IT services companies are looking to boost the number of senior executives who can sell their services to a growing number of clients who are assigning such work to in-house units based in India.
“The GIC marketplace is expanding rapidly and requires third-party support as it digests this growth. It is fair to say that the do-it-yourself movement is taking work away from the third-party providers as a whole, but as this work shifts, it is creating opportunities within GICs for those service providers which are willing to go after it,” Peter Bendor Samuel, CEO of consultancy Everest Research, told ET.
Research Vice President Abhishek Singh will be a speaker at Becker’s Hospital Review Health IT + Clinical Leadership held on September 19-22 in Chicago. Abhishek will speak on the growing importance of blockchain technology on September 22 during Track F of the Blockchain Summit portion of the event.
Join the brightest minds in Health IT and the Revenue Cycle – great networking – learn more in 48 hours than you can all year! This exclusive conference brings together hospital and health system CIO and IT executives to discuss the Role of the CIO, Social Media, Data Analytics, Blockchain, Mobile Health, EMR Issues and Health IT Issues.
Come listen and network with Hospital Executives as speakers discuss their biggest concerns and how they are addressing them.
September 19-22, 2018
Abhishek Singh, Research Vice President, Everest Group
In the last few years, enterprise preference for IT service delivery has shifted subtly toward in-house delivery. While IT support remains predominantly outsourced, share of delivery from Global In-house Centers (GICs, or shared services centers) has risen steadily.
Global services in South Africa – headcount, services, and key companies
The Indian tech industry is headed to a big shakeout with a couple of major mergers and acquisitions expected in 18-36 months. It could mean tier 2, 3, 4 or 5 firms exploring merger with peer or giving in to M&A invitations from external player.
Thus the leader board of Indian IT may look different in the near future as the next couple of years will flesh out a new set of league players in the business, say global analysts who track the space.
Few M&As are likely as domestic tech players are constantly forced to evaluate the size and scale needed to compete in new markets and in new technologies. The dual forces of industry consolidation and new emerging digital market will end status quo and remake the industry. Thus, the entire pecking order of IT Indian may change, they say.
According to Peter Bendor-Samuel, CEO of US-based Everest Group, clear signs of consolidation are discernible in the global markets. The latest example of it is Atos acquisition of Syntel.
The newer IT contracts involving higher levels of automation and New-Age digital components like cloud, analytics, and artificial intelligence, often get service providers better prices, but they also come with more stringent liability clauses.
This is because the work either impacts the front-end operations of clients, and hence the overall business — or they are aligned to delivering specific outcomes. Traditional IT contracts were based on the time-&-material model, under which clients simply paid for the number of hours spent on delivering a project.
Rahul Barwe, a senior analyst with IT research firm Everest Group, says a global consumer goods company’s outsourced robotic process automation (RPA) solution malfunctioned. “It took six months for the base product to be updated and fixed. The company could not recoup the lost opportunity costs from the service provider because such a scenario was not adequately incorporated into the contract terms and conditions,” he says.
For the longest time, US was the largest as well as the most dominant market for the $150-billion software services industry. While it still contributes to two-thirds of the sector’s revenues, over the past few quarters, it is countries in Europe – especially in Continental Europe – that are bringing the maximum growth, defying the concerns around Brexit. Under a lot of pressure, US – especially in the banking and financial services (BFSI) industry –growth rates have reduced to low, single digits for top IT companies.
Meanwhile, Europe – traditionally considered shy of outsourcing (except for UK) – is growing at a much faster pace. The percentage share of revenues contributed by the US has also been steadily coming down.
In the case of Infosys, the number is down from 61.5% to 60.6% during the same period, while for Wipro, it has fallen from 54.8% to 53.6%. Peter Bendor-Samuel, the CEO of market consultancy firm Everest Group, said the EU economy has lagged the US and is now accelerating.
Research Managing Partner Eric Simonson will be a key speaker at this year’s International IT-BPM Summit hosted in the Philippines. Eric will present and lead a panel discussion on the evolution of the future of work given the growing need for new digital labor skillsets.
The 9th International IT-BPM Summit will play host to discussions on current industry trends, issues, forecasts, with a particular focus on the upcoming Artificial Intelligence headwind. It will bring together analyst firms, thought leaders and industry stalwarts to discuss the future of enterprises, jobs and technology.
With all the talk on the looming threat of AI and automation and its potential impact to the sector, the IIS puts the spotlight on the secret sauce of the Philippines’ continuing success in the industry: the Filipino workforce. For Filipinos, it’s hardwired in our DNA to be emotive, creative, tech-savvy, and service-oriented – striking the perfect balance to complement the technological advances of the future. The Filipinos are the human touch in the age of digital transformation, future-proofed for the coming impact of technology.
November 7, 2017
Eric Simonson, Managing Partner, Everest Group
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Enterprises realized value in IT shared services organizations for the past three decades. Over the past two years, I’ve delved into the nuances of capturing the promise of digital transformation. As I think about the impact of digital transformation on shared services, it becomes clear that shared services are in for substantial changes.
I blogged before about SaaS and SaaS-like products driving the collapse of the IT technology stack (server, operating system, middleware, applications, etc.). For those of you who have not read or can’t remember what I wrote, the following is a quick recap. Much of the innovation in technology over the last few years has been aimed at integrating and automating the IT stack. For example, SaaS combines the infrastructure middle layer of the database and applications layer into a single consumable product. In doing this, it automates and integrates many otherwise automatous components, resulting in lower TCO and tighter alignment with business functions. It may be less clear that this same collapsing IT stack will inevitably set in motion other significant changes in both the enterprise IT organization and it business model.
Enterprises created IT shared services organizations to centralize IT functions, professionalize services and sell high-quality services back to the enterprise at lower prices. The concept worked well improving the reliability and performance of IT, lowering unit cost of IT components and creating a professional team of technology experts for the wider organization to rely on. These enterprise IT functions naturally aligned around the technologies they supported broadly organized by infrastructure, middle ware, application maintained, application development, security, project management and so forth. Each functional team organizes around creating high quality functional services which are then resold to the broader organization. All of this makes a great deal of sense until we consider the collapsing stack which now integrates and automates much of what the functional teams currently do.