Category: Press Releases

6 Innovation Myths Busted by Everest Group Research on Global Business Services | Press Release

May 7 Webinar to Address How GBS Organizations Can Leverage Innovation to Prepare for Economic Downturn

For those enterprises striving to create a culture of innovation, Global Business Services divisions* can be an enormous asset, markedly accelerating the innovation journey and driving the enterprise innovation agenda, according to Everest Group research.

In its newly published report, Innovation in GBSs: Pinnacle Model® Analysis, Everest Group examines 51 GBS organizations and identifies Pinnacle™ (best-in-class) GBS centers—those entities that are achieving superior outcomes because of their advanced capabilities.

Collectively, Pinnacle GBS organizations debunk six common myths associated with innovation.

1.    Myth: Bigger and older GBS centers are not agile and lean enough to deliver better business outcomes. Reality: Bigger and older GBS centers deliver better business outcomes.
2.    Myth: GBS centers should not focus on in-house technology development. Reality: Pinnacle GBS centers primarily develop mature technologies in-house while leveraging ecosystem partners for niche technologies.
3.    Myth: Mature GBS centers deliver only high-end innovation. Reality: Pinnacle GBS centers focus mostly on incremental innovation.
4.    Myth: The GBS innovation team should have more leadership members to ensure better outcomes. Reality: Pinnacle GBS organizations exhibit a balanced team structure while other GBS organizations are more top-heavy.
5.    Myth: Centralized innovation teams in GBS centers and parents are essential to deliver business impact. Reality: A hybrid team structure at the parent level and an innovation head or dedicated steering committee at the GBS center level have proved to be more successful.
6.    Myth: Service providers and technology vendors are the most important value creators in the innovation ecosystem. Reality: Pinnacle GBS organizations extensively leverage a mix of service providers, technology vendors, and startups for driving innovation.

“The entities we’ve identified as Pinnacle GBS centers are adept at leveraging their unique position and capabilities to help their parent organizations build truly disruptive innovation capabilities,” said H. Karthik, partner at Everest Group. “This is demonstrated by significantly higher ROI and cost savings as well as operational and strategic impact.”

Pinnacle GBS centers have been able to achieve significant business impact by effectively driving their innovation engines. Here are a few examples:

  • Cost impact: Pinnacle GBS centers generated 1.5X higher return on investment (ROI) and cost savings than other GBS centers. An example of an innovation initiative with cost impact is identifying potential opportunities to consolidate multiple product lines and processes, thereby realizing the benefits arising from economies of scope.
  • Operational impact: Pinnacle GBS centers have achieved 1.9X greater operational impact than other GBS centers. For instance, a leading Banking, Financial Services and Insurance (BFSI) GBS organization built a smart contracting platform to seamlessly process unstructured data and automate multiple transactional processes, reducing FTE time.
  • Strategic impact: Pinnacle GBS centers delivered 1.6X more strategic impact than other GBS centers. An example of a GBS center having significant impact is a leading electronic and hi-tech GBS organization who leveraged next generation technology solutions to revamp its existing cold chain to preserve and increase the shelf life of perishable goods and chemicals, ensuring the quality through last-mile delivery to the end customer.

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

May 7 Webinar: How GBS Centers Can Leverage Innovation to Prepare for the Economic Downturn

Everest Group is hosting a complimentary webinar to assist senior enterprise executives in understanding how they can effectively leverage their GBS organizations for driving the enterprise innovation agenda. The webinar will address these questions:

  • For what kinds of innovation initiatives are enterprises leveraging the GBS model?
  • How does the current uncertain environment present a significant opportunity for GBS centers to build and demonstrate innovation?
  • What business outcomes have Pinnacle GBS centers delivered for their organizations?

The live webinar will be held on Thursday, May 7, at 9 a.m. CDT.

***Register here.***

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global enterprises, service providers, and investors. Through our research-informed insights and deep experience, we guide clients in 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.

*Note: For the purposes of this report, Everest Group uses the term GBS to include Shared Services Centers (SSCs), Global In-house Centers (GICs) and Global Capability Centers (GCCs), although distinctions in these business models can be made.

