Category: Press Releases

Everest Group Unveils 8th Annual Business Process Services Top 50 | Press Release

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

 

DALLAS, June 1, 2022 — Everest Group today released the eighth 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 now valued at more than US$225 billion. The ranking is based on 2021 revenues and year-on-year growth.

Topping the 2022 list of leading BPS providers are these 10 service providers:

  1. ADP
  2. Teleperformance
  3. Accenture
  4. Concentrix
  5. Sitel Group
  6. Paychex
  7. TELUS International
  8. Conduent
  9. Genpact
  10. TCS

 

***Download a complimentary copy of the 2022 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.

 

“In this year’s listing, we see several interesting trends,” said Rajesh Ranjan, partner at Everest Group. “First, as we predicted, 2021 was a great year for the BPS industry, with Top 50 providers growing at 12.5 to 13% versus 1 to 2% in 2020. Providers that managed the COVID crisis well and continued to invest in next-gen capabilities anchored around the BPS 4.0 value proposition grew significantly above the market average. This also meant we saw considerable volatility in the rankings, with over 50% of the listed providers’ rankings shifting by five or more positions, compared to 42% last year. Secondly, IT-BPS providers grew faster than pure play BPS providers (14.9% vs. 11.8%), partly due to greater prevalence of integrated IT-BPS deals. We encourage enterprises to look to the Everest Group BPS Top 50 list if they are seeking scaled-up providers, and service providers in the industry can refer to the list to know where they stand in relationship to their peers in the market.”

 

Other highlights:

  • The Top 5 leaders in terms of revenue were ADP, Teleperformance, Accenture, Concentrix and Sitel Group.
  • The Top 5 fastest growing companies year-on-year were Tech Mahindra, TELUS International, Majorel, Teleperformance and Comdata.
  • Top risers (companies whose position in the list advanced the most) include Comdata, Allegis Global Solutions, IBM, Iron Mountain and HGS.

 

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 BPS revenue in US$ million and accounting for 12.5% of the composite score) and percentage growth (measured as percentage change in BPS 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 research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

Impact Sourcing Delivers Winning Business Trifecta: Competitive Edge, Talent Advantage, Positive Social Impact—Everest Group | Press Release

Everest Group research validates growing business case for impact sourcing—offering enterprises alternative talent sources while making this world a better place to live in.

 

DALLAS, May 12, 2022—Impact sourcing is a proven approach to gain a competitive business edge and talent advantage while creating a positive social impact, according to Everest Group. Newly released research from Everest Group indicates that employers investing in impact sourcing are reporting long-term cost savings, reliable service delivery, improved brand equity, positive social and environmental impacts, easy access to untapped talent, and a stable, engaged workforce with a low attrition rate. Everest Group predicts demand for impact sourcing will continue to rise globally, driven by spiking attrition rates, growing talent demands, and high talent costs currently being observed in the outsourcing industry.

“Everest Group encourages enterprises to prioritize impact sourcing,” said Rita Soni, principal analyst for Impact Sourcing and Sustainability at Everest Group. “Based on our research and the feedback we receive from enterprises that are already actively engaging in the impact sourcing ecosystem, impact workers offer a competitive and cost-effective alternative to traditional outsourcing engagements. Impact sourcing workers deliver a reliable quality of service and, in many cases, very unique and valuable talents and perspectives. This is not to mention the benefits that accrue to the hiring organization from corporate citizenship, societal contributions and shared value among customers and investors.”

Impact sourcing refers to intentionally hiring and providing career development opportunities to people from marginalized communities while meeting business objectives such as:

  • Fulfilling Corporate Social Responsibility (CSR), Environmental Social Governance (ESG), and diversity, equity, inclusion, and belonging (DEIB) objectives of both the business and their clients.
  • Leveraging the uniqueness of the target marginalized group, such as detail orientation of youth on the autism spectrum or diversity of perspective for Artificial Intelligence (AI) and Machine Learning (ML) data services.

Impact sourcing workers comprise employees from economically disadvantaged groups, socially marginalized groups, under or unemployed groups, and other groups with unique factors of employability.

Currently, the impact sourcing market is approximately 350,000 FTEs worldwide.

