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Service provders

Internet of Things Services Market Will Double by 2020 | Press Release

By | Press Releases

Accenture, Atos, HCL Technologies and IBM are named Leaders in Everest Group inaugural PEAK Matrix™ list of top Internet of Things service providers

Given the huge potential of the Internet of Things (IoT)—most of which is yet to be realized—enterprises are making significant investments in partnership with key service providers to explore new growth areas. As a result, Everest Group expects that the IoT services market will more than double in the next three years, reaching US$18 billion by 2020.

Enterprises are exploring ways that IoT can be used to achieve higher efficiency, enable data-driven decision-making and develop new revenue opportunities through customer-centric products and services.

**Read more about how enterprises are “Seizing the IoT Opportunity”**

With enterprises and service providers considering IoT as their next big opportunity, Everest Group has identified intriguing trends that are emerging from the current adoption pattern:

  • Eighty-seven percent of enterprises are optimistic about the returns on their investments in IoT.
  • The percentage of IoT projects moving from pilot to production has jumped four-fold from 2014 to 2016.
  • All industries are gearing up for IoT adoption, with manufacturing leading the way with 36 percent of IoT adoption across all industries.
  • Developing a strong partner ecosystem is extremely complex and requires disruptive vision.

“Enterprises are increasingly adopting IoT to improve operational efficiency and create disruptive business models,” said Chirajeet Sengupta, vice president at Everest Group. “A number of players across the IoT stack are making huge investments to grab a larger share of the pie, but most fall short on expectations of a transformation partner. Service providers can use this opportunity to draw on their engineering and services expertise and embrace new engagement models to help enterprises with long-term innovation.”

The current use cases of IoT are dominated by the need of enterprises to drive operational efficiency. However, we do expect enterprises to leverage IoT to fundamentally transform their business going forward. In fact, Everest Group has identified four distinct classifications of enterprises based upon the business objectives they hope to accomplish through their IoT initiatives:

  1. Engagers: Engagers represent 17 percent of IoT adopters; these enterprises drive IoT adoption largely for customer engagement and creation of experiences.
  2. Optimizers: Optimizers (63 percent) adopt IoT mainly to solve operational issues and improve internal efficiencies.
  3. Integrators: For Integrators (14 percent), the objective of IoT adoption is growth for the entire enterprise ecosystem.
  4. Innovators: IoT adoption by Innovators (6 percent) results in transformative disruption and “unthinkable” business models.

“Enterprises should adopt IoT across all categories, which will lead to new revenue streams and adoption of new business models,” added Sengupta.

Announcing the IoT Services Market Leaders

In its inaugural Internet of Things PEAK Matrix assessment, Everest Group explores the vision, services suite, scale of operations and domain investments of 16 IoT service providers. Everest Group has identified the following Leaders, Major Contenders and Aspirants:

  • Leaders: Accenture, Atos, HCL Technologies and IBM
  • Major Contenders: Cognizant, EPAM, HPE, L&T Infotech, NTT DATA, TCS, Tech Mahindra and Wipro.
  • Aspirants: CGI, Infosys, Luxoft and Prodapt

***Download Complimentary 4-page PEAK Matrix™ Preview Here***

Trends in the IoT services market as well as detailed insights into each of the 16 providers listed above are provided in the 92-page report, “Internet of Things Services — PEAK Matrix™ Assessment and Market Trends — IoT: Bigger Than the Hype.”  A preview report is available for complimentary download here.

*** Download Publication-Quality Graphics ***

High-resolution graphics illustrating key takeaways from this report can be included in news coverage, with attribution to Everest Group. Graphics include:

  • Internet of Things Adoption is Led by “Optimizers”
  • The Internet of Things Technology and Services Provider Ecosystem
  • Internet of Things Adoption Trends
  • Internet of Things and the Transformation Agenda
  • Internet of Things Adoption: A Definitional Framework

About the PEAK Matrix™

The Everest Group PEAK Matrix is a proprietary framework for assessing the relative market success and overall capability of service providers based on Performance, Experiences, Ability and Knowledge. Each service provider is comparatively assessed on two dimensions: market success and delivery capabilities. The resulting matrix categorizes service providers as Leaders, Major Contenders, and Aspirants. Companies that demonstrate strong upward movement in successive reports are recognized as Star Performers. Everest Group recently announced a recalibrated methodology, in which innovation, intellectual property and technology take center stage.