GBS Share of Market Expands to 27%, with 54% of New Setups Focused on Digital Services | Press Release

Setups of Global Business Services centers outpaced outsourcing growth in 2019 as enterprises looked in-house for high-value contributions beyond arbitrage

Everest Group reports that the Global Business Services (GBS) market1 commanded a 27% share of the US$210 – $212 billion global services market in 2019, outpacing the growth of outsourced services and continuing the segment’s gradual increase in share of market over the last decade.

Enterprises are extensively leveraging the GBS model to accelerate enterprise-wide digital transformation initiatives, with approximately 54% of new GBS centers focusing on digital services. In particular, GBS centers in the engineering services and research and development (R&D) space have gained traction during the last couple of years, with focus on building deep capabilities in areas such as machine learning (ML), artificial intelligence (AI), internet of things (IoT), mobility, analytics, cloud, and cybersecurity.

GBS organizations are also undergoing changes in their operating and governance models, driven by three key needs: building greater alignment with business teams, building agile organizations, and improving performance reporting mechanisms. As a result, GBS organizations are increasingly:

  • moving from a horizontal to a vertical reporting model.
  • shifting to dual-responsibility leadership roles where the site-head’s responsibilities are entrusted (or co-trusted) to other functional leaders.
  • collapsing IT and operations silos into integrated teams focused on business objectives.
  • taking global ownership roles across various domain or functional areas.
  • deploying a wide array of metrics to measure value beyond costs.

“GBS organizations are evolving to become strategic partners to enterprises, playing a significant role in enterprise digital transformation journey as they continue the move from an ‘arbitrage-based model’ toward a ‘value-based model,’” said Rohitashwa Aggarwal, practice director at Everest Group. “We see GBS organizations building deep domain capabilities and shifting to operating models that allow them to build “agile” into their core philosophy and to work closely and freely with key global business leaders. Another major shift is in evaluation—GBS organizations are linking their goals to business- or domain-specific targets and shifting beyond cost-arbitrage as the key metric of performance to a wide array of operational, financial and innovation-related indicators.”

Everest Group shares these findings in its recently published report, GBS State of the Market Report: Evolving Operating and Governance Models to Build GBS of the Future. This report analyzes the GBS landscape, sharing key insights on the GBS market across locations, verticals, and functions.

Additional Findings

  • The GBS market continues to experience strong growth, with 3,300 offshore and nearshore GBSs established until 2019.
  • The GBS model continues to attract new adopters. Around two-thirds of the companies that established GBS centers in 2019 were new entrants with no existing offshore or nearshore GBS facility. At the same time, there are several global companies that have divested their GBS operations, mainly due to talent-related challenges, especially for IT services.
  • India dominates delivery, with a 35-40% share of the overall GBS market. U.S.-based companies are especially inclined towards leveraging India; approximately 58% of the total GBS centers in India are set up by U.S.-based companies.
  • European firms prefer the Central and Eastern European (CEE) region (39% of GBS centers in CEE belong to European firms) due to geographical and time-zone proximity. However, in 2019, the share of U.S.-based companies in the mix of GBS setup in CEE increased considerably.
  • APAC-based firms experienced an increase in overall GBS activity, driven by an uptick of 80% in R&D GBS centers set up by enterprises in China.
  • GBS setups by small companies (annual revenue less than US$1billion) have increased on the back of higher demand for R&D and innovation. In 2019, small companies’ GBS setups increased by 22% over 2018.
  • A majority of GBS centers focus on delivering a single function, such as information technology (IT) or voice-based business process services (BPS), but many (44%) have multi-functional capabilities such as a combination of R&D and IT capabilities.
  • Technology and communication firms lead GBS activity in terms of the number of GBS centers (38%); but the banking, financial services and insurance (BFSI) sector dominates in terms of scale (34%).

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global enterprises, service providers, and investors. Through our research-informed insights and deep experience, we guide clients in 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.

1Everest Group uses GBS as the preferred term for in-house Global Business Services setups, which are also referred to as Global In-house Centers (GICs), shared services, global capability centers, or captives. The scope of this research does not include GBS centers serving the domestic market.

Everest Group Predicts Significant Slowdown in Revenue for Third-Party Administrators as Needs of Insurance Industry Shift | Press Release

Insurers’ extreme focus on employee and customer experience is forcing TPAs to adapt their offerings beyond commoditized services by leveraging digital technology.

