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Analytics—Bedrock of Procurement Outsourcing—is Driving Sustained Double-digit Industry Segment Growth, According to Everest Group | Press Release

By | Press Releases

Analytics, artificial intelligence and robotic process automation see strong adoption as CPOs demand digital-first procurement ecosystem.

The role of chief procurement officer (CPO) has expanded beyond driving down the overall spend and operating costs to delivering greater strategic value to the enterprise, leveraging both technological solutions and supplier-enabled innovation, according to new research from Everest Group.

This imperative is further reflected in the demand for a digital-first procurement ecosystem, which centers on the power of digital tools such as analytics, robotic process automation (RPA), artificial intelligence (AI), the Internet of Things (IoT) and blockchain.

Everest Group reports that analytics, in particular, has become the bedrock of procurement outsourcing.

“Analytics is changing the way that sourcing and procurement happens,” said Rajesh Ranjan, partner, Business Process Services, at Everest Group. “Analytics is now at the heart of procurement decisions, particularly with respect to spend management, vendor management and even procurement operations. We’re also beginning to see integration of IoT and AI with analytics. For example, AI is being used to enable faster contract analysis, fraud and duplicate payment prevention and conversational support. IoT is being used in a variety of ways as well, such as automating order placement and improving traceability in the supply chain. A few visionary enterprises see this as a strategic area for internal development, but the majority of enterprises are looking to service providers to deploy these solutions.”

As a result, the global multi-process PO market is expected to witness a growth of 11-12 percent in the next three years to reach US$3.6 billion in size by 2020. Technologies such as AI and analytics will witness increasing adoption over the next two to three years. RPA also will witness strong adoption, especially in the procure-to-pay (P2P) process. IoT and blockchain are in the early stages of adoption.

 These results and other findings are explored in a recently published Everest Group report: “Procurement Outsourcing (PO) Annual Report 2018: Driving Strategic Value from Procurement.” The report provides comprehensive coverage of the global PO market including detailed analysis of market size and growth, buyer adoption trends, key emerging themes, solution characteristics and service provider landscape.

Other key findings:

  • North America continues to lead the PO global market. Increased scope of deals in Rest of Europe and United Kingdom led to high growth in these regions. APAC grew slightly above market rate while Latin America grew at a very high rate.
  • Two sectors—manufacturing as well as consumer product goods (CPG) & retail—the leading adopters of PO, witnessed flat growth in 2017. In contrast, emerging buyer segments—including financial services, healthcare and pharmaceuticals, and media—were the high growth drivers for the last two years.
  • The degree of onshoring in PO contracts is increasing, as buyers are expanding the scope of work to include more sourcing processes that require significant onshore presence.

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

Enterprise Adoption of Digital Customer Experience (CX) Capabilities Soars, Expected to Grow at 25% CAGR—Everest Group | Press Release

By | Press Releases

Demand for CX services is disrupting the Contact Center Outsourcing market, pitting traditional models based on labor arbitrage and scale with digital-first strategies.

Customer experience (CX) is king, dominating the strategic focus of a growing number of enterprises seeking to build a loyal customer base. These enterprises are taking a digital-first approach, aggressively shopping for service providers with next-generation, digital capabilities that can help them gain in-depth customer understanding, deliver personalized CX and establish highly qualified talent pools for managing CX. According to new research from Everest Group, digital CX, which currently represents 4-6 percent of the overall contact center outsourcing (CCO) market, is expected to grow at a compound annual growth rate of 20-25 percent for the next five years.

“Traditional CCO approaches are rapidly evolving to those focused on delivering customer experience services,” said Skand Bhargava, practice director of Business Process Services at Everest Group. “In fact, the digital outsourcing drivers for enterprises—such as CX consulting, omnichannel platforms and digital capabilities such as automation and analytics solutions—are increasingly becoming more important than in the past. Enterprise buyers expect their service providers to be customer-centric and to provide innovative solutions that can help them meet and exceed the expectations of digital-native customers.”

These findings and more are discussed in “Contact Center Outsourcing Annual Report 2018 – Transforming Customer Experience Through a Digital-First Approach.” This report provides an overview of the CCO market, evolving buyer expectations, market size, adoption trends, key solution characteristics, and the outlook for 2018-2019.

