Category: Press Releases

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.

Recruitment Process Outsourcing Market Suffered COVID-based Contraction of 13% in 2020, But Sharp Recovery Is Underway | Press Release

Recruitment Process Outsourcing Market Suffered COVID-based Contraction of 13% in 2020, But Sharp Recovery Is Underway—Everest Group

The global Recruitment Process Outsourcing (RPO) market contracted 13% in 2020 as enterprises’ talent demand decreased substantially during the pandemic. However, according to Everest Group, during this downturn, service providers accelerated the development of their technological capabilities and service offerings and are now poised to usher in a new era—RPO 4.0—as enterprises rebuild their businesses and resume hiring activity.

Everest Group expects a sharp recovery in the RPO market in 2021 and beyond.
The recovery began in the third quarter of 2020 as enterprises, especially those who had downsized their internal talent acquisition function, began to rebuild their workforce and turned to RPO for its flexibility and scalability. The early recovery also was boosted by strong demand from healthcare, pharmaceutical and life sciences segments as well as government/public sector looking to strengthen their workforce for contract tracing purposes.

Rapid growth in 2021 and beyond will be led by increased adoption from new industries such as fast-growing tech, retail, services, and government/public sector. The increased adoption from new market segments such as small- and mid-sized buyers along with increased penetration from traditional RPO adopters will further boost market growth.

Everest Group’s State of the Market Report
In its newly published report, “Building for the New Normal: Recruitment Process Outsourcing (RPO) State of the Market Report 2021,” Everest Group provides comprehensive coverage of the 2020 RPO market and analyzes it across aspects such as post COVID-19 recovery, regional overview, adoption trends, value-added services and capabilities, and digital trends in permanent recruitment. Everest Group also details the next evolution of this sector—RPO 4.0.

Key Characteristics of RPO 4.0:

  • Integrated Talent Acquisition Platform: There is increased adoption of a platform-based approach, integrating a diverse range of tools and platforms that together form the talent acquisition technology ecosystem, including Software-as-a-Service human resources systems, applicant tracking systems, candidate relationship management systems and bolt-on tools. Seamless data flow between these tools and platforms will enable service providers and enterprises to leverage advanced predictive and prescriptive analytics and glean meaningful insights.
  • Total Talent Acquisition: Leading service providers are investing heavily in the development of digital capabilities platforms and associated integration tools for the management of both permanent and contingent workforce.
  • High-volume, Low-Cost RPO: Leading RPO providers have made dedicated investments and launched highly automated high-volume, low-cost RPO solutions.
  • Diversity, Equity and Inclusion (DE&I): As DE&I transitions from “nice to have” to a critical part of enterprises’ talent strategies, RPO providers can play a key role in building a truly diverse and inclusive workforce by sourcing a diverse slate of candidates and removing inherent biases in the recruitment process.
  • Distributed and Dispersed Talent: Global preference for the Work From Home (WFH) and hybrid models will be equally applicable to RPO services delivery. RPO providers can play a key role in formulating and executing a strategy to engage and source talent across geographies.
  • Automation Solutions in RPO: Cognitive automation solutions driven by artificial intelligence (AI), machine learning (ML) and natural language processing (NLP) are helping ensure business continuity and cost reduction.
  • Blockchain in Recruitment: Blockchain-enabled solutions can ensure security of data and help build trust between candidates and enterprises amid growing data privacy concerns.
  • Advanced Analytics: With a higher degree of data availability, enterprises and service providers are leveraging advanced data analytics to draw better insights and optimize the recruitment process.
  • Value-added Services: Strategic value-added services, such as employer branding, talent community curation, and workforce planning, will become crucial as enterprises scramble to compete for limited supply of talent.
  • Outplacement and Career Transition Services: As enterprises focus on workforce agility and look inward to fulfill their talent needs, RPO providers may expand into outplacement and career transition services space to explore opportunistic growth possibilities.

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

Life Sciences Operations

About Everest Group

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

As Enterprises Scale Their Contingent Workforce, Vendor Management System (VMS) Market Will See 7-10% Growth by 2023 | Press Release

Broader awareness of VMS benefits and rising demand for holistic digital solutions are paving the way for surge in VMS adoption.

Following a year of stagnation in 2020 (declining 3%), the market for Vendor Management Systems (VMSs) is expected to bounce back and grow at a faster pace (approximately 7 to 11% by 2023) than in pre-COVID times, according to Everest Group.

