Category: Press Releases

Cloud Services Market Will Accelerate to 24% Growth Rate Through 2024 as Hyperscalers and Non-Hyperscalers Battle for Market Share | Press Release

Hyperscalers will seize more of enterprise IT spend, but other infrastructure vendors will continue to be relevant

Hyperscale public cloud providers have experienced growth rates exceeding 30% for the past few years, and their appetite for enterprise IT spend remains insatiable. Everest Group predicts hyperscalers—namely Amazon Web Services (AWS), Google Cloud, and Microsoft Azure—will seize more of enterprise IT spend as the cloud services market accelerates to 24% compound annual growth rate through 2024. However, enterprises will continue to demand a diverse vendor portfolio to avoid lock-in, address data security and governance concerns, build innovative consumption and commercial models, and take advantage of vendors’ unique strengths.

More than 90% of enterprises already leverage one or more public clouds in their enterprise environment. COVID-19 has further accelerated enterprise migration to the public cloud, with most enterprises reaping business continuity benefits during the pandemic. Hyperscalers plan to capitalize on this growth and dominate the enterprise IT spend by expanding their offerings beyond infrastructure services to full-stack capabilities.

To sweeten their appeal, hyperscalers are offering next-generation services including artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), natural language processing (NLP), augmented reality (AR) and virtual reality (VR), blockchain, and more. In addition, leading hyperscalers are evolving their operating models to attract enterprises, for example by adding financial and technical support, offering A-team talent for professional services, and providing deep resources for enterprise training.

However, enterprise willingness to engage not only with hyperscalers but also with non-hyperscalers indicates the strategic importance of private cloud, multicloud and traditional infrastructure in running their end-to-end enterprise IT landscape. Non-hyperscalers will continue to be relevant with enterprises often choosing non-hyperscalers for their unique capabilities.

These findings and more are shared in Everest Group’s recently published report, “Cloud Hyperscalers: A Critical—But Not the Only—Building Block of Enterprise IT.” This State of the Market report deep dives into the global IT cloud services market, providing data-driven perspectives on the market at large. The report evaluates cloud services trends and demand drivers, analyzes hyperscaler offerings, and describes how hyperscalers have moved beyond providing infrastructure services to now cater to the entire enterprise IT stack, making consuming technology easier.

**Enterprises also need non-hyperscale cloud vendors to run their digital businesses**
Enterprises believe hyperscalers have their sweet spots but other options are also needed to run their end-to-end enterprise IT landscape, according to Everest Group research. Non-hyperscale cloud vendors and IT service providers can capitalize on the advantages they have to offer enterprises, including the following:

  • Innovative commercial models: Most non-hyperscale vendors have transformed their pricing models for on-premise deployments. This change has made enterprises reevaluate their infrastructure sourcing strategy and consider these vendors as an important and viable partner.
  • Easier consumption models: Vendors have learned from cloud hyperscalers to make “as-a-service” consumption a key part of their strategy. Therefore, clients are open to the idea of a “local cloud” that can run independently or extend to form a hybrid edge-to-local distributed cloud architecture.
  • Product innovation: Infrastructure vendors are bringing in innovative service offerings, not to compete with cloud hyperscalers but to demonstrate their capabilities to help clients in building a digital business. These innovations vary and include enterprise-grade security, workload-specific compute, single pane of management, and transparent invoicing. Some non-hyperscalers are also building “software only” platforms that are not tied to their infrastructure but can be deployed on any hosting environment to give flexibility to clients. In addition, many are significantly increasing open source adoption to not only reduce cost of solution but also provide a market standard offering.
  • Enterprise context and consulting skills: Enterprise technology transformation projects are highly complex, require advanced consulting skills and need a combination of technical skills with vertical expertise. IT service providers have developed this skill set, whereas hyperscalers, comparatively, have a lesser understanding of the enterprise IT landscape.
  • Deep industry knowledge: Service providers possess deep industry knowledge and better understand industry-specific challenges, allowing them to cater well to specific enterprise demands.
  • Strategic client relationships: Service providers are viewed as trusted partners by enterprises. Their relationship over the years has witnessed multiple technology transformations. Service providers have proved their execution competency.

