adecco, Kenexa, and Aon Hewitt as leading providers in terms of hires managed. Other providers also covered in the study include Accenture, Alexander Mann Solutions, Caliber Point, CDI-World Concert, Futurestep, Hays, Hudson, hyphen, IBM, Infosys, KellyOCG, Ochre House, Pinstripe, SourceRight Solutions, Talent2, Wipro and Yoh.

For more information about the report, Recruitment Process Outsourcing Annual Report 2010 – A Year of Rapid Growth and Intense Competition, other RPO or HRO reports, or other research services, please visit research.everestgrp.com, email  [email protected] or call +1-214-451-3110.

Everest Group Releases Report on Tier-2 Indian IT Providers Highlighting the Criticality of Differentiation for Survival | Press Release

DALLAS – Through focused differentiation initiatives, Tier-2 Indian IT service providers can survive the imminent consolidation in the industry, thrive in the current challenging environment and continue playing an important and meaningful role in buyer portfolios, according to a study by Everest Group, an advisory firm on global services. Everest’s report, “Survival of the Differentiated” – The New Mantra of Success for Tier-2 Service Providers, is available free by visiting research.everestgrp.com. A one-hour Webinar will be held November 18, 8:30 a.m. CST, to present study findings and insights.

The study examines the Tier-2 Indian IT service provider landscape and illustrates the distinctive value propositions of five leading Tier-2 IT providers: Headstrong, Microland, MindTree, MphasiS and Sonata Software.

Everest estimates the Indian offshore IT services market at US$27 billion, which commands about 50 percent of the global industry. Tier-2 or mid-sized IT service providers in India with revenues between US$100 million to US$1 billion currently account for approximately 30 percent of India’s offshore IT services market.

“Tier-2 providers have carved out an important role in the market and, when leveraged optimally, can often deliver superior value in comparison to larger providers,” said Eric Simonson, managing partner, Research. “While the value proposition for small and mid-sized buyers is well understood, the success of Tier-2 service providers in serving large buyers is contingent on their ability to demonstrate a differentiated value proposition.”

“Tier-2 providers typically differentiate themselves by specializing along three distinct themes: industry vertical, service offerings and geographic market focus. In select instances, service providers combine two of these themes to create ‘super specialized’ offerings,” said Amneet Singh, vice president, Research.

Jimit Arora, research director, added that the examined five Tier-2 providers recognized the need for differentiation and specialization in an intensely competitive marketplace and are well-positioned to see long-term success.

“‘Generalist’ or sub-scale providers need to re-evaluate their portfolios and select core offerings and focus segments that will drive differentiation in the broader marketplace,” said Arora. “Additionally, providers must build deep vertical-specific expertise to demonstrate differentiation in light of increased buyer emphasis on industry knowledge for ADM (Application Development and Maintenance) services.”

Everest Q3 Report: Outsourcing Market Holds Steady from Renewals amid Concerns over Weak Economy | Press Release

DALLAS ─ The global outsourcing market remained steady in the third quarter this year due to transaction activity largely fueled by renewals and a healthy captive market, according to Everest Group, a global consulting and research firm. A one-hour Webinar will be held November 9, 8 a.m. CST, to present study findings and insights.

Everest’s Market Vista: Q3 2010, a quarterly report on global outsourcing and offshoring activity, reports global transaction volumes for the third quarter were similar to the previous quarter with deals accounting for US$3.4 billion in annual contract value (ACV). Outsourcing of IT services (ITO) improved while Business Process Outsourcing (BPO) activity marginally decreased compared to the previous quarter. ITO activity was led by five “mega deals,” each having contract values over $1 billion, that significantly contributed to the global sourcing market’s 13 percent increase in transaction ACV over the previous quarter.

Other third quarter 2010 findings include:

  • North America continued to account for about one-third of total transactions; North America and the United Kingdom contributed toward about one-half of all deals. Notable activity was reported from select geographies including Spain, Germany and India.
  • The BFSI (banking, financial services and insurance) and MDR (manufacturing, distribution, retail) verticals continued to dominate transaction signings with some high-value contracts also reported in the public sector.
  • In addition to the five ITO mega deals, 60 large deals with contract values exceeding $50 million also were recorded during the quarter.
  • A healthy captive market witnessed a fifth consecutive quarter of robust growth with 25 new announcements, including captive announcements in Africa and the majority in Asia.
  • Offshore activity saw 34 delivery centers established in the second quarter, the majority in Asia followed by Eastern Europe and Latin America.
  • Consolidated revenues increased across offshore-centric suppliers whereas traditional global suppliers saw a marginal decline during the quarter.
  • M&A activity for suppliers substantially increased with 22 acquisitions, almost double the number in the first two quarters combined. The quarter also saw 57 new alliances compared to 52 and 61 in the previous two quarters.

“The global outsourcing market is holding steady and is being upheld by an increase in contract renewals and traction in the ITO segment,” said Eric Simonson, managing partner of Research. “The slowing growth in BPO is not surprising given a slow post-recessionary recovery as well as anti-offshoring sentiment in the United States.”

