Outsourcing Archives - Page 4 Of 15

Improved Business Sentiment Drives 11% Jump in US Outsourcing Deals in Q1, According to Everest Group Findings | Press Release

May 31, 2018

Cloud, automation and analytics lead in digital-focused outsourcing deals, which dominate outsourcing activity with a 65 percent share.

North America witnessed a significant increase in outsourcing transaction activity in Q1 2018 as compared to 4Q 2017, with 115 deals recorded as compared to 103, respectively, according to Everest Group. This increase can be attributed to an improved business sentiment in the U.S. as well as an increase in outsourcing demand across healthcare and manufacturing verticals.

For the first time, the number of new centers supporting digital skills surpassed new centers supporting only traditional services. Among global services transactions overall, digital services continued to dominate the outsourcing activity in Q1, similar to the previous quarter. The share of digital-focused transactions increased from 61 percent in Q4 2017 to 65 percent in Q1 2018 vis-à-vis the pure traditional services, which showed a decline in adoption over the past quarter.

Among all outsourcing transactions, 50 percent included cloud, 21 percent included automation, 14 percent included analytics, 13 percent included mobility, 7 percent included cyber-security and 30 percent included some other form of digital service, such as social media, Internet of Things (IoT) or blockchain.

Other key global services market trends noted for the quarter include the following:

Global in-house center (GIC) expansions are at a seven-year high, as mature GICs added next-generation technologies (especially big data analytics, cloud and IoT capabilities) in their service delivery.
The industry saw a secular increase in the number of new centers supporting R&D/engineering services, driven by the need for innovation and customer-centricity.
Service providers are actively looking for partnerships with startups (as opposed to acquisitions) to leverage them for niche capabilities.

These findings and more are discussed in Everest Group’s recently released report, released Market Vista™: Q2 2018. The report discusses outsourcing transaction trends, GIC-related developments, global offshoring dynamics, location risks and opportunities, and key service provider developments.

“Outsourcing activity remained steady in Q1 as compared to the previous quarter, with a growth in information technology outsourcing as well as increases in several verticals, including retail and consumer product goods, technology and communication, and healthcare,” said H. Karthik, partner at Everest Group. “New GIC setups, which reached an all-time high in Q4 2017, declined slightly, but GIC expansions are at a seven-year high. All-in-all, Q1 was a good quarter for service providers—both global as well as offshore-heritage service providers—with most reporting sequential growth in revenue and an increase in operating margins.”

Complimentary Webinar Offers Q1 Review Plus Bonus Topic—“War for Talent: Impact on Talent Acquisition Strategies”

Everest Group hosted a webinar on May 22—Webinar Deck: Q2 2018 Market Vista™ Update and Implications on Talent Acquisition with Intensifying War on Talent—in which the findings of the “Market Vista: Q2 2018” report were reviewed. During this 45-minute webinar, Everest Group experts discussed the most impactful events in the global services industry thus far in 2018 and looked ahead to how these events likely will shape the rest of the year.

The webinar also addressed talent acquisition strategies, including the factors impacting talent models and the resulting implications and imperatives for employers. The impact of automation on transactional jobs and the redesign of the employee value proposition to reach a predominantly millennial workforce are two of the key topics covered in the discussion.

*** Watch the Webinar Replay *** (The webinar slide deck also is available for complimentary download with registration.)

11 outsourcing myths debunked | In the News

March 29, 2018

Even as CIOs enter their third generation of IT services deals, misconceptions persist about the practice of IT outsourcing. Worse, new illusions have begun to emerge as outsourcing approaches have evolved. Achieving desired outcomes when working with third-party providers depends on clear-eyed understanding of what’s possible and what’s not, what responsibilities remain with the buyer and what new capabilities are required, what’s changed about outsourcing models and what remains the same.

CIO.com talked to IT outsourcing experts who work with IT buyers and vendors to help bust some of the most common myths around outsourcing today — and to aid IT leaders in setting up their outsourcing engagements for success.

Myth: The old ways still rule

Third-generation outsourcers may think they know everything there is to know about structuring engagements for success, but the reality is that the fundamentals of value creation from outsourcing have changed significantly. Consumption-based pricing is replacing fixed-price models. Contracts designed for efficiency and cost reduction have given way to deals aligned to business outcomes and growth.