  • The majority of impact workers (85-87%) are being employed by the large traditional outsourcing service providers, either directly for specific project requirements or as a part of their inclusive hiring initiatives. The remaining impact workers (13-15%) are employed by impact sourcing specialists.
  • Impact sourcing specialists prioritize the inclusive talent model and help enterprises meet business objectives (mentioned above) while maintaining service quality and cost at parity with traditional Business Process Outsourcing (BPO) and Information Technology Services (ITS) service providers.
  • Although the market size for impact sourcing specialists is small, revenues for this segment achieved a compound annual growth rate of 28% between 2019 and 2021. For impact sourcing specialists, Asia Pacific leads as the key impact sourcing location (58% of global FTEs), followed by Africa (17%), North America (11%) and Latin America (7%).
  • Unemployed youth (in the age group of 20-30 years) form the backbone (68%) of the impact sourcing workforce.
  • Women represent 52% of the impact sourcing workforce in contrast to representing 25-35% for traditional service providers. Single mothers, women who have lost their families, and victims of war and migration have become the breadwinners for their families. They want to be independent, and the impact sourcing industry is helping them to achieve this goal.
  • While North American enterprises are at the forefront of collaborating with impact sourcing specialists, firms in emerging markets such as the Middle East and APAC have been proactive in engaging with specialists in recent years. Specialists here provide services across industries ranging from BFSI, healthcare, hi-tech to e-commerce, retail and agritech.

These findings and more are included in Everest Group’s recently published “State of the Market” report, “The Growing Need for Inclusive Talent Models: Learning from Impact Sourcing Specialists.” The report examines the impact sourcing ecosystem, business delivery models, drivers and challenges; details the impact sourcing specialist provider landscape; and shares case studies and buyers’ satisfaction across a variety of evaluation criteria.

***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 research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

Everest Group Identifies ‘Top Employers for Tech Talent’ Among Largest US Enterprises | Press Release

Everest Group’s new rankings reveal top US employers by industry based on their perceived ability to recruit and retain highly coveted software engineers and other tech talent.

 

DALLAS, May 10, 2022— With the IT skills gaps widening and demand for talent consistently outpacing supply, competition among U.S. employers for top tech talent is stiff. Everest Group today launched its new ranking of top employers for tech talent, identifying which US companies are perceived to be the best tech employers by virtue of their work environment and the job satisfaction of their employees.

For the inaugural edition of Everest Group’s Top Employers for Tech Talent™, the research firm has ranked the largest US-based companies (based on overall scale and market share) within each of three industries—Technology (Top 20), Financial Services (Top 30), and Insurance (Top 20). The top 10 employers in each industry are listed below.

  • Also join Everest Group for a LinkedIn Live event—Top Employers for Tech Talent – Who is Winning the Tech Talent War?— on Wednesday, May 18, at 10 am CDT. Everest Group experts will share critical insights into what today’s tech workforce truly wants and what potential employers could be overlooking. Special guest Karl Sprules, head of Global Technology and Operations, AllianceBernstein (No. 1 on the Financial Services ranking), will discuss the culture and environment that AllianceBernstein has created to recruit and retain tech talent.

Top Employers for Tech Talent—Technology

  1. NVIDIA
  2. Intuit
  3. ServiceNow
  4. Netflix
  5. Salesforce
  6. Google
  7. Adobe
  8. Microsoft
  9. Meta (formerly Facebook)
  10. Apple
 

Top Employers for Tech Talent—Financial Services

  1. AllianceBernstein
  2. Capital One
  3. Capital Group
  4. Fidelity
  5. TD Bank
  6. BlackRock
  7. Franklin Templeton
  8. U.S. Bank
  9. Edward Jones
  10. KeyBank
 

Top Employers for Tech Talent—Insurance

  1. New York Life
  2. Liberty Mutual
  3. Travelers
  4. Northwestern Mutual
  5. American Family Insurance
  6. Marsh & McLennan
  7. Prudential
  8. Nationwide
  9. Hartford
  10. State Farm
 

“With the demand for technical talent higher than ever, our clientele among the Fortune 500 are keenly interested in how best to recruit and retain their most valuable assets, and benchmarking against the leaders is one of the best ways to develop successful strategies,” said Jimit Arora, partner at Everest Group and leader of the research practice serving Enterprise IT leaders. “With the launch of Everest Group’s Top Employers for Tech Talent report, we’re providing a snapshot of market-leading employers across a variety of industries and shining a spotlight on organizations who are perceived by their tech employees as successfully creating the culture, trust and environment they want and need in an incredibly competitive race to hire and retain the best of the best.”

