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Outsourcing Demand Falls, Global In-house Center Setups Grow in Q1 2019 According to Everest Group Report on Top Trends in Global Sourcing | Press Release

By | Press Releases

Enterprises increasingly outsourcing engineering services, including software engineering, mechanical engineering, and embedded engineering.

The global sourcing industry posted a decline in transactions in the first quarter of 2019 as compared to Q4 2018, dropping from 551 transactions to 501, according to Everest Group. Conversely, Q1 saw Global In-house Center (GIC) activity increase vis-à-vis Q4 2018, with the number of new GIC setups and expansions increasing in onshore as well as offshore and nearshore locations.

Everest Group also identified these Q1 global sourcing trends in its recently released Market Vista™: Q2 2019 report:

Large financial services firms, especially banks, are increasingly looking to expand their in-house IT teams and insource parts of their outsourced IT services portfolios.

The United Kingdom witnessed a significant decline in outsourcing activity, primarily due to a decline in contracts signed by banking, financial services and insurance (BFSI) enterprises in anticipation of Brexit.

Western Europe saw increased activity driven by an increase in set-ups of engineering-focused GICs in Germany by manufacturing firms and an increase in IT-focused service provider delivery centers in the Netherlands given its skilled and multi-lingual talent pool and well-developed digital infrastructure.

Indian-heritage service providers increased product-focused investment, mainly driven by next-generation technologies and competition from global majors. For example, Genpact acquired RiskCanvas to access its suite of Anti-Money Laundering (AML) solutions, and Tech Mahindra partnered with Rakuten Mobile Network to open a next-generation (4G and 5G) software-defined network lab.

Market Vista™: Q2 2019 features a profile of enterprise spending on engineering R&D (ER&D) and the increasing adoption of outsourcing services in this industry segment. Business ER&D spending stood at over US$739 billion in 2018, with global engineering sourcing constituting 10.9%, or approximately US$80.5 billion. Engineering service providers command a 51% share of this sourcing segment, while GICs account for 49%.

“Since 2016, engineering service providers have grown at a compound annual growth rate of 16.5%, while GIC activity expanded only 6.8% in this same three-year period,” said H. Karthik, partner, Global Sourcing, at Everest Group. “We’re definitely seeing a trend here as enterprises such as Google, Samsung, and Ford explore engagement with engineering service providers and reap the benefits of offshoring. We’ll see this trend continue as service providers invest in building their capabilities in software engineering, mechanical engineering, and embedded engineering.”

Market Vista™: Q2 2019 also addresses major outsourcing deals, Global In-house Centers (GICs) developments, location risks and opportunities, and service provider developments (including latest developments on next-generation technologies such as digital services).

***Download a complimentary 20-page abstract of the report***

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.

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Only 10% of Enterprises Have Effective Applications Strategy | Press Release

By | Press Releases

Transformative enterprises balance application development and modernization of legacy apps to drive agility, better customer experience

In an ideal world, enterprises that invest in application services capabilities would see a return in the form of application quality, operational efficiency and speed to value, but only 10% of enterprises are achieving this, according to Everest Group. The firm recently surveyed 194 C-level officers of global enterprises with revenues over US$1 billion and found that nearly 90% of global enterprises are unable to achieve the desired business outcomes of their application portfolios.

“Unfortunately, too many enterprises focus entirely on either investing in new technology stacks or blindly replacing their legacy applications, and this unbalanced approach is highly ineffective,” said Yugal Joshi, vice president, Information Technology Services, at Everest Group. “In contrast, 10% of enterprises are able to achieve significant improvement on their business metrics as a result of their applications strategy. What these leading organizations have in common is that they take a balanced view of their legacy and new application investments.”

Everest Group identified four more elements of effective applications strategies that leading organizations share:

  • Alignment of business and IT objectives
  • Outcome-oriented organizational structure
  • Robust talent strategy for legacy and new applications
  • Investment in strategic automation

These results and other findings are explored in a recently published Everest Group report: “Business Transformation: A Confluence of New and Legacy Applications – Annual Report 2019.” This report gives insight into the current applications services landscape, providing a fact-based analysis of buyer trends by geography, industry, and revenue size, and also offers an outlook for the application services market in the global ITS industry.

