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85% of Enterprises Report That Modern IT Infrastructure Is the Bedrock of Digital Transformation—Everest Group | Press Release

By | Press Releases

Most enterprises believe their IT infrastructure isn’t future-ready. Everest Group says enterprises need ‘invisible’ Infrastructure 3.0, underpinned by AI, analytics and automation, to drive digital transformation.

According to Everest Group, nearly 85% of enterprises believe that IT infrastructure is the bedrock of business transformation initiatives; however, most enterprises believe that their current IT infrastructure services model is not ready to cater to their digital needs.

Everest Group asserts that digital enterprises need to consider a new model for IT infrastructure – Infrastructure 3.0, where the focus of IT infrastructure management is on improving business metrics instead of pre-defined IT SLAs and TCO management. Infrastructure services need to be underpinned by artificial intelligence (AI), analytics, and automation to drive self-healing, self-configuring systems that can dynamically and autonomously adapt to changing business needs, thus creating an “invisible” infrastructure model that is highly secure and requires minimal oversight.

“With the concept of ‘invisible infrastructure,’ we’re suggesting that IT infrastructure must evolve to become a proactive enabler of business innovation with minimal human intervention,” said Chirajeet Sengupta, partner, Information Technology Services, at Everest Group. “To achieve Infrastructure 3.0, enterprises must focus their IT investments on the three I’s—invincible, interoperable and intelligent. In other words, enterprise must build a resilient and secure infrastructure that protects the business, is seamlessly interoperable across stacks, and uses intelligent tools to continuously evolve with business needs.”

Detailed recommendations for achieving Infrastructure 3.0 are offered in Everest Group’s recently published report, “Exploring the Enterprise Journey Towards ‘Invisible IT Infrastructure’: Cloud and Infrastructure Annual Report 2019.” This annual research also deep dives into the cloud and infrastructure services (IS) landscape. It provides data-driven facts and perspectives on the overall market. The research covers cloud and IS adoption trends, demand drivers, and buyer expectations. The research analyses buyer challenges, trends shaping the market, and provides an outlook for 2019-2020 for the broader IT as well as cloud and IS market.

Highlights of the Cloud and IS market analysis:

  • Enterprises’ need for business transformation has increased the number of consulting-led IS engagements: 68% of IS engagements in 2018 had consulting services in their scope.
  • Change management initiatives will be crucial for service providers going forward, as adoption rates are a crucial metric for buyers.
  • The cloud and infrastructure market in the telecommunication industry in North America is booming primarily due to focus on 5G implementation. Adoption within the retail industry is driven by buyers focusing on enhancing customer experience with digital initiatives.
  • Going forward, enterprises expect infrastructure services to enhance business metrics in addition to reducing costs through outsourcing.
  • Vendor-agnostic behavior will continue as buyers expect agile and continuous innovation and higher value from outsourcing contracts.
  • Cloud adoption is rising, with hybrid cloud becoming the preferred model for enterprises. Service providers are best placed for solutions that will enable hybrid cloud as well as multi-cloud adoption amongst enterprises.
  • Service providers need to provide interoperable infrastructure capabilities to enable enterprises in their digital journeys.

***Download a complimentary 12-page abstract of the report here***

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

Demand for Contingent Workforce Drives Another Year of Double-Digit Growth in Managed Service Provider Market | Press Release

By | Press Releases

What enterprise buyers want from MSPs is rapidly evolving beyond cost reduction and compliance to next-gen services like inclusion of services procurement (SOW), direct sourcing, contingent talent branding, analytics and automation.

Economic uncertainty and millennial workers’ preferences for workplace flexibility are pushing organizations to leverage contingent workers in their workforce. On the back of this rising demand for contingent workforce across geographies and industries, the global Managed Service Provider (MSP) market has continued its double-digit growth momentum (13%) in 2018. According to Everest Group, the total annual contingent spend managed by MSP service providers stood at US$144-149 billion in 2018. More importantly, MSP spend is expected to grow at a rate of 10-12% to touch US$160-165 billion in 2019.

Organizational challenges also are contributing to the rising demand for contingent workers. These include scarcity in the talent market, the availability of niche skills in the contingent segment, and the need for organizational flexibility and scalability.

