Category

Press Releases

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.***

Talent Shortage Expected to Hamper Innovation, Customer Service in 2019, According to Everest Group Report | Press Release

By | Press Releases

Firm to share research findings on enterprise key issues and offer insights, recommendations on outsourcing.

Talent challenges are starting to create real hardship for enterprises—hampering innovation, delaying implementation of critical projects, and adversely impacting customer service—according to the results of a recent Everest Group survey of global enterprises. Enterprises rank the difficulty of finding, retaining, upskilling and reskilling talent among the three most pressing issues they will face in 2019. Pricing pressures and adapting to shifting business models round out the list.

Everest Group will discuss these insights in a webinar on Thursday, December 13, at 9:00 am CST:Enterprise Key Issues in Global Sourcing: Exposing Disconnects and Unlocking Opportunities.There is no charge to participate.

“At Everest Group, we believe that talent shortages will continue to become more chronic as demographics and policies combine to exasperate available labor challenges, particularly in the U.S. and Europe,” said Michel Janssen, chief research guru for Everest Group. “Organizations will be forced to use automation technologies of all kinds to make their existing workforce more productive.”

Despite the challenges enterprises face, the majority of respondents to the Everest Group survey (51 percent) viewed 2018 as a great year, and 84 percent expect growth in 2019.

In the webinar, Everest Group experts will address the following topics:

  • Talent challenges – finding, retaining, upskilling and reskilling – are having a real, negative business impact and lead the list of enterprise key issues for 2019.
  • The role of the chief digital officer continues to expand. Study participants from both the enterprise and service provider viewpoints reported significantly increased decision making capacity and budgets going into 2019.
  • In a recent survey, service providers indicated their top technology investments are robotic process automation (RPA) and artificial intelligence (AI)/cognitive computing; however, those don’t match enterprises’ top investment priorities, which comprise cloud solutions, automation and big data analytics. Everest Group experts will discuss the mismatch and what it means.
  • While cost reduction remains a high priority when outsourcing, it’s not in the top two value propositions among survey respondents.

***Register for Complimentary Webinar here***

Significant Outsourcing Demand Growth According to Everest Group Report on Top Q3 Trends in Global Sourcing | Press Release

By | Press Releases

Digital services continued to dominate outsourcing activity, driven by cloud-based deals

The global sourcing industry posted healthy numbers for Q3 2018, marked by notable increases in outsourcing demand, according to Everest Group. The total contract value of outsourcing transactions rose 11 percent from Q2 to Q3.

Digital services continued to dominate the outsourcing activity, driven by cloud-based deals. Among GIC setups, the share of digital services as compared to traditional services increased from 44 percent in Q2 to 56 percent in Q3. Likewise, a focus on digital continued to dominate both service providers’ acquisitions (73 percent) and partnerships (84 percent) landscape. Both enterprises and service providers are increasingly leveraging disruptive technologies such as artificial intelligence (AI) and machine learning (ML) to build more a strategic digital agenda, drive innovation and focus on value-added services.

Everest Group discusses these and other third-quarter developments in the sourcing industry in its recently released Market Vista™: Q4 2018 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.

“The global services industry has enjoyed three consecutive quarters of growth in 2018,” said Salil Dani, vice president at Everest Group. “In Q3, transaction activity rose, and the volume of new contracts increased significantly. Although Q3 did see a decline in GIC market activity in comparison to Q2, we continue to expect healthy growth of the overall global services market through the remainder of the year.”

Additional highlights from the Market Vista: Q4 2018 report:

  • North America reported a significant increase in transaction activity, especially in the retail and consumer packaged goods segment and the technology and communication vertical.
  • GIC activity continues to be driven by existing adopters, with focus on establishing R&D centers for next-generation technologies.
  • While there was a decline in activity for Europe, emerging locations such as Bulgaria and Czech Republic witnessed an increase in activity given high-skilled IT talent, favorable business environment, and excellent R&D and digital infrastructure.

***Download a complimentary 16-page abstract of the report findings here.*** (Registration required.)

Investments in Healthcare AI Will Quadruple by 2020, According to Everest Group | Press Release

By | Press Releases

New research predicts US$6 billion investment will drive innovations in patient identity verification, opioid abuse detection and individually tailored healthcare.

Healthcare organizations are pouring billions into embedded AI across the value chain, driving an estimated quadrupling of AI investments in the next three years, according to Everest Group. The firm predicts that healthcare AI investments will grow from US$1.5 billion in 2017 to exceed US$6 billion by 2020, representing a compound annual growth rate of 34 percent.

While AI is a relatively new area in the healthcare space and its adoption is in the nascent stage, digitalization of healthcare is accelerating healthcare enterprises’ interest in AI. AI has the potential to transform healthcare processes and dramatically reduce costs and improve efficiencies.

For example, healthcare payers are leveraging AI for product development, policy servicing, network management and claims management. Examples include:

  • Use of fingerprints, eye texture, voice, hand patterns and facial recognition to reduce the time taken for customer verification
  • Leveraging of machine learning with integrated claims data and analytics to detect opioid use patterns that suggest misuse
  • AI-powered wearable devices and mobile applications to help customers with personalized advice
  • Chatbots and virtual assistants to predict the right answer to standard customer inquiries and assist customers in navigating through the insurance plan selection process.

Currently, the area where payers are adopting AI to the greatest extent is in care management.