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

Global 5G Expansion Hits Engineering Services Market, Poised for Multi-Year Boom—Everest Group | Press Release

5G emerges as fastest-growing segment of engineering services market, with 30% annual growth rate forecast for the next four to five years.

Both telecom companies and other enterprises are gearing up for 5G, which is driving a growth boom in the 5G engineering services industry as well, according to Everest Group. Investment in 5G engineering, a nascent and fast-growing market, reached US$12.0 to 12.2 billion in 2021, with 80% of overall spend allocated in house and 20% outsourced. Engineering services spend is expected to show a 30% annual growth rate for the next four to five years, with the outsourcing growth rate stabilizing at approximately 45% by 2022.

5G, the latest in mobile network technology, offers high data transfer speeds and ultra-low latency. Not only are telecommunication entities spending significantly in 5G engineering and deployment, but also enterprises in non-telecom segments are expressing interest in how 5G can be applied to solve industry-specific challenges. Potential use cases span a variety of sectors and include the following:

  • Industrial: Process automation, IIoT systems, remote monitoring, predictive analytics, collaborative robots
  • Consumer electronics: IoT devices and sensors, connected products, wearables technology, edge-enabled devices
  • Automotive: V2X, Autonomous driving, vehicle edge computing, traffic management, HD mapping
  • Public sector: Smart cities and infrastructure, public networks, defense networks, enhanced surveillance, autonomous public transport
  • Media and entertainment: HD and distributed content, remote production, Metaverse and AR/VR, hyper-personalized advertising
  • Energy and utilities: remote critical process control, supply chain monitoring, asset diagnostics, predictive maintenance, field services
  • Healthcare and Others: medical devices, virtual health, remote surgery, education and training, retail and ecommerce

North America, which is home to a high percentage of the large telecom companies participating in 5G, is the largest and most mature market for 5G engineering spend, representing 35-40% of the global market. Europe is the second largest market (30-35%) and is as mature as North America. Asia Pacific, representing 15-20% of the market, is gaining ground quickly.

These findings and more are detailed in Everest Group’s recently published report, “Envisioning the Connected Future – 5G Engineering Services State of the Market Report 2022.” This report assesses the global 5G engineering services market and the trends that are emerging as a result of the increasing number of use cases. The report addresses enterprise expectations, challenges for service providers, the market for 5G engineering services outsourcing, and the investments being made by enterprises and service providers.

“Telecommunications companies and other enterprises recognize the potential of 5G, and 5G has already become the fastest growing market segment within the global engineering services market,” said Akshat Vaid, vice president and lead of Engineering Services research and advisory at Everest Group. “This is opening up a new dimension of engineering services outsourcing, where engineering service providers are helping enterprises and telcos with conceptualization and scaling of various use cases across industries. The opportunities in 5G will boom over the next several years, particularly as enabling technologies advance, private networks expand, and partners collaborate to explore the full potential of 5G applications.”

Additional Market Highlights

  • The overall enterprise spend (comprising telecom and other industries) for 5G engineering services has been increasing steadily year by year; however, COVID-19 caused a slight dip in growth rate during contract year 2020.
  • The major roadblocks to adoption include high setup costs, complex use cases, and the regulatory landscape around 5G.
  • The private network market for 5G is growing fast; and given the benefits that it offers as compared with 4G, enterprise adoption and associated engineering services will also observe strong growth momentum.
  • A variety of 5G-driven use cases have led to collaboration between an ecosystem of network participants for developing solutions and providing services to an ever-growing market.