Everest’s quarterly Market Vista reports provide data and analysis of deal trends in the outsourcing and offshoring market, captive landscape, current and emerging locations, key supplier intelligence insights and key developments across the top 20 financial services companies globally. Everest’s recently launched industry trends research complements the Market Vista reports through quarterly updates focused on industry specific global sourcing data, developments and insights across four industries (BFSI, MDR, Healthcare and Energy and Utilities).

The Market Vista Q3 report also includes these focus sections:

  • Geography profile of Asia includes analysis of labor arbitrage sustainability, operating costs, operating cost inflation and currency trends. Cities profiled include Jaipur, Pune and Bangalore in India; Guangzhou and Shanghai in China; Manila, Philippines; and Kuala Lumpur, Malaysia.
  • Location optimization insights include recent enacted U.S. border security bill’s impact on onshore delivery costs for offshore-centric suppliers, recent U.S. regulatory developments including Ohio’s ban on offshoring state projects and emergence of locations in Central America for supporting voice work. The section also provides an overview of new captive set-ups in India for high value-add services such as R&D and engineering services, a topic explored in greater depth in Everest’s recent report, India Captive Market Landscape: Challenging Common Myths and Charting Future Role.

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

The Webinar will be held November 9 at 8 a.m. CST; 2 p.m. GMT Standard Time. To register, please visit: research.everestgrp.com/Events/Webinars.

Market Vista is a subscription service with four reports published per year, now enhanced to also include location datasets, Breaking Viewpoint briefings, Market Vista Primer and Global Locations Insights newsletter. For information about the Market Vista: Q3 2010 report or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

SaaS Prevalent in HRO but Slow to Gain Adoption in Other BPO Segments | Press Release

DALLAS ─ Although adoption of software-as-a-service (SaaS) and Business Process Outsourcing (BPO) is growing rapidly, the combined SaaS-BPO approach is yet to see significant traction in BPO beyond Human Resources Outsourcing (HRO), according to Everest, a global consulting and research firm.

A new Everest study, Role of Software-as-a-Service (SaaS) in BPO, demystifies the BPO-SaaS approach marked by multiple definitions, offerings and “look-alikes.” The study provides a framework to differentiate SaaS and non-SaaS solutions in BPO and highlights the various engagement models, value proposition and challenges of a combined SaaS-BPO approach. It also highlights adoption trends in the key BPO segments: HRO, Finance and Accounting Outsourcing (FAO) and Procurement Outsourcing (PO).

The report finds most instances of adoption of the SaaS-BPO approach, outside of HRO, involve a buyer having an existing BPO or SaaS relationship and the buyer then driving an independent BPO and SaaS play.

“Although some SaaS and BPO players have initiated partnerships, they are in a very nascent phase,” said Research Director Rajesh Ranjan. “As some of these partnerships solidify and successful case examples emerge, this approach will see increased adoption in other segments as well. Further innovations in technology, including the move to cloud platforms, should help further reduce total cost of ownership thus making the value proposition impossible to ignore.”

Adoption of the combined SaaS-BPO model is highest in HRO and is the predominant model within sub-segments such as payroll, benefits administration and increasingly within Learning Services Outsourcing (LSO). The PO market is seeing emergence of sourcing-focused SaaS-BPO solutions with FAO seeing minimal activities. With the exception of HRO, adoption is largely restricted to the mid-market.

For more information about the report, Role of Software-as-a-Service (SaaS) in BPO, other research reports or other research services, please visit research.everestgrp.com, email [email protected] or call +1-214-451-3110.

Infrastructure Outsourcing Market Sees Suppliers Return to Traditional RIMO Model | Press Release

DALLAS ─ After a noticeable development in recent years that witnessed the convergence of the Remote Infrastructure Management Outsourcing (RIMO) and traditional Infrastructure Outsourcing (IO) models, RIMO suppliers returned to their roots and, if they remain loyal to the traditional RIMO model, could see promising growth moving forward, according to Everest, a global consulting and research firm.

Tier-I offshore suppliers of RIMO saw healthy growth in their infrastructure business lines during the recession, unlike competing traditional multinational companies (MNCs), by leveraging the unique flexibility of their foundational model, according to a new Everest IT Outsourcing (ITO) study, Remote Infrastructure Management – RIMO Strategy – Stick to the Basics, but Fine-Tune, Too. The RIMO model is gaining wider acceptance with buyers, resulting in a larger number of high-value IO deals with offshore delivery in scope, including new engagements signed by traditional IO suppliers.

Everest projects the offshore IO supplier market, estimated at US$2.9 billion as of March 2010, to increase to US$3.5 billion by March 2011. By 2011, Everest estimates Tier-I offshore RIMO suppliers will hold about 90 percent of market share for IO services. In 2009, 86 percent of offshore IO deals, in terms of annual contract value, were between US$1-5 million compared to 46 percent a year earlier; the average deal size in ACV was US$3.2 million in 2009 compared to $7.2 million in 2008.

