Category: Press Releases

COVID-19 Has Changed the Way Money Moves, Ushering In Rapid Adoption of Real-Time and Alternative Payment Methods | Press Release

China, India and Singapore lead the world in adoption of alternative payment methods (APMs); US and Canada lag in comparison.

The global COVID-19 pandemic has changed not only the way we interact, but also the way money moves. According to Everest Group, the pandemic has accelerated the digitalization of payments and prompted consumers and businesses to rely on digital and contactless payment options when buying and selling goods and services.

Although cash and cards still dominate in many geographies, the pandemic has accelerated momentum for already growing traction for alternative payment methods (APMs) across the globe. Among the most popular APMs are Alipay, Apple Pay, Google Pay, PayPal and Stripe. With the rise of digital payments and increase in online shopping, retailers are partnering with banks and FinTechs to offer a Buy-Now-Pay-Later (BNPL) facility to customers at check-out. The pandemic gave a massive boost to BNPL adoption and is expected to come under more regulatory scrutiny going forward, but that isn’t going to slow down this trend.

  • The Asia Pacific region, particularly China and India, has experienced higher adoption maturity, spurring the mobile payments revolution. APMs account for nearly 55-60% of total e-commerce spending across Asia. In China, the largest digital payments market in the geography, digital wallets account for nearly 45% of e-commerce transactions.
  • Comparatively, the U.S. and Canada lag in adoption, in part due to reliance on payment cards; however, the North American region is seeing a rapid increase in adoption of contactless cards and mobile payments. APMs are expected to capture over 50% of the market by 2022. Digital wallets are leading the pack in the US and bank transfer in Canada.

Banks and Payments Service Providers (PSPs) have been investing in payment modernization initiatives to shift to an open API-based architecture and adhering to the ISO 20022 payments messaging standard, which allows them to capture rich and structured data. These initiatives will help improve the payment experience.

In addition, evolving regulations and customer demands for a seamless experience across multiple channels are pushing banks and payment services providers (PSPs) to invest heavily in modernizing their payments technology stack. Payments technology service providers are investing in next-generation digital technologies such as the cloud, API, and AI/ML to provide an integrated payment ecosystem with value-added services, while managing risk and reducing fraud. Usage of data, advanced analytics and AI is fueling the rapid growth in next-generation fraud management solutions and value-added services.

These findings and more are discussed in Everest Group’s recently published report, “Modernizing Data, Applications, and Infrastructure for the Next Phase of the Payments Revolution.” In this report, Everest Group examines the payments technology market trends across products, experiences, infrastructure, regulations, data and technology themes. The report also looks at how technology vendors and service providers are increasing their investments to cater to these demand trends.

Additional Highlights:

  • With the rise of APMs such as cryptocurrencies, digital wallets and Central Bank Digital Currencies (CBDCs), regulators are amplifying their scrutiny of new players and offerings. It has become mandatory for banks to upgrade their risk and compliance management systems for better fit to regulatory requirements and emerging security risks as a result of adoption of new forms of payments processing.
  • Cryptocurrency as a payment method will soon become mainstream, as regulatory uncertainties gradually settle down and the market sees more institutional investments.
  • Digital fiat might not replace cash, but the hesitation toward CBDC adoption will not last long; emerging economies are leading the race for CBDC development.
  • Real-Time Payments (RTP) platforms—which initiate and settle payments nearly instantaneously—are being embraced globally; however, RTP maturity varies across countries due to differences in legacy infrastructure, richness of overlay services and the FinTech ecosystem, and openness to alternative payment methods.
  • Banks and technology vendors are taking a partnership-led approach to offer innovative payment solutions for merchants, corporate entities, and specific industry verticals. BigTech firms are also getting into the race, tapping into the changed consumer behavior for payments by launching new offerings to grab wallet share.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. 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/

COVID-19 Drives Distributed Approach to Agile Software Development, Offering 13-15% Cost Savings, Up to 5X Improved Access to Talent | Press Release

Distributed agile is emerging as the de-facto software development model, especially among high-performing enterprises.

Roughly two in every five enterprises are expected to adopt distributed agile as their de-facto operating model, according to Everest Group. Everest Group reports the pandemic has jettisoned concerns around the viability of the distributed agile model,
with 47% of enterprises accelerating their programs for agile development in the past year, 45% reporting increased productivity with remote working, and 40% reporting a reduction in quality defects by developers.