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

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Intelligent Document Processing (IDP) Adoption Swells as Enterprises Seek to Lower Costs Through Automation; IDP Market to Grow 55-65% in Next Year | Press Release

IDP vendors are expected to offer more out-of-the-box, pre-trained IDP solutions to meet the demand for faster ROI and quicker deployment

The global market for Intelligent Document Processing (IDP), estimated at US$700-750 million in 2020, is expected to grow at a rate of 55-65% over the next year, according to Everest Group. Cost impact is now the key driver for IDP adoption as enterprises seek to realize tangible benefits from the technology, closely followed by improving operational efficiency and productivity.

IDP solutions automate the processing of complex documents with accuracy. These solutions blend the power of artificial intelligence (AI) technologies to efficiently process all types of documents and feed the output into downstream applications. Optical character recognition (OCR), computer vision, machine learning (ML) and deep learning models, and natural language processing (NLP) are the key core technologies powering IDP capabilities. The most common use cases of IDP solutions are invoice processing, Know-Your-Customer (KYC) information, insurance claims, patient onboarding, patient records, proof of delivery and order forms.

Enterprises seeking to leverage IDP technology should seek an enterprise-grade IDP solution comprising the following capabilities:

  • 1.    Training the software: The underlying AI/ML model of an IDP solution has to be trained with sample documents to accurately extract data.
  • 2.    Data extraction and classification: Core IDP capabilities include techniques to extract data from structured, semi-structured and unstructured documents; classification of documents; support for a range of languages; and product configurability.
  • 3.    Interoperability: Integration with enterprise applications—such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems—and complementary technologies, including Robotic Process Automation (RPA) and cloud, are needed for data ingestion and enabling broader automation.
  • 4.    Monitoring and security: Key capabilities include monitoring the performance of the software and users; assessing the accuracy of algorithms for various document types and drawing insights; and ensuring confidentiality of sensitive data.

IDP solution vendors are heavily investing in technology capabilities as well as expansion of their partner ecosystem. Development trends in IDP products that are delivering benefits to enterprises include the following:

  • Extraction capability for a large set of languages, including Asian and Middle Eastern languages.
  • Increasing maturity for processing unstructured documents.
  • Vertical- and horizontal-specific pre-trained solutions out-of-the-box; app store-like channels for easy access.
  • Software-as-a-service (SaaS) offerings of the solution to lower Total Cost of Ownership for enterprises and increase accessibility.
  • Increased configurability of platforms to provide greater control to enterprise users.
  • Enhanced integration with complementary technology solutions, including RPA, Business Process Management (BPM), and process mining.
  • Dedicated mobile applications to facilitate document processing through handheld devices.
  • Advanced image recognition and processing capabilities using a combination of computer vision and deep learning algorithms.
  • Availability of benchmarking analytics for particular processes such as invoice processing.

These findings and more are shared in Everest Group’s recently published report, “Intelligent Document Processing (IDP) State of the Market Report 2021 – Key to Unlocking Value in Documents.” This report provides comprehensive coverage of the IDP market and analyzes it across various dimensions, such as market size and adoption trends, solution characteristics, product capabilities and trends, buyer satisfaction, vendor landscape, challenges to adoption and future outlook.

IDP Market Adoption Trends

  • Banking and insurance continue to be the largest adopters of IDP solutions and account for approximately 30% and 13% of the IDP market, respectively.
  • Government and the public sector have shown significant growth in 2020, driven mainly by an increased need to improve efficiency and compliance and reduce dependence on manual processing.
  • North America continues to be the largest market for IDP software solutions with over 50% market share, while the Asia Pacific (APAC) market is growing rapidly.
  • Adoption of IDP solutions in industry-specific processes, especially in Banking, Financial Services and Insurance (BFSI) and healthcare, observed significant growth.
  • Large buyers continue to have the highest adoption; however, small and medium-sized businesses (SMBs) are showing the highest growth rate in the adoption of IDP solutions.

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

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Everest Group Unveils Seventh Annual Business Process Services Top 50 | Press Release

ADP, Teleperformance, Accenture, Concentrix and Arvato take Top 5 spots among world’s largest third-party BPS providers

Everest Group today released the seventh annual edition of “The Everest Group BPS Top 50™,” a ranking of the world’s largest third-party providers of business process services (BPS). The list was launched in 2015 as the first of its kind for the global industry, which is valued at more than US$200 billion. The ranking is based on 2020 revenues and year-on-year growth.