Other key findings:

  • The global contact center spend stands at US$320-350 billion, of which third-party outsourcing accounts for approximately 26 percent. The global CCO market grew at approximately 4 percent in 2017 to reach US$81-83 billion, driven by the growing interest among new buyers for outsourcing and the emerging growth avenues for service providers around consulting and digital CX solutions. The CCO market is expected to grow further at a rate of 4-5 percent to reach US$91-93 billion by 2020.
  • The adoption of chat and social media has increased significantly over the past two years, compared to email and voice; chat has become the most preferred channel among millennials.
  • Robotic process automation (RPA) and rule-based chatbots are increasingly adopted across multiple use cases in contact centers to solve key business problems such as longer average handle time (AHT), average waiting times, and navigating through multiple systems and applications. Artificial intelligence (AI) is largely leveraged to unlock customer insights, predict customer actions, and make personalized recommendations.
  • The operational analytics solutions such as desktop analytics and agent performance analytics have witnessed high adoption in contact centers. The adoption of business analytics solutions that include customer analytics, sentiment analytics, and Voice of Customer Analytics (VoCA) is expected to increase over the next few years.
  • The delivery model for customer service management (CXM) services is evolving with a balanced mix of onshore, offshore, and nearshore agents, augmented with the Work-at-Home Agent (WAHA) model and next-generation technology solutions. The WAHA model continues to grow in CXM services, with around 93 percent of the total WAHA agents based out of the United States.

Sarah Burnett, Service Optimization Technology and RPA Expert, Promoted to Executive VP of Everest Group | Press Release

By | Press Releases

SOT business doubles under Burnett’s leadership, delivering strategies for deployment of disruptive technologies such as RPA, analytics, AI in the global services industry

Sarah Burnett—who has been named one of 50 most influential women in UK IT by Computer Weekly in 2016, 2017 and 2018; was shortlisted for AI-leader of the year by Information Age in 2018; and was deemed an outsourcing A-lister by the Global Sourcing Association in 2016/2017—has been elevated to the position of executive vice president and distinguished analyst at Everest Group, the global sourcing research and advisory firm where she has served as vice president for the past 4 years.

Burnett, a well-known industry analyst and market influencer, now leads the firm’s Service Optimization Technologies (SOT) research program globally. As part of this role, she researches and advises clients on automation technologies, such as Robotic Process Automation (RPA), Artificial Intelligence (AI), and global service providers’ capabilities in the field. Based in London, she also serves European clients across Everest Group’s research areas.

In the past six months alone, Everest Group’s team of analysts devoted to the SOT practice has doubled and has presented their expertise and findings at more than 20 events around the world. In addition, the team has published a dozen reports including technology assessments, best practice guides, and market analyses, such as the recently released RPA Technology Vendor Landscape with Products PEAK Matrix™ Assessment 2018. Coverage of these disruptive technologies and related technologies will continue to expand as more team members join in the coming months.

“Everest Group is extremely fortunate to have Sarah Burnett at the helm of one of our fastest growing research and advisory areas,” said Eric Simonson, managing partner at Everest Group. “Her expertise in automation is recognized and valued around the globe, and under her leadership, our firm has established a preeminent reputation in the field based on the quality of our research, the impact of our thought leadership, and the caliber of clients we serve.”

Chief Digital Officers Influencing More Outsourcing Spending Decisions, Becoming a Priority C-Level Exec Buying Center —Everest Group Research | Press Release

By | Press Releases

New survey also explores how service providers feel about their future paycheck, what keeps them awake at night, and what investments actually pay off in creating client value

Service providers in the outsourcing industry say enterprise CIOs, COOs and CFOs may still control the largest budget centers for sourcing services, but their influence on future deals is slipping in favor of the chief digital officer (CDO), according to new research conducted by Everest Group.

In a recent survey of leading global sourcing service providers, 55 percent said they believe the CDO’s domain is the fastest-growing budget center for outsourcing services. Respondents indicated they believe CDOs are becoming an influential C-suite executive in future outsourcing initiatives.

“Service providers are perceiving a significant shift in who most influences outsourcing deals within the enterprise,” said Michel Janssen, chief research guru at Everest Group. “As enterprises implement more and more digital initiatives through their sourcing agreements, these deals are increasingly being directed from a more firm-wide strategic or business unit perspective within the enterprise, namely in the purview of the chief digital officer.