“As the preferences of workers evolve, organizations must adopt new ways of engaging with the specialized knowledge workers they seek,” said Vishal Gupta, practice director, Business Process Services, at Everest Group. “Increasingly, organizations are engaging Managed Service Providers given the rapid evolution of contingent workforce and the technological innovation happening in this space. The scope of services being delivered by MSPs has expanded greatly and will continue to do so as buyers look to their MSPs for managing SOW spend, direct sourcing, automation, consulting, analytics and insights, total talent acquisition, and other strategic services beyond the traditional, transactional activities of recruiting temporary workers.”

These findings are discussed in more detail in Everest Group’s recently released report, “Managed Service Provider (MSP) – Annual Report 2020: Leading Through Market Disruption.” This research provides comprehensive coverage of the market across dimensions such as MSP market size and growth, key MSP market themes, and buyer adoption and solution trends.

Everest Group identifies these key themes in the MSP market:

  • While traditional temporary labor still constitutes 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.
  • In 2018, the market continued to witness an uptick in the number of requests for information (RFIs) for Total Talent Acquisition (TTA), which is the holistic management of all kinds of talent requirements of an organization (permanent and contingent hires) under one roof.
  • The market also witnessed faster growth in the mid-market segment compared to other markets, owing to increasing buyer interest and development of productized offerings by service providers.
  • Direct sourcing is increasingly being leveraged by enterprises and MSPs as an alternative sourcing mechanism due to its multiple benefits. (Direct sourcing involves leveraging enterprises’ employer brand to create internal and external talent pools to source candidates.)
  • Digital technologies in talent acquisition are advancing rapidly, and as the 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.
  • Next-generation digital technologies—including advanced analytics, natural language processing (NLP), machine learning (ML), robotic process automation (RPA), and blockchain—are being increasingly leveraged in MSP engagements to create valuable insights, cost reductions, and superior experiences for both candidates and hiring managers. This is also prompting service providers to make dedicated investments to stay relevant in the increasingly competitive market.

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

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

Everest Group Identifies Six Enterprises with the World’s Most Innovative Procurement Operations | Press Release

By | Press Releases

Sourcing Innovation Pinnacle Enterprises™ set themselves apart with proactive innovation strategies, superior outcomes.

Research by Everest Group reveals that the world’s most innovative procurement operations are set apart by one rare but critical behavior: they take proactive steps to be innovative, whereas most other procurement operations are not even thinking about it. Everest Group has identified six Sourcing Innovation Pinnacle Enterprises™, set apart by their proactive innovation strategies and superior outcomes.

“Innovation in procurement has just scratched the surface of its full potential, particularly since so many powerful, new tools for analytics and automation and other digital solutions are emerging in the ecosystem,” said Michel Janssen, chief research guru for Everest Group. “However, a number of exceptionally performing procurement organizations have already set themselves apart by taking initiative, making the most of current technology, and not waiting for innovation to be mandated. These best-in-class sourcing operations, which we’ve deemed Sourcing Innovation Pinnacle Enterprises, are taking a proactive approach to building a culture of innovation in people, processes and technology. Whether it be their vision, organizational structure and personnel incentives or their investments in technology and ecosystem partnerships, their strategies are imbued with an innovation mindset, and as a result, they are reaping business benefits far beyond those of their peers.”

Everest Group, in partnership with Sourcing Industry Group (SIG) and SIGInnova, set out to determine:

  • The innovative procurement and sourcing practices that leading organizations are adopting.
  • The capabilities needed to drive successful innovation in procurement.
  • The technology innovations that are changing sourcing practices.

Everest Group assessed the sourcing innovation strategy and approach of 50 global enterprises representing more than a dozen industry sectors. Those enterprises that rated highest in terms of the maturity of their sourcing capabilities and the impact delivered were deemed Sourcing Innovation Pinnacle Enterprises™.

Sourcing Innovation Pinnacle Enterprises are delivering significant impact in three key areas:

  • Cost impact: Pinnacle Enterprises generated 50% higher percentage reduction in spend (under control) than other enterprises.
  • Operational impact: Pinnacle Enterprises achieved consistently high improvement in operational metrics through their sourcing innovation initiatives, especially on Key Performance Indicators (KPIs) such as reduction in cycle time, increased process accuracy, improved compliance and increased employee productivity.
  • Business impact: Pinnacle Enterprises significantly created business impact in areas such as increasing spend under management, improving vendor satisfaction, increasing spend visibility, and improving procurement’s reputation as a key partner in business innovation.