Outsourcing Landscape

  • Telecom Service Providers (TSPs) and Network Equipment Providers (NEPs) are driving more than 70% of the outsourced services spend in 5G engineering. The remaining investment comes from other enterprises and technology companies looking to build specific use cases, such as IIoT, private 5G, and network assurance and testing activities.
  • Service providers need to develop capabilities in assistive technologies, such as Multi-access Edge Compute (MEC), Software-defined Networking (SDN), and cloud, which are enabling the world of 5G.
  • Service providers are investing heavily in developing strong partnerships, infrastructure, talent, and IPs to cater to the 5G market.

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

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

Swapna Allapur Joins Everest Group as Chief People Officer

Allapur to lead human resources strategy and operations for the global research firm.

DALLAS, April 6, 2022 — Swapna Allapur has joined Everest Group—a global research firm focused on strategic IT, business services, engineering services and sourcing—as chief people officer. Allapur, based in Bengaluru, India, is responsible for the human resources strategy and operations for the firm, which employs nearly 400 people across the U.S., Canada, Europe, India and Latin America.

A global HR professional with more than 25 years of multinational experience, Allapur will direct all aspects of the Everest Group people strategy and function, including acquiring, nurturing and retaining talent. She will also oversee the firm’s application of technology to transform its HR operations in a distributed environment.

“We are tremendously excited to have Swapna join us and contribute her deep acumen in human resources to our growing firm,” said Peter Bendor-Samuel, founder and CEO of Everest Group. “Her multinational experience and her expertise in leadership development will be particularly valuable to Everest Group as our workforce continues to expand across the globe.”

Founded in 1991, Everest Group has experienced rapid growth in recent years, including a 27% leap in research bookings in 2020 and an additional 50% growth in 2021. The firm’s global headcount has seen year-over-year increases of more than 25% for several years running.

“Everest Group is well respected by its Global 1000 client list for its depth of expertise,” said Allapur. “The firm already has a strong foundation in hiring great people from a wide variety of backgrounds, which has no doubt contributed to its rapid growth in recent years, even as talent shortages have adversely impacted enterprises across the globe. It’s an exciting and challenging time to join this organization as chief people officer, and I look forward to applying the best people strategies and technology to help Everest Group succeed in building an unparalleled workforce.”

Prior to joining Everest Group, Allapur was with Deloitte Consulting for a decade in multiple senior roles. She was instrumental in driving large-scale HR transformation in talent management, global mobility and talent acquisition. Her previous international stints have included roles with Sun Life Financial and Hexaware Technologies in the U.S., as well as Satyam Computers, Mascon, Parke-Davis and HMT. She also has extensive experience enabling organizational capabilities through leadership development, succession planning and brand-building initiatives.

Allapur is a certified Global Professional in Human Resources (GPHR) and holds a master’s degree from Tata Institute of Social Sciences, Mumbai, and an HR certification from Carnegie Mellon University.

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

Everest Group Announces Winners of Inaugural 2022 Engineering Services PEAK Matrix Provider of the Year Awards | Press Release

Capgemini, HCL Technologies and TCS tie for the No. 1 spot on the list of Top 15 Engineering Services Providers.

Everest Group—a research firm focused on strategic IT, engineering services, business services and sourcing—today announced the winners of the 2022 Engineering Services PEAK Matrix Provider of the Year™. The awards, presented for the first time this year, recognize Engineering Services providers who have demonstrated consistent leadership in the PEAK Matrix® reports issued by Everest Group in the previous year (October 2020 to September 2021).

Capgemini, HCL Technologies and TCS tie for the No. 1 spot on the list of Top 15 Engineering Services Providers. Wipro took the No. 4 spot, followed by Tech Mahindra at No. 5. Rounding out the Top 15 are LTTS and Cognizant (tied for No. 6), Accenture (8), Infosys (9), Harman (10), Alten (11), UST (12), Cyient and Tata Elxsi (tied for No. 13) and Persistent (15).

Everest Group determined its rankings by evaluating consistent performance in PEAK Matrix® reports across five segments: Industry 4.0, Software Products, Semiconductor, ACES (autonomous, connected, electric and shared automotive engineering), and 5G. The Top 15 providers were identified based on comparative assessment of over 50 engineering service providers using a consolidated score reflecting points received on individual evaluations.