***Download a complimentary abstract of the report***

Other Key Findings

  • Application Services, which comprises application development, maintenance and testing services, accounts for approximately 32% of the US$539 billion global information technology services (ITS) outsourcing market, which is expected to continue growing at 2% per annum.
  • Application services are the fulcrum of the ITS industry, with 79% of ITS deals having some form of application services in the scope. Stand-alone application services deals have been growing consistently and contribute the largest share (68%) to the IT services market.
  • Enterprises are not shying away from making long-term investments. Deals with longer duration (longer than three years) have seen an increase at the expense of deals with shorter durations.
  • Average deal sizes in most verticals have plummeted, except for healthcare and life sciences, which saw a marginal increase in deal sizes.
  • Multi-region deal signings decreased sharply from 11% in 2017 to 2% in 2018.

About Everest Group

Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.

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Intelligent Document Processing Market Is Exploding, Expected to Grow 70-80% Over Next 2 Years | Press Release

By | Press Releases

Enterprise adoption of IDP is accelerating geometrically as companies apply AI technologies to improve governance and compliance, reduce costs and increase customer satisfaction.

The Intelligent Document Processing (IDP) market reached US$250-350 million in 2018 and is expected to grow at a compound annual growth rate of 70-80% over the next two years, approaching US$1.1 billion by 2020, according to Everest Group. Adoption of IDP will rapidly accelerate as enterprises seek to harness the power of artificial intelligence (AI) technologies to improve compliance and governance and reduce the overall cost of processing huge volumes of information.

IDP software solutions blend the power of AI technologies—such as computer vision, optical character recognition (OCR), natural language processing (NLP) and machine/deep learning—to efficiently process all types of documents, extract relevant information, and feed the output into downstream applications. The most common use cases of IDP solutions are KYC (know-your-customer) verification, invoice processing, insurance claims, patient onboarding, patient records, proof of delivery and order forms.

“Today’s IDP solutions are already capable of handling complex documents with accuracy and a fair amount of resiliency to change and variation, which is why enterprise adoption is accelerating rapidly,” said Sarah Burnett, Executive Vice President and distinguished analyst at Everest Group. “Even more exciting, however, is the way the technology is evolving to help enterprises achieve strategic business outcomes. In the very near future, for example, we’ll see remarkable capabilities such as pre-trained, ‘out-of-the-box’ solutions for particular use cases and better integration with robotic process automation solutions to enable end-to-end automation for enterprises. Mobile capture, multilingual solutions and ways to improve capture of low-quality images and handwritten documents are also on the horizon.”

These findings are discussed in more detail in “Intelligent Document Processing (IDP) Annual Report 2019 – Let AI Do the Reading.” This report addresses IDP market size and adoption trends, product capability trends, solution characteristics, the IDP vendor landscape, challenges to IDP adoption, and the IDP market outlook for 2019-2020.

Other Key Findings:

  • Banking, financial services and insurance (BFSI) and healthcare industries are the early adopters of IDP, with over 50% share.
  • Consumer package goods (CPG) and retail, travel and logistics, manufacturing, and telecom are also deploying IDP solutions to process documents such as proof of delivery, custom declarations, driver logs and maintenance logs.
  • North America and Continental Europe dominate the market for IDP solutions, largely driven by mature enterprises within BFSI.
  • OCR, computer vision, machine and deep learning models, and NLP are the key core technologies powering IDP capabilities.
  • Sophisticated features such as configuration and set-up GUIs (general user interfaces), review or correction GUIs, workbenches for IT users, and analytics dashboards are proving of great use to enterprises.
  • The IDP software market primarily comprises three types of solutions: platform-based, package-based and IDP-as-a-service solutions. Package-based solutions are expected to become more prevalent than platform-based and IDP-as-a-service solutions, as they can be easily deployed and take less time to achieve high accuracy for pre-built use cases.
  • ABBYY, Kofax, Parascript and WorkFusion are the leading IDP vendors, each processing over one billion pages annually.

Download the complimentary report abstract.

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.

Everest Group Predicts Accelerated 12% Growth in Life & Pensions BPO Market in 2019 as Insurers Leverage Providers’ Digital Expertise | Press Release

By | Press Releases

L&P Insurance BPO providers offer scalable, cost-efficient digital talent and technology to help insurers remain relevant and competitive.