Sourcing Innovation Pinnacle Enterprises Honored at SIG Global Executive Summit

SIG, SIGInnova and Everest Group recognized the two Sourcing Innovation Pinnacle Enterprises that were recently in attendance at SIG’s Fall Global Executive Summit, CDK Global and VSP Global® .

“It’s an honor for CDK Global to be recognized as a Pinnacle Enterprise in Everest Group’s Sourcing Innovation Pinnacle Model,” said Mike Morsch, vice president of global procurement and supply chain at CDK Global. “CDK procurement is implementing an operating model focused on its people, core processes and technology enablement. This focus is helping us achieve substantive improvements in operational metrics while reducing procurement and business costs. Forward-thinking procurement leaders must also be technology leaders, driving investment and innovation in automation, digitalization and analytics.”

“This recognition is a great honor for VSP Global, but also a special tribute to our global sourcing and procurement team,” said Greg Tennyson, head of global corporate services at VSP Global. “Innovation is encouraged throughout our organization and our ability to embrace transformative change has propelled our enterprise forward by delivering significant cost savings, operational improvements, and business impact.”

Resources Available for Download
Everest Group describes in detail the differentiating strategies of Sourcing Innovation Pinnacle Enterprises in the report, “Sourcing Innovation: Pinnacle Model Analysis.”

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

Practical implications and best practices are also discussed in an Everest Group webinar, “Achieving Sourcing Innovation: Practices and Technologies Leveraged by Pinnacle Enterprises.” The webinar features Dawn Tiura, CEO and president of SIG.

***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.

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

Enterprise Adoption of RPA Doubles in 2018, Will Reach $2.5 B by 2020 | Press Release

By | Press Releases

Everest Group estimates 2.5 million attended robots and 0.8 million unattended robots will be running by 2020.

Encouraged by a growing number of success stories and positive word-of-mouth publicity, enterprises are increasingly investing in Robotic Process Automation (RPA). In fact, Everest Group predicts that the number of robotic desktop automation (RDA) robots running on users’ desktops, assisting agents and employees, will be close to 2.5 million by 2020. In addition, by 2020 there will be 0.7 to 0.8 million virtual workers or unattended RPA robots running on cloud and on-premise servers.

Enterprise RPA adoption, as indicated by the number of enterprise clients served by independent RPA vendors, grew 100-110% from 2017 to 2018, surpassing US$1 billion, according to Everest Group. Two-thirds (68%) of the revenue earned in the RPA software vendor market in 2018 came from RPA software licenses. The remaining 32% was from professional services such as consulting, training and implementation. The market is expected to grow at a compound annual growth rate of 70-85% between 2018 and 2020 to reach approximately US$2.5 billion.

Although the RPA customer base is growing at a fast pace across a wide spectrum of industries, geographies, and organization sizes, the majority of RPA buyers are still in an early adoption phase due to challenges faced while scaling up. Everest Group has identified the top five pain points enterprises experience when adopting RPA:

1. Lack of a robust RPA strategy and roadmap
2. Difficulty managing organizational change
3. Concerns about IT security and compliance
4. Lack of experienced RPA resources
5. Difficulty identifying use cases to maintain a healthy automation pipeline

“Fortunately, the RPA ecosystem is evolving to address the scale-up challenges of enterprise adopters,” said Sarah Burnett, executive vice president and distinguished analyst at Everest Group. “We see the technology overall becoming smarter and more robust with deeper capabilities thanks to advances in AI, machine learning, deep learning and natural language processing. Plus, RPA vendors are making significant investments in improving the customer experience, making training more accessible, and expanding their solutions by partnering with service providers and technology vendors. And enterprises themselves are sharing best practices to help others advance more quickly along the adoption curve.”

These findings and more are discussed in a newly released Everest Group report, “Robotic Process Automation (RPA) Annual Report 2019 – Laying the Foundation for a Light-touch Organization.” This research explores RPA market size and adoption trends, buyer expectations, key challenges and best practices in the enterprise RPA journey, solution characteristics, technology trends, the RPA vendor landscape, and the outlook for 2019-2021.