“In recent years, offshore IO suppliers targeted traditional IO suppliers and larger deals with larger buyers, but they veered too far away from the core characteristics of the RIMO model in terms of pricing, deal scope and buyer segment,” said Ross Tisnovsky, vice president, Research. “The inherent flexibility of the RIMO model allowed offshore IO suppliers to tweak strategies and win business during the recession. With buyers continuing to remain reluctant to engage in mega deals of long duration that involve complex and risky transformations, RIMO suppliers are in a favorable position and only need to stay the course and fine-tune their offerings.”

The Everest study analyzes the key trends in the RIMO market, providing an analysis of the fundamental value levers in various IO models and how the RIMO model offers different value to buyers compared to its traditional counterpart. The study discusses an earlier trend, the convergence of the RIMO model and traditional model, and how the recession influenced RIMO suppliers to refocus on their unique characteristics and hence diverge from the traditional model. The report also discusses the strategy RIMO players need to adopt to continue their growth without compromising on the fundamentals of the RIMO model.

For more information about the report, Remote Infrastructure Management – RIMO Strategy – Stick to the Basics, but Fine-Tune, Too, other ITO research reports or other research services, please visit research.everestgrp.com, email  [email protected] or call +1-214-451-3110.

The following documents provide additional insights on this topic or complementary content that may be of interest:

Outsourcing Market Activity Led By Banking Sector, BPO Services, and North American Buyers | Press Release

DALLAS ─ Outsourcing contracts signed by banking, financial services and insurance firms (BFSI sector) in the second quarter this year represented the highest volume of activity since the fourth quarter of 2008 and significantly contributed to a third consecutive quarter of increased transaction volumes in the outsourcing industry, according to Everest, a global consulting and research firm. The global outsourcing market saw a 12 percent increase in transaction volumes with continued growth led by Business Process Outsourcing (BPO) services, BFSI sector deals contributing one-fifth of overall global market activity, and North America and Europe driving three-fourths of all global transactions. A one-hour Webinar will be held August 17, 9 a.m. CDT, to present study findings and insights.

Everest’s Market Vista: Q2 2010, a quarterly report on global outsourcing and offshoring activity, reports global transaction volumes for the second quarter were valued at US$3 billion in annual contract value (ACV). North American transaction activity in the second quarter increased 3 percent but ACV declined by 16 percent compared to the previous quarter.

Other second quarter 2010 findings include:

  • BPO market activity increased by 15 and 33 percent in transaction volumes and ACV respectively. IT Outsourcing (ITO) registered a decline in ACV by 22 percent
  • The BFSI vertical saw a 41 percent increase in transactions. Most contracts were signed in the banking sub-vertical; volume was double over the previous quarter
  • The MDR (manufacturing, distribution, retail) vertical witnessed decreased activity but increases were found in healthcare, technology and telecommunications sectors
  • A healthy captive market witnessed a fourth consecutive quarter of robust growth with 38 new announcements and no divestments, signaling the captive model remains an important component of sourcing portfolios
  • Offshore activity saw 32 delivery centers established in the second quarter, the majority in Asia followed by Eastern Europe and Latin America
  • China moved into the category of “mature location,” an elite group previously comprised of only India and the Philippines
  • Consolidated revenues increased across offshore-centric suppliers whereas traditional global suppliers saw revenues drop during the quarter. Operating margins dropped for both classes of suppliers
  • M&A activity increased with 12 acquisitions compared to nine in the first quarter as well as 61 alliances compared to 52 in the previous quarter

“The overall services sourcing market remains on a slow and steady growth path marked by indicators such as sustained transaction activity, captive activity, delivery center growth, and renewals and restructuring of contracts,” said Eric Simonson, managing partner of Research, Everest. “Now, there exists a sizeable number of mature, large buyers who are focused on evolving and optimizing hybrid sourcing strategies that leverage offshore, onshore and captive models with less emphasis on mega deals.”

Everest’s quarterly Market Vista reports provide data and analysis of deal trends in the outsourcing and offshoring market, captive landscape, current and emerging locations, key supplier intelligence insights, and key developments across the top 20 financial services companies globally.

The Market Vista Q2 report also includes these focus sections:

  • Geography profile of Latin America includes analysis of labor arbitrage sustainability, operating costs, operating cost inflation and currency trends. Cities profiled include Mexico City, Monterrey, Buenos Aires, Sao Paulo, Rio de Janeiro, Santiago and San Jose.
  • Location optimization insights include emergence of offshore delivery from Tier II and III cities in India, China’s flexible exchange rate policy impact on operating cost, and decreased offshore activity in Eastern Europe due to the economic recession in EU countries as well as lower demand.
  • Vista Primer provides an overview of key contact center suppliers in the Europe Middle East and Africa (EMEA) region for French language support.

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

The Webinar will be held August 17 at 9 a.m. CDT; 2 p.m. GMT Standard Time. To register, please visit: research.everestgrp.com/Events/Webinars.

Market Vista is a subscription service with four reports published per year, now enhanced to also include location datasets, Breaking Viewpoint briefings, Market Vista Primer and Global Locations Insights newsletter. For information about the Market Vista: Q2 2010 report or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

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