Prior to COVID-19, the success of agile development projects was traditionally attributed to close collaboration and regular communication among team members and with customers. Pandemic-induced remote working has disrupted the agile model and tested its limits. With enterprises rapidly transitioning to a remote delivery model, they have replicated the processes, governance, and workflows of traditional agile development. However, the increasing need for continuous value delivery along with risk-efficient, employee-centric operations is driving enterprises to adopt a more sustainable software development methodology.

The next generation of agile will embrace a natively distributed construct – with communication, processes, and workflows optimized for remote delivery. The model will be poised to deliver benefits such as increased productivity, higher talent availability, and cost savings. According to Everest Group, the business case for distributed agile includes an estimated 13% cost savings and an up to 5 times increase in access to talent. Other advantages include enhanced business continuity and resilience, improved delivery model flexibility, and societal and environmental benefits.

These findings and more are shared in Everest Group’s recently published report, “Making Distributed Agile Work – An Enterprise Adoption Guide.” In this report, Everest Group examines the key considerations for charting a path to distributed agile, including the changes required in the workflow, processes, talent, and governance constructs to operationalize and scale the model.

Highlights:

  • Truly distributed agile delivery moves away from the concept of locations and passes accountability to self-governing feature pods.
  • Core teams typically comprise multiple feature pods of architects, managers and business owners connected virtually and situated in similar or close time zones for ease of collaboration. Feature pods are responsible for end-to-end product features.
  • Certain digital-native organizations—such as Etsy, Basecamp, GitHub and Bleum—are already leading the way, debunking myths about the distributed agile model. These organizations are demonstrating the following:
  • Distributed agile is much more than remote working. It requires process, people and structural changes.
  • Distributed agile involves a cultural and mindset shift.
  • Non-invasive governance and autonomy are key.
  • Productivity increases with stronger teams and more flexibility.
  • Distributed agile practices need to be built on a foundation of TRUST: transparency, resilience, understanding, self-reliance and a technology bedrock for collaboration and engagement.
  • Stronger emphasis on softer work aspects such as empathy, independence, and team bonding are requisites for successful distributed agile.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. 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 is Bullish on the Global Services Industry, Expects It to Move Past COVID Challenges in 2021 | Press Release

Companies are firing on both thrusters—leveraging outsourcing and global business services—to drive growth momentum in global services.

The global services industry is on a growth trajectory and will overcome COVID-19-related business disruptions in 2021, according to Everest Group. The firm has released research findings that summarize the performance and shifts of the sourcing industry in 2020. The report also forecasts the key trends that will shape the market in 2021.

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

Everest Group highlights the following as key developments in the global services industry in 2020:

  • 1.    Despite the pandemic, the global services industry witnessed an increase in number of outsourcing deals in 2020 as compared to 2021, with a significant growth in share of IT outsourcing deals.
  • 2.    2020 saw significant momentum in new Global Business Service (GBS) center setups by the technology and communication vertical.
  • 3.    The past year also saw a rise in M&As (mergers and acquisitions) and alliances among service providers, driven by providers’ desire to augment digital capabilities and expand geographically. Also, many cash-rich service providers found startups to have attractive valuations driven by COVID-19.

Looking ahead to the remainder of 2021, Everest Group suggests that multiple forces will drive growth of the global services industry:

  • Positive enterprise sentiments
  • Vaccine roll-out
  • Fiscal stimulus across demand geographies
  • Pent-up demand
  • Digital acceleration
  • Need for cost optimization

Everest Group research indicates that enterprises are firing on both thrusters—leveraging outsourcing as well as GBS centers.

  • Outsourcing revenue is recovering sharply and bookings have accelerated significantly. Large deals are expected to increase, driven by large-scale transformation initiatives, vendor portfolio consolidation to drive cost efficiency, and a rise in asset-leveraged deals as enterprises monetize their non-core assets.
  • GBS center executives expressed optimistic sentiments about accelerated growth in 2021. More than 70% of those surveyed anticipated growth in IT functions, especially application development and maintenance, cloud and datacenter services, and infrastructure services. More than half expected growth in analytics, industry specific business process outsourcing (BPO), finance and accounting BPO, and human resources (HR) BPO.

