Digital Pinnacle GICs™ – different from the start
Digital Pinnacle GICs™ – different from the start
Six high-impact differentiators for Pinnacle GICs™
The best-performing, or Pinnacle, GICs differentiate from others in six distinct ways
Pinnacle GICs™ leverage digital to differentiate: Pinnacle GICs™ have developed differentiated capabilities through digital initiatives
Pinnacle GICs™ significantly exceed other GICs in three key impact areas
Everest Group predicts enterprises will express preference for GICs and make significant shifts in their locations strategies in the year ahead.
Although 2018 will see a modest increase in demand for global services overall, some leading service providers in select segments will experience a double-digit surge in revenues this year, according to Everest Group. Labor-arbitrage focused service providers will continue to create a drag on the market; however, digital-focused service providers will more than offset that, especially in key segments such as engineering services, business process outsourcing (BPO), and consulting and systems integration.
“Throughout 2017, outsourcing transaction activity was driven by an increased adoption of digital services, and this trend will continue in 2018 as more enterprises move beyond exploration and pilot projects to large-scale digital implementations,” said Salil Dani, vice president, Global Sourcing, at Everest Group. “The industry is ready to act: enterprises have undertaken copious research and testing, service providers have invested in acquiring the digital capabilities needed, and the market is being lifted by availability of funding, cheap capital, tax cuts in the United States, and low interest rates.”
Global In-house Center (GIC) setup activity was at an all-time high in 2017, and Everest Group predicts that the Do-It-Yourself, in-house model will become even more popular in 2018, with small and mid-sized enterprises driving Global In-house Center (GIC) setup activity.
Moreover, large enterprise outsourcing adopters will begin to undertake significant, long-term shifts in their location strategies, including the following:
These findings and more are discussed in Everest Group’s recently published report, “Market Vista™: 2017 Year in Review and Outlook for 2018.” This annual report covers the key forces and metrics defining the global sourcing market, including trends in outsourcing, digital adoption, and Global In-house Centers (GICs), as well as insights into location activity in offshore and nearshore geographies. The report also reviews 25 leading service providers on their annual performance, capability enhancements, merger and acquisition landscape, and other key events.
In the beginning of the digital revolution, GICs were primarily used as hotspots for analytic services. But in their quest to deliver more value-added services to the parent organization, many are accelerating their ability to serve as strategic innovation partners by significantly expanding their portfolio of digital-focused activity. In fact, our most recent Market VistaTM report showed that digital activity in new setups and expansions jumped 900 basis points between Q4 2016 and Q4 2017.
Like most organizations dipping their toe into the digital pool for the first time, GICs initially focused on automating processes through technologies such as Robotic Process Automation (RPA). However, in last couple of years, they have also started leveraging Artificial Intelligence (AI) to improve in areas such as customer experience, operational efficiency, risk management, and development of digital products and services for the market. After realizing the benefits of RPA and AI, some of the mature GICs are also now testing the waters for cognitive computing.
Here is a sampling of the digital use cases coming out of today’s GICs:
Of course, changes and challenges abound in the rapidly evolving digital environment. Here are several that will impact GICs in 2018.
There’s no question that GICs have the ability to drive the digital agenda for their enterprises. To gain a deep-dive understanding of how they’re doing so today, and what they plan to do in the near future, Everest Group is conducting an online survey. This first-ever assessment will be based on our proprietary Pinnacle ModelTM, which identifies what the best performers are doing to achieve strategic business objectives and deliver increased value. We invite you to participate in this survey.
GICs leaders are confident about upskilling/reskilling for future needs, but challenges remain
Skills such as intuition & innovation, design thinking, pattern recognition, leadership, and problem solving are likely to become highly critical to GICs for service delivery in the future
The reason for the widening skills-gap include:
Relative to 2015, GICs have increased the scale/scope of digital services and focus on talent models and innovation, but still have opportunity to improve in other areas
Everest Group’s predictions for BFSI GIC’s* digital future