Life & Pensions Insurance BPO Market Expected to Grow 10-12 Percent as Political Climates Stabilize | Press Release

By | Press Releases

‘Outsourcing is one of the most effective options L&P insurers are pursuing to make their operations cost effective.’

The global life and pensions (L&P) insurance business process outsourcing (BPO) market will grow at 10-12 percent in the next few years, reaching US$2.3 billion by 2017, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing. As political environments in the US and United Kingdom stabilize, new contract signings are expected to experience revival. Also, contracts worth approximately US$450 million will be up for renewal over the next three years.

Amid political uncertainties in the United States (due to the presidential election) and the United Kingdom (due to Brexit), the year 2015 witnessed a lower number of new contract signings compared to 2014; nevertheless, the market continued to expand steadily, driven by scope expansion of existing contracts.

In the future, evolving buyer demands will shape the market as buyers seek more efficient operations—both for cost control and compliance reasons—and more sophisticated digital services for consumers. In response, service providers will differentiate themselves by offering efficient platforms for policy administration, strengthening capabilities around digital customer acquisition, and leveraging robotic process automation (RPA). (Everest Group reports that RPA can yield incremental cost reduction that can range anywhere from 15 percent for offshore operations to as high as 45 percent for onshore operations.)

“Outsourcing is one of the most effective options L&P insurers are pursuing to make their operations cost effective,” said Skand Bhargava, practice director, Business Process Services, at Everest Group. “Outsourcing also helps insurers strengthen their presence in the digital space in order to meet the demands of the modern-day consumer.

“Buyers are looking for one-stop solutions, so service providers with the capabilities to offer end-to-end coverage of the value chain will gain momentum. In addition, buyers are looking beyond just the bottom-line impact and are focusing on top-line performance. Service providers that can help buyers improve their top-line and act as business-transformation partners will remain differentiated in the market.”

These results and other findings are explored in a recently published Everest Group report: L&P Insurance BPO – Annual Report 2016: Breaking New Grounds.”

This research examines the global non-voice, third-party L&P insurance BPO market. It provides detailed analysis of market size and growth, solution characteristics, emerging trends and the service provider landscape.

Other key findings in the report:

  • North America and the United Kingdom continue to be key geographies in the L&P insurance BPO market, with the majority of growth coming from the North American region.
  • Increasing adoption of automation, along with higher adoption of platform-based solutions within L&P insurance contracts, is reducing the FTE-intensive play in rule-based processes such as policy servicing.
  • Providers are strengthening capabilities around value-added services such as RPA, digitalization and analytics via organic and inorganic routes.
  • Regulators across the globe have been enacting a spate of laws, thereby causing a massive upheaval in the insurance sector. Insurance companies need help in setting up the systems required to support compliance with these regulations, which creates an opportunity for insurance BPO providers.
  • Adoption of outsourcing continues to increase among small- and mid-sized buyers, driven by two key reasons: (1) small- and mid-sized buyers typically lack technology platforms for L&P insurance operations, and (2) small- and mid-sized buyers seek cost-effective solutions for running operations in order to remain competitive in the market.
  • Small- and mid-sized buyers now account for more than half of the contractual activity in the L&P insurance BPO market, both by the number of contract signed and by the average contract value (ACV) of signed contracts.
  • Policy servicing and reporting continues to account for the bulk of processes managed by service providers. Claims process remains the second most dominant portion.

Recruitment Process Outsourcing Market Remains Hot, Posting 17 Percent Growth Rate in 2015 | Press Release

By | Press Releases

New deal activity tops 18 percent growth as service providers from all backgrounds, diverse regions taste success in highly competitive, fragmented RPO market.

The global Recruitment Process Outsourcing (RPO) market continued to remain one of the fastest growing single-process HRO markets. Buoyed by a resurgence of growth in the North American market, RPO posted a strong growth rate of 17 percent in 2015 over 2014 and touched the US$2.4 billion mark. A majority of the global growth is attributed to new deal activity, which grew at a rate of more than 18 percent year on year.