Topping the 2020 list of BPS providers are these 10 leaders:
1.    ADP
2.    Teleperformance
3.    Accenture
4.    Concentrix
5.    Arvato (Majorel)
6.    Paychex
7.    Conduent
8.    Genpact
9.    Telus
10.    TCS

***Download a complimentary copy of the 2021 Everest Group BPS Top 50 list and analysis***

BPS (also referred to as business process outsourcing or BPO) started as a cost optimization concept focusing on “non-core” and “back-office” business processes. Today BPS permeates the entire business process value chain, addressing a wide variety of business objectives.

Everest Group estimates there are more than 250 service providers with more than US$50 million in revenues offering BPS around the globe. Some are pure-play BPS providers, while others offer business services as part of a broader portfolio (including IT services, consulting, technology products, etc.). Some are focused on a particular domain or geography, while others are broad-based. Some are listed, while others are privately held. Interestingly, in 2020 specialist providers reported higher growth (4.04%) than broad-based providers (1.6%), a reversal from 2019.

In the 2021 Everest Group BPS Top 50, North America-head quartered service providers continue to dominate with a 54% share; however, in 2020, the region’s overall share declined slightly from 2019, while the share for Europe (26%) and APAC (20%) increased from 2019.

Top 3 North American Providers:

  • ADP
  • Concentrix
  • Conduent

Top 3 European providers:

  • Teleperformance
  • Accenture
  • Arvato (Majorel)

Top 3 APAC Providers:

  • TCS
  • Transcosmos
  • NTT Data

“In this year’s listing, we see several interesting trends,” said Rajesh Ranjan, partner at Everest Group. “First, the divide between risers and decliners continues to widen, increasing to 38% this year, up from 35% last year. Secondly, the overall volatility in the rankings in 2020 was subdued compared to the previous year. Going forward, as BPS 4.0 takes shape in this industry, we expect providers taking a proactive approach to align their operating model to this new paradigm will grow much faster than others.”

Other highlights:

  • The Top 5 leaders in terms of revenue were ADP, Teleperformance, Accenture, Concentrix and Arvato/Majorel.
  • The Top 5 fastest growing companies year-on-year were Telus, Sopra Steria, Willis Towers Watson, Webhelp Group and TTEC.
  • Top risers (companies whose position in the list advanced the most) include Telus, SD Worx, Webhelp Group, Sutherland, and Transcom.

The Everest Group BPS Top 50 is based on both revenues and year-on-year growth. Revenues comprise 75% of the composite score used for ranking. Growth comprises 25% and has two sub-parameters: absolute growth (measured as change in ES revenue in US$ million and accounting for 12.5% of the composite score) and percentage growth (measured as percentage change in ES revenue and accounting for the final 12.5% of the composite score).

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Traditional Banks Take Heed: The Future of Money Is Digital | Press Release

The cryptocurrency and digital assets market experienced more than seven-fold growth in the last 12-18 months, making it a key area of focus for global financial systems

Everest Group reports the year 2020 and Q1 2021 produced a seven-fold surge in retail and institutional investments in cryptocurrencies and related crypto assets, driven by increased investor demand, pandemic-fostered digitalization and clarity in regulatory tenets. The cryptocurrency market hovered around US$2 trillion through April 2021 and is projected to reach US$24 trillion by 2027. This growth is forcing traditional banks to realize that digital assets are the future of money. Banks need to invest early to capture high-growth pockets and investor mindshare in this market, according to Everest Group.

Several players within the banking and financial services (BFS) industry are already active in the growing crypto market, which is a thriving ecosystem comprising several digital assets including privacy coins, stablecoins, cryptocurrencies, security tokens, utility tokens and Central Bank Digital Currencies (CBDC). IT service providers are developing in-house solutions to help financial institutions use Blockchain-as-a-Service (BaaS) for their digital asset needs. FinTechs are at the forefront of innovating products and services but operate in an unregulated environment, posing high risks for investors. Larger investments have increased the safety, security, and accountability requirements to invest in these assets. Thus, there is an urgent need for regulatory bodies globally to bring in practical frameworks and regulations for digital asset trade at the earliest.