Everest Group also recognized the Top 5 Challengers—Engineering Services providers that offer credible alternatives for enterprises by focusing on specific solution segments, geographies, and/or industries. DXC Technology, NTT Data and Virtusa tied for the No. 1 Challenger position. KPIT earned the No. 4 spot, followed by Infogain at No. 5.

“The Engineering Services PEAK Matrix Provider of the Year Awards identify the best of the best – Engineering Services providers with strong capabilities and successful services strategies that align well with evolving enterprise engineering needs,” said Akshat Vaid, vice president at Everest Group. “Throughout the year, Everest Group evaluates Engineering Services providers across multiple ER&D domains to help buyers compare and contrast their options. Our evaluations offer guidance and nuanced insights into each provider’s strategies for key business lines, geographies and technologies. Taking these evaluations into account, the Engineering Services PEAK Matrix Provider of the Year Awards recognize the providers that truly set themselves apart by exhibiting consistent leadership and top performance.”

***A complete list of winners are listed in the report, “Engineering Services PEAK Matrix Provider of the Year 2022,” available for complimentary download.***

About the PEAK Matrix

The Everest Group PEAK Matrix® is a proprietary framework for assessing the relative market success and overall capability of service providers based on Performance, Experiences, Ability and Knowledge. Each service provider is comparatively assessed on two dimensions: market success and delivery capabilities. Market success is measured by revenue, number of clients and year-over-year growth. Delivery capability is measured by scale of operations, scope, technology and innovation, delivery footprint and buyer satisfaction. The resulting matrix categorizes service providers as Leaders, Major Contenders, and Aspirants. Companies that demonstrate strong upward movement in successive reports are recognized as Star Performers.

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

Outsourcing Demand Held Steady in Q4 2021 as Global Sourcing Industry Exhibited Modest Signs of Post-COVID Recovery | Press Release

Setups of Global Business Services centers increase in India and China, providing evidence of post-COVID economic recovery

In its latest quarterly report on the global outsourcing industry, Everest Group revealed outsourcing demand held steady from Q3 to Q4 2021, with 404 transactions reported in each quarter. Activity in offshore locations experienced an increase, providing evidence of post-COVID economic recovery, particularly in India and China; however, offshore activity has not yet reached pre-COVID levels.

Notable Global Services Trends in Q3 2021:

  • North America experienced a decrease in its share of outsourcing deals. “Rest of Europe” (excludes U.K.) and “Rest of World” (comprising Asia Pacific, the Middle East, Africa and Latin America) geographies recorded higher transaction activity compared to the previous quarter, due to an increase in deals across the energy and utilities sector.
  • The demand for digital services such as automation, blockchain, cybersecurity and Internet of Things (IoT) experienced an increase in offshore GBS centers, driven by cloud-based contracts as businesses continue to migrate toward cloud infrastructure.
  • During Q4 2021 setups of new Global Business Services (GBS) centers in offshore/nearshore locations numbered 45 as compared with 37 in Q3 2021.
  • Notably, GBS center setups increased in offshore Asia (primarily China), driven by companies in the manufacturing industry seeking to leverage engineering research and development (ER&D) services involving software development, systems integration and testing of autonomous, connected, electric and shared (ACES) mobility offerings.
  • GBS activity also increased slightly in India, with 16 setups in Q4 2021 to deliver ER&D and digital services, compared with 15 setups in Q3 2021.

Key Service Provider Developments:

  • Revenue for both global and offshore heritage service providers experienced a rise on a sequential and annual basis, but operating margin decreased in Q3 2021. In fact, the average operating margin of offshore heritage service providers is at its lowest when compared to the last two quarters. Although revenues have increased, an increase in employee, subcontractor and hiring costs as well as lower utilization of resources have negatively impacted margins.
  • Merger and acquisition (M&A) and alliance activity among service providers experienced an increase, driven by heightened demand for digital-based capabilities, especially artificial intelligence (AI) and cloud. Forty-four acquisitions were documented for Q4 2021 as compared to 25 in Q3 2021. Alliances also experienced a significant increase.
  • The number of setups of delivery centers by service providers remained similar to the previous quarter. Centers established in onshore regions decreased from 10 in Q3 2021 to four in Q4 2021; on the other hand, the number of new centers in offshore regions increased from four in Q3 2021 to 10 in Q4 2021.
  • Service providers are now deriving 40-45% of automotive engineering services revenues from engagements involving ACES mobility services, a market which is expected to increase through 2025 at a rate of 20%.