A Vendor Management System (VMS) is a software application that helps manage and procure contingent talent or the non-permanent workforce. VMS providers typically charge enterprise buyers a fee as a percentage of managed spend.

VMS continues to be an important technology solution for enterprises globally, especially as enterprises increasingly leverage contingent workers as part of their workforce. In recent years, VMSs have not only enhanced the features and functionalities of core technologies, but also expanded the scope of services delivered to other areas within Contingent Workforce Management (CWM), such as direct sourcing and services procurement.

Currently, temporary labor, sourced through staffing agencies, accounts for 60-70% of spend under management by VMS providers. However, changing employment requirements and increasing preference for contingent workforce is leading to a rise in other categories, such as services procurement or statement of work (currently 20-25%) and independent contractors or freelancers (currently 10-15%). Everest Group expects these other segments to be major growth drivers of VMS in the future.

Other Key Trends in the VMA Market
While buyers expect to achieve all three benefits—cost, operational and business impacts—from VMS adoption, they are currently the most satisfied with the operational impacts delivered by their VMSs. A majority of enterprise buyers praise their VMSs for ease of use, but enterprises also seek improvement with respect to analytics capabilities and reporting functions.

Spurred to innovate, VMS vendors are working to develop end-to-end candidate management capabilities, including compliance and shift management; leverage next-generation artificial intelligence (AI) and machine learning (ML); develop strategic partnerships with other vendors; and provide holistic insights leveraging multiple data sources.

These findings are explored in Everest Group’s newly published report, “Vendor Management System (VMS) State of the Market Report 2021: Keeping Pace with Rapidly Evolving Buyer Expectations.” In this report, Everest Group provides comprehensive coverage of the 2020 VMS market and sheds light on the future trajectory of VMS.

The report includes the Everest Group PEAK Matrix® for VMS, an assessment of the capabilities and market impact of 18 VMS providers. Beeline, PRO Unlimited, SAP Fieldglass and VNDLY are classified as Leaders.

Market Highlights:

  • Healthcare; manufacturing; and banking, financial services and insurance (BFSI) are the leading adopters of VMSs, accounting for more than 50% of market share in terms of active deals.
  • Engineers/IT and blue-collar job roles together account for more than 70% of market share.
  • The small and mid-sized market dominates with two-thirds of the market share, with activity rising rapidly across all buyer sizes.
  • Single-country deals dominate the VMS market currently; however, multi-country deals saw an increase in 2020 and are expected to increase further.
  • North America is the largest (64%) and most mature of VMS geographies, followed by EMEA (27%), Asia Pacific (7%) and Latin America (1%).

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

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

Life Sciences Operations Outsourcing Is Expected to Grow 9-11% Through 2022 | Press Release

Pharmaceutical firms are seeking faster time to market, reduced costs and access to technology, thereby generating rapid traction in life sciences outsourcing marketing

The life sciences industry is going through a renaissance period that is marked by transformational breakthroughs in the way technology is utilized. Key market trends such as rising adoption of decentralized trials, focus on research and development (R&D) efficiency, rise in the use of specialty medication, and increasing importance of real-world evidence (RWE) is forcing enterprises out of their comfort zone and necessitating the development of next-generation technological capabilities, resulting in increased adoption of outsourcing in the life sciences space.

The rising demand for technological support is one of many trends compelling firms in the life sciences industry to rethink their strategy and operations. Other trends are explored in depth in Everest Group’s “Life Sciences Operations: Changing Market Dynamics Ushering In a New Wave of Digitalization” In this report, Everest Group examines the key themes and trends characterizing the life sciences operations market, including the various levers of emerging technologies and their impact across the life sciences value chain, outsourcing dynamics, deal trends, and the service provider landscape.