Some third-party administrators (TPAs) are building the requisite capabilities in talent, technologies and data to address the changing needs of the insurance industry, but most TPAs lag behind. Everest Group reports that the top 10 US TPAs suffered a significant drop in year-on-year revenue growth, falling from 20% for 2017-2018 to 5-10% for 2018-2019. Everest Group predicts the slowdown will continue in the year ahead under the impact of the COVID-19 crisis as TPAs look to battle against the falling demand and the changing requirements of insurers.

“Insurers’ extreme focus on employee and customer experience is forcing TPAs to adapt their offerings beyond commoditized services,” said Skand Bhargava, practice director at Everest Group. “Most of the digital-led use cases that TPAs have implemented thus far are low on the sophistication scale when compared to the use cases implemented by insurance IT or Business Process Outsourcing providers. However, some leading TPAs have showed signs of change, making intensified digital investments in more new-age partners and technologies, such as the use of IoT sensors, artificial intelligence, predictive image analytics, telematics and predictive modeling. As a result, these more innovative TPAs are reaping differentiation in the market and positioning themselves for success amidst recessionary pressures because of the greater value they are providing for their clients. Going forward, those TPAs who deliberately commit to well-executed digital transformation will not only deliver a more progressive value proposition to clients but also secure the relevance of the overall industry, especially considering the current environment.”

Third-party administrators are commonly used by health insurance providers as well as enterprises or healthcare organizations who fund their own health plans for employees. TPAs assist these organizations with claims administration as well as premium billing, customer enrollment, and other day-to-day operations of insurance programs.

Currently, the Top 10 TPAs in the U.S command only 3-5% of a $270 billion market, with some of the largest TPAs functioning on single-digit operating margins and very few keeping pace with digital transformation. By leveraging digital technology, TPAs can improve margins, drive differentiation, address operational challenges, enhance talent throughput and ensure client retention. In the longer term, digital adoption can help TPAs adjust to changing risks and move up the value chain to manage critical tasks.

Everest Group shares these findings in its recently published report, Third Party Administrator (TPA) State of the Market Report 2020: Industry Facing an Urgent Mandate to Transform. This report examines the global TPA market, particularly the property and casualty (P&C) and workers’ compensation insurance segments, including changes in client demand patterns and delivery requirements from TPAs, and the role and adoption of digital levers.

Additional Findings

  • For property and casualty (P&C) and workers’ compensation insurance, TPAs are primarily restricted in the value chain to end-to-end claims management.
  • For employee benefits—both life and pension (L&P) and health insurance—TPAs play a more end-to-end administration role.
  • While there are multiple growth drivers for the TPA industry, such as expansion in the scope of services and carrier outsourcing, there are a number of impending challenges as well that restrict the growth opportunities.
  • Intelligent automation, mobility, predictive analytics, drones, and cloud-based modern claims platforms are the five key digital and technological enablers for the transformation of the TPA industry.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global enterprises, service providers, and investors. Through our research-informed insights and deep experience, we guide clients in 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.

Growing at a Steady 9% Pace, IT Services in Life Sciences Drives Advancements in Pharmaceuticals, Medical Devices, Supply Chain | Press Release

Nearly $4.5 billion of life sciences IT services deal up for grabs over 2020-2021

Speed to market is the primary focus of biopharmaceutical and medical device firms when it comes to their investment in life sciences IT services (ITS), a market which is expected to grow at a steady 9% compound annual growth rate (CAGR) through 2025, according to Everest Group.

Nearly $4.5 billion of life sciences IT services deal are up for grabs over 2020-2021. Everest Group research shows that these deals will be led by digital initiatives such as artificial-intelligence-assisted drug discovery, leveraging real-world data (RWD) and real-world evidence (RWE) to make clinical trials more accurate, industry 4.0 to automate manufacturing, and responsive supply chains.

Everest Group reports that although biopharmaceutical companies and medical device firms have traditionally devoted the largest share of their ITS investments to manufacturing (31% share) and sales and marketing (25% share), research and development (R&D) has become the fastest growing segment of life sciences ITS expenditures. ITS investments in clinical/device trials and drug discovery/device product development are expected to grow at rates of 15% and 12% respectively through 2025.

