Monthly Archives

September 2017

Everest Group revises forecasts for BPO, ITO in India based on labor supply | In the News

By | In The News

In the early 2000’s, many analyst models predicted that the US labor arbitrage incentive for outsourcing work to India would have run out of steam by 2017, but Everest Group recently revised its forecast, saying that train may still be running strong in 25 to 30+ years.

“India is still  a highly attractive and viable option for low-cost labor, albeit not quite as good as it was 15 years ago, but still very compelling, and it will likely remain so for another three decades,” said Michel Janssen, chief research guru at Everest Group.

Read more in InfotechLead

The Impact Of Leaders’ Transformation Knowledge Gap | Sherpas in Blue Shirts

By | Blog, Digital Transformation

Too many transformation initiatives aiming at breakthrough performance hit critical roadblocks that can quickly spiral into costly delays or even a failed initiative. Why is that? The primary problem that afflicts initiatives is the knowledge gap in leaders’ understanding of the nature of the transformation journey and what it requires. The usual focus of discussion among leaders at the outset of a major transformation is “Can we do it?” This is the wrong question. Instead, the focus should be on “What will it take to do it?” Here are three tips (among many others) on what it takes.

  1. Ensure Executive Ongoing Commitment To Complex Change

There is no “silver bullet” for a journey in which your company will reconceive the value it delivers to customers and end users as well as how it delivers that value. Often, leaders believe that changing only one or two components of the business will drive the desired impact. Their mistaken mindset underestimates the scale, complexity and cross-functional nature of the necessary change. The level of change encompasses many elements of the business model.

Read More Here

Mindtree Takes Two-Pronged Attack for Digital Leadership | Sherpas in Blue Shirts

By | Blog, Digital Transformation

What would you do if your company has been the darling of its industry with leading industry growth but now struggles to adapt to new market requirements in the digital world and faces a shrinking book of business? How would you change existing and potential clients’ perception of your company’s expertise?

In observing how India’s service providers adapt to the new realities and transition to become digital transformation partners, Mindtree is one of the firms going all-in on the digital sweepstakes. A mid-size service provider that made its mark by doing strong work in building applications, Mindtree is well positioned to make the transition into the digital marketplace. It has existing advantages, such as its collaborative culture, that aid in this effort.

But changing market perceptions and client perceptions – from a firm that provides good but cheap offshore services to a firm that is a digital transformation partner in position to help clients build innovative digital technologies – is a steep hill to climb. So, the firm is investing in a two-pronged attack to change its branding.

Two-Pronged Attack

The first line of attack was to buy a series of digital firms, which helps more strongly position Mindtree toward being a digital company. In the second line of attack, Mindtree built two digital pumpkins – digital innovation hubs. This is like developments we see at Accenture, Infosys, TCS and other providers transitioning to digital. I like the branding of the innovation hub as a digital pumpkin. It brings a cool marketing vibe to a model that other providers have already rolled out into the marketplace.

I recently attended the launch of Mindtree’s second digital pumpkin, a US digital innovation hub in New Jersey. Like its first digital pumpkin, located in Bangalore, the hub is a collaborative, interactive space demonstrating Mindtree’s digital expertise and is designed to help clients accelerate their digital journey. It displays interesting examples of digital projects that Mindtree ran in its Bangalore pumpkin.

Like other service providers, Mindtree’s Bangalore digital innovation hub takes advantage of the significant footfall of enterprise clients as they visit their delivery partners in India. A visit to the hub for a few hours illustrates the kinds of digital capabilities that Mindtree can perform on a client’s behalf.

Its digital pumpkin in New Jersey gives clients a space to co-create and manage new digital capabilities, turn innovation sessions into pilots and then to more meaningful initiatives with deeper adoption across a client’s space.

Mindtree is combining acquisitions and innovation hubs to make a case to its existing and prospective clients that they should consider Mindtree as a partner that will help take full advantage of new digital technologies.

So, What’s Missing?