Selected Highlights:

  • Modernizing clinical trials: Clinical trials in the life sciences sector are experiencing a shift from a centralized clinical trial approach to a decentralized clinical trial (DCT) approach, which has resulted in reduced costs and enhanced recruitment. DCTs leverage virtual platforms and other technologies (such as smart phones, wearables, sensors, and in-home devices) to enable clinical trial testing in various settings—from point-of-care locations to trials conducted at patients’ homes. Artificial intelligence (AI) and machine learning (ML) are being leveraged to facilitate diagnosis, improve patient satisfaction, and generate real-world evidence of drug efficacy.
  • Increased focus on APAC markets: Although North America and the European Union (EU) are currently the largest geographies for life sciences, Asia Pacific (APAC) countries are growing in importance due to the increase in healthcare spending and rise of non-communicable diseases (such as cardiovascular disease, cancer, and diabetes) in the region. Healthcare spending in APAC is projected to surge to US$2.3 trillion by 2026, based on an analysis of health expenditure data from the Organization for Economic Co-operation and Development (OECD). The rise in spending will be partly utilized to purchase medication and MedTech devices, thereby boosting the life sciences market in the region.
  • R&D’s focus on efficiency: To improve their return on investment, pharmaceutical companies are shifting towards more cost-efficient DCTs, improving efficiencies through collaborative R&D, and utilizing emerging technologies such as AI and analytics. Additionally, life sciences firms are increasingly outsourcing their R&D activities in a bid to reduce cost.
  • Specialty medicine: The life sciences industry is transitioning from a blockbuster model (i.e., development of mass market drugs to generate new sales) to a specialty model (i.e., development of specialized medicines to treat specific disease subtypes). Examples of specialty medicine include gene therapy and precision medicines customized to each patient’s genetic makeup. As the demand for biotechnology drugs grows, enterprises will be required to develop and adopt new technologies such as AI and analytics for rapid drug development and adaptive clinical trials.
  • Beyond-the-pill services: “Beyond-the-pill services” refers to an accompanying offering to a pharmaceutical or medical device product that addresses a patient’s needs along the entire journey, leading to better health outcomes. Such services may include education and information, assistance in managing the disease or side effects of treatment, tracking therapy progress, and co-pay programs. To develop and implement an effective beyond-the-pill service offering, life sciences firms need to invest in digital remote monitoring platforms and cloud-based technologies and increase hiring of trained personnel to provide care.
  • Regulatory scenarios: In nearly every geographic region, life sciences firms are anticipating regulatory changes that will impact their business. The U.S. is developing guidelines to regulate the Software-as-a-Medical Device (SaMD) market. In Asia, regulatory scrutiny is on the rise, particularly in the Chinese and South Korean markets. In the EU, the Medical Device Regulation (MDR) and In Vitro Diagnostic Regulation (IVDR) are set to replace the Medical Device Directive of 1993.
  • Real-World Evidence: The US Food & Drug Administration (FDA) defines Real-World Data (RWD) as data relating to patient health status and/or the delivery of health care routinely collected from a variety of sources. Real-World Evidence (RWE) is the clinical evidence about the usage and potential benefits or risks of a medical product derived from analysis of RWD. Currently RWE is used to support regulatory submissions and label expansion, to inform the design of value-based contracts for comparative effectiveness research, and as a synthetic control arm of clinical trial design. To develop RWE capabilities, most pharmaceutical firms are actively seeking access to new sources of data; however, many lack the capabilities and infrastructure to analyze large datasets, which may result in huge investments in data analytics platforms and a rise in outsourcing to service providers with data analytics capabilities and requisite data security and governance measures.
  • COVID-19 impact: The pandemic has exposed the pharmaceutical industry’s supply chain fragility and its dependence on China and India, leading several countries to restructure pharmaceutical supply chains to enhance onshore production capacity. The pandemic has also ushered in the digital age in the life sciences industry, with several firms focused on investing in social media, cloud computing, big data, cybersecurity, and digital platforms.

These trends have generated rapid traction in the life sciences outsourcing market as service providers accelerate their efforts to assist enterprises in augmenting their operations by delivering services and solutions across the life sciences operations value chain.

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

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

Serious Talent Shortage Deepens in Software Product Engineering, the Fastest Growing Segment of $1.27 Trillion Global Engineering Spend—Everest Group

Tremendous talent shortage anticipated as adoption of next-generation technologies—including cloud, AI/ML, IoT, analytics, cybersecurity, and AR/VR—grows exponentially over the next few years.

Everest Group reports that although a talent shortage exists across the overall engineering, research and development (ER&D) landscape, the supply crunch is much more pronounced for emerging skills, such as cloud engineering, artificial intelligence and machine learning (AI/ML), internet of things (IoT), analytics, cybersecurity, and augmented reality and virtual reality (AR/VR). According to Everest Group, the exponential growth in the adoption of these next-generation technologies over the next couple of years will cause a huge supply shortage in the software product engineering world.