The Life and Pension (L&P) business process outsourcing (BPO) market has seen a consistent pace of year-on-year growth in the range of 9 to 10% since 2014. According to Everest Group, growth will accelerate in the future, jumping from a market size of US $2.3 billion in 2017 to US$3.1 billion by 2020.

“In 2019, we will see buyers in the L&P insurance BPO market increasingly partnering with service providers to leverage their technological capabilities and expertise,” said Skand Bhargava, practice director, Business Process Services, at Everest Group. “In particular, as insurers’ hurdles continue to magnify and the need to address inefficient legacy systems becomes unavoidable, buyers will be even more open to leveraging external resources for digital enablement. Thus, providers who have invested in digitally modernized and integrated platform solutions are going to have a clear advantage.”

Currently, the L&P insurance market massively lags behind other industries in adapting to the digital era; however, the following market forces are pressuring insurers to augment their front-, middle-, and back-office operations and connect these together through digital systems:

  • Growth opportunities in new product classes such as voluntary and worksite benefits, whole life and individual universal life. Delivering these products will require product innovation, speed-to-market, and customer experience delivery, all of which can be enabled and enhanced by leveraging digital capabilities.
  • Increasingly costly and complicated regulatory compliance requirements. In the UK, for example, L&P insurers are being impacted by Automatic Enrollment, Pensions Freedom and GDPR. Digital solutions can address the burdens of these requirements by enabling data visualization, providing analytics for identifying regulatory risk areas, and automating workflows for efficient compliance.
  • An evolving competitive landscape, including challenges from InsurTechs and continual competitive shifts from strategic mergers and acquisitions (M&As).

Everest Group advises L&P insurers to leverage partnerships with L&P BPO service providers to:

  • access the requisite talent and digital technologies at scale and efficient costs
  • gain from service providers’ experience in digital implementations
  • identify greater opportunities for digital interventions

These findings are discussed in more detail in “Life and Pensions (L&P) Insurance BPO Annual Report 2019: Digital a Potential Game-changer but Insurers Stuck in Legacy Mode.” This report provides comprehensive coverage of the global L&P insurance BPO market, including the adoption trends across geographies and buyer size, factors impacting the market, key solution characteristics, emerging trends and the service provider landscape.

Other Key Findings:

  • New deals were signed across almost all geographies, with the exception of Latin America and Middle East and Africa.
  • Buyers’ inclination toward continuing with their incumbent service providers is being reflected by the market growth, which is primarily attributed to contract renewals and expansion in the existing scope of services.
  • Small- and mid-sized buyers are increasingly opening up toward outsourcing and now contribute to the market almost in the same proportion as large-sized buyers.
  • As a greater number of L&P insurers realize the need for digitalization of operations to adapt to the market forces and strengthen their competitive positioning, service providers need to be prepared for such opportunities through requisite investments.

Download the complimentary report abstract.

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.

Outsourcing Transactions, Global In-house Center Setups Grew in Q4 2018 According to Everest Group Report on Top Trends in Global Sourcing | Press Release

By | Press Releases

Digital services—especially automation, analytics and cloud—continued to dominate outsourcing activity

The global sourcing industry posted healthy numbers for Q4 2018, marked by an 8 percent increase in outsourcing transactions and a 13 percent increase in Global In-house Center (GIC) setups and expansions over the previous quarter, according to Everest Group.

Digital services continued to dominate the outsourcing activity in Q4, with 74 percent of all outsourcing transactions comprising digital-focused services as compared to 26 percent of transactions focused on pure traditional services. Cloud services were included in 44 percent of all digital-focused transactions for the year.

  • The majority (55 percent) of offshore and nearshore service delivery centers set up in Q4 were focused on digital services. Fifty-six percent of new centers established in Q4 supported automation and 33 percent included analytics services.
  • GICs were increasingly leveraged for digital services in Q4, with 59 percent of GIC setups and expansions including digital services in their scope. Automation continued to account for the maximum share (63 percent) of the total digital-based GIC setups during Q4, reflecting the significant degree to which enterprises are seeking to leverage automation to improve efficiency, deliver business value and reduce cost beyond traditional means.