These findings and more are shared in Everest Group’s recently published “Deconstructing the Digital Assets Revolution – What Financial Institutions Can Learn from the Meteoric Rise of Coinbase.” This State of the Market Report analyzes the rise of retail and institutional investments in digital assets, including cryptocurrencies, other crypto assets and crypto technology. The report examines crypto financial service offerings and their impact on the BFS market. Everest Group also recommends a transformation plan for traditional banking systems through a hybrid model, which seamlessly integrates value-added processes and operational functions for both traditional and digital assets being serviced on a digital-native platform.

Key trends and imperatives in the digital assets revolution:

  • Venture funding is at an all-time high for blockchain-based market infrastructure platforms, which indicates a rising threat to existing financial systems.
  • Banks must follow a three-pronged strategy to build, partner and acquire digital assets skillsets in the market to stay ahead of the curve.
  • Traditional financial institutions will face several issues in developing in-house solutions to adapt new financial technologies, such as updating legacy systems, regularly innovating solutions, and keeping up with regulations globally. These institutions can partner with FinTechs that specialize in developing and servicing such solutions at global scale in a plug-and-play model.
  • Large financial services firms are developing capabilities and skillsets to stay ahead of the competition in the crypto asset services market. For example, Wells Fargo has introduced a cryptocurrency fund focused on HNIs; a consortium of 15 major institutions have developed a Utility Settlement Coin (USC) for peer-to-peer digital cash settlement; BNY Mellon built expertise as a crypto ETF service provider; JPMorgan Chase & Co. has invested in building its own cryptocurrency; and Anchorage and Silvergate, new players in the banking sector, cater only to crypto assets.
  • Technology vendors (such as AWS, Alibaba Cloud, Oracle and R3) and IT service providers (such as Accenture, Infosys, IBM and Tata Consultancy Services) are developing in-house solutions to help financial institutions use Blockchain-as-a-Service (BaaS) for their digital assets needs.
  • Several financial technology platforms and services players have entered the digital assets space in core and value-added services, including cryptocurrency mining pools, custodians and banks, crypto assets development tools, crypto asset and portfolio managers, crypto assets analytics platforms, crypto over-the-counter desks and trading spaces for market whales, and crypto credit providers.
  • Banks face numerous challenges as they strive to stay ahead of the curve, including regulations, disaster management, private key recovery, insurance-backed custody, and systems for fraud prevention.

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

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Rewards & Recognition (R&R) Solutions Market to Grow Up to 20% by 2022 | Press Release

COVID-19 has ushered in a new era in human resources that is focused on enhancing employee experience and modernizing employee engagement with digitally enabled solutions.

Everest Group reports that the rewards-and-recognition (R&R) solutions market grew at a rate of 9-11% in 2020 as enterprises globally grappled with COVID-19. COVID-19 brought uncertainty and change to many organizations with respect to managing and motivating their workforces. The pandemic challenged organizations to align culture and values, offer engagements valued by employees, and provide face-to-face interactions and feedback. In the midst of these challenges, Human Resource (HR) personnel tasked with enhancing employee experience and building more resilient organizations looked to third-party support in the form of R&R solutions, a market which Everest Group estimates is currently valued at US$2.7 to $2.9 billion worldwide.

Although enterprises took measures to save on their rewards budgets in 2020 and decision making slowed down, recognition platforms were still seen by senior stakeholders to be one of the key ways to solve issues pertaining to employee productivity, motivation and engagement. Going forward, Everest Group predicts the R&R solution market will grow at 18-20%, reaching a US$3.3 to $3.5 billion valuation by 2022.

These findings and more are shared in Everest Group’s recently published “Rewards and Recognition (R&R) State of the Market Report 2021: The Era of Modernizing Employee Engagement.” This report provides comprehensive coverage of the R&R market and analyzes it across various dimensions, such as buyer objectives, market overview, evolving solution characteristics, and solution provider landscape.