From a regional perspective, the United States, United Kingdom and Australia are the relatively more mature and bigger RPO markets, and they account for a large chunk of the global deal activity. Nonetheless, many countries in different regions across the world are emerging as strong RPO markets on their own, particularly in Latin America, Continental Europe and Asia Pacific.

“Across the globe, the key challenge in today’s recruitment landscape is the need to find and engage the required talent, especially for high-skilled roles, and buyers are expecting greater proactiveness and innovation from service providers in that regard,” said Arkadev Basak, practice director, Business Process Services, at Everest Group. “Providers are responding to this opportunity by developing niche areas of expertise, adding talent advisory capabilities, and improving their internal efficiencies, by leveraging technology, providing targeted training, and addressing division of labor fundamentals.”

Over 40 percent of RPO deals are bundled with a technology capability. In particular, many service providers are making dedicated investments in developing bundled RPO offerings that include advanced analytic services.

“Service providers are using technology as a productivity lever as well,” adds Ranjan. “For example, we are beginning to see providers adopting Robotic Process Automation to improve efficiency and save on costs, and we expect RPA adoption to rise rapidly in the future.”

These and other research findings are explored in a recently published Everest Group report: Recruitment Process Outsourcing (RPO) Annual Report 2016 – Opportunities Abound in a Buoyant Market.

This report provides comprehensive coverage of the RPO market across dimensions such as market overview, key business drivers, buyer adoption trends, solution and transaction trends, emerging themes and areas of investment, and service provider landscape.

Other key findings in the report:

  • Single-country RPO accounts for a majority of the deal activity. Interest in Multi-Country RPO (MCRPO) engagements is high; however, the size and scope of such deals is witnessing a downward trend. In fact, very few incidents of global mega-sized deals were witnessed of late.
  • Emerging RPO markets, such as India, China, Poland, and Colombia, which were mostly included as part of multi-country deals earlier, are now increasingly witnessing greater single-country deal activity, characterizing the growing maturity of RPO in these markets
  • While cost reduction is an important RPO driver, operational scalability and flexibility is what most buyers, especially the large ones, seek from an RPO engagement.
  • With growing maturity of the RPO market, inclusion of value-added services, such as employer branding, talent communities, workforce planning, etc., has almost become table-stakes in RPO, especially among second- and third-generation buyers
  • Service providers are increasingly offering separate, more targeted offerings around niche areas such as veterans, diversity hiring and outplacement. Not only does this trend help address buyer needs better, it also provides differentiation for the service provider
  • Almost all major RPO service providers are investing in developing talent advisory capabilities. Such services bulk up the value proposition of existing RPO offerings, especially among the first-time buyers, and can also act as potential door openers for new business opportunities

The RPO market continues to remain intensely competitive and fragmented. Providers from all backgrounds (including staffing, broader BPO, and pure-play RPO) have tasted success in this fast-growing market

Surge in Onshoring Shapes Global Sourcing Market | Press Release

By | Press Releases

Despite macroeconomic uncertainties and reduced investor confidence, global sourcing industry witnesses stable growth in 2016

The global sourcing industry has experienced a surge in setup activity in onshore locations, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing. The proportion of onshore versus offshore delivery centers jumped from 45 percent in 2014 to 52 percent for the period of 2015-H1 2016.

Onshore setup activity increased among the top 20 service providers, with North America’s share surpassing 2012 levels after experiencing significant declines in 2013 and 2014 due to a global slowdown. North America is the most favored onshore location followed by Continental Europe.

According to Everest Group, the factors contributing to this rise in onshoring include:

  • a need for a deeper talent pool to support complex services,
  • the desire for easier coordination and better alignment/training with clients,
  • new data security regulations
  • tier-2 onshore locations gaining credibility for service delivery.

Overall, the global services market grew at a rate of 8-10 percent in 2015, reaching US$161-166 billion, a slight slowdown compared to the 9-11 percent growth rate of 2014.

“We expect that the global services market growth will be lower in 2016—likely 7-9 percent—due to the overall macroeconomic slowdown, currency fluctuations and volatility in equity and investment markets,” said Anurag Srivastava, vice president and director of the Global Sourcing practice at Everest Group. “Political instability associated with Brexit in the United Kingdom and the Trump presidency in the United States will continue to affect the growth rate as well.”