A selection of key findings:

  • Industry-specific processes continue to see the highest adoption of RPA. Banking, Financial Services and Insurance (BFSI) and telecom accounted for over half of the overall RPA software market. Manufacturing as well as travel and logistics showed strong growth. RPA also witnessed significant traction among public sector organizations.
  • North America holds the lion’s share of the RPA market. APAC witnessed accelerated growth.
  • Buyers consider operational impact to be the most important factor driving RPA adoption, followed by cost impact, and buyers are satisfied with their RPA vendors in these aspects.
  • Top technology trends to watch include online digital worker marketplace, predictive SLA monitoring, and workload balancing.
  • Automation Anywhere, Blue Prism, and UiPath are the top three vendors in terms of RPA license revenue, closely followed by NICE. Pegasystems leads in terms of revenue from robotic desktop Automation (RDA)/attended RPA licenses.

***Download a complimentary abstract of the report. (Registration required.)***

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

IDP Revenue Growth Expected to Exceed 80% in 2 Years as Enterprises Embrace More Powerful Technology, Mature Partners | Press Release

By | Press Releases

Most Enterprises Need Intelligent Document Processing: Everest Group Explains Why, Provides Roadmap for Adoption and Strategies to Improve ROI

In a competitive marketplace, companies that can minimize cost while increasing productivity, accuracy and efficiency are extremely likely to have an advantage over those who cannot. According to Everest Group, that is precisely why most companies need intelligent document processing (IDP) solutions and why the IDP market is expected to grow 80% between 2018 and 2020.

“We foresee tremendous growth in IDP in the near future, especially now that core IDP technologies have advanced far beyond optical character recognition,” explained Sarah Burnett, executive vice president and distinguish analyst at Everest Group. “IDP solutions are becoming progressively more sophisticated, offering enterprise-grade features and an enticing track record of successful pilot implementations, particularly in the banking and financial services industry, which was the early adopter of IDP technology. Also, vendors are offering more mature service capabilities enhanced with salient features like outcome-based pricing and package-based solutions.”

Everest Group defines Intelligent Document Processing (IDP) as any software product or solution that captures data from documents (e.g., email, text, pdf, and scanned documents), categorizes and extracts relevant data for further processing using artificial intelligence (AI) technologies such as computer vision, optical character recognition (OCR), Natural Language Processing (NLP), and machine/deep learning (ML/DL). These solutions can be integrated with internal applications, systems and other automation platforms. Adoption of IDP solutions can not only help enterprises achieve cost savings, but also improve their workforce productivity as well as employee and customer experience.

Common use cases of IDP solutions:

  • Banking, Financial Services, and Insurance: processing KYC documents, invoices, insurance claims, bank statements and checks
  • Healthcare and Pharmaceuticals: processing R&D data, patient onboarding, patient records, patient surveys, physician referrals, claim-related documents
  • Telecom: Processing proof-of-delivery information, custom declarations, driver logs and maintenance logs
  • Manufacturing: Processing invoices, order forms, change requests, proposals and quality assurance records
  • Travel and Logistics: Processing user documentation, invoices, proof of delivery, and purchase orders.

IDP solutions are rapidly replacing traditional OCR-based solutions for document extraction because IDP solutions are capable of processing documents with greater accuracy and are more resilient to changes in document templates than traditional OCR. For example, with the help of NLP, an IDP system can process complex unstructured documents and can also create summaries. Once an IDP system is trained using ML/DL, the system can achieve Straight Through Processing (STP), which is processing without human touch. The benefits include:

  • Increased productivity and efficiency of both digital and non-digital workforce
  • Improved employee experience
  • Improved compliance and governance
  • Faster turn-around times due to increased STP
  • Improved accuracy with minimal manual intervention
  • Streamlined document tracking
  • Reduction in the overall cost of processing huge volumes of data.

For enterprises interested in IDP adoption, Everest Group has published “Intelligent Document Processing (IDP) Playbook.” The playbook is designed to help enterprises conceptualize where they want to get with automating data capture, identify the capabilities they need to get there, and create a business case and roadmap for adoption. The playbook details a five-step process to adopt, expand and scale IDP solutions and also includes IDP market characteristics, challenges and best practices for adoption, enterprise case studies, and a future outlook for the IDP market.