Two HR-related trends will also factor significantly in 2021:

  • The war for talent will intensify. Solutions to talent challenges will be found in increased training and development, automation and building a longer-term talent pipeline. Additionally, enterprises will need to revise workforce strategies to make them future-ready, examining skills needed, application of automation and robotics, organizational structure and whether traditional models of workforce engagement still apply.
  • Work From Home (WFH) is here to stay. While WFH model adoption will decline from current levels, it will continue to be a part of the delivery model strategy, but with a more intentional approach. Organizations will need to invest in a wide array of tools, technologies and platforms to enhance the employee experience.

These findings and more are shared in the Everest Group report, “Market Vista™: 2020 Year in Review and Outlook for 2021.” The Market Vista report highlights the key trends and developments in the fast-evolving global offshoring and outsourcing market. The study captures the key developments across outsourcing transaction trends, health of GBS centers, location risks and opportunities, and service provider developments.

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 Identifies Most, Least Favorable Locations to Do Business in a Disrupted World | Press Release

New Everest Group ‘Risk Watch’ report assesses risks of outsourcing to and setting up Global Business Service Centers in major delivery locations around the world.

The risks and uncertainties of doing business in a disrupted world cannot be entirely avoided, but Everest Group can assure enterprises that some countries are a far better bet than others when it comes to outsourcing and setting up global business service centers (GBSs).

Everest Group has released its Global Locations State of the Market 2021: Risk Watch, which includes a risk assessment of 61 countries. For each location, Everest Group rates the risk of doing business in each location; the assessment covers important occurrences in the past year and captures positive and negative movements in risk ratings based on these events.

Everest Group uses seven parameters to evaluate overall risk across locations:

  • Infrastructure quality
  • Geopolitical stability
  • Macroeconomic stability
  • Regulations and ease of doing business
  • Safety and security
  • Digital readiness
  • Quality of life

In addition, Everest Group offers insights for buyers of IT, business process and engineering services and service providers in the sourcing industry by identifying key risks to watch out for and major developments underway in each region.

Key Findings
In general, the Asia Pacific (APAC) region offers a safe and secure business environment with relatively high macroeconomic stability. The Americas offer a high quality of life in general; however, there are some concerns in this region, primarily in Central and South America, with respect to regulatory environment, digital readiness, and quality of infrastructure. In general, locations within the Europe, Middle East and Africa (EMEA) region offer high-quality infrastructure, high quality of life, and a safe and secure business environment.

Asia Pacific: 14 countries assessed

  • Most favorable – Singapore, Hong Kong, Taiwan and South Korea are characterized by high quality of infrastructure, stable economy, high safety and security and quality of life.
  • Least favorable – Cambodia’s poor infrastructure and concerns in the geopolitical and regulatory environment make it the least favorable business environment in the region.

Americas: 19 countries assessed

  • Most favorable – Canada, Chile and the United States offer the most favorable business conditions, given the high quality of infrastructure and stable political and macroeconomic environments.
  • Least favorable – Nicaragua offers the least favorable business environment in the region, given its geopolitical instability and poor regulatory environment.

EMEA: 28 countries assessed

  • Most favorable – Germany, the United Kingdom, Estonia and the Czech Republic are among the leading locations offering low risk across all parameters.
  • Least favorable – Nigeria has one of the least favorable business environments given its poor state of infrastructure, macroeconomic instability, and concerns around the regulatory and business environment.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. 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/

Global Business Services (GBS) Model Sees Strong Growth in 2020, With More than 200 New Centers Established | Press Release

More than 50% of GBS centers expanded their digital capabilities in areas such as advanced automation, analytics, cloud and platform-based engineering

2020 was not a bleak year for Global Business Services (GBS*) organizations after all. According to new research from Everest Group, the GBS market witnessed improvement in performance, enhancements in role, and growth across verticals and functions.

Despite the pandemic, the GBS center set-up activity continued to experience strong growth, with 200+ GBS centers established across onshore and offshore/nearshore locations in 2020. Approximately 27% of the US$214 billion global services (sourcing) market is attributed to the GBS model.

The COVID-19 crisis further strengthened the value proposition for evolved GBS organizations, as GBS centers exhibited resiliency and earned spikes in Net Promoter Scores in 2020. The pandemic acted as a catalyst across most verticals for accelerating adoption of digital initiatives, thus providing an opportunity for GBS organizations to step up and deliver higher value-add services for enterprises. More than 50% of GBS center set-ups expanded their digital capabilities in areas such as advanced automation, analytics, cloud, and platform-based engineering to meet evolving business expectations and priorities.