“The fundamental mindset needed to succeed is very different, and a contract written for efficiency does not align with a contract that needs to drive growth,” says Jimit Arora, partner in Everest Group’s IT services research practice.

IAOP’s Outsourcing World Summit® 2018 — February 18-21 | Event

January 2, 2018

Everest Group is once again exhibiting at The IAOP Outsourcing World Summit 2018, IAOP’s annual global gathering. The event is taking place at the Renaissance Orlando in Orlando, Florida, February 18-21, 2018.

Chief Research Guru Michel Janssen will lead an Educational Partner session titled Achieving the Best-of-the-Best RPA Results: Learn What It Takes. The session will be held on Tuesday, February 20 from 4:00 p.m. – 4:45 p.m. Michel will also be joined by Peter Quinn, Former Managing Director of Automation for SEI Investments, who will share his success stories and lessons learned with RPA.

About the presentation: Human nature makes us want to know what the best are thinking about doing. However, while interesting, these findings do little to help move our own organizations forward in the use of RPA. In this session, you’ll get an exclusive preview of just released Everest Group research that details the capabilities the most successful organizations – Pinnacle Enterprises™ – have leveraged and the RPA journey they have taken to realized superior business outcomes. This analysis is based on research that directly compares and correlates business outcomes with the capabilities required to achieve those results. You’ll walk away armed with the comparative information you need to start designing a roadmap to be competitive today – and in the future.

Also at OWS18, Eric Simonson, Managing Partner, Everest Group, will present an overview of the outsourcing industry, setting the stage for the Voice of the Customer session on the morning of Monday, February 19.

In addition, Partner Cecilia Edwards will participate in the breakfast panel discussion on Tuesday, Februarty 20 titled Strong Teams and Alliances Make Strong Organizations. The session is designed help attendees understand how to best support each other in the workplace, get the work done, and maintain a culture of safety and support for every employee. Attendees will leave with ideas for how to check themselves, be a voice for others, and strengthen teams through clear communication.

Additionally, Cecilia will participate on the panel Diversity is Great, Inclusion is Greater #weinclude on Tuesday evening. The session will discuss and define the concepts of diversty and inclusion separately and why the combination of both will create an enviable culture.

If you’re attending IAOP OWS18, plan to stop by booth #58, to talk with our analysts, consultants, and executives. We’ll also have a professional photographer at our booth who will take complimentary headshots for anyone who would like an updated corporate or LinkedIn photo.

To set up a meeting with us before, during, or after the conference, please contact Research Senior Vice President, Alan Wolfe.

Peoplestrong Altify HR 2018 — Jan 19 | Event

January 1, 2018

Research Practice Director Arkadev Basak will be a key speaker at Peoplestrong’s Altify HR 2018 event in Gurgaon, India.

About the event
AltifyHR is the place to experience the next in the world of work. Join in for an exciting day where you can meet HR Tech enthusiasts, learn how to overcome business challenges, and engage with the latest technologies at one of its kind experience zone. With exciting keynote sessions, analyst interactions, and live demos, we can certainly assure that you’ll be touched with the power of a connected world and will leave with more than just new connections on LinkedIn.

When
January 19, 2018

Where
The Oberoi
Gurgaon, India

Speaker
Arkadev Basak, Practice Director, Everest Group

Learn more and register

Sourcing Professionals Have a Tough Job | Sherpas in Blue Shirts

November 13, 2017

If you are a sourcing professional, you have our deepest respect, because now, more than ever, your job is a tough one. The sourcing industry is changing fast, disrupted by emerging technologies, shifting talent requirements and evolving service provider capabilities. Moreover, fluctuating geopolitical and legislative issues are causing enterprises to rethink substantial, long-held sourcing strategies and provider relationships. Sourcing professionals face formidable challenges in the global economy as the new year approaches and they look for better strategies in an industry experiencing unparalleled turbulence.

Technology is Changing the Game

It used to be that a sourcing professional’s No. 1 responsibility was finding a way to get the work done as cheaply as possible. Not any more. Technology has changed the game. In nearly every industry, digital technologies are driving the development of innovative products and services and improved customer experiences. To keep pace in this digital world, enterprises are now pursuing a digital-first rather than arbitrage-first strategy. In fact, the global services market has seen a threefold increase in digital-focused deals.