“The CDO is focused on the transformation story, the improvement of processes from end to end, and how to best position the company to compete in a rapidly evolving marketplace, rather than being focused on deploying technology for technologies’ sake,” added Janssen. “This shift in influence to a CDO-controlled buying center bodes well not only for enterprise transformation initiatives but also for service providers who are positioning themselves as valued partners in the transformation process.”

The Everest Group survey also revealed how service providers feel about their future paycheck, what keeps them awake at night, and what investments they believe actually pay off with respect to creating client value.

  • Industry optimism is high…and rising. Employees of service providers are optimistic and excited about their bonus potential. While 2017 delivered mid-single-digit results for revenue growth, 72 percent of service provider respondents are confident that revenue growth will be significantly higher in 2018 and 2019.
  • Enterprise automation in all forms is red hot. Service providers are investing their money in enterprise automation, seen as the next best value proposition beyond labor arbitrage to respond to ever-present demands for productivity and cost reduction. Forty-nine percent of survey respondents are investing in robotic process automation (RPA) and 66 percent are investing in artificial intelligence (AI) and cognitive computing, because they believe these areas have the highest potential for client value creation. Interestingly, only 14 percent are investing in blockchain and 27 percent in Internet of Things (IoT), both of which ranked low on perceived client value creation.
  • The issues that most frequently cause service providers to lose sleep at night are pricing pressures (cited by 41 percent of respondents) and adapting to new business models (a concern of 40 percent). The shortage of talent was mentioned by 38 percent of respondents and is seen both as a challenge and an opportunity to provide value. A shortage of next-generation skills is a particularly troubling challenge, with 71 percent of service providers declaring it their most important talent issue. In contrast, few service providers (19 percent) are worried about regulations in key markets, and only 8 percent are anxious about finding capital.
  • Reducing costs will never go out of style, but availability of skilled talent is becoming a key driver of sourcing deals. Fifty-nine percent of service providers say that cost drives winning value propositions more than any other factor and always will. However, service providers also believe the shortage of talent (cited by 56 percent) and the need to execute more quickly (mentioned by 57 percent) comprise value propositions that win deals. Notably, bringing jobs back onshore or avoiding capital investments are value propositions that are perceived to have little to no traction with enterprise clients, mentioned by only 13 percent and 27 percent of service provider respondents respectively.

**Watch the Webinar Replay***

Everest Group held a webinar on Wednesday, August 29, in which these findings were discussed. During this complimentary, 60-minute webinar—“Service Provider Vantage Point, Plus Q3 2018 Market Vista™ Briefing”—Everest Group presenters also reviewed the results of its recently published report,  “Market Vista: Q3 2018.” Watch the webinar replay and download the complimentary webinar deck here.

The Sourcing Market is on the Up and Up: Everest Group Reports Rise in Global Outsourcing Demand, GIC Activity and Service Provider Revenues in Q2 2018 | Press Release

By | Press Releases

Sourcing center setups at all-time high in Q2, driven by increased location activity in Nearshore Europe, Middle East

The global sourcing industry experienced a lucrative Q2 2018, marking notable rises in outsourcing demand, setups of global in-house centers (GICs) and service provider revenues compared to Q1, according to Everest Group. In addition, Everest Group reports that overall location activity was at an all-time high (87 setups of delivery centers by GICs and service providers during the quarter) due to significant increases in Central and Eastern Europe (CEE) and the Middle East.

Everest Group discusses these and other second-quarter developments in the sourcing industry in its recently released Market Vista™: Q3 2018 report. The quarterly report highlights the trends in the fast-evolving global sourcing market, exploring the key developments across outsourcing transactions and Global In-house Centers (GICs), as well as location risks and opportunities, and service provider developments.

“We’re coming off a great second quarter for the global services industry as a whole,” said Salil Dani, vice president at Everest Group. “For starters, location activity was at an all-time high and transaction activity rose in comparison to Q1. More than two dozen of the world’s leading companies announced plans to expand or set up new centers, which is a strong indication that enterprises anticipate that the market will continue to validate their sourcing strategies in the near future. We expect that this positive momentum will continue through the remainder of the year, which suggests the global sourcing industry will post significantly improved metrics compared to 2017.”

***Register for Complimentary Webinar***

Everest Group will review the findings of the “Market Vista: Q3 2018” report in a webinar to be held on Wednesday, August 29, at 9 am CDT. In addition, Everest Group presenters will address the results of a brief survey the firm recently conducted with leading service providers to gauge their market perspectives for the remainder of 2018 and into 2019. Register here for the complimentary, 60-minute webinar, “Service Provider Vantage Point, Plus Q3 2018 Market Vista™ Briefing.”