Despite both digital innovation hubs and the acquisition, Mindtree still faces an uphill battle. It needs to do two things:

  • Overcome the shrinking in its core marketplace. All service providers transitioning to the digital world face substantial shrinking of their revenue based on the labor arbitrage model. As clients engage in portfolio rationalization happening in the mature labor arbitrage space, they seek to reduce the number of service providers in their portfolio, taking work away from smaller providers and giving it to larger providers in exchange for better pricing and lower costs. As a sub-billion-dollar firm, Mindtree loses out in the portfolio rationalization.
  • Create differentiation by changing its business model. The firm doesn’t yet appear to have come to grips with the need for a differentiated delivery model aligned with the new digital reality.

It remains to be seen how effective Mindtree will be in changing market perceptions and in selling enough digital work to offset the losses in the labor arbitrage space and establish a healthy growth rate. Its two-pronged approach is a good step in that direction. But with the entire market following a similar path, Mindtree will need to work very hard to create a differentiated position from other service providers.

Offshored Information Technology jobs may not return home | In the News

By | In The News

India’s standing as a labour arbitrage market could survive for the next three decades, IT consultancy Everest Group said, and that it was unlikely that previously offshored work would return to its home market.

In the early 2000s, industry analysts had said the labour arbitrage advantage would end by 2020. Analysts have also suggested that as wages rise in offshore centres, it might be feasible for the jobs to move back onshore.

“There is no doubt that India is still a highly attractive and viable option for low-cost labour, albeit not quite as good as it was 15 years ago, but still very compelling, and it will likely remain so for another three decades,” Michel Janssen, Chief Researcher at Everest, said.

Read more in The Economic Times

 

Evolution of Robotic Process Automation (RPA) | Webinar

By | Webinars

Thursday, September 21, 2017 |1 p.m. – 2:00 p.m. EST

Research VP and automation expert Sarah Burnett will lead a NICE-hosted webinar on the evolution of Robotic Process Automation.

Driven by significant product innovation over recent years, RPA has evolved from tactical to strategic. With the Evolution of RPA, organizations are looking for step-change improvements in service delivery to create additional efficiencies, but also to enhance service quality and capabilities. Robotic Process Automation, Cognitive tools, and others are now providing great promise, but what can they truly deliver?

Join this session to discover the evolution of Robotic Process Automation and what it means to your organization.

register for the webinar

Pharma Service Providers’ Role in Tempering Pricing Wars | Sherpas in Blue Shirts

By | Blog, Healthcare & Life Sciences, Outsourcing, Pricing

Shortly after the U.S. Food & Drug Administration (FDA) approved Novartis’ CAR T-cell drug, Kymriah – which is used for pediatric B-cell Acute Lymphoblastic Leukemia – last month, Novartis announced its price…a whopping $475,000 per patient. This is certainly not the first market instance of highly expensive drugs (see below.)

But it might just be the tipping point for stakeholders – including regulatory bodies, payers, physicians, advocacy groups, and patients – to start having constructive discussions with drug manufacturers on how to make drugs that treat extremely rare diseases more accessible to the very small share of the population that needs them.

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It is certainly time for pharma companies to overhaul their operations in order to mitigate price anger and get such drugs into the hands of those whose lives depend on them.

One way they can do so is by employing pay-for-performance, or outcome-based, contracts, wherein the manufacturer charges for the drug once it proves effective, say one or two months into treatment. Note that this pricing model hasn’t yet really taken off, especially in the United States, where the fragmented multi-payer environment acts as an added roadblock. Indication-based pricing, wherein there are different prices for different conditions, is another model that biopharma companies can use, but the U.S. market does not have mechanisms in place for it, at least as of now.

Other ways of ensuring patients are able to benefit from such critical drugs are through mixes of personalized offline and online marketing campaigns directed specifically to the relevant patient and physician pool, and improved and comprehensive patient support programs to help in solving “last mile connectivity” issues.

But at the end of the day, stakeholder backlash might – and should – force pharma companies to drive down their own costs to make these expensive, personalized medicines more affordable. And this is where outsourcing service providers can help.