Likewise, the highest adoption of AI by healthcare providers is for care and case management. Providers also are employing AI tools to:

  • collaborate more effectively with patients
  • reduce the time required for aggregating, storing, and analyzing patients’ data
  • streamline workflows
  • monitor patients remotely
  • detect diseases faster and more accurately
  • come up with better treatments.

These findings and more are discussed in Everest Group’s recently published report, “Dr. Robot Will See You Now: Unpacking the State of Artificial Intelligence in Healthcare – 2019.” The firm has analyzed the market from the vantage point of 27 leading healthcare enterprises and closely examined the distinctive attributes of the leaders, who are far ahead of the other industry participants in terms of AI capability maturity. The report identifies best practices, illustrates the impact generated, and offers proposed a roadmap for market stakeholders.

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

“While healthcare enterprises are still in the nascent stages of AI adoption, the scale of opportunity in AI demands C-level vision,” said Abhishek Singh, vice president of Information Technology Services at Everest Group. “AI presents unique opportunities for healthcare enterprises – allowing them to improve customer experience, achieve operational efficiency, enhance employee productivity, cut costs, accelerate speed-to-market, and develop more personalized products. In the case of the leading healthcare organizations, their CEOs and CIOs are acknowledging the transformative power of AI, rapidly building appropriate AI strategies, and building a robust, overarching business plan to harness its benefits.”

Additional key findings:

  1. Nearly two-thirds of spending on AI in healthcare is driven by North America. The North American market is also expected to be the fastest growing during the next five years, driven by regulatory mandates for use of electronic health records, increasing focus on precision medicine and a strong presence of service providers engaged in developing AI solutions for healthcare.
  2. Around 75 percent of all AI initiatives in healthcare are still driven by large enterprises as most mid- and small-sized firms are taking a wait-and-see approach.
  3. With a boom in enterprise AI, talent scarcity has become one of the biggest leadership challenges in implementing and evolving AI capabilities.
  4. Application of machine learning (ML) for structured data and natural language processing (NLP) for unstructured information have become mainstream in the healthcare industry.
  5. Cognitive technologies are expected to play an important part in health plans’ technology strategies going forward. Also, providers are looking to increasingly leverage deep learning to explore more complex, non-linear patterns in data, such as that found in research papers, doctors’ notes, textbooks, clinical reports, health histories, X-rays and CT and MRI scans.

Multi-Country Payroll Outsourcing Set to Continue Riding a 20% Growth Wave According to Everest Group | Press Release

By | Press Releases

Providers invest in AI, RPA and other next-gen digital solutions to improve employee experience with payroll systems.

The Multi-Country Payroll Outsourcing (MCPO) market —one of the fastest growing markets in the human resources (HR) outsourcing space— is set to continue riding a multi-year growth wave of 20 percent, according to Everest Group. This momentum is fueled by the rising appreciation enterprises have for the MCPO value proposition as well as increasing provider maturity.

Although MCPO service providers have performed well with respect to the traditional drivers (cost reduction, process standardization and compliance), buyers expect more in terms of next-generation technologies and strategic support. In fact, drivers for MCPO adoption are slowly shifting from the traditional to next-generation ones, which include factors such as better employee experience, better insights through analytics, and access to next-generation digital solutions such as artificial intelligence (AI) and robotic process automation (RPA).

“The shift we’re seeing in MCPO adoption is from an arbitrage-first to a digital-first play,” said Anil Vijayan, practice director at Everest Group. “This is creating a significant challenge for providers, because although most buyers express fairly high satisfaction levels with the ability of their providers to deliver on the traditional metrics, buyers are expressing a fairly low satisfaction level with providers with respect to next-generation metrics. Providers need to address this gap between expectations and perceived performance.”

The leading players in the MCPO landscape—namely ADP, NGA Human Resources, and TMF Group—have done just that; they have constantly innovated and invested in developing technological capabilities to differentiate themselves from others in the market.

One growing area of technology investment is employee experience solutions, where next-generation technologies are being used to enhance both employee empowerment and employee engagement. For example, greater empowerment  can be achieved through advanced employee self-service portals, omnichannel experiences, and investments that enable rapid response and accuracy. Employee engagement  can be enhanced through HR systems that are easy to use, provide a consistent experience across sub-processes, have an intuitive look and feel, and offer employees a personalized experience, including multi-lingual support.

Everest Group explores these findings and others in a recently published report: “Multi-Country Payroll Outsourcing (MCPO) – Annual Report 2019 – Persistent Growth Amidst Evolving Propositions.” This research provides a comprehensive analysis of the global MCPO market across various dimensions such as market overview and key market trends, buyer adoption and solution trends, and service provider landscape.

Additional key findings in this report include:

  • Buyers headquartered in North America and Europe, the two most mature markets, are the leading adopters of MCPO globally. Rising adoption is seen from the emerging markets of Asia Pacific and Latin America.
  • The market has witnessed strong adoption by small-sized multinational corporations (MNCs), which are spread across two to five countries. The large market segment also has witnessed a resurgence of activity, with many large enterprises venturing into large multi-continent deals.
  • The small market segment witnessed a dip in the average deal size, while the mid- to large-sized segments witnessed a significant increase due to a rise in large multi-country deals.
  • ADP, NGA Human Resources and TMF Group dominate the MCPO market in terms of market revenue. The three companies cumulatively constitute over 50 percent of the total market revenue.