Additional highlights from the Market Vista: Q3 2018 report:

  • There was an uptick in outsourcing deals in the Banking, Financial Services and Insurance (BFSI) vertical, driven by U.S. tax reforms. Healthcare outsourcing transactions also surged, driven by declining enterprise margins.
  • Outsourcing activity across North America and Rest of the World (especially Asia, Australia and New Zealand) increased notably over the last quarter.
  • The “Technology and Communication” sector remained the most active and accounted for more than one-third of the total market activity in Q2. The manufacturing sector witnessed an increase, accounting for 25 percent of total setups as compared to 18 percent in the previous quarter.
  • Digital services continued to dominate the outsourcing activity relative to pure traditional services, representing 61 percent of transactions compared to 39 percent, respectively. Automation was the most prevalent digital component employed by new or expanded GICs, with deployments in 52 percent of Q2 setups and expansions.
  • Tier-2/3 locations in the U.S. witnessed significant growth in new center setup activity for both transactional and transformational work, driven by low-cost skilled talent availability.
  • CEE accounted for more than one-third of the total GIC setups and expansions, with Ireland and Romania remaining the preferred nearshore locations in the region.
  • Middle East and Africa (MEA) gained traction during the quarter, accounting for nearly 10 percent of the total GIC setup and expansion activity. The majority of the centers that opened in this quarter in this region support R&D/engineering functions of the parent company.
  • Both global and offshore-heritage service providers saw an increase in revenue and operating margin.
  • Service providers point to a gap in digital skills as a key growth challenge and are utilizing multiple approaches, including alliances and acquisitions, and exploring talent models to mitigate risk.

***Download a complimentary 14-page abstract of the report findings here.*** (Registration required.)

Next-Gen Solutions Add Fuel to Fire of Blazing Recruitment Process Outsourcing Market—Everest Group | 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 15% for the past three years

The Recruitment Process Outsourcing (RPO) market is one of the fastest growing outsourcing segments today, with growth hovering above 15 percent consistently for the past three years, according to Everest Group. Although the solutions applied in RPO have been slowly evolving for nearly two decades, the adoption of next-generation technologies is expected to surge and significantly alter the RPO market landscape in the near future, adding fuel to the fire of an already blazing RPO market.

Enterprises today are facing unprecedented challenges in talent acquisition, suffering from significant pain points such as forecasting workforce requirements, adapting to the changing nature of the candidate base, developing effective branding, and responding to rapid development in technology. According to Everest Group, RPO service providers are seizing this golden opportunity to help enterprises meet recruitment challenges with next-gen technologies like advanced analytics, benchmarking and workforce planning.

Evolving use cases of digital technologies in talent acquisition include the following:

  • Analytics: Use cases include spend analytics, supplier analytics, workforce analytics, peer benchmarking, and social media analytics to source, screen and engage candidates
  • Natural Language Processing (NLP): Chatbots can leverage NLP to improve candidate experience by engaging with candidates right from the sourcing and screening phases all the way to the interview scheduling and onboarding stages.
  • RPA: RPA can be used to parse key words in resume screening; automate job postings in job portals, banner advertisements and direct emails; and update all instances of workflow when a change is needed.
  • Machine Learning (ML): ML can be used to conduct first-level screening, including checking the relevance and quality of experience and the cultural fit of the candidate. ML also assists analytics applications with identifying and leveraging the most suitable sourcing channels.

“The technology in the RPO market to date has been largely focused on improving the efficiency of specific talent acquisition processes and has been limited to dealing with structured data,” said Vishal Gupta, practice director at Everest Group. “Going forward, we’ll see next-generation technologies such as RPA, analytics and AI that can deal with unstructured data and deliver insights and probabilistic solutions. The impetus to be on the front edge of this wave is driving significant technology investment on the part of RPO service providers. We’re also seeing more and more service providers embracing the RPO+ value proposition, offering value-added services such as employer branding, talent communities, and talent consulting services. These capabilities will become important differentiators in a fiercely competitive market where more than 700 deals are up for renewal in the next three years.”