“Rising drug prices have become a major concern for healthcare payers, governments and patients, especially since drug and device efficacy and outcomes have not been improving in line with the increasing prices,” explained Nitish Mittal, vice president at Everest Group. “As life sciences firms face pushback on pricing as well as pressure from competitive forces, they can and will look to the IT services landscape for innovative platforms and solutions for R&D functions. As a result, we expect the life sciences R&D segments to witness a healthy growth in demand for IT services in the 12-15% range, compared to an 8-9% growth rate for the life sciences ITS market as a whole.”

Digital transformation has been identified as a strategic imperative by many life sciences enterprises, with particularly emphasis on leveraging enormous amounts of health data now available from electronic health records (EHR), clinical trials, wearables, health apps, genomic sequencing, social media and many other sources. Enterprises are looking at AI-driven systems to leverage this RWD. For example, about 60% of biopharmaceutical companies currently use machine learning to analyze RWD; 95% expect to use it in the future.

ITS providers are significantly ramping up their digital capabilities to cater to this need. Everest Group predicts that numerous high-growth segments in the life sciences ITS market will exceed 10% CAGR from 2020 to 2025, including the following:

  • Clinical trials management (13-15%): Top demand themes will be pharmacovigilance (PV) automation, pragmatic trials using real-world data (RWD) and real-world evidence (RWE), and virtual trials enablement.
  • Personalized and efficient drug discovery (14-16%): Top demand themes will be genomics data analysis and drug repurposing solutions.
  • Patient engagement (16-18%): Top demand themes will be digital therapeutics and Software as a Medical Device (SaMD), including mobile apps, patient portals and smart devices. Patient monitoring and health interventions will be top demand themes as well.
  • Omni-channel marketing support (10-12%): Top demand themes will be customer analytics to measure success of different marketing channels, and customer cohort segmentation and engagement through customized digital marketing campaigns.

Everest Group shares these findings and more in its recently published report, Life Sciences State of the Market – Key Trends, Service Provider Performance in 2019, and Outlook for 2020. This report examines the global 2019 life sciences ITS service provider landscape and covers themes expected to garner greater interest in 2020. It analyzes key market trends and provides a snapshot of all the life sciences IT services PEAK Matrix® assessments carried out in 2019.

***Download a complimentary 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. Our clients include leading global enterprises, service providers, and investors. Through our research-informed insights and deep experience, we guide clients in 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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Covid-19 Propels Healthcare Providers to Accelerate Shift to Telehealth and Digital-First Models—Everest Group | Press Release

Surge in telehealth necessitates investments in analytics, automation, IoT, and cloud infrastructure to enable distributed and scalable care models

Healthcare providers, historically slow to pursue digital transformation, are being forced to jump on the digital bandwagon. According to Everest Group, the surge in telehealth to meet the demands being placed on the healthcare ecosystem by COVID-19 will accelerate healthcare providers’ investment in digital technologies.

Prior to the coronavirus pandemic, Everest Group predicted that healthcare providers would increase spending on digital IT services by more than 15% by 2025. The firm now expects higher investment and a shorter timeline.

“The digital adoption levels in the healthcare provider market had been relatively low, but healthcare response to COVID-19 will accelerate digital adoption,” said Chunky Satija, practice director at Everest Group. “The pandemic is a forcing function, necessitating that healthcare providers future-proof their technology estate—led by investment in analytics, automation, IoT, and cloud infrastructure—to enable distributed and scalable care models such as telehealth and telemedicine.”

Healthcare providers historically have been mired down by their legacy and disintegrated IT systems and by regulations that have had the unfortunate consequence of incentivizing them to maintain the status quo. But that’s not an option anymore, particularly as healthcare providers scramble to meet the unprecedented needs of a world disrupted by the COVID-19 pandemic.

Today’s new models of healthcare delivery, including telemedicine and telehealth, offer great potential for enabling remote healthcare management and better access to care, both during the current crisis and henceforth. However, these new models of care delivery require more widespread digital adoption. Automation, analytics and IoT are the biggest areas of opportunity.

Other opportunities likely to emerge in the healthcare provider space in 2020 include the following:

  • Data monetization. The emergence of a data exchange platform is likely to spur revenue generation for companies holding data assets.
  • Cloud adoption to improve clinical data handling. The use of cloud-based platforms for management of disparate data sources allows for seamless collaboration across multiple stakeholders.
  • Rising stringency of healthcare policies. Due to regulatory changes (such as CMS hospital price transparency requirements recently announced and effective January 1, 2021), providers must establish efficient channels and methods to disclose cost and price-sharing information to patients.