Enterprises globally spent US$1.27 trillion on engineering in 2020, and more than one-third of that spend was on software product engineering. Software product engineering has been the fastest growing segment of engineering spending over the last four years and was the only segment to witness positive growth in 2020, even as overall global engineering spend declined by 2%. Contributing to sustained software engineering spending are commercial software sellers and internet companies as well as enterprises seeking to augment existing products with software-driven features and functionalities.

In its newly published report, “Reaching New Frontiers in Experience-centricity and Resilience –Software Product Engineering Services State of the Market Report,” Everest Group examines the dynamics of global software product engineering services trends prevalent among leading service providers. It includes an overview of the software product engineering market and an in-depth view of outsourcing in this space.

Selected Highlights:

  • Overall enterprise spend for software product engineering has been growing at a robust pace, reaching approximately US$410 billion in 2020.
  • The supply crunch in the software engineering talent market is leading to a price war, where enterprises are having to pay a premium rate to access talent skilled in emerging software engineering themes.
  • The talent shortage in emerging skillsets is also compelling enterprises to explore non-traditional locations to access talent. As a result, nearshore locations have steadily been gaining prominence for talent sourcing.
  • Cloud engineering has emerged as the biggest spend area for enterprises, with more activity around cloud-native engineering, platformization, carve-outs of legacy products and verticalized solutions.
  • The software product engineering services market (i.e., outsourcing) has grown at a rate of 16% over the past year to reach approximately US$23.5 billion, which is 5.7% of the overall enterprise spend.
  • The hi-tech verticals continue to hold a large share of the services market, while the geography split reveals North America to be the largest location.

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

Talent Shortages in Software Product Engineering

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

Sourcing of Application Services Management Grows Steeply Among Smaller Enterprises —Everest Group

Optimizing applications is a mandate for enterprises of all sizes, but enterprises seek more business value from sourcing engagements.

Enterprises with revenue less than US$5 billion have witnessed a steep increase in adoption of application services (AS), increasing from 55% to 79% in the last two years, according to Everest Group. The growing share of smaller enterprises in AS engagements reinforces the fact that optimizing the application estate has become a universal mandate. The COVID-19 pandemic has also forced many smaller enterprises to undertake modernization initiatives to remain resilient in the wake of another black swan event.

Although AS engagements take the top spot (more than 70%) in an IT services market expected to grow by 5-7%, most enterprises consider application management to be a necessary evil and the sourcing of application management to be solely a cost take-out function. According to Everest Group’s most recent poll of enterprise buyers of application services, enterprises believe service providers have not been able to add value to application management initiatives beyond cost-take out; value addition received the lowest score among assessment criteria. The key value-add benefits enterprises desire from their AS engagements include the following:

  1. Enable better experience for customers
  2. Increase scalabilty and resiliency of existing applications
  3. Facilitate advanced analytics and forecasting capabilities
  4. Increase security, reduce risk and adhere to compliance

To help organizations derive more business value from application services, Everest Group proposes a model that enterprises can use to drive transformation in their AS function. The “Business Value Orchestrator Platform” views application management as one part of a broader initiative comprising other technology towers, operating models, service management solutions, delivery enablement, and next-generation sourcing.

The model is described in detail in Everest Group’s newly published State of the Market Report, “Application Services – Transform Application Management to Drive Digital Success.” In this report, Everest Group also examines the market trends in the AS market, including IT services market size; AS buyer adoption trends across geographies, industry verticals and revenue sizes; and key trends shaping the AS market.

Selected Report Highlights:

 Though enterprises plan to adopt cognitive capabilities in application management functions, only 16% have adopted it thus far. The key challenge is the unavailability of suitable mature AI solutions.

  • Sixty percent of enterprises are integrating site reliability engineering (SRE) with application management.
  • With incumbent application management service (AMS) providers unable to drive more value, enterprises are willing to work with challengers. Everest Group sees nearly 20% of AMS engagements now being signed with challenger service providers rather than incumbents.
  • Discrete application services engagements continue to form 71% of the IT services market.
  • Enterprises continue to prefer short-term AS engagements (less than three years). The proportion of short-term engagements has risen over the last two years from 23% to 36% of all engagements.
  • AS engagements in the North American market continued to decline in comparison to other geographies, but Everest Group expects the North American market to grow faster than other regions as the market recovers from pandemic influences.