Automation, once merely a service delivery tool, is now “front end,” with enterprises demanding strategy, vision and strong Proof-of-Concepts (POCs) for advanced automation in 33 percent of all application services contracts in 2016. Similarly, artificial intelligence, cognitive computing and robotics will soon begin to pervade the enterprise portfolio and will eventually become mainstream in sourcing landscape.

Talent Requirements Are Shifting

The increasing adoption of digital strategies is changing the workforce skills that enterprises seek, and, in turn, forcing sourcing professionals to revamp their location portfolios in the midst of a dynamic landscape. Location options for traditional global sourcing continue to expand, and new locations are emerging for unique talent demands, such as digital capabilities.

Geopolitical Disruption Adds Complexity

Sourcing professionals also must anticipate and react to numerous geopolitical disruptions that keep the sourcing landscape shifting like windblown sand. In the past year, for example, we have seen a significant decrease in demand from the United Kingdom given the uncertainty with Brexit; uncertainty about healthcare legislation in the US has dampened the healthcare sourcing market; and the uncertainty due to visa reforms has led to increased local hiring and onshoring in the U.S.

The Provider Landscape is Constantly Changing

Sourcing professionals also are challenged to stay abreast of changes in the provider landscape. Mergers and acquisitions are on the rise, and leading providers are making fundamental changes to their talent and service delivery models. Between April of 2016 and March of this year, Everest Group witnessed 40 acquisitions to expand digital capabilities, 140 alliances between providers and technology providers or startups, and the setup of 35 new centers and digital pods to help clients rethink their digital strategies.

Data for Sound Decision-Making

In the midst of this complexity, buyers of global services are tasked with making critical decisions. Recompeting an outsourcing contract, selecting a location for a global in-house center, or contracting for new tech services—these are the types of decisions that can significantly impact an organization’s performance and an executive’s career.

That’s why Everest Group has announced that it is doubling down on its commitment to provide fact-based comparative assessments. We’re consolidating our comparative analysis offerings – previously offered under a variety of product names – under our flagship PEAK Matrix brand, which will now evaluate services, solutions, products and locations. Additionally, we’ll be expanding the market segments addressed to include new functions, processes and industry verticals. Read more about it here.

In the midst of all the complexity and change that sourcing professionals face, one thing remains the same: Everest Group is your source for the fact-based analyses you need to make informed decisions that deliver high-impact results.

What is outsourcing? Definitions, best practices, challenges and advice | In the News

November 7, 2017

Outsourcing is a business practice in which services or job functions are farmed out to a third party. In information technology, an outsourcing initiative with a technology provider can involve a range of operations, from the entirety of the IT function to discrete, easily defined components, such as disaster recovery, network services, software development or QA testing.

The term outsourcing is often used interchangeably — and incorrectly — with offshoring, usually by those in a heated debate. But offshoring (or, more accurately, offshore outsourcing) is a subset of outsourcing wherein a company outsources services to a third party in a country other than the one in which the client company is based, typically to take advantage of lower labor costs. This subject continues to be charged politically because unlike domestic outsourcing, in which employees often have the opportunity to keep their jobs and transfer to the outsourcer, offshore outsourcing is more likely to result in layoffs.

In recent years, IT service providers have begun increasing investments in IT delivery centers in the U.S. with North American locations accounting for more the a third of new delivery sites (29 out of a total of 76) established by service providers in 2016, according to a report from Everest Group, an IT and business sourcing consultancy and research firm. Demand for digital transformation–related technologies specifically is driving interest in certain metropolitan areas. Offshore outsourcing providers have also increased their hiring of U.S. IT professionals to gird against potential increased restrictions on the H-1B visas they use to bring offshore workers to the U.S. to work on client sites.

CX and the Philippines: An Evolving Value Proposition | Sherpas in Blue Shirts

October 4, 2017

For the last several years, the Philippines’ value proposition as the leading contact center delivery location has been availability of a large workforce with good language skills and high empathy, at very competitive costs. But to remain the top contact center destination, it will need to evolve its value proposition from customer service delivery to CX delivery.

This is because CX has emerged as a top priority for firms to build a loyal customer base in today’s digital age in which end-consumers are seeking a seamless, quality, personalized experience across channels. To support clients in this quest to deliver a superior customer experience, the contact center industry is transforming from an arbitrage-first to experience-first model. Everest Group research shows that the key to delivering the CX of the future is optimizing a blend of talent and technology.