Everest Group shares these findings in its recently published report, Healthcare Provider State of the Market – Trends, Service Provider Performance in 2019, and Outlook for 2020. This report examines existing trends in the healthcare provider space and how they are impacting providers’ decisions. It also provides a snapshot of the PEAK Matrix® healthcare assessments that Everest Group carried out in 2019.

The report includes an overview of the marketplace pressures impacting the strategic decisions of healthcare providers, such as:

  1. BigTech claiming space in healthcare. BigTechs such as Amazon, Apple, Facebook and Google are invading the healthcare market, bringing technologically advanced solutions that aim to drastically improve overall physician and patient experience.
  2. Providers adopting value-based care (VBC). The shift to align healthcare provider incentives with quality of care and health outcomes of patients requires an unprecedented level of data sharing and usage.
  3. The advent of business models of coexistence. To improve patient outcomes and reduce costs, hospitals and health systems are joining forces, providers are partnering with payers, and accountable care organizations (ACOs) are on the rise. These new business models require integration of infrastructure, data and IT management and spur uptake of technologies such as IoT for remote healthcare, analytics to guide interventions, and mobility for intuitive patient portals and information exchange.
  4. Rise in consumerism. Patients increasingly expect healthcare to be delivered as a digital service, but also expect their healthcare information be secure and protected.

***Download a complimentary 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. Our clients include leading global enterprises, service providers, and investors. Through our research-informed insights and deep experience, we guide clients in 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.

Everest Group Webinar to Offer Counsel on Mitigating Process and Supply Chain Disruptions Due to COVID-19 Pandemic | Press Release

Everest Group’s leading analysts to offer specific actions and frameworks for minimizing the impact of the novel coronavirus to business operations in the short- and mid-term.

Leading analysts from across Everest Group’s practices have compiled their advice for enterprises on how to mitigate the business impact of the COVID-19 pandemic in the short- and mid-term. The firm will share this counsel in a complimentary webinar to be hosted on Tuesday, March 24, at 9 am CDT: “Coronavirus—Beyond Hand Sanitizer: Mitigating Business Impact and Uncovering the Positive.”

***Register for the webinar here***

The one-hour event will delve into these issues:

  • How do you assess immediate impact on supply base?
  • How can you find the cost savings you’re being asked for?
  • How do you reorganize resources and processes to maintain delivery in the mid-term, and how do you build in contracting flexibility/agility to address unexpected capacity variations?
  • Given the current and expected economic impact, do you renegotiate pricing … and how?

“Most organizations have already addressed the basic issues of safe hygiene practices, travel policies, work from home plans and other ways to conduct business while observing social distancing, so this webinar will take it to the next level,” said Michel Janssen, chief research officer at Everest Group. “We will address the questions business leaders have about how to get business done under these unprecedented circumstances and what adjustments can be made now to best position the company for the near and distant future. Our experts will offer a 360-degree view of the business implications and provide specific actions and frameworks leaders can deploy this quarter, next quarter, and the quarter beyond.”

The webinar is designed to help leaders across organizations evaluate impact and uncover opportunities. The event is particularly well-suited for executives in businesses that provide or use IT, business process, or engineering services, including:

  • Heads of procurement and sourcing
  • Category managers
  • Heads of in-house centers or shared services centers
  • C-suite leaders from service provider organizations and buying organizations

The webinar will be hosted by Janssen as well as Amy Fong and Abhishek Singh, vice presidents at Everest Group.

Live participation is encouraged, but registrants who are unable to attend will receive by email a link to the session slides and on-demand playback.

***Reserve your seat***

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global enterprises, service providers, and investors. Through our research-informed insights and deep experience, we guide clients in 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.

More Than One-Third of Quality Assurance Spending Devoted to ‘Next-Generation Role’ in Digital Transformation—Everest Group | Press Release

No longer tasked with the mundane, innovative Quality Assurance teams are now playing a pivotal role in helping enterprises adopt emerging technologies without impairing existing operations.