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

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

Healthcare Payers Enjoy Rising Revenues, but COVID Is Still Taking a Bite Out of the Bottom Line | Press Release

COVID-19 continues to shape Healthcare Payer financials, business strategies and IT investment trends

If profit margins were a theme park attraction, Healthcare Payers would have experienced quite the roller-coaster ride in the last 18 months, according to Everest Group.

Payer margins spiked in Q2 of 2020—rising from 2.6% to 6.8%—as a result of COVID-19 induced deferment of non-emergent procedures. Then, in the second half of 2020, operating and net income dropped to 2.5% as healthcare utilization rebounded. In Q1 2021, healthcare payers reported substantial profits (4.1%) as higher enrollment in government plans drove strong revenue growth, especially for Medicare Advantage (MA) plans, though commercial enrollment was still below pre-pandemic levels. In Q2 2021, despite posting strong revenue growth, payers experienced a drop in operating and net income, with net profit margin falling to 3.2%, due to an increase in COVID-19 care costs for testing, treatment and vaccination. Some payers also cited acquisition costs to explain the drop in income.

These findings are examined in more detail in Everest Group’s recently published State of the Market Report, “Healthcare Payer Enterprise Insights – H1 2021.” In this report, Everest Group examines payer performance in H1 2021, focusing on industry- and account-level financial and Line of Business performance as well as key business and IT investment themes. Payers profiled in the report include Anthem, Centene Corporation, Cigna, CVS Aetna, Health Care Service Corporation (HCSC), Highmark, Humana, Kaiser Permanente, Molina Healthcare and UnitedHealthcare.

COVID-19 Continues to Shape Healthcare Payer Trends
COVID-19 has fundamentally altered the functioning of the healthcare industry by significantly changing who receives care and how they access it.

Evolution of Healthcare Payer Business Strategies

  • In 2020, healthcare payers began looking beyond the immediate issues of cost takeout and capacity utilization toward improving access to care through home care and telehealth capabilities. Payers sought to increase operational efficiency and enhancing member engagement through improved outcomes, increased productivity and lower costs for members.
  • In H1 2021, home care, telehealth and integrated, coordinated and preventative care emerged as key themes. Payers leveraged partnerships and acquisitions to enhance their capabilities and improve member experience. In addition, payers are expanding their Medicare Advantage business by offering virtual and digital health capabilities. Payers also report the launch of various initiatives to tackle vaccine hesitancy and expand vaccination coverage.

Shifting IT Strategies

  • In 2020, the COVID-19 pandemic accelerated the need to future-proof technology, and healthcare payers responded by investing significantly to modernize legacy systems and leverage artificial intelligence (AI), machine learning (ML) and robotic process automation (RPA) technologies to reduce operational inefficiencies and automate time-consuming processes.
  • In H1 2021, healthcare payers continued the modernization quest. More specifically, payers are modernizing legacy platforms by shifting to integrated, cloud-based platforms and cloud-native applications. The payer industry is leveraging blockchain-based public ledger technology to improve transparency and interoperability in healthcare.

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

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

Despite Financial Setbacks Due to COVID-19, US Healthcare Providers Were Well along the Road to Recovery by End of 2020 | Press Release

Everest Group Delivers Results of 2020 Financial Checkup on US Healthcare Providers

Everest Group has released its findings of a “financial checkup” conducted on the U.S. healthcare industry at the end of 2020, one of the industry’s most challenging years in history. Everest Group reports that U.S. healthcare providers as a whole are well along the road to recovery, but their way of doing business has changed forever.

The U.S. healthcare industry responded to the onset of the COVID-19 crisis with sweeping changes with regards to who receives care, how they access it, and how healthcare organizations (healthcare providers, payers, and community resources) come together to meet the complex and accelerated demand for care. These changes put the industry on a course of healing, despite having sustained heavy financial injuries in the first half of the year.

In its newly published report, “Healthcare Provider Enterprise Insights Q42020 and Q12021,” Everest Group provides a perspective on how providers performed in 2020 and Q1 2021. The report is based on the performance of 10 large healthcare provider systems, with a focus on industry- and account-level financial and Lines of Business (LoBs) performance, key business, and IT investment themes.