“The global services industry enjoyed a fourth consecutive quarter of growth in Q4 2018, with digital services activity continuing its upward trend,” said H. Karthik, partner at Everest Group. “Two key areas of service provider activity in Q4 demonstrate this strong emphasis on digital services. First, service providers such as Accenture, DXC Technology and TCS announced acquisitions of startups to enhance their interactive digital content capabilities. Secondly, several service providers announced innovative partnerships with educational institutions in their attempts to bridge the digital skills gap. For example, Accenture announced a partnership with Georgia Institute of Technology, IBM is teaming up with IIT Delhi, and Infosys is joining forces with Cornell. We will continue to see service providers investing in acquisition and partnership strategies to strengthen their digital services capabilities in the year ahead.”

Everest Group discusses these and other fourth-quarter developments in its recently released Market Vista™: Q1 2019 report. The quarterly report highlights the trends in the fast-evolving global sourcing market, exploring the key developments across outsourcing transactions and Global In-house Centers (GICs), as well as location risks and opportunities, and service provider developments.

Additional highlights from the Market Vista: Q4 2018 report:

  • Themes such as design, customer experience, automation and cloud were prominent in Q4 2018.
  • The uptick in outsourcing activity was led by the Banking, Financial Services and Insurance (BFSI) sector.
  • Q4 saw substantial growth in adoption of GICs by small enterprises, with a particular focus on specific services rather than multi-functional centers.
  • The Asia Pacific region witnessed a significant rise in research and development (R&D) GIC setups by manufacturing enterprises, demonstrating a preference to insource next-generation engineering services.
  • To build niche capabilities, service providers focused on the acquisition of startups as opposed to partnerships. As many as 70 percent of acquisitions in Q4 were startups compared to 50 percent in Q3.
  • Key location risk/opportunity trends identified for Q4 2018 include South Africa announcing a new GBS incentive scheme to improve the country’s value proposition; Lithuania attracting a multitude of players looking to innovate and deliver FinTech services, increasing competition from service providers for engineering services sourcing, and significant investment from the Canadian government, likely to boost attractiveness of British Columbia for digital services delivery.

Learn More

  • Download a complimentary 16-page abstract of the report findings here.
  • In the recent webinar, “The 5 Most Important Global Services Trends for 2019,” Everest Group experts shared the context for many of the highlights of the Market Vista™: Q1 2019 report as well other key market trends. Watch the replay or download the webinar deck here.

Focus on Execution: Everest Group Identifies Highest-Impact Talent Strategies of Best-in-Class Shared Services Centers | Press Release

By | Press Releases

Talent strategies of Pinnacle GICs™ produce superior business outcomes and a ‘future ready’ workforce.

Shared services organizations are also known as Global In-house Centers (GICs), and in its recently released report, “Talent Strategy in Global In-house Centers (GICs): Pinnacle Model™ Analysis 2019,” Everest Group assessed the talent strategies of 43 GICs. Five GICs who rated highest in terms of the maturity of their capabilities and the impact delivered were deemed Pinnacle GICs™. In comparison to other GICs, Pinnacle GICs have achieved significant impact in three key areas:

  • Cost optimization: Twice as many Pinnacle GICs (as compared to other GICs) have kept their human resources (HR) costs to less than 5 percent of overall GIC costs.
  • Operational impact: The talent programs of Pinnacle GICs have improved operational metrics two to three times greater than other GICs.
  • Business impact: Pinnacle GICs deliver 1.5 times greater satisfaction from their talent programs than other GICs.

“With unemployment levels reaching generational lows in the US and other regions of the world, enterprises are desperate to know what talent strategies are delivering the most impact,” said Michel Janssen, chief research guru for Everest Group. “Our research on Pinnacle GICs shows that there is a cause-and-effect relationship between advanced capabilities and advanced outcomes. This means there are definitely concrete things enterprises can do to get the talent results they are looking for.”

Specifically, GICs are investing in five key capability areas to drive superior outcomes:

  1. Talent strategy. Pinnacle GICs have a 2.6 times higher proportion of their programs targeted to high-performing talent as compared to other GICs.
  2. Talent acquisition. Compared to others, Pinnacle GICs invest considerably more in partnering with educational institutions, hiring from adjacent industries and leveraging social media.
  3. Talent development. Pinnacle GICs are much more likely than other GICs to focus on developing in-house talent to be future ready. Examples include investing in learning and development tools such as gamification-based learning and employee-to-employee networks.
  4. Performance management and employee value proposition. Compared to other GICs, Pinnacle GICs are twice as dedicated to adopting structured career paths for most employees and are 1.6 times as likely to have invested in 360-degree appraisal approaches for performance management.
  5. Relative to other GICs, twice as many Pinnacle GICs have adopted cloud-based HR systems and 2.3 times as many Pinnacle GICs have invested more than 20 percent of their overall HR spend in next-generation technologies such as artificial intelligence (AI) and robotic process automation (RPA).