Everest Group’s Market Vista Report
In its newly published report, “Market Vista™: Q1 2022,” Everest Group highlights the key trends and developments in the fast-evolving global offshoring and outsourcing market. The study provides data, analysis and insights on major outsourcing deals, Global Business Services (GBS) market dynamics, trends in offshoring from emerging destinations, and service provider developments (including latest developments on next-generation technologies such as digital services). The report includes assessments of 29 leading service providers, including 4 engineering services providers.

In its on-demand webinar, Key Global Services Trends Shaping 2022, Everest Group experts break down key global services market developments and explore trends in outsourcing and the global in-house market. The speakers also report insights on talent, location activity, service provider M&A activity, and the key trends likely to shape the global services industry in 2022.

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

Enterprises—More Open than Ever to Outsourcing—Will Drive Double-Digit Growth in Finance and Accounting Outsourcing (FAO), According to Everest Group | Press Release

FAO buyers are increasingly open to third-party support for complex, judgment-intensive processes and digital solutions; providers are further differentiating themselves with talent strategies, governance models and ESG initiatives.

Everest Group projects that the finance and accounting outsourcing (FAO) market will grow significantly (up to 10% year-on-year) in 2022, because enterprises are demonstrating an openness toward expanding their scope of services with third-party service providers. While FAO is one of the most mature Business Process Services markets, it is far from reaching saturation, and great growth opportunity still exists in the market, as evidenced by the double-digit growth rates that Everest Group is forecasting over the next few years.

FAO buyers are increasingly embracing the advantages third-party providers bring to the table, as reflected by these key trends:

  • Mature buyers are becoming more open to leveraging third-party support across more complex, judgment-intensive processes [such as financial planning and analysis (FP&A) and tax] as well as industry-specific processes (such as premium collections and claims accounting in the insurance sector). Other industries where specialized expertise in finance and accounting is highly valued include banking and financial services (BFS), media and entertainment, healthcare, retail and consumer packaged goods (CPG), and travel and logistics.
  • CFOs and other finance leaders are increasingly leveraging a “one-team” approach with third-party providers to centralize governance frameworks; implement environmental, social and governance (ESG) initiatives; and demonstrate success with measurable and standardized metrics.
  • Organizations are also becoming more open to leveraging service providers’ support in their Global Business Services (GBS)/Shared Services Center (SSC) operations.

Service providers are positioning for growth by evolving in these ways:

  • Developing more flexible global services delivery and location models. Providers are rebalancing and “de-densifying” work across locations while enabling office, work-from-home and hybrid models.
  • Building a robust talent management strategy with a well-differentiated, techno-functional talent pool.
  • Creating robust, agile and secure workspaces by investing in collaborative tools and platforms.
  • Investing in partnerships to cater to digital demand, especially with respect to cloud, AI (artificial intelligence) and D&A (data and analytics).
  • Creating synergies and market differentiation by unifying digital assets into best-of-breed Business-Process-as-a-Service (BPaaS) platform solutions that help buyers minimize upfront capital expenditures.

“The finance and accounting outsourcing market has been resilient throughout the pandemic, continuing to grow at a rate of 9 to 11 percent,” said Shirley Hung, partner at Everest Group. “During this time, service providers have proven themselves to be valuable partners, not just in cost control, but in far more sophisticated ways, like helping organizations respond to workforce challenges, adopt digital technologies, and develop strategies for governance, ESG, and more. We’re also seeing that buyers are much more confident in using service providers for complex, judgment-intensive processes. All of this suggests that the FAO market will regain its pre-pandemic momentum and grow at a healthy clip for the next few years.”

These findings are discussed in more detail in Everest Group’s recently published report, “Finance and Accounting Outsourcing (FAO) State of the Market Report 2022: Growth and Opportunity in the Digital Era.” This research provides comprehensive coverage of the FAO market and analyzes it across aspects including regional variations, buyer adoption trends, growth drivers and digital trends.