*** Download Complimentary Abstract ***

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

The Siloed Walls of F&A Won’t Keep Transformation Out Any Longer | Press Release

By | Press Releases

F&A service providers expected to handhold enterprises through their transformation journey; FAO experiences double-digit growth in 2018.

The waves of digital transformation are crashing down the siloed walls around the traditional finance and accounting function (F&A), as enterprises demand more from F&A in an effort to remain competitive. According to Everest Group, as enterprises shift from legacy to digital-first business models, F&A departments are being held accountable for not only reducing costs but also increasing operational efficiency and making a greater business impact.

However, the F&A transformation journey is not an easy one. Typically, F&A functions are beset with many challenges from the outset, such as siloed operations, fraudulent transactions, lack of visibility, changing macroeconomic factors, multiple dependencies and touchpoints, fragmented technology architecture, delayed reporting and suboptimal cash flow.

In its recently published report, “Finance and Accounting Outsourcing (FAO) Annual Report 2019: Why, What, and How of F&A Transformation,” Everest Group explains why the traditional, siloed process improvement efforts of the F&A function must give way to a holistic, end-to-end transformational approach in order to reap sustainable benefits. Everest Group also elevates a critical component of F&A transformation efforts: a strategic service provider partnership.

“Service providers play a critical role in helping F&A departments make the transformation journey,” said Shirley Hung, vice president of Everest Group. “Service providers with strong capabilities in process improvement, digital transformation and talent management can handhold the enterprise as it moves through the process. In fact, the ideal partner is one who offers a platform-led approach, where all the digital levers are integrated, implemented and orchestrated with the right mix of process improvement and talent management to deliver optimal outcomes.”

Everest Group’s FAO Annual Report 2019 provides an in-depth discussion of what it takes to transform the F&A function and how a service provider partnership driven by business outcomes rather than service-level agreements (SLAs) achieves better outcomes.

*** Download Complimentary Abstract ***

The report also offers an overview of the FAO market and service provider landscape, including the FAO Service PEAK Matrix™ Assessment 2019, which identifies Leaders, Major Contenders and Aspirants in the market based on providers’ vision, capabilities and market impact.

Highlights of the FAO Market Overview:

  • The global multi-process FAO market witnessed a strong growth of 8-10% in 2018 to reach US$8.6 billion, driven primarily by an increase in first-generation outsourcers, large-scale transformation deals and scope expansion in existing contracts.
  • Traditional industries such as financial services, manufacturing, high-tech & telecom, and retail continue to hold major share of the FAO market, while energy & utilities and healthcare sectors witnessed the maximum growth.
  • North America and Europe still dominate the market (with a decline in the United Kingdom), while the highest growth in adoption is seen in the Asia Pacific (APAC), Latin America (LATAM) and Middle East & Africa (MEA) regions.
  • Offshore/nearshore delivery continues to increase, with the majority of F&A services being delivered from India, the Philippines, and Poland.Although FTE-based pricing is still dominant, hybrid pricing models are increasingly being leveraged due to the growing adoption of technologies such as automation and a greater focus on achieving business outcomes.

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

Contact Centers: Adopt Digital Customer Experience Capabilities for Huge Success, or Else…, Warns Everest Group | Press Release

By | Press Releases

In Customer Experience Management (CXM) market, digital CX will grow 20-25%, traditional contact center outsourcing only 2-3% by 2023.

Contact centers and service providers that can smoothly transition to a next-generation operating model and adopt digital capabilities will witness huge success in the market, while others will face the risk of falling off the radar, according to Everest Group.

The customer experience management (CXM) industry is witnessing significant disruption in service delivery, as buyers are increasing their focus on digital solutions to reduce costs, optimize operations, and improve customer experience (CX). While traditional contact centers primarily rely on voice-based delivery as well as manually intensive tasks to deliver services, an increasing number of investments are being made in building next-generation contact centers to meet growing customer expectations.

Next-generation contact centers can be characterized by integrated data, multi-channel interactions, and the leverage of digital tools such as virtual assistants, robotic process automation (RPA), robotic desktop automation (RDA), and advanced analytics. They also go beyond offering innovation around technology to include other elements such as consulting, design thinking, talent upskilling, and evolving delivery models such as Work-At-Home-Agents (WAHA) to align with the enterprise needs.

