Service Provders Archives

Remote Work, Global Hiring Drive Explosive Growth in ‘Employer of Record’ Partnerships—Everest Group

February 21, 2023

Employers of Record (EORs) help enterprises hire and retain skilled talent in new countries or regions, use technology to provide a seamless experience to a globally distributed workforce.

DALLAS, February 21, 2023 — Everest Group research suggests that 71% of organizations want to improve their geographical footprint; however, global expansion can be a complex and lengthy process, with organizations needing to navigate new legal systems, regulations, taxes, cultures, languages and more. Enterprises are discovering that Employer of Record (EOR) arrangements can ease the burden of international expansion; accordingly, the EOR market swelled 170% in 2020 and 120% in 2022 and is expected to continue to grow at a compound annual growth rate of 40-50% through 2025 according to Everest Group.

An Employer of Record is a third-party organization that becomes the full legal employer of a company’s workforce and assumes all employee-related responsibilities in a particular country. With an EOR, enterprises can onboard and manage talent without needing to establish a new legal entity in a particular region or risk violating local laws. EOR offerings can span the entire employee administration value chain and include services such as onboarding, benefits provision and administration, time and expense management, and payroll. An EOR partnership is a better alternative to traditional outsourcing in that it offers higher accessibility and control over the employees, better transparency in employee practices, lowered complexity in end-to-end HR management, and shorter onboarding timelines.

“Two of the top benefits enterprises receive from EOR adoption is that they no longer have to deal with the complexity of setting up international entities nor worry about staying in compliance with local laws and regulations,” said Priyanka Mitra, vice president at Everest Group. “In addition to mitigating these risks, EOR partnerships deliver administrative cost and time savings, business continuity, and global mobility—all of which are now highly valued by enterprises striving to excel in a post-pandemic, next-normal business environment.

“Despite explosive growth in the EOR industry, it does have its fair share of challenges, not the least of which is the lack of awareness among buyers,” continued Mitra. “Large enterprise buyers are still gaining confidence in the model. Even those who are adopting the model often see it as a short-term solution, preferring to set up their own entities if they plan to remain in the territory for a long time. Other challenges include the recessionary headwinds that may slow down adoption and the ever-evolving regulations around remote work and dispersed workforces that add complexity to the space.”

Despite these challenges, EOR firms are investing significantly to enhance their technological capabilities to provide elevated stakeholder experiences and to bring efficiencies to various processes. For example, service providers interviewed by Everest Group have made investments in chatbots, advanced analytics, dynamic dashboards and benchmarking, and employee self-service and manager self-service tools. In addition, EOR firms are expanding payroll capabilities and services capabilities, such as recruitment, multi-language support, knowledge centers, and benefits offerings.

These findings and more are detailed in Everest Group’s recently published report, “Employer of Record (EOR) – State of the Market 2023.” This report offers an introduction to Employer of Record and an EOR market overview, including buyer adoption trends, the provider landscape, key investment themes and the outlook for 2022-2023.

Market Highlights

Adoption by buyer size: EOR solutions are largely adopted by small and midsized buyers, as they are primarily focused on expanding their employee size and tapping potential markets across regions.
Adoption by geography: North America remains a major adopter and has the highest contribution to the overall revenue of EOR providers, followed by Europe and Asia Pacific regions.
Adoption by industry: The services industry has the highest market share followed by the financial and healthcare industries.

Solution Provider Landscape

Based on Everest Group’s comprehensive evaluation framework, the PEAK Matrix^®, 15 leading EOR providers evaluated are segmented into three categories:

Leaders: Atlas, Deel, Globalization Partners, Safeguard Global, and Velocity Global
Major Contenders: BIPO, Mauve Group, Mercans, Neeyamo, Omnipresent, Oyster, Papaya Global, and Remote
Aspirants: Links International and Skuad

***Download a complimentary abstract of “Employer of Record (EOR) – State of the Market 2023.”***

About Everest Group
Everest Group is a leading research firm helping business leaders make confident decisions. We guide clients through today’s market challenges and strengthen their strategies by applying contextualized problem-solving to their unique situations. This drives maximized operational and financial performance and transformative experiences. Our deep expertise and tenacious research focused on technology, business processes, and engineering through the lenses of talent, sustainability, and sourcing delivers precise and action-oriented guidance. Find further details and in-depth content at www.everestgrp.com.