***Download a complementary abstract of the report***

Other key findings:

  • An 8-10% growth rate in FAO spend is expected from June 2021 to June 2022.
  • BFSI, manufacturing and retail constitute the major share of the FAO market; retail, hi-tech and telecom, and healthcare segments are key drivers of growth, despite the impact of COVID-19.
  • While mature markets of North America and Europe continue to dominate the FAO market, APAC, the U.K. and LATAM grew strongly in 2020; APAC has become a hotbed for F&A transformation.
  • While India continues to be the leading delivery location for F&A services across the globe, FTEs grew across delivery locations in North America, Europe and Southeast Asia, with the emergence of new service delivery centers in Poland, Brazil and tier-2 cities in the U.S.
  • The Everest Group PEAK Matrix® for FAO Services identifies Leaders as Accenture, Capgemini, Genpact, IBM, Infosys, Tata Consultancy Services and Wipro. These leaders hold more than 65% share of the FAO market and demonstrated 10-14 % growth in 2020, which was above market average.

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

Where in the World Should Enterprises Look to Find Talent? Everest Group Research Points to India and Africa | Press Release

Asia-Pacific and Africa offer best source of talent for enterprises taking a long-term view; Everest Group advises companies to invest now for highest future payoff.

A shrinking labor pool in North America, Europe and China is at the heart of the talent scarcity, forcing companies in these countries to look elsewhere to find the talent needed to run their business. New research from Everest Group advises companies to double down in Asia-Pacific (especially India) and consider Africa for the best long-term solutions.

Everest Group’s Top-Line Recommendations:

  • Immediately: Pay your employees more, improve employee experience, reduce talent demand via automation and technology.
  • Next 3-5 years: Double down in India. India represents the biggest growing educated pool of talent in the world today. Tier 2/3 cities are particularly poised for the next round of growth.
  • Long term: Look to Africa and boldly go where no one has gone before. In addition, discover new pools of candidates from millions of previously excluded people. Innovative approaches to socially responsible recruiting include reevaluating education requirements and targeting previously excluded groups (such as women, people with disabilities, LGBTQ+, and veterans and military spouses) and under-resourced or marginalized groups (such as rural or urban poor, refugees, incarcerated groups, and indigenous communities).

***Register for LinkedIn Live Video Presentation***

Everest Group experts will share their recommendations in a live video presentation on LinkedIn on Thursday, January 27, at 9am EST. “Now is the Time to Refresh Your Global Talent Strategy: Could Africa be the Next Great Talent Pool?” will be presented by Parul Jain, practice director, and Michel Janssen, chief research officer of Everest Group. Jain and Janssen will discuss how organizations can address the talent challenge by focusing on untapped populations and the top emerging hotspots for talent.

“Enterprises in North America and Europe are facing a stark reality: their onshore and nearshore labor pool has 2.4 million fewer employees than they’ve had access to before,” said Michel Janssen, chief research officer for Everest Group. “This is a huge wake-up call, forcing employers to think outside the box and deploy strategies they’ve never considered before to find the talent they need. Our research points to not only where organizations can find immediate solutions to their workforce challenges today, but also what strategies they need to enact today to prepare for 5 and 10 years down the road.”

Evaluating Location Readiness and Future Potential

Everest Group maintains that locations should be evaluated both from their current readiness and future potential. Although the talent in onshore geographies such as the U.S. and Western Europe are considered high on a “readiness” scale, the workforce populations in these regions are shrinking. The same is true for Nearshore Europe (e.g., Poland, Romania, Czech Republic and Lithuania). North America and Europe, in particular, have unhealthy “labor pyramids,” with 2.4 million less new workers coming into the workplace than just 5-10 years ago.

In contrast, populations in Africa and Asia-Pacific are continuing to expand. India and the Philippines are particularly attractive short- and long-term talent locations, boasting high talent readiness, relatively mature markets that will continue to grow, and multiple tier-2/3 locations that offer untapped potential. Africa is a viable long-term solution with an attractive population pyramid: Africa has almost six times more people entering the workforce than North America will have this year. However, the talent readiness in Africa is comparatively low, and significant investment will be required to shape the talent market and enable a strong talent delivery ecosystem.