These and other research findings are explored in a recently published Everest Group report: “Recruitment Process Outsourcing (RPO) Annual Report 2018: Orchestrating the Digital Talent Acquisition Symphony.” This research provides a comprehensive coverage of the market across dimensions such as evolving RPO value proposition, market overview, key trends, solution characteristics, buyer adoption trends, and digital in talent acquisition.

Other key findings of the report:

  • The RPO market touched the US$3.3 billion mark in annualized contract value in 2017.
  • As the RPO model gains maturity, the marketplace is witnessing the entry of hither-to unknown buyers. Industries such as retail, healthcare and pharmaceuticals, as well as small-sized buyers (less than 3,000 FTEs) are entering the market in increasing numbers, leading to new avenues for service providers to tap.
  • Total Talent Acquisition (TTA) is increasingly getting a prominent place in the discussion around the talent needs of enterprises. While still in its early stages, service providers would do well to develop TTA capabilities with an eye to the future.
  • North America continues to occupy the lion’s share of the market with the UK and Australia being the other major markets. Continental Europe and Asia Pacific are emerging markets with good potential for the future.
  • The competition in RPO remains intense, with not many players having a dominant market share, both in terms of number of deals as well as hires. With a large number of deals coming up for renewal in the next three years, service providers will have to be on their toes to maintain their market share as competition intensifies.

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

With Aware Automation, Enterprises Can Achieve 35% Cost Savings as Compared to Traditional Automation Approaches—Everest Group | Press Release

By | Press Releases

72% of enterprises cite IT infrastructure services as a key hurdle to becoming digital-first enterprises; new Everest Group report describes how ‘Aware’ automation—underpinned by AI and analytics—can solve this problem

According to Everest Group, aware automation can help achieve more than 35 percent cost savings as compared to traditional automation approaches and can help enterprises realize significant improvements in business operations and user experience.

With IT infrastructure complexity at an all-time high, Everest Group has found that 72 percent of enterprises cite infrastructure services (IS) as a key hurdle in becoming a digital-first enterprise. Most enterprises believe that their IT infrastructure services are not moving fast enough to support and drive the future of their business.

“Aware” automation holds promise for resolving the challenges and complexity of traditional IT infrastructure. Aware automation is a concept wherein automation systems are underpinned by artificial intelligence (AI) and analytics, making them conscious of the environment and capable of driving self-configuring, healing and evolving IT infrastructure services.

“The trinity of analytics, automation and AI can make the infrastructure run the way business needs it to, without requiring significant oversight or bandwidth,” said Ashwin Venkatesan, practice director at Everest Group. “So, in essence, this next-generation automation can make infrastructure services ‘invisible’ rather than a glaring nightmare that causes executives to lose sleep at night. Already in the last two to three years, we’ve witnessed intelligent automation making enterprise inroads, backed by a rapid proliferation and maturation of solutions in the market.”

Everest Group offers a featured analysis of aware automation in its newly released annual report on Cloud and Infrastructure Services: “AI Stands to Make IT Infrastructure Services ‘Invisible’.”  This research deep dives into the cloud and 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, describes trends shaping the market, and provides an outlook for 2018-2019 for the broader IT as well as cloud and IS market.

Highlights of the Cloud and IS market analysis:

  • The global information technology services (ITS) market is expected to continue its modest growth rate of approximately 2 percent per annum. The collapsing of the traditional IT stacks across the previously siloed layers of applications and infrastructure is driving the demand for consulting services.
  • Emerging technologies are disrupting the infrastructure services market. There has been increased market momentum for the adoption of these technologies that are facilitating the enterprises’ journey toward digital transformation.
  • The United States takes the lion’s share (90 percent) of the deal volume emanating from North America, which itself continues to dominate the global market share (37 percent). The Nordic region witnessed an uptick in deal volume (30 percent of the deal volume in Europe), taking over the lead from the United Kingdom.
  • While the Banking, Financial Services and Insurance (BFSI) industry dominates the ITS market share (23 to 27 percent), the healthcare and life sciences vertical witnessed an above-average growth to take over a larger share of the market (8 to 10 percent), beating the retail, distribution, and consumer packaged goods (CPG) sectors.
  • Accenture and IBM continue to dominate the ITS market.

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

78% of Enterprises Fail to Scale and Sustain Their Digital Transformation Initiatives. Everest Group Says ‘Old School’ Operating Models are to Blame | Press Release

By | Press Releases

New Everest Group report finds enterprises are adopting digital and seeing initial success, but struggles come in scaling and sustaining the transformation effort.