Customer Experience Management (CXM) Outsourcing Spiked 12-14% in 2021 as Enterprises Doubled Down on Delivering Digital Experiences to Customers—Everest Group

January 10, 2023

Everest Group says growth in CXM outsourcing will continue as enterprise seek to maximize customer retention in face of recessionary climate.

DALLAS, January 10, 2023 — Following pandemic shutdowns in 2020, the global outsourced customer experience management (CXM) market spiked in 2021, with the fastest year-on-year growth (12-14%) in recent history, according to Everest Group. Growth of the CXM outsourcing market, which currently stands at 31% of overall global CXM spend including in-house contact centers, outpaced GDP growth in all economies in 2021 after a decline in 2020.

Everest Group says the CXM outsourcing market will continue to grow, albeit at a more normalized rate (7-9%), despite the uncertainty presented by a looming recession. In fact, the recession will act as an indirect market driver; to compensate for low buying sentiment, enterprises will focus on customer service and retention, thereby spurring continued growth in CXM outsourcing over the next few years.

Additional growth drivers will include the following:

A considerable shift of contact center operations toward a hybrid delivery model, with greater emphasis on gig and work-at-home (WAH) workers to enhance delivery capabilities
The increasing use of conversational artificial intelligence (AI) and automation to decrease reliance on full-time equivalent (FTE) employees while delivering better CX outcomes
A foray of first-time outsourcers into the CXM market, especially driven by the small and midsize business (SMB) segment, which will continue to grow rapidly.

“The future of CXM service delivery will be defined by a combination of locations, technology and delivery models to create unique solutions that are flexible, scalable and tailored, based on each enterprise’s requirements,” said Shirley Hung, partner at Everest Group. “The service providers who are growing faster than the market average are those who offer end-to-end CXM solutions that include advanced digital tools, front- and back-office services, and advisory and consulting services to provide bespoke solutions tailored to their clients’ requirements.”

Everest Group also notes interesting geographic dynamics in the CXM market, including:

Numerous mergers and acquisitions primarily focused on expanding geographic presence.
Multiple new multilingual hubs emerging in the Eastern European region
The linguistically diverse ASEAN (Association of Southeast Asian Nations) region being considered for Asian language capabilities
Africa experiencing increasing demand from customers in the MEA (Middle East and Africa) region to provide quality CXM and from other enterprises who want to diversify their service delivery footprint by shifting work away from India and the Philippines.

These findings and more are detailed in Everest Group’s recently published report, “Capturing the Post-pandemic Resurgence: Customer Experience Management (CXM) State of the Market Report 2023.” In this report, Everest Group examines the CXM market in the wake of the pandemic, factors affecting market growth, and changes in service delivery models. The report also addresses differentiating factors for service providers, buyer satisfaction performance, key investment themes, major acquisitions, and future trends in the CXM market.

***Download a complimentary abstract of “Capturing the Post-pandemic Resurgence: Customer Experience Management (CXM) State of the Market Report 2023”***

Everest Group Survey Points to a Resilient Year for Outsourcing in 2023 as Global Enterprises Prioritize Cost Savings, Talent Management

January 5, 2023

Global leaders share their chief concerns and strategy adjustments for outsourcing in 2023 in Everest Group’s annual Key Issues survey.

DALLAS, January 5, 2023 — In the face of macroeconomic uncertainty, the majority of enterprises feel cautiously optimistic about 2023 and expect to tap outsourcing resources to control costs and meet the demand for talent, according to the results of Everest Group’s annual Key Issues survey. In fact, more than 80% of respondents expect their investments in outsourcing for IT services (ITS) and business process services (BPS) to stay the same or increase in 2023 over 2022, and more than 40% are optimistic about growth in their global services budgets in the coming year.

Everest Group’s 2023 Key Issues Study comprises the input of 200 global leaders across enterprises, Global Business Services (GBS) centers and service providers. Everest Group delivered the key findings from this research in a December 13 webinar, “Rise Above Economic Uncertainty and Succeed.” The webinar deck and recording are available for complimentary download.

Asked to rank their top-of-mind issues for 2023, enterprises cited “price and cost pressures” as number one this year, moving into the top position from second place last year. “Talent/skills shortage,” which held the number one spot in 2022, dropped to third. “Slowdown in demand,” which ranked tenth in 2022, has moved into the No. 4 position.

***Top of Mind Issues for Enterprises in 2023***

Price/cost pressures
Adapting to evolving customer needs and business models
Talent/skills shortage
Slowdown in demand
Slowdown in customer decision making

As a result of these concerns, enterprises have identified cost optimization, digital transformation, and productivity improvement as their top three priorities going into 2023.