The primary technology enablers

Fortify analytics solutions – Contact centers are blessed with access to a wealth of high-quality data. Customer analytics can help them provide personalized services and real-time support for query resolutions. Operational analytics will allow them to monitor processes, predict future demand, and optimize service elements to achieve the best outcomes.
Embrace automation solutions – The first step is using self-service offerings to manage simple queries, followed by leveraging rule-based chatbots and smart IVRs to manage high-volume transactional tasks for maximum automation impact on contact center operations.
Focus on delivering omni-channel experience – Delivering a consistent, seamless customer experience requires an integrated view of the customer across all channels. With a more case-driven approach, each interaction that the customer has with the organization feels like part of an ongoing conversation and relationship.

The key talent enablers

While technology advancement will help prepare the groundwork for CX delivery, talent enablers are equally important to ensure a smooth transition:

Build the right talent strategy – As contact centers adopt technology on a wider scale, the role their agents play will evolve to focus more on domain and technology expertise. Thus, recruitment and training programs must align to identifying new talent with the right skills, and strengthening existing agent capabilities and knowledge.
Rationalize KPIs/metrics – To measure agent performance, contact centers will have to establish metrics and KPIs that focus on digital enablement, business outcomes, and impact on the customer experience.

If you’re currently associated with a contact center in the Philippines, or are considering outsourcing contact center operations to the Philippines, we invite you to join us at the Contact Center Association of the Philippines’ annual conference at Shangri-la’s Boracay Resort & Spa, Boracay Island, Philippines on October 11 and 12. The Contact Islands conference, at which my colleagues Karthik H and Katrina Menzigian will be featured speakers, will focus on the evolving nature of CX, and how the Philippines is matching the pace of the global industry-wide disruption.

Outsourcing To India Is A Suitable Option For Another 3 Decades: Study | In the News

October 3, 2017

India’s position as a labor arbitrage market may continue for another “25-35 years”, said IT consultancy Everest Group. However, it is unlikely that earlier offshored work would be back to its home market, it added.

“There is no doubt that India is still a highly attractive and viable option for low-cost labor, albeit not quite as good as it was 15 years ago, but still very compelling, and it will likely remain so for another three decades,” said Michel Janssen, Chief Researcher at Everest. “We move out our estimate for the end of the India labor arbitrage to beyond the 2040-50 time horizon.” Indian IT firms have put it that they have shifted from a model based purely on labor arbitrage and have been hiring in bulk onshore.

Changing Landscape of Global Outsourcing | Webinar

September 26, 2017

Tuesday, September 26, 2017 | 9:30 a.m. CDT

Everest Group’s H. Karthik, Partner, will be a featured speaker at the Bloomberg Professional BI Analyst Briefing webinar: Changing Landscape of Global Outsourcing.

Topics discussed during the webinar will include:

Impact of digital disruption on global services
Industry forecast and growth outlook
Increased investments by offshore IT services companies in high-cost countries
Robotic process automation and its impact on growth and profitability in the industry

Join this session to learn about the changing landscape of Global Sourcing and how it will impact the offshore IT services industry.

In Digital, What was Context Now Becomes Core | Sherpas in Blue Shirts

June 21, 2017

I don’t know about your company’s situation; but having looked at literally hundreds of outsourcing contracts, I see that they all have something in common. The original intent was a one-time shift to transform and improve an operational aspect. Unfortunately, IT outsourcing contracts sort of poured concrete around the outsourced processes. Thus, the quest for operational excellence through outsourcing IT has the effect of stopping companies from changing. That’s a non-starter in the digital world.

When companies begin to rotate from legacy environments into digital technologies and digital business models, it’s not long before they realize they must fundamentally rethink their assumptions around the old ways of doing things. In those old assumptions, outsourcing IT infrastructure, development and maintenance and other IT functions made sense. The assumption was those functions were not core competencies, so the company should outsource to get efficiencies of scale and price points through leveraging the outsourcer’s core expertise. That assumption was usually right; the company transformed from Point A to Point B and achieved a one-time shift in improving operations.

Don’t miss the premier conference for GBS, sourcing, and tech leaders. Reserve your spot for Everest Group Engage!

Tag: outsourcing