“One of the important takeaways of our research is that the talent strategies of Pinnacle GICs do not involve any secret tools and techniques that other shared services organizations lack,” said Rohitashwa Aggarwal, practice director of Global Sourcing at Everest Group, “Rather, what Pinnacle GICs have that others do not is a higher commitment to investing in talent strategies and a greater dedication to thorough execution of those strategies.’

More detail on the differentiating talent capabilities of Pinnacle GICs is provided in an Everest Group webinar, “Is Your Shared Services Strategy Future Ready? 5 Differentiating Talent Capabilities.”

***Watch the replay or download the webinar deck here.***

About the Pinnacle Model™

Everest Group’s Pinnacle Model™ approach explores what the very best organizations are doing in terms of optimizing costs, improving operations, and delivering strategic impact.  The journeys of these best-of-the-best companies provide insights into the key enablers needed to achieve desired outcomes and point to the investments required for the greatest speed to impact. By examining what Pinnacle Enterprises have in common, others can learn how to succeed, whether they desire to make incremental changes or achieve major transformations.

Sourcing Industry Group and Everest Group Announce Global Partnership | Press Release

By | Press Releases

SIG, the premier membership organization for sourcing, procurement and outsourcing executives, today announces a new partnership with Everest Group, a leading consulting and research firm that advises clients on strategic IT, business services and sourcing.

This relationship provides SIG buy-side members with insights and analysis to help them capture greater value from their contracts and provider relationships. SIG members can gain practical knowledge from the insights that Everest Group’s research leaders offer in session presentations at SIG’s Regional SIGnature Events and Global Executive Summits, including proprietary research that identifies and details what the best enterprises are doing to achieve exceptional outcomes through their sourcing strategies.

In March of this year, Everest Group and SIG will kick off joint research based on surveys and interviews to determine what the best-of-the-best companies are doing to achieve innovation in strategic sourcing. They expect to release findings of this Pinnacle Model™ analysis in October 2019. This will the first of several joint research projects the two organizations have planned.

“We are excited to partner with SIG, an organization truly dedicated to offering its members education, information, and insights to advance their sourcing journeys. With our keen focus on strategic sourcing and procurement, we are confident that the research we contribute will support SIG and its members’ objectives,” said Michel Janssen, Chief Research Guru, Everest Group.

Dawn Tiura, President and CEO of SIG, added, “We are delighted to partner with Everest Group to educate the market and provide our members with premier research that will assist them in making better decisions and understanding how to overcome the challenges of this radically evolving industry.”

This partnership also provides SIG members with special pricing on Everest Group’s Strategic Outsourcing and Vendor Management membership. To learn about the full benefits of this partnership and gain access to the research, visit our website.

About SIG
SIG, https://sig.org/ is a membership organization that provides thought leadership and networking opportunities to executives in sourcing, procurement and outsourcing from Fortune 500 and Global 1000 companies and the advisors who serve them. SIG is widely known as a forum for sharing “next” practices and thought leadership through live networking events, virtual forums and a comprehensive online SIG resource center (SRC), which was developed by and for professionals in sourcing and outsourcing. The organization is unique in that it blends practitioners, service providers and advisory firms in a non-commercial environment. SIG is also the parent organization for SIG University, a one-of-a-kind certification and training program for professionals and executives seeking deep expertise in sourcing and governance for themselves or their teams, as well as Future of Sourcing, which provides unrivaled digital content for the opinion-formers and decision-makers at the heart of the outsourcing space.

Everest Group Projects Robust 6-8% Growth for Multi-Process HR Outsourcing in 2019; Transformation to Next-Gen HR Model Is Driving Growth | Press Release

By | Press Releases

MPHRO service providers augmenting services with cloud, analytics, mobility-based solutions to deliver greater value to buyers

The global multi-process human resources outsourcing (MPHRO) market will sustain its 6-8 percent annual growth over the next three years and will exceed the US$5 billion mark by 2020, according to Everest Group. This growth trajectory is fueled by enterprises increasingly seeking strategic partners with the expertise to support a next-generation HR model wherein technology is leveraged to not only provide cost reduction and process efficiency but also orchestrate a seamless, intuitive employee experience.