Although traditional models of contact center outsourcing constitute 92-94% of the market as of 2018, this segment is expected to grow at only 2-4% over the next few years, whereas the digital CXM segment (6-8%) is expected to grow at a high compound annual growth rate of 20-25% over the same period. By 2021 the digital CXM segment will command a 10-15% share of the overall CXM services market.

These findings and more are discussed in Everest Group’s recently published report, “Customer Experience Management (CXM) Annual Report 2019: Delivering Next-generation Contact Center Services.” The report offers an in-depth discussion of the changing dynamics of the CXM market, including insights on evolving customer needs and the components of a next-generation operating model, emerging solution trends in CXM services, CCO market overview and adoption trends, and the outlook for 2019-2020.

*** Download Complimentary Abstract***

“Everest Group believes next-generation contact centers are more than a trend: they are the only viable way forward,” said Shirley Hung, vice president at Everest Group. “Enterprises need a growing base of loyal customers, and the way to build that base today is to provide a customer experience that is personalized, seamless, requires less customer effort and offers strong security. Traditional contact centers simply are not well equipped to deliver on this mandate. Next-gen contact centers, in contrast, leverage data, technology and talent to deliver the kind of seamless, omnichannel interactions that can meet evolving customer needs, contribute to business objectives, and keep companies alive and thriving.”

Key findings:

  • The global CCO market grew at 3-4% in 2018 to reach US$83-86 billion, driven by the growing interest among new buyers for outsourcing and emerging growth avenues for service providers around consulting and digital CX solutions
  • Some industries, such as technology and travel & hospitality, witnessed high growth, driven by increased outsourcing by digital-born firms
  • Next-generation contact centers, while in high demand, continue to be only a fraction of the traditional Contact Center Outsourcing (CCO) market, which is still driven by scale, location footprint, and voice-based delivery
  • Digital CXM, which is currently at 6-8% of the CCO market, is expected to grow at a CAGR of 20-25% over the next three years. The adoption of digital CXM components is on the lower side, leaving providers with huge untapped market opportunities
  • Real value for enterprises lies in transitioning from multi-channel to consistent and seamless omnichannel CX delivery, including being available for customers at their channel of choice – both voice and non-voice
  • Heavy investments across the entire spectrum of next-generation technology solutions have led to an increase in the impact that service providers can deliver with these deployments
  • Next-generation recruitment techniques and advanced learning methods are increasingly being used to build skilled talent pools that can enhance operational delivery
  • Delivery from onshore locations is rising as buyers shift their focus towards enhancing services support. Even alternate delivery models, such as the gig economy, are growing as they provide access to skilled talent at lower operational costs

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

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Sleepy Global Services Market Sees Emerging Delivery Hot Spots on the Horizon, According to Research from Everest Group | Press Release

By | Press Releases

Everest Group spotlights market-shaping trends and fastest growing delivery locations for global services.

In the modestly growing global services industry, the location strategies of enterprises and service providers are being reshaped by two key trends—reshoring and a strong demand for engineering/R&D and digital services—according to Everest Group, which recently published its annual report on global services delivery locations.

Key Findings and Predictions:

  • The global services market continues to grow overall, but modestly. The global services landscape sustained 6 to 8% revenue growth in 2018 (the same pace as 2017). New center setups witnessed a significant increase in 2018 (12.5%), driven by a focus on digital and R&D/engineering services; however, headcount growth in 2018 (6-8%) was slower than in 2017 (7-9%). Everest Group predicts that the market will continue to grow for the next three to five years, but at a slower growth rate in 2019.
  • Global services delivery is increasingly being characterized by nearshoring. A marginal shift in growth from offshore to nearshore locations in 2018 was primarily driven by enterprise and service provider initiatives to rebalance and optimize their existing locations portfolios and to comply with data protection mandates. In particular, Nearshore Europe witnessed a significant increase in headcount and new center setups in 2018, benefitting from availability of complex skills, proximity to customers in Western Europe, increased regulatory oversight and demand for multi-lingual support. Everest Group predicts that Nearshore Europe will continue to expand its share of the global services market, with Poland becoming the third-largest market for global services delivery behind India and the Philippines.
  • Enterprises are adopting insourcing to a greater extent than outsourcing for digital services. Using the GIC model, enterprises are focusing more on building skills in and delivery of IT-related services. Between 2017 and 2018, GICs led service providers (62% to 38% respectively) in the setup of new centers for digital services such as analytics, mobility, artificial intelligence and cybersecurity. Everest Group predicts that enterprises will continue to rebalance portfolios to bring more critical pieces of work in-house, but we will also see growth in the outsourcing market as enterprises outsource non-core activities.
  • Engineering/R&D and digital services continue to dominate the industry. An increased focus on R&D/engineering services delivery (especially in India, Singapore and China) contributed to APAC’s growth. Nearshore Europe had the second highest increase in new center setups, growing significantly in digital services delivery in Ireland, Lithuania, and Poland. Everest Group predicts that APAC will continue to be the leading geography of choice, and Nearshore Europe will grow faster as the market sees increased demand for R&D and innovation hubs to support development of digital products and services.