Highlights from the R&R State of the Market Report 2021

  • COVID-19 brought unprecedented uncertainty in many organizations and now buyers are seeking holistic solutions to build employee resilience and future-proof their HR strategies.
  • The majority of enterprises adopting R&R solutions were small- or mid-sized enterprises. Buyers from manufacturing, financial services, and healthcare industries have led the adoption of R&R solutions, while newer industries have experienced a rise in demand.
  • North America continues to constitute the largest market and has the highest revenue contribution, whereas the UK and Asia Pacific are on a growth trajectory.
  • Buyers of R&R solutions prefer flexible solutions that cater to their company-specific requirements. To improve overall buyer satisfaction levels, solution providers need to bring in next-generation technology solutions, expand their existing offerings, and increase the flexibility of their solutions.
  • R&R providers are adopting a multi-prong approach to revamp their present capabilities:
  • – Developing smarter platform capabilities. R&R solution providers are infusing artificial intelligence, machine learning, automation and analytics into their solutions to develop more intelligent, intuitive and user-friendly platforms.
  • – Expanding beyond R&R capabilities. R&R solution providers are integrating their solutions with other collaboration and HR tools, unifying with social engagement platforms, and offering fitness and wellness platforms.
  • – Diversifying rewards catalog. R&R solution providers are offering extensive catalogs based on the evolving needs of buyers. Rewards may comprise merchandise, gift cards and e-cards, discounts and perks, experiences and donations to favorite charities.
  • – Exploring new and innovative commercial models, such as more transparent and less complex pricing models.
  • Four companies are considered leading solution providers in the space, and these four contributed more than 50% of the market share in terms of revenue in 2020: O.C. Tanner, Engage2Excel, Madison PG, and Workhuman.
  • Challenges faced by enterprises due to the pandemic will have a long-term impact on the way they engage with the employees. They will continue to explore new strategies

to deliver a superior employee experience. Enterprises will focus on employees’ mental and physical well-being and will ramp up post-implementation support and internal communication initiatives to promote R&R practices.

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

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Everest Group Reports Q1 Uptick in Global Outsourcing Transactions | Press Release

Market activity saw a recovery in offshore/nearshore setups driven by Asia.

As the economic impact of the COVID-19 pandemic recedes, several key demand themes are gaining prominence in the sourcing industry, driving deal growth and deal wins for service providers. According to Everest Group, the uptick in global sourcing transactions in Q1 2021 over Q4 2020 was driven by demand for cloud services, cybersecurity, digital engineering and support for the modern workplace.

Demand for system integration services witnessed an increase in recent quarters. One of the major contributors to this trend is the adoption of advanced technologies such as big data, cloud-based services, Software-as-a-Service and numerous others.

These findings and more are shared in Everest Group’s recently published Market Vista: Q2 2021 report. The Market Vista™ report highlights the key trends and developments in the fast-evolving global outsourcing and offshoring market. The study captures the key developments across outsourcing transaction trends, the health of Global Business Services (GBS) centers, location risks and opportunities, and service provider developments.

Highlights from the Market Vista: Q2 2021 Report

  • Outsourcing demand witnessed an increase quarter on quarter, with 436 outsourcing transactions completed in Q1 2021 compared to 422 in Q4 2020.
  • Deals for government and Banking, Financial Services and Insurance (BFSI) were the highest among all industry verticals, although BFSI saw a decline quarter on quarter due to fewer deals across banking and capital markets.
  • The share of digital services in these transactions increased significantly as well, with 59% of Q1 2021 deals have digital components whereas only 54% of Q4 2020 deals featured digital components.
  • Digital services continued to dominate transaction activity, driven by an increase in cloud-based deals. Cloud-based services were a component of 50% of all outsourcing transactions completed in the last year (Q2 2020 to Q1 2021).
  • Advanced automation—including artificial intelligence (AI), machine learning (ML) and cognitive technologies—were included in 16% of those deals, robotic process automation (RPA) in 13% and analytics in 11%.
  • Offshore center setup activity (comprising both service provider and GBS) increased from Q4 2020 (41 setups and expansions) to Q1 2021 (59), but onshore setups declined (from 37 to 26).
  • Total center setups in Asia jumped from 19 in Q4 2020 to 28 in Q1 2021.
  • On average, the 30 service providers profiled in the report witnessed an increase in revenues on a sequential basis but a decline in operating margins.

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

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Everest Group Announces 2021 List of Top 50 Engineering Services Providers | Press Release

Capgemini takes No. 1 spot via Altran acquisition; HCL Technologies and Alten remain in top 3, but 2021 list is otherwise marked by many shifting positions.

Everest Group today released the third annual edition of the Everest Group Engineering Services Top 50™, a ranking of the world’s largest third-party providers of engineering services (ES). ES includes all activities that support the design, development, testing and management of commercial products, both hardware and software.