At the heart of the next-generation HR model are digital tools and concepts such as analytics, automation, and cloud:

  • Analytics: Analytics solutions can have a significant impact in mitigating all business challenges faced by enterprises through enhanced visibility and control. However, despite the growing adoption of basic analytics solutions, advanced analytics penetration within HR still remains relatively low.
  • Automation: Automation has the potential to bring about enhanced efficiency and reduce error rates, thus reducing the cost of operations. However, since the HR landscape already has a high leverage of technology, basic automation has found limited penetration. Nevertheless, with advanced forms of automation solutions (such as artificial intelligence) gaining traction, the scenario is slowly changing.
  • Cloud: Cloud has become a major disruptive force in reengineering HR operations. Cloud-based solutions not only provide an elevated employee experience, but also offer an integrated view of the data, allowing enterprises (or providers) to glean strategic insights to overcome many talent-related challenges.

“The most critical issues facing enterprises today are HR challenges such as the scarcity of talent, the high cost of HR operations, and providing employee experiences that are required to maintain competitive positioning,” said Anil Vijayan, practice director at Everest Group. “Increasingly, enterprises of all sizes are looking to their MPHRO service providers, seeking strategic partners who can pave their way through the digital HR transformation journey. The importance of third-party advisory has increased sharply, and, going forward, digitally-driven, orchestration-led engagements will form the primary deal archetypes in the ever-evolving MPHRO marketplace.”

These findings and more are explored in Everest Group’s recently published report, “Multi-Process Human Resources Outsourcing (MPHRO) Annual Report 2019 – Unraveling the HR Conundrum Through Digital Adoption.” This research provides comprehensive coverage of the 2017-2018 HRO market and analyzes it across various dimensions such as market overview, evolving market situation, and buyer adoption trends.

*** Download Complimentary Abstract ***

 Additional Key Findings:

  • The market has witnessed adoption from first-time outsourcers as they venture into cloud-based HR services delivery.
  • North America continues to dominate as the primary decision-making location; however, its share is slowly being acquired by other geographies such as Asia, Eastern Europe and the Middle East.
  • With enterprises taking a more strategic outlook toward HRO, there has been a marked increase in the inclusion of talent management processes. Enterprises want to undergo end-to-end transformation of their HR processes rather than focusing on transactional processes in isolation.
  • MPHRO deals on third-party SaaS-based platforms are witnessing much faster adoption rates. Among prominent third-party platforms, Workday has witnessed the highest traction, followed by SAP and SuccessFactors.
  • While manufacturing and financial services still lead the adoption in MPHRO, non-traditional adopters such as healthcare and retail have seen an uptick in adoption.
  • The market continues to witness steady inclusion of offshoring within its deals. India retains its position as the most favored offshore location; however, providers are also investing in Eastern Europe and Latin America.

Everest Group Identifies Four ‘Must Haves’ for BPO Providers in Life & Pension Insurance Market in 2019 | Press Release

By | Press Releases

Everest Group report describes clear marketplace advantage held by service providers who offer end-to-end capabilities, onshore services, domain expertise and digital proficiency.

The Life and Pension (L&P) business process outsourcing (BPO) market has seen a consistent pace of year-on-year growth in the range of 9 to 10 percent since 2014. According to Everest Group, growth will accelerate in the future, jumping from a market size of US $2.3 billion in 2017 to US$3.1 billion by 2020. However, growth will be focused on four distinct areas as buyers demand these specific capabilities from their service providers:

  1. End-to-end delivery capabilities: Insurers are moving away from managing multi-vendor engagements to consolidating their vendor portfolios. Buyers are also demanding greater value-addition from service providers, including support on faster launch of new products, customer experience and regulatory compliance.
  2. Onshore presence: Buyers in almost all the major geographies are now demanding an onshore presence of service providers. Buyers often seek localized presence to minimize language and cultural issues, to ensure quality of customer service, to ease relationship management, and to address political and regulatory requirements.
  3. Domain expertise: As buyers expand the scope of services with service providers, they will be inclined to engage with providers that have deeper domain expertise.
  4. Digital proficiency: Buyers are increasingly considering service providers for their digital initiatives. The ability to deliver integrated and modernized platform solutions will differentiate service providers in the L&P insurance BPO market.