The GBS focus on value addition beyond cost arbitrage remains critically important to future growth. Everest Group, tracking more than 3,500 offshore and nearshore GBS centers, reports that the top 5 expectations from the GBS model going into 2021 are (in rank order from highest importance):

  • 1.    Enable digital transformation
  • 2.    Drive cost excellence
  • 3.    Accelerate innovation
  • 4.    Drive agility and cross-functional collaboration
  • 5.    Enhance service delivery resiliency.

Accordingly, Everest Group advises that GBS priorities include:

  • Reevaluation of operating models, especially geographic diversification
  • Designing a workforce strategy that is holistic and based on design principles.
  • Winning the talent wars
  • Embracing productivity as a superpower
  • Addressing issues with the Work from Home model
  • Ensuring cost-competitiveness to overcome inevitable third-party economic comparisons

These findings and more are discussed in Everest Group’s “GBS State of the Market Report: Top 2021 Priorities for GBS.” This report provides an extensive assessment of the GBS landscape and adoption trends, along with a deep dive into emerging trends driving the future of GBS organizations.

Key findings regarding the GBS landscape:

  • India continued to be a leading delivery location for GBS market activity, accounting for more than one-fourth of center set-ups in 2020, followed by Rest of Nearshore Europe and Rest of Asia.
  • While the overall GBS center set-up activity was dominated by U.S.-based companies, firms based in Asia Pacific have gained significant traction over the last three years (increasing APAC’s share of center set-ups from approximately 10% to nearly 25%).
  • Enterprises are increasingly leveraging the GBS model to establish digital hubs and Engineering, Research and Development (ER&D) centers in order to create successful digital customer and employee experiences, thus driving differentiated strategic capabilities.
  • The contribution of new adopters in the overall GBS model has increased significantly over the last three years; more than 70% of the companies that established GBS centers in 2020 were new entrants with no existing offshore/nearshore GBS center.
  • Interestingly, small companies (i.e., with revenue less than US$1 billion) accounted for almost half of the center set-up activity in offshore/nearshore locations in 2020, with technology and communication companies leading in terms of center set-ups.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. 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 uses GBS as the preferred term for in-house set-ups, which are otherwise also referred to as Global In-house Centers (GICs), shared services, global capability centers, or captives. GBS centers are enterprise-owned, centralized units that deliver IT, business process or engineering services to other business units of the enterprise.

Healthcare Adoption of Salesforce Grew 35% Over Last 3 Years; More Growth to Come | Press Release

Salesforce applications in healthcare go far beyond patient management to address three of the industry’s biggest challenges: consumer experience, interoperability and value-based care.

According to Everest Group, healthcare adoption of Salesforce has grown approximate 35% since 2018, driven by the industry’s focus on implementing better care strategies, producing greater value, and refining patient and member experiences. Salesforce services for healthcare generated US$700 million in 2020. (This data is derived from Everest Group research and is not provided by Salesforce.)

Moving forward, Everest Group expects healthcare adoption of Salesforce to grow steadily. Future adoption drivers will include modernizing legacy applications and spearheading the digital transformation agenda. Healthcare organizations will use Salesforce to lower expenditures, build resilient business models and develop intelligent enterprises.

Salesforce Evolves, Adds Value Beyond Sales & Marketing
Salesforce is the world’s No. 1 customer relationship platform and a pioneer of Software-as-a-Service (SaaS). Across industries, early adopters of Salesforce services were looking to boost sales and marketing efforts by using Salesforce to effectively manage customer relationships, market targeted products, explore sales performance and drive cost efficiencies. As the Salesforce technology landscape broadened, enterprises’ approach toward Salesforce has evolved from “reactive” relationship management to a “proactive” approach to Customer Experience (CX).

Salesforce Helps Healthcare Address Big Challenges
Healthcare organizations are looking to leverage Salesforce not only to engage with patients, but also as a tool to manage end-to-end business functions and address three of the biggest challenges faced by the healthcare industry:

  1. Consumer Experience: Healthcare consumers experience disjointed services because different stakeholders have access to data residing at different places. Salesforce has capabilities to integrate the experience of consumers at different points of their care journey to provide a holistic view.
  2. Interoperability: The movement of data within healthcare is stymied today by infrastructure architecture and complexity. Salesforce allows sharing data across platforms and electronic health records (EHRs), including legacy systems, helping health systems become interoperable. This data-sharing ability makes Salesforce a powerful tool for creating a coordinated care experience.
  3. Value-based Care: Low patient satisfaction has been the result of healthcare’s focus on volume over value, fraud and waste, and ever-rising costs with a disproportionate improvement in outcomes. Salesforce, with its data integration, advanced analytics and workflow capabilities, is helping to improve care management and fast-track population health initiatives.