Global technology spending remained flat in 2015, a statistic that obscures the impact that new technologies are having on the industry.

“Going forward, countries such as India are expected to witness a slowdown in the growth of IT services exports, although digital services will continue to grow at a fast pace,” added Srivastava. “Analytics will be one of the key contributors of growth in the BPS segment; conversely, adoption of technologies such as automation will result in a decline in contract sizes and revenue growth.”

These findings and more are discussed in Everest Group’s recently published report “Global Locations Annual Report 2016: Persistent Growth in Uncertain Times.” This research offers insights into the size and growth of the global services market, global services exports by regions and country, an update of locations activity by region and country, and trends affecting global locations (changes in investment environment and exposure to various risks). It also provides industry-leading comparison and analysis of key changes in maturity, arbitrage and potential of global delivery locations through Everest Group’s unique MAP Matrix™ analysis.

Other Key Findings

  • Asia-Pacific (APAC) share of market has been consistently declining since 2012 but continues to constitute more than 60 percent of the share of the global services FTEs. India and the Philippines account for more than 90 percent of the share in the APAC region. APAC also holds the largest share (more than 70 percent) of the global services market in terms of revenue.
  • India and the Philippines retained their leadership status in the global services market, continuing to hold more than one-third of the share in new delivery center setups globally.
  • Nearshore Europe witnessed strong growth in activity during the period of 2015-H1 2016, emerging as the second largest region after Asia Pacific, with the majority of new center activity in Poland, Ireland and Romania.
  • New center setup activity increased in 2015, surpassing pre-2013 levels and reaching a new high since 2011.
  • All locations witnessed a decrease in GIC activity during the period of 2015-H1 2016. In total, global in-house center (GIC) setups continue to outnumber service provider setups. In terms of percentage share, service provider setups exceeded GIC setups for the first time during H1 2016 since dropping below in 2013.
  • Among all regions, Nearshore Europe witnessed the largest increase in new center setups in 2015 compared to 2014.

Everest Group’s New IT Service Provider of the Year Awards 2016 | Sherpas in Blue Shirts

By | Blog

Everest Group is proud to release the first edition of its annual PEAK Matrix Service Provider of the Year™ awards for IT Services 2016.

Before you turn a blind eye to another set of service provider awards in a market already flooded with matrices, quadrants, and other such convoluted shapes…these are special recognitions of a small handful of providers that are unique stand-outs.

2015 was a seminal year for our IT services PEAK Matrix™ evaluation program. Under the aegis of four key ITS practices – Banking, Financial Services & Insurance (BFSI), Healthcare & Life Sciences (HLS), Application & Digital Services (ADS), and Cloud & Infrastructure Services (CIS) – we published a whopping 26 PEAK Matrix evaluations, featuring double click views on capabilities and market success across practice sub-segments.

While we appropriately recognized performance in individual segments, what started to unravel was a picture of consistency by a few service providers that was hard for us to ignore. Hence, while there indeed are Leaders and Star Performers for each of the segments we evaluated, the composite picture clearly shows that some deliver consistent leadership and top performance across many different categories.

As today’s enterprises navigate the complex landscape of next-generation and legacy technology, a global business footprint, and a complex vendor portfolio, the PEAK Matrix Service Provider of the Year awards will help them to identify the best of the best – service providers with strong broad-based capabilities and successful service strategies that align well with the evolving enterprise IT demand.

The award categories are:

  • ITS Top 20: We arrived at this list using a consolidated score reflecting points received on individual evaluations based on tiered scores for Star Performer, Leader, Major Contender, and Aspirant positions.
  • Individual awards categories: These awards are based on the count of Leader or Star Performer positions across the category evaluated
    • Leader Of The Year
      • IT Services (Overall)
      • HLS
      • BFSI
      • ADS
      • CIS
    • Star Performer Of The Year
      • IT Services (Overall)
      • HLS
      • BFSI

Here’s a PEAK peek at the top five on the ITS Top 20 leader board.

Top_5_PM_SP_oftheyear_award_2016

 

See the complete list of winners.

Have you had experience with one or more of these providers? Our readers would love to hear your views about them!