In light of these results and its corporate body of research, Everest Group has forecast five trends for the new year:

A significant service provider portfolio rebalancing by enterprises is in the cards. The percentage of enterprises expecting to rebalance their workload across providers has increased from 25% last year to 36% heading into 2023. Those expecting to consolidate or rationalize the service provider portfolio in the next 12 months has increased from 20% last year to 34%.
The talent demand-supply mismatch will continue. Enterprises will shift their focus to internal talent management (upskilling and employee experience/engagement) as higher priorities than recruiting.
Service provider bill rates will increase, albeit slower than in 2022. To manage the impact of inflation, service providers will increase price/rate cards and optimize costs by employing automation and adjusting locations mix, scopes and roles.
The service delivery model will continue to evolve. Organizations will leverage alternative delivery strategies to optimize cost and gain access to talent. Examples include remote and hybrid workers, tier-2/3 locations, center setups in offshore-nearshore countries, and setup of small, satellite centers.
Pragmatic digital investments will be prioritized over moonshot investments. Proven investments such as cloud solutions, cybersecurity, analytics, advanced automation (AI, cognitive) and automation (RPA) will remain high priorities for enterprises in 2023. Other technologies (such as Internet of Things, UX/CX design, blockchain, mobility, edge computing, Web 3/metaverse, 5G/6G and extended reality/ AR/VR) will receive relatively lower focus.

During the webinar, Everest Group experts recommended ways organizations can address this new reality, including strategies for pricing, sourcing, ESG, and potential technology solutions.

“Our advice to enterprises is not to obsess about the uncertainty of their external environment but instead focus on creating the agility to respond with speed as the situation unfolds,” said Rajesh Ranjan, partner at Everest Group. “This will require them to strategically leverage global services, human capital, technology initiatives, and delivery models to not only address the upcoming challenges but position the organization to capture upsides as we come out of it. Put another way, don’t miss the forest for the trees.”

***Additional Resources Available from Everest Group***

Global Services Market Update: Emerging Location Opportunities to Combat the Economic Slowdown | On-demand Webinar
2023 Predictions For Tech and Services Demand | Blog

Insurers Can Unlock $874 Billion in Untapped Potential by Investing in Data and Analytics—Everest Group | Press Release

December 16, 2022

Everest Group estimates the massive economic value insurance enterprises can generate by tapping their vast data pools to achieve operational efficiency and drive premium growth.

By investing in becoming data-centric organizations, insurance companies can unlock a collective economic value of US$874 billion, according to Everest Group. This potential lies in the impact data and analytics can have in helping organizations increase operational efficiency (US$306 billion), reduce claims leakage and fraud (US$117 billion), and achieve premium growth in the Property & Casualty (US$285 billion) and Life & Annuity (US$166 billion) sectors.

“Insurers today are challenged by an environment of high uncertainty that includes natural disasters, geopolitical and macroeconomic risks, the repercussions of a global pandemic, inflation and the looming threat of a recession,” said Ronak Doshi, partner at Everest Group. “Nevertheless, they can unlock immense value and come out on top by investing in data and analytics. Everest Group has documented how insurers can use data and analytics to achieve cost savings from increased operational efficiency, reduce claims leakage and fraud expenses, and drive premium growth by unlocking higher sales efficiencies and rapid product innovation. We estimate that collectively the industry could tap up to $874 billion in value by investing in a data-driven approach.”

Currently, insurers’ data and analytics spend is growing at an accelerated rate of over 25% annually. The spend is being directed toward digital transformation of business operations. Key priorities include:

Modernizing the data estate (especially, eliminating data silos and storing customer data in a governed data lake), enabling a single view of customers across ecosystems.
Redesigning operations to infuse data across workflows to enable enterprise-level, data-driven decision-making capabilities
Leveraging cloud-based analytics and AI/ML (artificial intelligence/machine learning) tools to process large data volumes for more effective risk assessment, building hyper-personalized products, and improving agility to respond to customer demands.
Building focused solutions to extract value from existing data, especially to build value-added products and services and minimize loss ratios.

These improvements will lead to value creation across five key areas:

Product and experience innovation
Minimization of claims payout
Enhancement of operational efficiency
Reduction in fraud abuse and claims leakage
Revenue growth

These findings and more are detailed in Everest Group’s recently published report, “Insurance IT Services – State of the Market 2022: Unveiling the Economic Value of Data and the Road to Actualization.” In this report, Everest Group showcases the need for a platform-based operating model with a collapsed data supply chain that can enable insurers to transition into data-driven organizations. In addition, the report examines the global insurance IT services outsourcing market and lists various services and technology providers across the data and analytics ecosystem that can help insurers maximize the value from their data and analytics initiatives.