Salesforce Healthcare Services in the Sourcing Industry
Within the sourcing industry, the scope of Salesforce healthcare services being provided to healthcare organizations includes consulting and advisory, custom application development, implementation and integration, and maintenance and support.

Service providers are building strong healthcare-specific solutions to expedite their clients’ time-to-market with Salesforce and are taking an inorganic approach to fill gaps across their Salesforce services portfolios and enhance their geographic footprints.

More Information Available in Everest Group Report
Everest Group’s recently released report, “Salesforce Healthcare Services – State of the Market,” explores market trends for Salesforce Healthcare services in detail. The report includes market size and growth, adoption trends by products and lines of business, key uses cases for healthcare entities and service providers, adoption challenges, and enterprise expectations of service providers. Finally, Everest Group suggests strategies service providers can use to enhance customer satisfaction and build market share.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. 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 Predicts Healthy Rebound in IT Spend by Banking and Financial Services Firms | Press Release

As traditional revenue sources of interest income and fees face downward pressure, banks and financial services firms will be forced to focus on innovation in products and customer experience to drive growth.

Pandemic-fueled demand shock, sustained low interest rates, and significant geopolitical shifts made 2020 a tough year for the Banking and Financial Services (BFS) industry. However, Everest Group reports that even as credit losses mounted and operating income fell, banks continued to invest in IT with the knowledge that it will be a major source of differentiation in the post-pandemic economy.

Everest Group research indicates the BFS industry will increase IT investments in the coming year. In general, large banks have indicated that they will increase their technology spending by 1-2% in 2021, despite a sharp decline in their revenue and operating income in 2020. Some, including JPMC, Bank of America and Citi, have indicated that they will increase spending by 3-4% in 2021. In addition, regional banks, credit unions and non-banking financial companies (NBFCs) have indicated that digital spend is poised to increase in 2021 to 2022.

These findings are shared in Everest Group’s recently released State of the Market Report, “Healthy Rebound in BFS IT Services Spend – Growth Themes and Cautions.” In this report, Everest Group discusses strategies that BFS enterprises have adopted to counter challenges, especially in the wake of COVID-19; how banks and financial services firms are accelerating recovery and executing cost and efficiency transformations; and the IT investments that will help banks navigate to recovery and drive future success.

IT Spend Areas for BFS in 2021
Everest Group’s prognosis for 2021 is that BFS firms will increase their digital spend to build an agile, intelligent, cloud-enabled, and composable IT operating model on their road to recovery. Digital imperatives will include:

  • Reinventing the IT operating model: Banks have questioned the underlying assumptions of their IT operating model and are open to redesigning all aspects of their future of work and operations. Building resilient IT infrastructure that supports this journey is a critical spend area.
  • Bridging the talent divide: Talent deficit has impacted the availability of deployable resources in a cost-effective model, hence BFS firms are redoing their global workforce planning to tap into the extended talent ecosystem and also improve workplace diversity.
  • Consolidating to survive: Mergers and acquisitions in BFS will reshape the competitive landscape and trigger large-scale transformation programs with a short-term increase in consulting spend and long-term synergy in overall IT estate.
  • Going all-in on the cloud: More than 70% of incremental IT spend will go towards cloud or cloud-enablement services. BFS firms are exploring how to move sensitive data and applications to cloud in a journey to unlock value, build data-driven operations, and exit legacy IT infrastructure.
  • Embracing open banking 2.0: Open banking presents an opportunity to reinvent products and channels—both business-to-business (B2B) and business-to-consumer (B2C)—by using APIs and working with ecosystem partners.
  • Pivoting from continuous modernization to continuous simplification: BFS firms are wary of added complexity from each modernization initiative, especially a series of RPA-based investments. BFS firms are now looking at building domain solutions that wrap around complex technology and extract data and services to simplify the digital operations. This philosophy of digital pragmatism of solving specific domain issues to make IT and operations simple, efficient, effective, and aligned is driving the modernization spend.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. 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/

Sourcing Service Providers Report Uptick in Q42020 Revenue and Margins | Press Release

Everyone likes to end the regular season with a win. According to Everest Group, the global outsourcing industry managed to eke out a few scores to close out a year dampened by the COVID-19 pandemic.