The third-party service providers that are already servicing the pharma industry need to prepare or bolster solutions and capabilities around areas including patient and market access, data analytics, omnichannel marketing, IoT, automation, portals, applications, customer support, pricing analytics, infrastructure modernization, and cloud orchestration. Service providers that are struggling to enter the life sciences space should view this as a window of opportunity to get a foot in the door of these companies. Doing so will mean additional business for both these types of vendors; it could also mean reduced pricing pressure for the patients who need such vital treatments.
The future of personalized medicine depends a lot on success of such drugs, and biopharma companies can no longer afford to sit back and operate like they always have. For a detailed discussion and analysis around these solutions, and to learn about other trends in the life sciences market, look out for our soon-to-be-published State of the Market Report.

ProcureCon Total Talent Management — September 20-21 | Event

By | Events

Vice President of Research Julian Herbert will be a key speaker at ProcureCon’s Total Talent Management event held on September 20-21 in Amsterdam.

In Julian’s presentation, How to Ensure Your Talent Acquisition Model is Ready for the Future, he will discuss how this future-readiness can be achieved through benchmarking and how the process involves:

  • Looking beyond cost to focus on talent through assessment of solution elements, leverage of technology, SLA/KPI comparison around adequacy and stringency, future orientation, and the ability to innovate
  • Assessment of the ability to deliver total talent acquisition from a process, people, and technology perspective, both from enterprise and service provider readiness angles
  • A comprehensive, multi-dimensional assessment that looks at partnerships holistically
  • Contextualized assessment instead of a one-size-fits-all approach

Attendees will learn the importance of looking beyond the cost of services delivered by MSP and RPO providers, if they want to have a talent acquisition model which is in-tune with the latest economic, demographic, and technological changes.

When
September 20-21, 2017

Where
Novotel Amsterdam City

Speaker
Julian Herbert, Research Vice President, Everest Group

Learn more and register

Capital Market IT Outsourcing Deals See Double-Digit Growth in Number and Value in 2016 — Everest Group | Press Release

By | Press Releases

Artificial intelligence, cloud, blockchain technologies driving digital disruption of capital markets ITO industry.

Capital market IT outsourcing (ITO) deals experienced double-digit growth in 2016; legacy modernization and adoption of digital technologies drove a 29 percent increase in the number of capital market ITO deals, with the average total contract value rising 23 percent, according to Everest Group.

Technologies such as artificial intelligence (AI), cloud and blockchain were key components of digital adoptions. The demand for virtual assistants, automated investment advisory capabilities, and improved agent/broker and customer experiences drove a 64 percent uptick in the number of capital markets ITO deals that included AI in their scope. Similarly, the impetus to improve agility and reduce costs led to a 47 percent surge in cloud-based initiatives in capital markets ITO deals.

Another major driver of capital market ITO deals in 2016 was risk and regulatory compliance initiatives. These saw a 58 percent increase over 2015, largely attributed to an overall tightening of regulatory grip in the capital markets industry, especially in Europe.

“Everest Group anticipates that the capital markets IT outsourcing market will grow modestly in the next 12 months, as many of the trends we have documented in 2016 continue,” said Ronak Doshi, practice director at Everest Group. “Risk and regulatory compliance will remain a primary focus; deal sizes will shrink as enterprises demand cost-reductions through automation; and artificial intelligence, cloud, and blockchain technologies will drive the next wave of digital disruption.”

These recommendations and research findings are explored in “Simpler, Smarter, and Seamless Capital Markets – The Digital Revolution: Capital Markets ITO Annual Report 2017.” This report examines the global activity and trends in the capital markets segment and the implications for enterprises and service providers.

 Other key findings:

  • Brokerage and investment sub-vertical witnessed an increase in transaction activity, led with a central theme of adopting digital to enhance the front-office user experience.
  • The capital markets industry witnessed a decline in demand for traditional IT application development and maintenance service while the demand for consulting and integration services surged in 2016.
  • Asia remained the most lucrative destination for application outsourcing service delivery, despite improvement in the cost effectiveness of Central Eastern Europe and Latin America owing to currency depreciation.
  • The capital markets vertical witnessed a significant increase in the number of small-ticket size and short-duration deals in 2016.
  • Deals over US$14 billion will be coming up for renewal in the next four years.

***Download complimentary report abstract here***