Everest Group BPS Top 50™: Service Providers’ Market Share by Region | Market Insights™
While North America-based service providers continue to dominate the list, the region’s overall share has declined versus 2014, while APAC’s share has grown
While North America-based service providers continue to dominate the list, the region’s overall share has declined versus 2014, while APAC’s share has grown
25% of the IOT start-ups analyzed had been acquired by larger players between 2013 and 2017; they share these key characteristics
Share of global IT services market by region:
On 31 January 2017, Australia-based Ascender and NGA Human Resources announced that Ascender had acquired NGA’s Australia and New Zealand business. Part of the agreement is a partnership between the two companies to deliver payroll and HR services solutions for the ANZ region, ensuring a seamless solution for NGA HR’s global payroll and HR clients. The deal makes Ascender one of the largest HR and Payroll providers in the ANZ and APAC region.
What are the implications of the deal?
For NGA:
For Ascender:
Of course, as with any deal of this type, there are numerous things those in the region should watch out for.
First, NGA and Ascender will be looking to forge a partnership in a way that is beneficial to both parties beyond the immediate operational need. The scope and extent of this new partnership will evolve and take shape as the dust settles. It remains to be seen what form it will take, especially in light of Ascender’s recent entry into the Europe-based Payroll Services Alliance, wherein eight major payroll service companies have bundled their services into a unified offering that consists of strong local expertise and services, supplemented by coordination and integration at an international level.
As far as technology is concerned, with NGA’s PS Enterprise and Preceda HCM platforms coming into Ascender’s fold as part of the acquisition, Ascender will likely seek to integrate the different system capabilities under one brand over time. As with a lot of private equity-backed acquisitions, since the focus will be on improving margins, we are likely to see more investment in consolidating and improving technology, driving automation, and increasing self-service functionality.
Although the APAC market continues to experience relatively high growth rates – 7-9% in single country payroll outsourcing and 23-25% in MCPO – the region is fairly complex, and each country requires a distinct strategy to ensure sustainable growth. For instance, while India requires a heavily price-sensitive services sales approach, a technology-driven approach works better in Australia.
With the APAC region requiring a great deal of management attention and local presence to drive continued success, global providers’ APAC arms tend to be private equity acquisition targets. Indeed, while Western economy-based global players don’t necessarily have the focus to negotiate the uniqueness of the APAC region’s HR services and payroll requirements, private equity can certainly help bring that focus to the table. For example, Ascender is backed by a private equity-led consortium, and just two years ago, private equity firm Everstone Capital bought out Aon Hewitt’s APAC business, (renamed Excelity Global).
While not all will be private equity-driven, we do anticipate more acquisitions and consolidation in this space in the APAC region as the market matures, particularly in geographic markets that are fragmented, with no clear leader in sight.
Although Asia Pac maintains the majority share of new center setups, its share has declined as other regions have grown
Asia Pacific continues to lead in global new delivery center set-ups
India and the Philippines hold the lion’s share of the global services market
Asia Pacific holds the dominant global services market share, but it is declining; Nearshore Europe and Latin America / Caribbean continue to grow
In the current day and age, we have moved into the “Talent Era,” where human capital is a top priority for organisations across the globe. With the fast-changing global economic landscape, wherein the emerging economies of Asia Pacific (APAC), such as China and India, are moving towards global economic supremacy, it is only natural that their talent needs are on the rise. This has consequently led to a steep demand for talent acquisition and talent management-related services in APAC.
The concept of recruitment process outsourcing (RPO) and managed service provider (MSP) programmes is picking up pace in these markets. Historically pioneered by West-headquartered organisations that had a presence in APAC, the RPO and MSP markets have reached a tipping point where many locally headquartered buyers have started embracing these solutions.
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