Although overall transaction activity (i.e., number of deals signed) decreased slightly from 438 in Q3 2020 to 422 in Q4, the total reported annual contract value (ACV) of outsourcing transactions increased from US$2.5 billion in Q3 to $2.8 billion during the final quarter of the year. In addition, service providers reported improved financials as the impact of COVID-19 continued to diminish. A majority of the providers reported a sequential rise in their revenue as well as improved margins.

Digital services continued to dominate transaction activity and experienced a slight increase in Q4 2020, rising to 56% of all outsourcing transactions from 54% in Q3. Cloud remained the most prevalent digital component of outsourcing deals (53%), with advanced automation (19%)—including artificial intelligence (AI), machine learning (ML) and cognitive technologies—edging out Robotic Process Automation (RPA) and analytics, 13% and 12% respectively.

These findings and more are shared in Everest Group’s Market Vista: Q12021 report. The Market Vista™ report highlights the key trends and developments in the fast-evolving global offshoring and outsourcing market. The study captures the key developments across outsourcing transaction trends, health of Global Business Services (GBS) centers, location risks and opportunities, and service provider developments.

Highlights from the Market Vista: Q1 2021 Report

  • As enterprises are trying to rationalize and consolidate their IT portfolios, the market is witnessing an increase in the number of mega deals, thereby causing an increase in the overall Total Contract Value (TCV) for deals. (Everest Group defines mega deals as those with TCV greater than US$50 million.)
  • Mergers and acquisitions (M&A) and alliances activity witnessed a significant rise in Q4 2020. Among M&As, cloud, advanced automation and analytics led the list of key digital focus areas, in that order. Since analytics has become relatively mature, companies are now focusing more on advanced automation than analytics.
  • New setups and expansions of GBS centers in Q4 2020 (58) remained in line with those of the previous quarter (59).
  • North America continued to dominate GBS activity in onshore locations and accounted for 46% of the total new center setups, followed by Western Europe, accounting for 42% of total new setups.
  • Nearshore and Eastern Europe witnessed growth in activity both in terms of new GBS center setups and surge in number of deals, primarily led by the Banking, Financial Services and Insurance (BFSI) vertical.
  • Technology & communication remained the most active sector in offshore/nearshore locations and accounted for 44% of the total GBS center setups in Q4 2020. GBS activity in the manufacturing sector increased substantially to 10 new setups in Q4 2020, up from six in Q3.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. 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/

Insurers, Hit Hard by Pandemic, Turn to IT to Drive Recovery | Press Release

Insurers are reorienting their IT operating models to reduce costs and unlock efficiencies and also weaponizing technology to simplify and improve consumer experience; however, digital talent is in short supply

The coronavirus pandemic has dealt a hard blow to the insurance industry, and the economic outlook for the near term is still uncertain. In addition to facing revenue and profitability declines, insurers must now deliver compelling online experiences to sustain and grow their customer base. According to Everest Group, IT investment maturity is playing a crucial role in insurers’ recovery strategies, particularly as they battle to reduce costs and digitally innovate at the same time.

First, to achieve cost savings and resiliency, insurers are taking a defensive stance, reevaluating key levers of their IT operating model. Everest Group has identified the five most prominent approaches insurers are using:

  • Selling non-core technology assets
  • Increasing IT outsourcing
  • Balancing offshoring levels
  • Consolidating the IT supplier portfolio
  • Scaling agile methodologies across the organization

Secondly, to create competitive advantage and gain market share, insurers are seeking digital innovation from their internal IT teams and their sourcing providers. Adoption of cloud, platforms, and digital solutions may enable recovery and future success; however, the workforce to guide those efforts is in short supply. Everest Group research indicates the unmet demand for digital talent is as high as 25%.

“The digital talent gap is a significant challenge in the insurance industry,” said Ronak Doshi, vice president, Information Technology Services, at Everest Group. “Twenty-eight percent of the workforce in the insurance industry is nearing retirement, taking with them valuable institutional knowledge that can be lost if not passed along to younger employees. But only 4% of millennials are interested in working in insurance technology roles because of the negative perception they have about the industry being slow to adopt technology and having an antiquated culture. To attract the type of digital talent needed to build a more profitable future, insurers must make themselves appealing by offering disruptive work, robust training, attractive employee propositions, and agile and collaborate ways of working.”