As many as 78 percent of enterprises today fail to scale their digital transformation initiative and achieve the desired return on their digital investments. Despite increasing digital adoption by enterprises and reports of initial successes, enterprises are struggling to scale and sustain their transformation efforts. According to Everest Group, a misalignment between an enterprise’s digital strategy and its “old school” operating model is often to blame.

“In recent years, enterprises increasingly have been undertaking digital transformation initiatives, leveraging digital tools to improve revenue, reduce costs and enhance customer experience,” said Yugal Joshi, vice president, Information Technology Services, at Everest Group. “Enterprises are typically quite encouraged by initial successes, but the majority don’t actualize the return on investment they envisioned in the long term. The struggle comes when enterprises try to scale and sustain their transformation initiatives. Typically, one of the biggest problems lies in ‘old school’ forms of operating models. If the enterprise’s operating model is not modernized and aligned with the digital strategy, the desired returns from a transformation initiative simply cannot be achieved.”

The following findings are also symptomatic of the all-too-common misalignment of operating model to digital strategy:

  • 73 percent of enterprises failed to realize sustained returns on their digital investments.
  • 69 percent of enterprises consider organization structure as a barrier while scaling up their digital initiatives. A complex organizational structure reduces transparency and creates silos, making it difficult for organizations to sustain their digital initiatives.
  • 82 percent of enterprises do not have a culture of collaboration and innovation. Lack of 360-degree communication channels and innovation culture leads to poor adoption of any change as the organization battles fear of uncertainty.
  • 87 percent fail to implement their change management plan for digital transformation.
  • 89 percent have a narrow scope of technology investments limited to particular products or functions. This impedes the organization-wide, long-term view required for digital transformation.

Everest Group has assessed the digital transformation success and failure cases of more than 328 enterprises to arrive at the best practices that enterprises need to adopt to transform their operating model into a digital operating model. The findings and recommendations are shared in the newly released report, “Digital Services – Annual Report 2018: Future Operating Model to Scale Digital.”

In this report, Everest Group introduces a simple “FIRE” framework that describes four key characteristics of the type of operating model needed to support digital transformation:

  • F: Fluid organizational structure—the enterprise should aim to create a self-organizing, ownership-driven and skill-centric organizational structure.
  • I: Innovative systems and culture—the enterprise should enable experiments, leverage technology, crowdsource ideas, and value the taking of measured risk as an asset
  • R: Responsive-by-design workplace—the enterprise must improve communication and collaboration and digitize internal processes
  • E: Experience-centric focus—the enterprise must move beyond siloed technology investments and identify areas across the value chain where end-to-end digital transformation efforts are required.

The report also describes in detail an approach and roadmap enterprises may use to transition to a digital operation model.

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

US P&C Insurers, Hammered by Natural Calamities, Leverage Technology to Lower Costs, Improve Customer Experience—Everest Group | Press Release

By | Press Releases

Other profitability drivers for Property & Casualty Insurers include product innovation, underwriting excellence, fraud control and effective capital management

U.S. property and casualty (P&C) insurers, hammered in 2017 by one of the worst years for natural disasters in recorded history, face uncommon margin pressures and are struggling to find strategies for profitable growth. U.S. P&C insurers are not alone in this struggle as insurers throughout the world face additional margin pressures such as modest growth in investment income, continued geopolitical uncertainty, increasing customer expectations, the rise of non-traditional competition from InsurTechs, and heightened complexity of risks.

Nevertheless, Everest Group counsels that P&C insurers can convert challenges to opportunities. Specifically, P&C insurers can employ these five key strategic levers to achieve profitable growth:

  • Product innovation, particularly in coverage, pricing and services
  • Underwriting excellence and fraud control, especially using predictive analytics, artificial intelligence (AI), Internet of Things (IoT) and blockchain
  • Effective capital management, such as investing in profitable segments, targeting low-risk customers and developing greater capital self-sufficiency
  • Leveraging technologies (such as mobility, telematics, automation and AI, drones and blockchain) to expanding digital use cases to middle- and back-office operations
  • Delivering excellent customer experiences through omnichannel services and self-service, straight through processing (STP), on-demand products and bundled services, and faster and simpler customer-facing processes.

