Tag: BPS

Everest Group Unveils Fourth Annual Business Process Services Top 50 | Press Release

ADP remains No. 1, Teleperformance leaps two spots to No. 2 and Accenture retains No. 3 ranking among world’s largest third-party BPS providers

Everest Group, a consulting and research firm focused on strategic IT, business services, and sourcing, today released the fourth annual edition of “The Everest Group BPS Top 50™,” a ranking of the world’s largest third-party providers of business process services (BPS). The list was launched in 2015 as the first of its kind for the global industry, which today is valued at more than US$175 billion.

This year’s ranking is based on both revenues (75 percent of the composite score used for ranking) and year-on-year growth, whereas the previous years’ rankings were based solely on revenues. Growth has two sub-parameters: absolute growth (measured as change in BPS revenue in US$ million, and accounting for 12.5 percent of the composite score) and percentage growth (measured as percentage change in BPS revenue, and accounting for the final 12.5 percent of the composite score).

Everest Group estimates there are more than 200 service providers with more than US$50 million in revenues offering BPS services around the globe. What started as a cost optimization concept focusing on “non-core” and “back-office” business processes today permeates the entire business process value chain, addressing a wide variety of business objectives.

“The industry has attracted many service providers from a broad range of backgrounds and heritages,” said Rajesh Ranjan, partner at Everest Group. “As digital forces create a new paradigm of value creation and service delivery, we are seeing a widening gap among providers in their capabilities and market success. By incorporating growth as an additional factor, we are making sure that the ranking reflects this. We also expect both the list and the rankings within to see greater volatility in coming years as this industry experiences accelerated change.”

This list helps enterprises to identify the scaled-up providers and their functional coverage. It helps BPS service providers to compare themselves against others in the industry.

***Download a complimentary copy of the 2018 Everest Group BPS Top 50 list and analysis.***

Topping the 2018 list of BPS providers are these 10 leaders:

  1. ADP
  2. Teleperformance
  3. Accenture
  4. Conduent
  5. Paychex
  6. Concentrix
  7. DXC Technology
  8. Xerox
  9. Arvato Bertelsmann
  10. Genpact

Other highlights:

  • The cumulative revenue of the providers in the BPS Top 50 list grew by 7 percent year-on-year.
  • The highest growth rate for the past two years was logged by Alorica at 95 to 105 percent and was achieved largely through acquisitions in 2015 and 2016. Cognizant logged the second fastest growth rate at 22 to 25 percent and achieved this largely through organic growth.
  • North America-based service providers continue to dominate the list; however, the region’s overall share has declined versus 2016 (54 percent share versus 56 percent), while the Rest of Europe’s share has grown (up from 14 percent in 2016 to 22 percent in 2017).

Top 3 North American Providers:

  • ADP
  • Conduent
  • Xerox

Top 3 “Rest of Europe” Providers (excludes UK providers):

  • Accenture
  • Teleperformance
  • Arvato Bertelsmann

Top 3 APAC Providers:

  • TCS
  • Transcosmos
  • Relia
  • For the first time in three years, the number of specialist service providers increased their share of market as compared to broad-based service providers, driven by increases in the Contact Center Outsourcing (CCO) submarket. Broad-based providers now represent 56 percent of the market whereas specialists represent 44 percent. The top 5 broad-based providers are:
    • Conduent
    • Accenture
    • DXC Technology
    • Arvato Bertelsmann
    • Capita
  • Among the specialist providers, the following ranked highest in their respective specialty area:

Human Resource Outsourcing:

  1. ADP
  2. Paychex
  3. Fidelity

Contact Center Outsourcing:

  1. Teleperformance
  2. Convergys
  3. Alorica

Document Management:

  1. Xerox
  2. Williams Lea Tag
  3. Iron Mountain

***Video: Watch “The Everest Group BPS Top 50 2018.***

Adoption of Service Delivery Automation in Business Process Services Grows More Than 80%—Everest Group | Press Release

BPS spending impacted by SDA can skyrocket to $10B by 2019 but will require a few kinks to be addressed.

The promise of next-generation benefits is powering explosive growth in the adoption of Business Process Service Delivery Automation (BPSDA), according to Everest Group, which reports that the number of BPS clients with SDA deployments rose by more than 80 percent year-on-year. SDA includes both Robotic Process Automation (RPA) and Artificial Intelligence (AI).

This growth in SDA is being driven not only by traditional drivers, such as efficiency and accuracy, but also by new-age drivers such as the need for enhanced customer experience.

“Increasingly, SDA is being used to enhance customer experience through much shorter response times for handling requests, round-the-clock availability, embedded intelligence, and reduced need to manually bridge gaps in technology,” said Rajesh Ranjan, partner at Everest Group.

However, although many more enterprises are adopting SDA, it is still rather nascent in the Business Process Services market today, says Ranjan. “Contrary to general belief, our data shows that the penetration and scale per BPSDA deployment is still quite low. One of the challenges is the mismatch between buyers’ expectations and reality, partly due to some inaccurate communication from service providers and automation vendors. However, the intrinsic benefits of SDA solutions, especially when combined with other digital components, the rising maturity of adopters and increasing sophistication of providers, suggest these issues will be addressed soon.”

As evidence of this low maturity of SDA, Everest Group points to the relatively meager amount of BPS spending on business processes where RPA has been applied. This amount is estimated to be US$700-800 million in 2016, or 2 percent of the addressable market, but it is expected to skyrocket in the future, reaching US$10 billion by 2019.

Another indicator that enterprises are barely scratching the surface of BPSDA’s potential is that a majority of current deployments (85 percent) involve Robotic Process Automation (RPA) only. Automation based on Artificial Intelligence (AI) is far away from widespread adoption.