“In 2019, we will see buyers in the L&P insurance BPO market increasingly partnering with service providers to leverage the latter’s technological capabilities and expertise,” said Saurabh Verma, practice director, Business Process Services, at Everest Group. “In particular, as insurers’ hurdles continue to magnify and the need to address inefficient legacy systems becomes unavoidable, buyers will be even more open to leveraging external administration platforms. Thus, providers who have invested in digitally modernized and integrated platform solutions are going to have a clear advantage.”

These findings are discussed in more detail in “Life and Pensions (L&P) Insurance BPO: Annual Deal Trends Report 2019.”  This report provides comprehensive coverage of the global L&P insurance BPO market, including the adoption trends across geographies and buyer size, factors impacting the market, key solution characteristics, emerging trends and the service provider landscape.

Other Key Findings:

  • New deal signings were witnessed across multiple geographies including the United States, the United Kingdom, Asia Pacific, and Continental Europe. L&P insurance BPO signing activity was the most intense in North America and Continental Europe.
  • Ensuring buyer satisfaction has become absolutely essential for service providers as renewals account for the majority of signing activity. Additionally, as buyers endeavor to move up the value stream in their outsourcing relationships, service providers need to consequently build supporting capabilities.
  • Adoption of Robotic Process Automation (RPA) and analytics in L&P insurance BPO contracts has steadily been increasing. However, the pace of adoption is slower than expected owing to multiple reasons such as complications around contract pricing for RPA leverage.
  • The demand for BPaaS models is getting stronger as service providers have developed suitable domain expertise and supporting platform capabilities over the years that could address buyers’ margin issues, volume fluctuations, and archaic technology infrastructure challenges.

***Download the complimentary report abstract.***

Double-Digit Growth in Managed Service Provider Market May Continue, Driven by Global Demand for Contingent Workforce—Everest Group | Press Relelase

By | Press Releases

Everest Group report describes rapid evolution of MSP technology model as next-generation digital technologies unlock powerful new avenues of value creation.

The global Managed Service Provider (MSP) market is growing steadily on the back of rising demand for contingent workforce globally. The total annual contingent spend managed by MSP service providers stood at US$127-132 billion in 2017, representing 11 percent growth year on year, and Everest Group predicts growth in 2018 of 10 to 12 percent, with total annual contingent spend reaching US$140-150 billion.

These findings are discussed in more detail in “Managed Service Provider (MSP) – Annual Report 2019: Navigating Through Unchartered Territories: Is the Industry Compass-Ready?.”  This research provides comprehensive coverage of the 2017-2018 MSP market and analyzes it across various dimensions such as market overview, evolving market situation, and buyer adoption trends.

Everest Group research identifies these key themes in the MSP market:

  • Clash of MSP and PO: Procurement outsourcing (PO) and business process outsourcing (BPO) providers hold a significant chunk of the global MSP spend and are increasingly clashing with MSPs as they defend their share of the services procurement space.
  • Services Procurement: While traditional temporary labor services still constitute a major part of the MSP spend, services procurement / Statement of Work (SOW) spend managed by MSPs is slowly capturing an incremental share of the pie, owing to its rapid growth across regions.
  • Total Talent Acquisition: In 2017, the market also witnessed an uptick in the number of Requests for Information (RFIs) for Total Talent Acquisition (TTA). While Europe remains the largest TTA adopter, activity in North America and the Asia Pacific region increased as well.
  • Digital technologies: Application of digital technologies in talent acquisition is advancing rapidly, and as contingent workforce across industries and buyer segments is taking different shapes and forms, the role of technology in MSP is becoming all the more crucial.

“Today, analytics is increasingly becoming an integral part of MSP engagements, with a wide variety of use cases such as spend analytics, supplier analytics, workforce analytics and peer benchmarking, among others,” said Arkadev Basak, vice president at Everest Group. “Other next-generation digital levers are typically still in pilot phases today, but we will soon see digital technologies impacting all aspects of talent acquisition, resulting in the transition from a traditional organizational structure to a digitally-enable one.”

***Download the complimentary report abstract.***