Engineering Services Top 50 companies had a combined revenue of US$46.7 billion in 2020. Mentioned below are the top 10 ES providers from the 2021 list:
1.    Capgemini
2.    HCL Technologies
3.    Alten
4.    Accenture
5.    Tata Consultancy Services
6.    AVL
7.    AFRY (ÅF Pöyry)
8.    Cognizant
9.    Wipro
10.    Globant

Capgemini’s acquisition of Altran propelled its 21-place rise, ensuring its top position in the 2021 Top 50 list.

“As expected, mergers and acquisitions played a significant role in changing the landscape of the Engineering Services Top 50 list this year,” said Akshat Vaid, vice president at Everest Group. “The ES market witnessed many service providers acquiring businesses to build capabilities, achieve business scale and generate greater access. In fact, this growth strategy was used by 60% of our top 10 firms, each making key acquisitions in 2020. We expect this consolidation of supplier base to play out further over the next few years.”

*** Download a complimentary copy of the 2021 Everest Group ES Top 50 list and analysis. ***

2021 ES Top 50 List Marked by Volatility Due to Pandemic, M&A Activity

In 2020, ES providers showcased high client commitment amid the COVID-19 crisis, as they successfully shifted 90-95% of their engineering talent to remote delivery within weeks. Despite these efforts, however, outsourcing slowed down significantly for a large part of 2020 due to canceled projects and decision-making delays. In particular, the slowdown in sectors such as automotive, aerospace and defense, and industrial products forced enterprises to cut back on their engineering, research and development (ER&D) spending, impacting ES providers catering to these sectors. Over 50% of the companies featured in the top 50 list experienced a decline in revenues during this time period. This decline was more prominent for pure-play ES providers.

Signs of recovery started appearing toward Q4 2020, when several service providers entered into US$10 million+ deals, many of which centered around digital engineering themes.

The slowdown’s impact and the pace of recovery have varied significantly for service providers, depending on their exposure across verticals and service functions. These factors, combined with continued M&A activity during 2020, have led to significant changes in how ES providers fare against each other, with five firms maintaining status quo in the ranking.

Other highlights:

  • The Top 5 companies based on revenue alone are Capgemini, HCL Technologies, Alten, AVL and AFRY (ÅF Pöyry).
  • The Top 5 fastest growing ES companies were Capgemini, Infogain, Globant, Mindtree and Endava.
  • With continued investments in digital engineering, the proportion of broad-based service providers featured in the ES Top 50 list continued to grow, reaching 40% in 2020.
  • Europe continues to hold a major share (48%) of the providers in the Top 50 list. The share of APAC- and North America-based ES providers stood at 28% and 22% respectively.

The Everest Group Engineering Services Top 50 list is based on calendar year revenue and year-on-year growth. Revenues comprise 75% of the composite score used for ranking. Growth comprises 25% and has two sub-parameters: absolute growth (measured as change in ES revenue in US$ million and accounting for 12.5% of the composite score) and percentage growth (measured as percentage change in ES revenue and accounting for the final 12.5% of the composite score).

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

COVID-19 Taught Life and Pension Insurers That Change Must Come, Complexity Must Go | Press Release

COVID-19 forced L&P Insurers to simplify operations and drastically reduce their reliance on manual interactions and complex, paper-based processes; modernization of IT and digitalization are among key investments being made in 2021 to future-proof the industry.

Overall, the life and pension (L&P) insurance industry held steady in 2020, showing sufficient resilience to the COVID-19 pandemic. However, according to Everest Group, COVID-19 undeniably made one significant impact on L&P insurers: they were forced to recognize the need for change and innovation.

The L&P insurance industry is known for being complex and compliance heavy. The challenges brought by the pandemic underscored for L&P insurers the inefficiency of reliance on manual interactions and paper-based, fragmented processes. As a result, many insurers are looking to simplify their operating models by investing in the following initiatives:

  1. Efficient capital management through divestitures: Most L&P insurers have a great deal of capital tied up in capital-intensive products such as guaranteed products and legacy blocks. Adding the high maintenance costs of disparate legacy systems, the capital that could be allocated to new innovation investments remains insufficient. Thus, proper capital management is the need of the hour, and many insurers have divested out of capital-intensive businesses or legacy blocks to free up resources and, in some cases, reduce debt.
  2. Expansion into strategic growth markets: Leading L&P insurers across the board are simplifying their geographical portfolio strategies and focusing on the markets that they consider lucrative in the long term, rather than stretching themselves too thin.
  3. Product alignment and innovation: Customers have become more aware of the importance of life insurance and retirement planning; however, they want to be offered more relevant products that are suitably customized to their specific needs and stage of life. Insurers also realize that only protection or coverage is not enough; value-added services such as financial wellbeing advisory are becoming more important than before.
  4. IT modernization: L&P insurers’ technology infrastructure remains a key shortcoming when it comes to innovation. L&P insurers largely rely on an IT and data architecture that is legacy, inflexible, and complex to navigate. Work environment changes during the pandemic forced insurers to provision a more flexible and remotely enabled IT landscape, and leading insurers are now concertedly taking other corrective measures as well.
  5. Digitalization of processes and channels: COVID-19 thwarted insurers’ usual manual and paper-reliant processes and drove a surge in online customer traffic, forcing insurers to quicken the pace of digital adoption. Digitalization is not only important for end-customers, but also for improving the productivity and efficacy of other stakeholders, such as agents, brokers and employees.

To achieve these strategic priorities, many insurers turn to the outsourcing ecosystem. Most of the large carriers already have outsourcing relationships with business process services (BPS) providers, so it is small-sized carriers that are creating new activity. Everest Group estimates the growth rate of the L&P Insurance BPS market at 4-6% for 2019 to 2020 and projects growth could accelerate to as high as 9% by 2022.

These findings and more are shared in Everest Group’s recently published report, “Life and Pensions (L&P) Insurance BPS State of the Market Report 2021: Insurers’ Complex Journeys to Simplification.” This report provides a comprehensive picture of the key investment trends in the L&P insurance outsourcing market across various dimensions and includes Everest Group’s L&P Insurance BPO Services PEAK Matrix® Assessment of service providers for 2020.

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

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Everest Group Says Two-Thirds of Enterprises Have Invested in Industry 4.0 | Press Release

As enterprises leverage emerging technologies for interconnectivity, digitalization and automation, outsourcing to service providers for industry 4.0 services grows steadily; majority of sourcing engagements involve IIoT, analytics, and AI/ML solutions.

Industry 4.0 is where enterprises aim to be, with almost two-thirds already invested in some capacity. According to Everest Group, 34% of enterprises have invested in pilot projects and are evaluating returns; 24% have implemented use cases and are willing to scale up to enterprise-wide adoption levels; and 5% of enterprises are enjoying maturity in the digital domain and realizing significant gains across their businesses. The remainder of enterprises are either still in the strategy-building phase (14%) or early stages of adoption (23%).

Industry 4.0 is the latest phase in the industrial revolution, characterized by advanced themes of interconnectivity, digitalization, and automation, and made possible through technological developments in multiple fields, including Internet of Things (IoT), additive manufacturing, cloud computing, edge computing, analytics, robotics, cybersecurity, artificial intelligence (AI) and machine learning (ML).

In its recently released “Industry 4.0 State of the Market Report: A Transformational Leap in Cyber-physical Convergence,” Everest Group analyses the global Industry 4.0 market, discusses the emerging trends among enterprises, and offers a detailed description of the outsourcing landscape for Industry 4.0 services.

Key findings:

The global Industry 4.0 market: The overall global spend for Industry 4.0 has been steady at approximately 15% over the past couple of years and stands at US$80-85 billion for calendar year 2019. The majority of growth can be attributed to the emerging areas of IoT, cloud, analytics and connected platforms.

Impact of COVID-19: Lack of visibility on returns and reduced cash flows have caused somewhat of a dip in enterprise spending on Industry 4.0 as a result of the pandemic; however, the change in workplace dynamics and remote work have only fueled the need to digitally enable factories and the workplace in the aftermath of COVID-19. Everest Group expects the market to recover well.

Top impediments to scaled adoption: Lack of management buy-in and organizational complexity remain key concerns when it comes to successful projects in this domain.