In 2019 more than one-third of enterprise spending on quality assurance (QA) was devoted to next-generation technologies rather than traditional QA activities, representing a 23% jump in next-generation QA spending since 2017, according to Everest Group. Everest Group predicts the QA market will witness radical transformation in the next three to five years as enterprises address the challenges brought by the increasing industrialization of next-generation technology applications, such as Internet of Things (IoT), big data, cloud native, augmented reality/virtual reality (AR/VR), artificial intelligence (AI), and distributed ledger.

Recently, QA standards have been strained by enterprises’ adoption of Agile/DevOps methodology. For example, QA too often has been pursued as an afterthought rather than a strategic activity, and a focus on faster time-to-market has pushed QA to the back burner or made it a severely time-constrained activity.

“With next-generation applications becoming the fulcrum of enterprises’ competitive edge, quality assurance needs to take center stage,” said Yugal Joshi, vice president at Everest Group. “In the recent past, we’ve witnessed how even technology leaders like Google, Facebook, Amazon and GitLab have experienced QA shortfalls, underscoring the need for enterprises to transform the QA role and function.

“Gone are the days when QA is relegated to gathering quality metrics at the end of a process; QA must evolve to play a critical role as a process innovation engine. Next-generation QA teams not only need a knowledge of emerging technologies but also the skills and adaptability to contribute and innovate within more agile, inclusive and automation-led delivery models. This means organizations must redefine QA talent requirements, organizational structure, methodology and use of technology.”

Everest Group explores these findings in its recently published Application Services State of the Market Report, “Next-Generation QA Services – From Mundane Existence to Innovation Engine.” The report presents a comprehensive analysis of the next-generation QA services market.

Selected Highlights:

  • QA is increasingly getting embedded in development processes, exhibiting convergence of QA spend with development spend.
  • Within next-generation QA, cloud native, big data and IoT are the leading investment themes with more than a 60% share.
  • End consumer-centric industries—such as banking, financial services and insurance (BFSI) and healthcare—are leading the charge of adopting next-generation QA services to stand differentiated amongst peers and attract users.
  • North America and Europe lead in adoption of next generation QA services, largely because these regions also lead in increased next-generation technology adoption and policies geared toward consumer protection.
  • Enterprises recognize the evolving talent needs but are still exploring different means to achieve the desired level of talent readiness. Eighty-five percent of QA leaders believe up-skilling the existing talent base is an urgent requirement.
  • Service providers are currently not measuring up to emerging enterprise expectations for QA services; only 31% of enterprises are open to working with new QA providers.

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

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.

Enterprises Boost Investment in Application Transformation Initiatives by 64% in 2019—Everest Group | Press Release

Only 13% of application transformation initiatives have delivered the intended objectives, which makes the market ripe for service providers to deliver much-needed expertise, talent and technology

Application transformation initiatives by enterprises witnessed a steep growth rate of 64% last year, as enterprises sought to achieve competitive advantage by transforming their core applications, according to new research from Everest Group. Unfortunately, only 13% of all transformation efforts delivered the intended consequences.

Application transformation refers to the migration and/or adaption of an existing application to a modern environment designed to significantly increase the value delivered in terms of functionality or experience, or both.

Business stakeholders led 56% of the transformation initiatives in 2019 as they sought faster time-to-value, new revenue streams, enhanced user experience, faster insights and scalability for growth. This represents a significant shift from 2018, when the majority (62%) of transformation initiatives were driven by CIOs with core IT objectives of technology standardization, process simplification, increase in automation, efficiency, cost optimization and architecture unification. Alignment of business and IT objectives is an essential component of successful application modernization initiatives.

“The good news is that enterprises are increasingly viewing digital transformation as table stakes, and they are investing in application modernization, specifically, to deliver competitive differentiation and other key business outcomes,” said Yugal Joshi, vice president at Everest Group. “In fact, more than 80% of the application transformation initiatives are directed to transform core applications supporting the business. Unfortunately, too few of these initiatives are achieving the desired outcome. Enterprises particularly struggle with understanding their legacy systems, aligning business and IT objectives, and transforming their human resources to derive full benefits from the modernization effort.”

Everest Group explores the findings and the implications for service providers in the application transformation market in its recently published report, “Application Transformation – Business Pioneering the Agenda.” The report examines enterprise demand themes and consumption patterns and provides an easy-to-follow playbook to help enterprises begin their transformation journeys.