Everest Group examines each of these areas in more detail in its recently published report, “Insurance IT Services – State of the Market 2021: Future-readying Insurance Business Through Continuous Digital Unraveling.”

Summary of Key Findings:

  • The quest for cost transformation and resiliency continues for insurance enterprises as the coronavirus pandemic slowly abates, prompting insurers to trim their technology asset portfolio and focus on strategic competencies.
  • Insurance enterprises are reevaluating their entire IT operating model and sourcing strategy to drive higher outsourcing activity, finely balance their sourcing location footprint, and consolidate their IT supplier portfolio.
  • While adopting Agile principles and a customer-first culture remains a key priority for insurers, the focus is now shifting to scaled Agile developments across insurance enterprises and digitizing their IT operating model.
  • Insurance enterprises are staying away from touching their core systems and are instead investing in optimizing service interactions to transform experience management. The focus for insurers is moving from continuous modernization to continuous simplification.
  • Insurers are weaponizing technology to drive growth and differentiation. Investments in composable technology platforms, value chain-specific solutions, and nurturing digital talent are the top insurer priorities in the near term.

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

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. 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/

HR Outsourcing Market on the Rebound as Enterprises Seek to ‘Future Proof’ Operations | Press Release

Buyers of MPHRO now list ‘access to better technology’, ‘employee experience,’ and ‘better insights and analytics’ among the most important drivers of their outsourcing decisions.

Despite short-term disruptions in 2020 due to COVID-19, the Multi-Process Human Resources Outsourcing (MPHRO) market is expected to grow at a steady rate of 5-7% over 2020-22, primarily driven by organizations attempting to future-proof their HR operations. According to Everest Group, enterprises need to focus on speed, agility, resiliency and digital enablement in their HR processes in order to achieve a future-ready state and safeguard the HR function against crises in the future.

The top digital levers used to enhance the HR function include:

  • Automation and AI solutions, which reduce dependency on manual interventions, increasing agility and resiliency.
  • Data and analytics technologies, which bring greater visibility and transparency into organizational data and strengthen decision making
  • Employee experience components, which enable faster remote working and improved efficiency.

“Digital will have a vital role to play in helping enterprise HR functions prepare for the ‘next normal,’” said Anil Vijayan, vice president at Everest Group. “As we have seen during the COVID-19 pandemic, a good digital infrastructure enables organizations to reduce dependency on manual interventions and more quickly transition to new working modes, when necessary. As evidenced by the rise in digital adoption seen in recent outsourcing deals, enterprises are taking this lesson from the pandemic to heart, and we expect digital adoption to accelerate even further.”

The infusion of technology in the HR function has been increasing over several years, but it is expected to become a necessity rather than an option for all stakeholders in the future. Buyers of MPHRO now list “access to better technology”, “employee experience,” and “better insights and analytics” among the most important drivers of their outsourcing decisions. For this reason, Everest Group projects that the role of HR service providers will evolve even further toward that of strategic partner, as service providers respond to the demand for technology solutions.

These findings and more are shared in Everest Group’s Multi-process Human Resources Outsourcing (MPHRO) State of the Market Report. This report provides comprehensive coverage of the 2020 MPHRO services market and analyzes it across various dimensions such as market overview, buyer adoption trends, solution trends, and service provider landscape.

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

MPHRO Market Highlights:

  • North America is the most mature geography by MPHRO adoption, followed by Europe-UK and Asia Pacific. APAC is expected to become a hotbed for HR transformation due to COVID-19 impact.
  • Financial services and manufacturing constitute a major share of the MPHRO market; healthcare and life sciences underwent significant growth and are expected to grow further despite COVID-19 impact.
  • There has been a marked increase in the inclusion of talent management processes as buyers look toward taking an end-to-end approach to their MPHRO deals.
  • Output-based pricing continues to be the most popular pricing model; Input-based pricing is also being used in some emerging markets and in first-generation contracts.
  • The top four providers (Alight, Accenture, ADP, and IBM) contributed more than 40% of the market share in terms of annual contract value (ACV).
  • Leading providers experienced strong traction from the more mature markets; in emerging markets, local players featured more prominently.
  • ADP has significant presence across the top four industry segments for MPHRO; TCS has the highest number of deals in the retail industry segment.

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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