Global Offshore Services Market Snapshot | Market Insights™
June 30, 2016
Global services market, 2010-15, and distribution of global services market by sourcing model, 2015
Global services market, 2010-15, and distribution of global services market by sourcing model, 2015
Second event in “On Point | Summit Series 2016” to feature Rod Bourgeois of DeepDive Equity Research; topics will include sourcing models, next-generation IT, and contracting for business outcomes.
The global outsourcing industry has matured into a slower growth pattern, but strategic outsourcing solutions can still add dramatically more and different value to organizations. Discovering the keys to unlocking this outsourcing value will be the focus of the day as enterprise sourcing executives and senior leaders gather in New York City on July 21 at the On Point Summit to network and share insights on optimizing their global sourcing strategies.
The half-day summit—hosted by Everest Group and themed “Succeeding in Outsourcing 4.0: Imperatives for Strategic Sourcing Executives”—is a forum designed for enterprise attendees to learn from each other and featured industry experts and leading practitioners.
Special guest speaker, Rod Bourgeois, head of research and consulting at DeepDive Equity Research, will present, “What are the Winning Models? An Investor’s View.”
“We launched the ‘On Point | Summit Series 2016’ because our clients and others in the industry wanted a safe forum where they could exchange ideas with peers and engage with us in person,” said Eric Simonson, managing partner – research at Everest Group. “Based on feedback from our first event, our format of intimate interaction with peers, an opportunity to hear provocative thought leaders, and a chance to have detailed discussions with us on key issues is exactly what these business leaders are looking for. The takeaways from the event offer an excellent ROI on the time invested.”
The July 21 agenda will feature a panel of leading outsourcing practitioners who will engage participants in a lively discussion about incorporating next-generation capabilities into outsourcing solutions. Other highlights will include “Bring Your Own Topic” (BYOT) roundtable discussions and insights on contracting for business outcomes, offered by Everest Group.
Everest Group hosts for the event include Simonson; Jimit Arora, partner and leader of IT services – research; and Sarthak Brahma, vice president, pricing assurance – research.
This is the second installment of Everest Group’s by-invitation-only “On Point | Summit Series 2016.” The first event, held in May, focused on emerging technology and talent trends in the banking, financial services and insurance industry. Guests enjoyed active dialogue with peers, insights from Everest Group research analysts, and a presentation by guest speaker, Chitra Dorai, IBM fellow and CTO of cognitive services, who shared her thoughts on “Cognitive Computing for Process Re-imagination in Financial Services.”
The third event in the “On Point | Summit Series 2016” will be held in October. Everest Group recently announced that, due to popular demand, the “On Point | Summit Series” will be extended with a full slate of events in 2017.
***Learn more and request to attend the July 21 event in the “On Point | Summit Series 2016” here. (Enterprise companies only; no service providers.)
Webinar identifies “talent hotspots”– locations well positioned to lead in the delivery of digital services
Global outsourcing demand exceeded industry expectations in Q1 2016, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing. Most service providers reported sequential growth in revenue, and transaction activity increased significantly, with more new deals reported in Q1 than in any of the previous eight quarters.
Growth in the IT outsourcing market was a key contributor to the outsourcing industry’s strong performance in Q1, with banking, financial services and insurance (BFSI) and manufacturing, distribution and retail (MDR) verticals leading the way. Service delivery automation, an ongoing trend among service providers, is helping replace a substantial amount of human yields, resulting in significant cost savings for enterprises.
Everest Group presented these and other highlights of the global services market in Q1 2016 in a one-hour live webinar on May 12. The webinar, “Key Insight on Digital Service Delivery ‘Talent Hotspots’ PLUS Market Vista™ Q1 2016 Update,” featured Everest Group experts offering insights on the delivery locations that are positioned to become the “talent hotspots” for the delivery of digital services.
“Service delivery automation continues to shape the industry, and we are beginning to see a clear demarcation of leading providers who have witnessed significantly greater impact on the revenue, cost and productivity,” said Salil Dani, vice president at Everest Group. “Best-in-class providers are reporting some remarkable milestones, such as a 24 percent reduction in net headcount addition, cost savings between US$100 to $300 million annually, and up to 50 percent improvement in productivity due to automation.”
Other Key Takeaways
CIOs need to check for “outsourcing bloat.”
Many companies in mature, offshore, FTE-based outsourcing environments experience substantial bloat. From our knowledge of our clients’ situations and our research for companies seeking objective data to help them determine the return on investment in outsourcing, it’s clear that many companies today are paying too much for the resources. And they’re blissfully unaware of the outsourcing bloat — which means that they are paying for 30 percent or more of FTEs than they need. Moreover, they don’t have visibility into what could be done to rationalize the bloat. This is a significant problem.
The outsourcing bloat grows in two dimensions: (1) paying for too many FTEs and (2) paying too much per FTE. The problem has an even bigger impact when you consider that outsourced FTEs will cheerfully respond to system problems, but not address the underlying issues which cause them. Our observation is companies that have fixed underlying systemic problems are operating with 30 to 40 percent fewer FTEs.
The nature of the global services industry is shifting as the market matures, and new and disruptive technologies are introduced
Wednesday, January 20, 2016 | 10 a.m. CST, 11 a.m. EST, 4 p.m. GMT, 8:30 p.m. IST
Register for the webinar
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Cecilia Edwards, Partner, Everest Group, will be a guest expert speaker on this Dell Services hosted webinar.
The current global business environment requires a fundamentally different applications services model than your organization may currently be using. However, both the structure of traditional services models and the vested interest of most vendors to maintain those models can impede your transition to a new, better model.
During the interactive webinar, speakers will discuss a bold new, future-ready approach for delivering application services: transformational outsourcing. You’ll learn how the three key tenets of our transformational outsourcing approach — optimize costs, simplify business and innovate technology — can help redefine the future of your organization’s application services.
Outsourcing vs. insourcing vs. hybrid sourcing? This decision tree will help you find the best fit
United States Domestic Sourcing Delivery Center Location Tiers
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