Additional research findings and predictions are discussed in “Global Locations Annual Report 2019: Demand for Next-gen Services Defining Location Strategies,” a comprehensive guide to understanding the nuances of the global services locations landscape and interpreting locations-related developments and trends to frame locations strategies.

“In our volatile global services market, the location decision should never be about cost or talent alone,” said Sakshi Garg, vice president, Global Sourcing, Everest Group. “Enterprises today are having to continuously re-evaluate and carefully evolve their location strategies because of multiple disruptive forces that are at play. These forces include increasing demand for next-gen technologies, intensifying competition for talent, evolving customer preferences, pressure on growth and margins, and geopolitical and macroeconomic uncertainties, just to name a few.”

***Download a complimentary abstract of the report.(registration required)***

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

 

Increasing Talent Gap Propels Faster, Wider, Deeper Growth in Recruitment Process Outsourcing Market | Press Release

By | Press Releases

As enterprises face unprecedented talent acquisition challenges, recruitment process outsourcing soars as one of the fastest growing outsourcing markets in the world, growing at over 15% for the past four years.

The Recruitment Process Outsourcing (RPO) market is one of the fastest growing outsourcing segments today, with 20% growth in 2018 and consistent double-digit growth over the past four years, according to Everest Group.

There is a massive talent supply-and-demand gap in almost all major economies across the world, which is forcing enterprises to go the RPO route for their permanent talent needs. This not only has given a significant push to RPO adoption but also is altering the dynamics of the RPO industry.

Overall, the RPO market is:

Accelerating: There is a huge influx of new RPO deals in the market and increased adoption in emerging geographies with above-average growth in even the mature regions. We also have witnessed continuous growth in multi-country RPO (MCRPO) deals as enterprises look to further scale their RPO initiatives.

Widening: The RPO market is expanding its horizons owing to:

  • Increased adoption from small and mid-market enterprises and buyers from newer industries. Banking, Financial Services and Insurance (BFSI), manufacturing, and hi-tech and telecom are the traditional and biggest adopters of RPO; however, with RPO service providers developing industry-specific capabilities, new industries, especially healthcare and retail, are witnessing a high increase in their adoption.
  • New offerings such as Total Talent Acquisition (TTA) and high-volume low cost RPO. Enterprises are gradually resorting to TTA to manage both their permanent and contingent talent needs “under one roof” in light of the cost, operational and strategic advantages that TTA model has to offer. Another innovative offering is high-volume low-cost RPO, a technology-intensive approach to helping enterprises that require relatively less skilled manpower with high scalability and agility at significantly low prices.

Deepening: As the RPO market is maturing and becoming more sophisticated, buyers are looking for additional value in different areas of their RPO engagements. Service providers are responding with:

  • Consulting capabilities such as reskilling and training, outplacement and “best fit” consulting.
  • Value-added services such as employment branding, talent communities, workforce planning and career transition services.
  • New service-level agreements that measure outcomes and associate rewards and penalties with those metrics.
  • Digital solutions. RPO service providers are increasingly investing in next-generation technologies—such as analytics, artificial intelligence (AI), blockchain and robotic process automation (RPA)—to create valuable insights, additional increase in efficiencies, cost reductions and superior experience for both candidates and hiring managers.