These findings and more are discussed in Everest Group’s newly published report, “Business Process Services Delivery Automation (BPSDA)—State of the Market Report— 2017.”  This report provides an in-depth view of the state of the BPSDA industry, offering a market overview, solution characteristics, an analysis of the service provider landscape, and recommendations for buyers and service providers on how to prepare for the future.

Other key findings:

  • Finance and Accounting (F&A) and contact center emerged as the leading areas of application of SDA in BPS, followed by banking and insurance. The banking, financial services and insurance (BFSI) industry accounts for the majority of the clients with BPSDA deployments.
  • Customer satisfaction with BPSDA is rather low, primarily because there is a mismatch between buyer expectations and reality. Also, many providers and buyers look at SDA in isolation and lose sight of the bigger benefits of digital transformation powered by not only SDA but also other digital levers such as cloud and analytics.
  • Encouraging signs abound in the market. Awareness of SDA benefits is increasing, investments in advanced AI-based automation are rising, and recognition of the utility of models such as automation-as-a-service is growing.
  • SDA is likely to significantly impact the BPS industry in the near- to medium-term along five dimensions – service provider revenue and margin; pricing model; shoring model; talent model; and contract composition.
  • In the face of this disruption, enterprises should adopt a set of best practices to ensure success with BPSDA. Service providers must develop robust strategies to ride the wave of BPSDA disruption and back those strategies with smart investments.

***A complimentary 13-page abstract of the report is available for download here.*** (Registration required.)

Stand back – you’re about to get splashed! The impact of digital on global services | In the News

Everywhere you turn today (ok, everywhere in the global services industry) you’ll hear talk of digital. And for good reason – if labor arbitrage had a rock-in-the-pond impact, digital could be a boulder. Which technologies are likely to have the greatest impact? And what do organizations have to do to maximize the benefits of digital for business outcomes?

Read more in Intelligent Sourcing

Impact of Digital on the Future of Business Process Services (BPS) Industry – What, Where, and How? | Webinar

Tuesday, October 10th, 7:30 PM IST, 3 PM BST, 10 AM EDT, 9 AM CDT

Download Presentation Slides

Digital has emerged as the biggest disruptive force challenging existing business models and shaping the new ones. The BPS industry is no exception. However, most studies in this space have taken an overarching view rather than unraveling the specifics in terms of clearly identifying various digital components and their maturity, and quantifying their likely impact on BPS segments individually and collectively.

During this one-hour webinar we will focus on:

  • “The WHAT”: What digital technology levers are most critical for the BPS industry and will that change in the future?
  • “The WHERE”: Which segments of BPS industry will be most impacted in the next few years and why?
  • “The HOW”: How deep will be the impact in terms of future market size and growth?
  • Implications of these changes on your business and sourcing model

Presenters:

Michel Janssen, Chief Research Guru – Everest Group
Rajesh Ranjan, Partner – Everest Group

Who should attend?

  • Service providers: CEOs, CXOs, BPO strategy heads, head of outsourcing, IT/BPO department heads, senior pre-sales and sales executives, and solution teams and leaders
  • Buyers: BPS/BPO relationship owners and sponsors, procurement managers, global sourcing mangers, vendor managers, and GIC/shared service leaders

Is Big Bad? Two Sides of the Coin for Scaled-up BPS Providers in the Digital-First World | Sherpas in Blue Shirts

One of my favorite quotes is “Disruption doesn’t discriminate.” And you’d have to be living under a rock if you hadn’t noticed the fundamental shifts taking place in the global services market due to digital disruption. We know that digital disruption is generally chaotic. It shakes up the existing business models, (likely destroys them), and paves the path for new ones. And it creates a set of opportunities not apparent earlier, while eliminating those we took for granted.

In general, big incumbents find it difficult to change, (change is hard, really hard when you are large – just ask prehistoric dinosaurs!), thus creating opportunities for smaller, nimbler ones that embrace it. Is this the case in the Business Process Services (BPS, also called BPO) market as well? Are the large incumbents necessarily in the disadvantageous position? The answer is actually more nuanced. Here are two big themes that highlight two very different sides of the coin:

  • Curse of Incumbency The rise of automation (especially RPA) is creating the biggest challenge for incumbents in their existing business model. Everest Group research shows that on a like-to-like basis, buyers are expecting the price per unit of work delivered in transactional BPS to reduce by at least 25-30 percent. If the incumbent shows reluctance, buyers are not hesitant to move the work to others. To put things in perspective, it means a USD $1 billion BPS company would see its base shrink by at least USD $100-120 million every year on an as-is base account basis (assuming an average five-year contract term, 40 percent of the portfolio will each year face pressure coming from renewal (20%) or a mid-term benchmarking (20%) situation). In reality, providers with the right approach and strategy will be able to mitigate this through scope expansion and new wins. Nonetheless, the pressure on an existing large book of business is tremendous.
  • Benefit of Data As I highlighted in a blog last year, scaled-up providers are sitting on a treasure trove of data that is ready to be exploited and monetized from a benchmarking and associated analytics perspective. Some of the providers have started to make the right moves here. The next frontier is leveraging it for artificial intelligence (AI). One of the big challenges of making AI tools enterprise-ready is helping them learn fast. Injecting the AI tool with variety, volume, and contextual data is key to making this happen. Large incumbent providers are uniquely positioned to exploit this opportunity. Combined with their deep domain expertise, this can act as a powerful differentiator, and help them create significant value for their client, and, in turn, for their own business.

Big is not bad. It is about identifying the digital disruption opportunities while managing the risks proactively. Speaking of size, my next blog will discuss what sized providers seem to be well positioned to exploit the opportunities created by digital disruptions. Stay tuned.

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