“Another important shift we’re seeing in the application transformation market is that the majority (55%) of enterprises are budgeting for transformation projects in their annual spends,” added Nitish Mittal, vice president at Everest Group. “The corresponding shift to long-term deals rather than small pilot projects is a move in the right direction, because enterprises need a longer-term, well-planned approach to application transformation in order to realize their desired business objectives.”

In the report, Everest Group identifies eight crucial steps in a well-planned approach to application transformation:

1.    Need identification – Clearly identify the business requirement and objectives.
2.    Landscape assessment – Undergo a value-chain assessment to identify processes and applications that require transformation.
3.    Transformational roadmap – Develop a strategic roadmap identifying key steps, stepwise goals, and the investment required.
4.    Measurable outcome – Develop a set of metrics across the funnel to improve the accountability of business outcomes.
5.    Self-funding model – Invest the benefits realized at each step to fund the successive transformation stages.
6.    Team structure – Promote a culture of innovation and shared responsibility through integrated teams.
7.    Talent – Build a learning ecosystem, enabling the workforce to evolve with technology and industry.
8.    Change management – Ensure enterprise-wide mandate of technology adoption with collaboration of the IT team.

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

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/.

 

BigTech Enters Healthcare Payer Space Poised to Disrupt Care Management and Every Other Aspect of the Value Chain—Everest Group

Healthcare payer investments in digital solutions expected to increase 13.8% by 2020

BigTech is stepping into the healthcare arena armed with a technological advantage and an ability to help healthcare payers improve their meager margins, which traditionally hover around 2 to 4%. According to Everest Group, payers are primarily utilizing the solutions and products of BigTechs to improve their member experience and operational processes, with care management being the primary area of focus.

BigTechs are helping payers to improve their customer-facing platforms, leverage chatbots to handle customer traffic, and have better access to members’ health data – leading to better customer experience and business growth. Payers are also using automation solutions (such as automated claims management services) from these firms to enhance their operational efficiencies and reduce cost.

Payers are currently investing $22.8 billion in the IT services (ITS) market, with 21% devoted to digital platforms and technologies. Everest Group predicts $32.2 billion in ITS spending by healthcare payers (a 5.9% increase) by 2025, with a 13.8% increase in spending on digital as compared to a 3.2% increase in traditional IT services.

“BigTechs such as Amazon, Apple, Facebook, and Google already have a track record of disrupting major industries such as retail and telecommunications,” said Nitish Mittal, vice president, Technology, at Everest Group. “These technology giants are now invading the healthcare payer industry – with many already making/announcing significant investments for transforming the industry.

“The healthcare industry makes an attractive target for BigTech,” continued Mittal. “Healthcare is one of the biggest industries in the U.S., expected to account for 19.4% of the GDP by 2022, and it is notorious for its rampantly rising costs and poor performance on quality indicators. The BigTech companies bring their data analytics expertise, customer-centric digital solutions, agility and consumer-trusted brands—all of which can be leveraged to improve care management and every other stage of the payer value chain, from product development to policy servicing and from IT infrastructure to claims management and business processes.”

Everest Group explores the potential implications of BigTech’s investments in the healthcare industry in its recently published report, Healthcare Payer State of the Market – Trends, Service Provider Performance in 2019, and Outlook for 2020. The report examines the global 2019 healthcare Information Technology Services (ITS) service provider landscape and covers themes expected to garner greater interest in 2020, including the following:

  • Shift to value-based care (rather than fee-for-service): Employers, health plans, and government purchasers of healthcare are pushing for a transition to value- based payment models. The premise of this shift is to align physician, hospital, lab, doctor, and nurse incentives with health outcomes of their patients and the quality of services rendered.
  • Broadening role of healthcare payers: The healthcare landscape in the US is witnessing a convergence between payers and providers, with multiple collaborations in the form of mergers and acquisitions, joint ventures, strategic alliances, etc. This convergence is critical to succeed in the value-based care model as collaboration between health plans and providers leads to efficient data sharing, higher accountability and transparency, better outcomes, lower costs, and improved patient experience.
  • Data monetization: The healthcare industry’s ever-growing repository of untapped data both from clinical and non-clinical sources may finally be a part of monetization use cases in the near future. The emergence of a data exchange platform is likely to spur revenue generation for companies holding data assets. At the same time, healthcare companies, researchers, and innovators may begin to realize improved innovation with requisite data up for purchase through data exchange platforms.
  • Cloud adoption: A sharp increase in affinity for cloud platforms is evident in the payer IT spectrum. Cloud platforms with built-in next generation tools enable payers to efficiently manage data and run analytics on claims and care data. Keeping the converging healthcare landscape in mind, the use of cloud-based platforms for management of disparate data sources allows for seamless collaboration across multiple stakeholders.
  • Rising consumerism: Regulatory policies are pushing for increased price transparency (such as the “transparency in coverage” rule that requires payers to disclose cost and price sharing information to participants). These policies and evolving customer expectations have put out a message for the payers to adopt technological solutions in order to improve customer experience at every touchpoint starting from the enrollment of a member. Payers will seek to adopt artificial intelligence (AI) based chatbots, voice assistants, and other customer experience enhancement technologies in order to fulfill expectations while keeping costs in check.
  • Evolution of payer core administration platform: A modular approach for core administration platforms is taking the front seat due to lack of success of completely integrated end-to-end solutions. Enterprises are leaning toward a modular approach rather than rip-and-replace solutions in order to improve time-to-market and to preserve the ability to tweak as per their own requirements.

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

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.

Outsourcing Activity Fell Slightly in 2019, According to Everest Group Report on Top Trends in Global Sourcing | Press Release

Bright spots in global sourcing for Q4 include GIC setups, Middle East and Africa locations, digital services, and service provider revenues

Everest Group reports that the global sourcing industry posted a 5% decline in outsourcing transaction activity for Q4 2019, culminating a year of steadily declining quarterly transactions that resulted in a year-on-year drop of 3% between 2018 and 2019. However, Q4 2019 did have some bright spots: global in-house center (GIC) setups increased in Q4, as did acquisition and alliance activity, and both global service providers and offshore-heritage service providers experienced a bump in revenue for the quarter. Digital services continued to dominate outsourcing activity, driven by cloud-based deals.

“We continue to see that the majority of outsourcing deals include digital services, as opposed to traditional services only,” said H. Karthik, partner at Everest Group. “Seventy percent of outsourcing transactions conducted in fourth quarter 2019 included digital services. Of these, 50% included cloud services. Robotic process automation, artificial intelligence, analytics, mobility and cybersecurity were also prominent features of these deals. Less commonly included but certainly worth noting were other digital services such as IoT, social media, blockchain and digital interactive components.”

Everest Group also identified these Q4 2019 global sourcing trends:

  • Cloud demand in the retail and consumer product goods (CPG) sector increased as enterprises looked to enhance omnichannel customer experiences by leveraging cloud technologies.
  • GIC setup activity increased across both offshore/nearshore and onshore locations, largely driven by the manufacturing sector.
  • The Middle East and Africa (MEA) region witnessed a jump in activity, primarily driven by growth in engineering-focused GIC setups.
  • Center setups activity rose in tier-2/3 locations as both GICs and service providers are increasingly exploring smaller cities, especially in mature markets such as India, Ireland and Poland.
  • Service providers announced numerous acquisitions and partnerships to enhance their IoT offerings and partnered with third parties to strengthen their mobility capabilities.
  • These developments in the fast-evolving outsourcing market are detailed in Everest Group’s recently released Market Vista™: Q1 2020 report. The report includes an analysis of outsourcing transaction trends, health of
  • GICs, location risks and opportunities, and service provider developments. A special section is devoted to outsourcing activity in the engineering/R&D space, with a focus on Verification & Validation (V&V) activities.

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

Complimentary Webinar: The 5 Most Important Global Services Trends in 2020
Everest Group is delivering a complimentary webinar on what lies ahead for the global services industry. The webinar, “The 5 Most Important Global Services Trends in 2020,” will be delivered on Thursday, March 5, at 9 am CST (10 am EST; 3 pm GMT; 8:30 pm IST). Everest Group hosts Michel Janssen, chief research guru, and H. Karthik, partner, will preview the firm’s upcoming Market Vista™ Annual Report 2020, sharing likely trends for 2020 and the keys to success in the context of rising uncertainty.

***Register for complimentary webinar***

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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