Key findings:

Financial Performance: At the onset of COVID-19, providers reported a significant drop in revenue due to deferment of non-emergent procedures. Net income and operating margin declined significantly due to additional costs incurred by the purchase of personal protective equipment and other supplies as well as higher expenditures for temporary staffing and premium pay. However, most of the U.S. providers experienced growth in the second half of 2020 owing to rebound in patient volumes, federal grants received under the CARES Act Providers Relief Fund, strong cost control measures, and implementation of alternate forms of care delivery.

Expansion of outpatient business & telehealth services: Due to the pandemic, the provider industry experienced an uptick in telehealth business as virtual care hesitancy diminished. Although the number of telehealth visits has decreased compared to what it was at the peak of the pandemic, the visits are still far higher than the pre-pandemic levels. Providers are utilizing telehealth services to not just increase access but also provide better quality of care via remote monitoring. In addition, providers remain focused on expanding their outpatient business to provide home care and long-term care opportunities to patients as well as delivering affordable care in remote locations.

Business Themes: The pandemic enabled providers to shift their focus on delivering virtual, home, integrated, and long-term care while investing significantly to reduce costs and improve operational efficiency to offset the impact of COVID-19. Providers are strongly focused on cost takeout measures to enhance the financial predictability of their organization.

IT Themes: In response to COVID-19, providers sought to future-proof their technology with patient care at the heart of the transformation by focusing on IT themes such as modernization, data analytics, cloud and automation.

Healthcare Provider Enterprise Insights
***Download a complimentary abstract of the report here.***

About Everest Group

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

Process Mining Software Market Posts 60-70% YoY Growth in 2020, Will Triple by 2022 | Press Release

Exponential growth is expected in process mining market as client base expands across industries, geographies, buyer sizes

Process mining—which is the technique of using software to discover and map business processes in order to optimize and automate them—is an emerging market, growing at around 60-70% between 2019 and 2020 to reach a total market size of $320-$340 million.

Everest Group reports that the client base for process mining is rapidly expanding, driving revenue growth in the market. Even in the pandemic hit year, the client base experienced impressive growth at around 60%. Going forward, Everest Group predicts adoption will accelerate across market segments, buoyed by an increasing awareness of the technology, growing use of process mining as an enabler of digital transformation, and snowballing word of mouth of early adopters’ success stories. Everest Group estimates that the process mining software market will triple between 2020 and 2022.

A Wide Variety of Business Processes/Functions Are Adopting Process Mining
Process mining blends the power of data-based analysis techniques, such as data mining and machine learning, to help organizations discover the as-is process along with its variants and identify opportunities for optimization and automation. Process mining technology can be classified in three categories as follows:
  • Classic process mining leverages specialized algorithms to analyze process-related information captured in event logs generated by enterprise systems such as ERP, CRM, and SCM to discover processes and generate process insights at a macro level.
  • Desktop process mining refers to the ability to capture and analyze keyboard, mouse, and potentially other system-level activities performed across multiple users involved in a process to virtually reconstruct the processes and provide process insights at a micro level.
  • Hybrid process mining refers to the ability to combine information from both event logs and user activities for a holistic view into as-is processes; it is carried out across both macro- and micro-levels.

While the need to optimize operations continues to be the most important factor driving process mining adoption, enhancing customer experience has emerged as the second key adoption driver because of the role process mining plays in mapping customer journeys to identify and address customer pain points.

These findings are discussed in more detail in Everest Group’s recently published report “Enabling Data-based Process DNA Analysis: Process Mining State of the Market Report 2021.” The report includes a detailed view of the current state of the market and analyzes it across various dimensions, including market size and adoption trends, buyer satisfaction, product capabilities and trends, solution characteristics, vendor landscape, challenges to process mining adoption, and the outlook for 2021-22.

Market Highlights:

  • Currently 86% of the revenue generated in the process mining market comes from software licenses, with most vendors offering cloud-based access.
  • Continental Europe holds the lion’s share of the market (48%) while North America accounted for the highest growth rate (90-95%).
  • Manufacturing; banking, financial services, and insurance (BFSI); and the healthcare industries are among the leading adopters of process mining solutions, accounting for more than 50% of the market share.
  • Celonis, Minit, Software AG and UiPath are the top providers in terms of process mining software revenue.

***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 clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

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