***Download a complimentary abstract of “Insurance IT Services – State of the Market 2022: Unveiling the Economic Value of Data and the Road to Actualization”***

About Everest Group
Everest Group is a leading research firm helping business leaders make confident decisions. We guide clients through today’s market challenges and strengthen their strategies by applying contextualized problem-solving to their unique situations. This drives maximized operational and financial performance and transformative experiences. Our deep expertise and tenacious research focused on technology, business processes, and engineering through the lenses of talent, sustainability, and sourcing delivers precise and action-oriented guidance. Find further details and in-depth content at http://www.everestgrp.com.

New Everest Group Research on Change Management Reveals the Huge Chasm Between ‘We Should’ and ‘We Do’ in Global Business Services Centers

November 30, 2022

Change management viewed as critical by 75% of GBS organizations, but only 16% manage change systemically; Everest Group offers practical 12-step guide to help GBS organizations approach, staff, invest in, and manage change.

DALLAS, November 30, 2022 — When enterprises establish a Global Business Services (GBS) center, the mission of the center is to make and sustain a positive change in business operations; however, despite the fact that change is their raison d’être, one-third of GBS organizations have no change management capability within their organization, according to new research from Everest Group.

In a first-of-its-kind study, Everest Group surveyed 58 leading GBS organizations across the globe, followed by in-depth interviews, to better understand their approaches to change management.

“Our study findings indicate that 75% of GBS organizations see change management as critical, overwhelmingly confirming that it is vital to the success of the model, but this does not align with actual execution, as only 16% of these organizations take a systemic approach to managing change across their scope of initiatives,” said Deborah Kops, executive advisor to Everest Group and a co-author of the report.

“Change management is a work in progress for most GBS organizations and poses significant challenges: there is no one-size-fits-all solution; it’s not a once-and-done task; and it’s difficult to define ‘good’ and ‘best’ when so much of what comprises change management is perceived as ‘soft stuff’—unmeasurable and therefore unknowable,” explained Kops. “This research aims to address these challenges head on by defining the dimensions of change management for GBS organizations to help the industry understand how to approach, staff, invest in and manage change.”

Selected Observations

Strategic or Situational?: Only 16% of respondents manage change as a critical component of GBS initiatives, or what we would consider systemic across all aspects of GBS operations. The normative view of change management is that it is situational, triggered by an event.
Biggest Catalyst is Change in Operations: Today, GBS change management at its most evolved is focused on changes in operations, such as a transition to a new delivery model, or to ease the pain of a transformation project, such as digitization.
A Tool to Diminish Resistance: Change management approaches have been focused primarily on informing and breaking down resistance as opposed to helping enterprises adopt and embrace the changes that an agile GBS model continually makes. Over 50% of respondents see change management a tool to “tell” or diminish resistance to a GBS program.
Maturity and Scale Matters: Maturity and scale of the GBS organization impacts the approach to change management: 45% of GBS organizations with large scale (5,000+ FTEs) tend to approach change management as a strategic transformational tool while the majority of smaller organizations (with a scale of 100-999 FTEs) tend to focus on communications and diminishing resistance to change.
Digital Maturity Correlates with Strategic Change Management Approaches: There is a discernable shift from communications to a more strategic approach as respondent organizations mature their digital operations. Over 70% of those GBS organizations embracing digital initiatives focus their change approaches on strategic transformation.

These findings and more are detailed in Everest Group’s recently published report, “State of Play in GBS Change Management.”

In addition to the findings above, the report explores these key questions:

What is the right time to involve GBS change management teams?
Do change management approaches foster real change?
Is the GBS change management operating model aligned with imperative?
To whom does the GBS change management team report? Do they have a seat at the table?
How do GBS organizations measure the success of change management initiatives?
What are the key priorities for GBS change management teams?
What is the scope of responsibilities of GBS change management teams?
What is the preferred approach to build change management competency?
What is the normative size and skills mix for the change management team?
How are change management teams governed?
What is the formula to fund change management?
How do GBS organizations measure the impact of change management teams?