“Property and casualty insurers are facing macro and micro challenges that make it difficult to achieve profitable growth,” said Skand Bhargava, practice director, Business Process Services, at Everest Group. “As a result, they are expanding their partnerships with BPO providers from just outsourcing of administrative tasks to more value-added services delivered through a blend of operational understanding, technology knowhow, and domain expertise.”

The P&C insurance business process outsourcing (BPO) market consistently grew at approximately 13 percent from 2015 to 2017, and the market growth is only expected to accelerate in the future as P&C insurers seek strategies for profitable growth in a heavily dynamic market.

A few BPO service providers are stepping-up to assist insurers in mitigating their present challenges. Service providers are leveraging domain expertise for consulting and design thinking services, technologies such as automation for increasing operational efficiencies, and analytics for greater value-addition. These are over and above the usual cost savings that are associated with an outsourced delivery model.

Everest Group explores these findings and others in a recently published report: “Property and Casualty (P&C) Insurance BPO: Embracing Growth Through Digital Empowerment.” This report provides comprehensive coverage of the global P&C insurance BPO market, including adoption trends across geographies and buyer size, factors impacting the market, key solution characteristics, emerging trends and service provider landscape.

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

Enterprise Adoption of RPA Exceeds 100% Growth in 2017, Buoyed by New Buyers of All Sizes, Industries—Everest Group | Press Release

By | Press Releases

High business value, low risk, sophisticated vendor offerings to propel 90% RPA market growth annually

Robotic Process Automation (RPA) continues to expand its reach and client base as more enterprises become aware of the benefits of the technology. Enterprises of all sizes and industries are testing the RPA waters, eager to keep pace with their peers in the technology adoption curve. Enterprise adoption of RPA, as indicated by the number of enterprise clients served by independent RPA vendors, achieved a 105 percent growth rate from 2016 to 2017, according to Everest Group.

“RPA offers many benefits and few risks,” said Sarah Burnett, vice president at Everest Group. “Using RPA, companies can reduce costs and achieve faster processing and improved quality. The risks are low, because the technology is non-invasive and easily remediable. The market is in its early stages of high growth and adoption, with most enterprises testing the water at this stage.”

Among current RPA deployments, desktop automation (attended RPA) is the most prevalent, followed by server (virtual machine) deployments (unattended RPA), which typically sees robots run according to pre-defined schedules or process related automatic triggers. Much less common is the use of cloud for running RPA deployments, but adoption of this model is increasing as the market grows.

RPA software typically comes with centralized robot management and robot performance analytics. More advanced features include auto-scaling, dynamic load balancing and context awareness. At the nascent stage of emergence is cognitive RPA, which is RPA integrated with artificial intelligence technologies, robot voice and vision interfaces, predictive and prescriptive analytics, automation of judgment tasks, and self-managing and self-healing robots.

“We expect an extrapolated high-growth curve for the next several years as vendor offerings get more sophisticated,” added Burnett. “For instance, we already see vendors building out capabilities in the areas of computer vision, pre-built automations, self-healing systems and auto-scaling systems, just to name a few.”

The RPA software market overall witnessed a growth of 92 to 97 percent in 2017 to reach US$480 million to $510 million. The market is expected to grow between 75 and 90 percent annually up to 2019.

These findings and more are discussed in a newly released Everest Group report, “Robotic Process Automation (RPA) Annual Report 2018 – Creating Business Value in a Digital-First World.” This research explores RPA market size and growth, buyer adoption trends and key learnings from early adopters, RPA solution characteristics, technology trends, the RPA technology vendor landscape, and the future outlook for 2018-2019.

Some of the findings are:

  • Small- and medium-sized enterprises have accelerated the pace of RPA adoption and now together account for a major portion of the market.
  • Industry-specific processes continue to see the highest adoption of RPA.
  • North America continues to be the largest RPA market; however, Europe and the United Kingdom, together, accounted for the highest growth among major markets.
  • Buyers generally have a high satisfaction level with RPA vendors, but they expect the vendors to improve their support, analytics, and cognitive capabilities.
  • The majority of RPA buyers are still in an early adoption phase, as they continue to test the technology before scaling up.
  • Attended RPA has a higher adoption maturity and installed base in terms of licensed volumes. However, unattended RPA is driving the highest growth due to cloud-based deployment.
  • Automation Anywhere, Blue Prism, and UiPath are the top three vendors in terms of RPA license revenue and account for over one-third of the total market revenue.

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