Recovery in the all important BFSI (banking, financial services & insurance) vertical is not likely before June of 2024 despite some IT firms witnessing green shoots in their financial services business during the third quarter.
“At this time, we do not see a full-scale banking recovery in the cards for the next two quarters,” Peter Bendor Samuel, CEO at Everest Group, told Bizz Buzz.
Europe has performed better than the North American market for the top four Indian IT companies including Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro. Execution of some large deals and subsiding of the ill-effects caused by the Russia-Ukraine war crisis were some other reasons that drove UK and continental Europe to pip the North American market in terms of growth, experts have said.
However, most analysts believe demand will bounce back by the second half of this calendar year. Peter Bendor-Samuel, CEO of market intelligence and research firm Everest Group, believes that whether interest rates in the US are cut or not, the IT services business will see a possible rebound soon.
An Everest Group study across industries found that 48% of enterprise respondents are expecting to shift to a shared services or global business services (GBS) sourcing model.
Biopharma has been slow to adopt this model. However, as GBS transitions from capacity to capability centers and enterprises’ expectations from GBS evolves from cost productivity to augmenting technology capabilities and strategic process re-engineering, pharma GBS centers will increasingly partner with specialist service providers to augment and elevate inhouse capabilities.
There may still be some room for further headcount reduction in line with demand rebalancing. However, we are starting to get to the end of this cycle, Peter Bendor Samuel, CEO at Everest Group, tells Bizz Buzz.
What happens when you expand the use of AI beyond a circle of experts? To prevent business challenges, leaders must make smart investments in AI tools and training for workers.
Arpit Mehra, Practice Director at Everest Group, recommends enterprises use decentralized governance models to enable data and technology learning strategies.
With the new year, SAP Signavio announced its partnership with Knoa as their new Solution Extension (SOLEX) partner.
According to Everest Group, the task mining market is projected to grow significantly, with a 75% to 85% expected growth rate, reflecting its rising adoption and diverse partnerships.
Growth in the information technology sector may rebound from next fiscal year, experts said, though the third-quarter performance of India’s top four IT majors did not inspire much confidence.
IT industry research firm Everest Group’s CEO, Peter Bendor-Samuel, expects a revival in demand by the second quarter (April-June) of 2024 based on the current guidance from the companies. “We see the next two quarters as difficult with a continued hesitancy to commit to discretionary spending or large new initiatives. It is likely that by the end of the second quarter (first quarter for most Indian tech services firms) that we will see the start of a modest recovery,” said Bendor-Samuel.
India’s two biggest IT services companies, Tata Consultancy Services (TCS) and Infosys, reported their third-quarter earnings for FY24 on January 11. Amid a seasonally weak quarter and an uncertain demand environment, all eyes were on their generative AI updates. However, they shied away from sharing definitive numbers or updates on deal pipeline opportunities or prospects of revenue in coming quarters.
Peter Bendor-Samuel, founder of Everest Group, believes most of the PoCs (almost 90%) undertaken in 2023 will not move into production in 2024. “However, 10% which does move (to production) will indicate to the market where gen AI does work, and we expect significant opportunities to arise in these areas for the tech services firms by the third quarter of 2024,” he said.
Undoubtedly, 2023 was a challenging year for businesses worldwide, and as 2024 approaches, economic uncertainty remains. According to the Federal Reserve’s predictions, the global economy is expected to grow at a modest 0.5% annually. Many firms’ natural response to such unsettling times may be to reduce or even stop their digital transformation activities. But this is the ideal moment to intensify your efforts in digital transformation.
According to the Everest Group Global CFO Survey 2022, most Chief Financial Officers (CFOs) rank digital transformation higher on their priority lists, especially when it comes to “judgment-intensive” expenditures.
DeepDive Equity Research serves a select set of institutional investors by providing IT services industry intelligence and related stock findings. To produce unique material targeted to address investment controversies, DeepDive research process leverages proprietary data, an industry growth forecasting methodology honed over two decades.
In particular, DeepDive has an ongoing collaboration with Everest Group, which Rod Bourgeois, Managing Partner at the firm, extols for its “unmatched, bottom-up knowledge of the IT services industry. Bourgeois salutes Everest Group’s CEO, Peter Bendor-Samuel, saying he is a luminary in the IT services industry.
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