“Enterprises today are facing unprecedented challenges in talent acquisition,” said Vishal Gupta, practice director at Everest Group. “Enterprise pain points include forecasting workforce requirements, adapting to the changing nature and demands of the candidate base, developing effective branding, and responding to rapid developments in technology. The RPO market is expanding rapidly as RPO service providers are seizing the opportunity to help enterprises meet recruitment challenges with industry-specific expertise, innovative offerings, next-gen technologies, and a willingness to put more skin in the game with metric-driven service level agreements.”

These and other research findings are explored in much greater detail in a recently published Everest Group report: “Recruitment Process Outsourcing (RPO) Annual Report 2019: Steering 3D Growth on the Tides of Talent Shortage.” This research provides a comprehensive coverage of the market across dimensions such as market overview, regional overview, adoption trends, total talent acquisition, value-added services and capabilities, and digital in recruitment.

***Download a complimentary 10-page abstract of the report here.***

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

Outsourcing Keeps Falling While Digital Picks Up the Slack, According to Everest Group Report on Top Trends in Global Sourcing | Press Release

By | Press Releases

Share of digital-focused outsourcing transactions witnessed a significant 8% increase in Q2.

The global sourcing industry posted a decline in transactions in the second quarter of 2019 as compared to Q1 2019, dropping from 501 transactions to 474, according to Everest Group. This marks the second consecutive quarter of declining transactions and a 3% year-on-year decline from Q2 2018 (489 transactions).

However, within the global outsourcing activity, the share of digital-focused deals continues to rise overall, posting a significant increase from 70% in Q1 to 78% in Q2. Cloud continues to be the dominant digital component, included in 46% of outsourcing transactions. Automation, artificial intelligence (AI) and analytics also factor heavily in driving digital transactions.

“Less than five years ago, digital capabilities were a competitive differentiator, but today they are a competitive must,” said H. Karthik, partner, Global Sourcing, at Everest Group. “As a result, enterprises and service providers alike are making significant investments in digital technologies to enhance customer experience and improve efficiency. We’re seeing this play out across the global sourcing landscape in the scope of outsourcing deals, the investments being made in internal capabilities, the focus of acquisitions and partnerships, and the recruitment of talent.”

These global sourcing trends are detailed in Everest Group’s recently released Market Vista™: Q3 2019 report. The report shines a spotlight on activity in the digital space, profiling key developments such as alliances, mergers and acquisitions (M&As), outsourcing deals, financial reports, Global In-house Center (GIC) or Shared Services Center (SSC) activity, and delivery locations.

Highlights:

  • Digital-focused GICs for offshore/nearshore locations formed 67% of the total new center setups, compared to 46% in Q1 2019, with AI included in 67% of GIC setups and expansions. Similarly, the share of digital-focused GICs in onshore locations grew from 44% to 49% in Q2 2019 over the last quarter, with AI included in 78% of onshore GIC transactions.
  • Although the share of digital in M&A activity declined significantly in Q2, digital-focused alliances increased due to cost benefits for enterprises and the opportunity to jointly utilize resources for capability expansion. Examples include the following transactions:
  • Accenture partnered with General Employee Benefits to jointly launch a blockchain solution to provide employee benefits such as life and healthcare insurance.
    ADP partnered with Google Cloud to launch identity services automation solution with Google Cloud’s Identity and G Suite. The partnership will enable customers to unite HR and identity solutions to simplify user lifecycle management.
  • HCL partnered with PTC Capability to launch Realtime Manufacturing Insights (RMI), an IoT solution that leverages PTC’s ThingWorx industrial IoT and Kepware industrial connectivity platforms.

Other notable Q2 trends:

  • The overall outsourcing transaction activity witnessed a substantial decline. The share of Market Vista™ Index service providers also decreased slightly in Q2 2019 as compared to the previous quarter. Within Market Vista™ Index service providers, deal activity from global service providers witnessed a significant decline in the volume of deals, as compared with the previous quarter.
  • Deals for Banking, Financial Services and Insurance (BFSI) and government were the highest among all industry verticals.
  • The technology and communications vertical experienced a decline due to a slowdown in telecom in the wake of financial stress and industry consolidation.
  • Technology and communications enterprises increased their GIC setups for business processes in North America to deliver finance and customer support services.
  • Business process focused center setups declined in India, slowing down Asia Pacific at large; service providers were primarily responsible for this decline.

***Download a complimentary 18-page abstract of the report***

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

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