Emerging trends:

  • Developing capabilities in multiple technology domains has become an imperative to delivering successful end-to-end solutions.
  • Converging technologies within Industry 4.0 include 5G, cloud, analytics, connected systems, digital twins, mixed reality, robotics, intelligent assistants, additive manufacturing, nanotechnology, composite materials, AI and ML.
  • Larger technology firms such as AWS, Microsoft and Google have dominated the industrial IoT market, with most others on the fringe.
  • A number of government initiatives across the globe have been kickstarted to boost competitive advantage in emerging technologies. Examples include the U.S. government’s “Advanced Manufacturing Partnership,” Germany’s “High Tech Strategy 2020,” France’s “La Nouvelle France Industrielle,” China’s “Made in China 2025,” and South Korea’s “Innovation in Manufacturing 3.0.”
  • Larger partnerships and rollouts are now becoming increasingly common as the market matures. For example, Microsoft and SAP announced a partnership to build Industry 4.0 solutions using existing cloud infrastructure and edge computing resources. Similarly, French automotive giant Renault has partnered with Google Cloud Platform to accelerate digitization of the supply chain and 22 facilities.

The role of service providers: Outsourcing spend for Industry 4.0 has experienced stable year-on-year growth over the last few years and captured roughly US$7.5 billion of the overall spend for calendar year 2019. Aerospace, energy and manufacturing-centric companies in North America, major automotive players in Germany, and industrial firms in the United Kingdom are the major contributors to this spend. Larger service providers hold the major portion of revenue; however, growth rate is higher among the smaller service providers. Service providers have invested in a range of competitive investments in order to expand the breadth and depth of their offerings; however, more than half of all customer engagements typically leverage only industrial IoT (IIoT), analytic solutions, and AI/ML solutions.

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

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

COVID-19 Forces Healthcare Payers to Face Up to Modernization, Member Service Shortcomings | Press Release

Everest Group research details how COVID-19 has compelled healthcare payers to future-proof their technology and build more resilient care models.

COVID-19 acted as a forcing function for healthcare payers to future-proof their technology estate and enable more resilient care models, according to new research from Everest Group. The pandemic pushed healthcare payers to focus on modernization, automation, data and analytics and cloud.

The high-priority IT investments made by payers in 2020 included the following:

  • IT for operational efficiency: With the onset of COVID-19, payers had to face some serious operational challenges such as disruption of member service operations as well as multiple administrative inefficiencies around provider network management, member communication and claims management. As a result, payers are transitioning to intelligent operations built on the pillars of cloud, artificial intelligence, automation and data to support growth, improve the customer experience and increase quality of care.
  • IT for access to care: Telehealth and home care broke ground as a care channel in 2020. The pandemic pushed technology giants, governments and institutions from varied domains to pool their efforts to innovate to help fight the pandemic. As a result, the ecosystem introduced new applications, information guides, consumer wearables and other devices. Payers have heavily invested in this area through strategic partnerships and acquisitions.
  • IT for member engagement: COVID-19 has irrevocably disrupted the traditional way of delivering care. Payers are developing strategies to reimagine member satisfaction by addressing challenges around communication, care access, coordination and responsiveness. They are increasing members’ access to health information, creating next-generation service desktops, launching health applications, and building member engagement platforms.

These findings and more are shared in Everest Group’s Healthcare Payer Enterprise Insights H2 2020 report. This report evaluates payer performance in H2 2020 and focuses on industry- and account-level financial and line-of-business performance, key business and IT investment themes, and the Global Business Services (GBS) landscape.

Additional key findings:

  • Most payers exhibited sustained revenue growth in 2020. At the onset of COVID-19, payers posted strong numbers due to a drop in non-COVID-19 claims. Most of the U.S. payers witnessed a growth in revenue on a sequential basis, attributed to a temporary reduction in operating expenses due to deferred surgeries and procedures as a result of stay-at-home orders across the U.S. However, operating and net income saw a dip in Q3 and Q4 2020, impacted by COVID-19 care costs.
  • The payer market experienced an uptick in the government membership enrollment along with a subsequent decline in commercial business. Large national plans with existing presence in Medicaid or exchange markets saw an increase in enrollees, while others looked to enter/expand into these lines of business through acquisitions and partnerships.
  • Payers’ response mechanism to the pandemic involved significant focus and strategic investments to improve clinical outcomes, increase operational efficiency, reduce cost of care, improve access to care, and enhance member experience.
  • Payers are investing in expanding their value-based care partnerships to enhance healthcare services for their high-growth Medicare Advantage member segment.
  • Mental/behavioral health innovation and technology is gaining significant traction in the healthcare payer industry.

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

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

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