Latin America and the Caribbean, although supported by a stable population pyramid and featuring strong pockets of expertise in contact center and IT services, is hampered by dicey geopolitical and macroeconomic situations.

It’s Not a Talent War, It’s a New Reality

Everest Group’s Key Issues study revealed that enterprises are bullish about growth in 2022; however, they’re facing a nearly “immovable issue”—fewer new workers entering the workforce. On one hand, enterprises anticipate 7.4% headcount growth in 2022, a much more positive growth sentiment than expressed in 2020 (5.2%) and 2021 (2.7%). On the other hand, enterprises report their No. 1 constraint heading into 2022 is “finding enough talent to run the business.”

According to Everest Group, enterprises need both short-term and longer-term solutions, with each requiring businesses to reach beyond their comfort zones.

  • In the short-term, the winners in the talent war will be companies that become radically better at hiring and are willing to bust their budgets by paying higher salaries. Executives responding to Everest Group’s Key Issues study anticipate average salaries to increase 6% in sourcing positions, 8.1% in Global Business Services, 6.7% in IT, and 4.5% in engineering.
  • In the longer term, the winners will be those businesses that reduce demand through process reengineering, automation, and the application of technology and also branch out to new geographies and talent pools (e.g., GIG workers and disadvantaged communities) to build their workforce.

***Additional Resources Available from Everest Group***

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

Everest Group: The Talent Shortage Is Not Temporary; It’s Here to Stay | Press Release

Enterprises responding to Everest Group’s 2022 Key Issues Study list “finding enough talent to run the business” as their No. 1 constraint.

The results of Everest Group’s 2022 Key Issues Study are in: Enterprises are bullish about growth in 2022; however, they’re facing a nearly “immovable issue”—fewer new workers entering the workforce.

On one hand, enterprises anticipate 7.4% headcount growth in 2022, a much more positive growth sentiment than expressed in 2020 (5.2%) and 2021 (2.7%). On the other hand, enterprises report their No. 1 constraint heading into 2022 is “finding enough talent to run the business,” a challenge that has moved up from the No. 5 position it held in both 2020 and 2021.

Everest Group says the concern about a talent shortage is entirely supported by the facts. Contributing factors explored in the study include the following:

  • North America and Europe, in particular, have unhealthy “labor pyramids,” with 2.4 million less new workers coming into the workplace than just 5-10 years ago.
  • Anti-immigration policies
  • COVID deaths
  • Government subsidies that provide alternatives to work
  • Changing culture views (including a rise in stay-at-home parents)

Other talent issues detailed in the study:

  • North America and Europe (including UK and Ireland) are the geographic regions most heavily impacted.
  • The talent shortage seems to be all-pervasive across all job levels and has spread beyond IT and high-end digital skills.
  • One half of all respondents reported they were actively looking to make a work change.
  • In general, enterprises cannot find enough qualified people to fill roles, and attrition levels are too high.
  • Enterprises are being compelled to compete not only by paying budget-busting market rates but also by improving employee experience and actively addressing environmental, societal and governance (ESG) issues.

“With 2.4 million less new workers entering the workplace in North America and Europe, the talent shortage is what we deem an ‘immovable issue’ for enterprises for the foreseeable future,” said Michel Janssen, chief research officer for Everest Group. “The talent shortage is our new reality, and the enterprises we surveyed recognize this as their No.1 constraint against their growth goals. So, the question then becomes, ‘When dealt a difficult hand, what strategies can we use to overcome this challenge?’ As we head into 2022, developing and implementing a talent strategy should be at the top of any enterprise’s list of priorities.”

***Webinar: It’s Not a Talent War, It’s a New Reality***
Everest Group will present the findings of its 2022 Key Issues Study in a December 14 webinar. Everest Group experts will recommend ways organizations can address this new reality, including strategies for pricing, sourcing, ESG, and potential technology solutions.
***Register for the webinar here.***

***Additional Resources Available from Everest Group***

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

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