Examining the responses to these questions, Everest Group was able to identify patterns that define four personas, ranging from organizations who have not yet prioritized an investment in change management (“Headshakers”) to those that embed it into all aspects of GBS operations (“Institutionalists”). Falling in between are “Crawlers”—who are gradually moving toward establishing a GBS change management competency— and “Game Changers,” organizations who see change management as necessary and are aggressively establishing it as a strategic capability.

Everest Group has also used the findings of this research to develop a 12-step program to help GBS organizations advance along the persona continuum and “do change management well.”

“One of the most surprising findings of our research was to see how common it was for GBS organizations to take a piecemeal approach to change management rather than developing it and strengthening it as a strategic muscle that is always in use,” said Rohitashwa Aggarwal, vice president at Everest Group. “Our research findings clearly indicate that ideally the change management team will have a seat at the leadership table from the outset of the GBS journey. The team also needs systemic funding, the scope and authority to succeed, and the right talent and training to adapt to all the needs of the GBS organization over time, because, as we’ve said, change is at the very heart of the GBS mission, every day, all the time.”

***Download a complimentary abstract of “State of Play in GBS Change Management”***

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

Enterprises Adoption of Employee Experience Management (EXM) Platforms Will Surge 35-40% Through 2025—Everest Group

November 18, 2022

EXM platforms help employers retain and attract employees by addressing the pain points in the employee life cycle; current Everest Group PEAK Matrix Leaders include Qualtrics and Medallia.

DALLAS, November 18, 2022 — Even with global economic headwinds, enterprises remain desperate to retain employees and recruit new talent. It is against this backdrop that the Employee Experience Management (EXM) platforms market is expected to experience a compound annual growth rate of 35-50% through 2025, according to Everest Group. EXM buyers of all sizes cite the rise of new and alternative working models, keeping attrition rates under control, and understanding real-time employee sentiments as major triggers for adopting EXM platforms.

The Great Resignation, the demand for hybrid work environments, and the shortage of talent have disrupted the conventional way of work and the traditional workplace. For enterprises facing this challenge, the ability to monitor and improve employee experience along each step of the employee lifecycle has become more crucial than ever before. The adoption of Employee Experience Management (EXM) platforms can make this task easier.

According to Everest Group research, buyers of EXM platforms cite the following as the top five benefits of the technology:

Better understanding of the workforce, especially the key challenges that each employee faces and understanding their sentiments
Inclusion of employees in formulating the organization’s people strategy. Particularly helpful is employee feedback gathered in pulse surveys on specific topics.
Improved employee engagement and productivity. The ability to anonymize feedback makes employees feel heard and empowered, thus stimulating higher productivity and increased rate of participating in future surveys.
Reduction in attrition, primarily by playing a role in elevating employee satisfaction, engagement and visibility.
Faster decision making. EXM platforms capture and process employee insights into real-time dashboards, giving leaders the right information at the right place and time.

These findings and more are detailed in Everest Group’s “Employee Experience Management (EXM) Platforms – State of the Market Report 2023.” The report provides an introduction to EXM platforms and a market overview, including buyer adoption trends, key investment themes, the service provider landscape and the outlook for 2023.

“Enterprises are realizing that EXM is an important element of their overall business growth strategy, not just one of many tasks assigned to the Human Resources team,” said Lokesh Goyal, practice director at Everest Group. “To win the talent war, enterprises need to revamp their employee listening programs and be acutely attuned to employee needs such as mental health, well-being, safety, flexibility, and work-life balance and this should be a continuous process rather than being limited to annual surveys. The EXM platforms market is surging because this technology provides employers with a way to support multiple channels of capturing real-time feedback from their total talent pool and making decisions that improve experience, culture and productivity.”

Additional market highlights

The Banking, Financial Services and Insurance (BFSI) industry has the highest market share of adoption (16%), followed by the hi-tech industry (15%).
EXM platforms are largely adopted by midsize (45-50%) and large buyers (35-40%) as most of them have already embarked on their HR transformation journey and capturing employee feedback is a critical aspect of it.
In 2021, North America constitutes the largest market share (68%) and the majority of the current supply base is consolidated in the North American region as well.
Qualtrics and Medallia rank as Everest Group PEAK Matrix® Leaders for 2022.
Current market leaders (in terms of market share by number of EXM clients in 2021) include Qualtrics, Culture Amp, InMoment, Perceptyx and Workday.
The top five reasons cited by buyers for choosing a particular provider are: flexibility in pricing; value-added services; ease of use, implementation and integration; differentiated platform functionalities; and responsiveness and customer support.

***Download a complimentary abstract of the report.***

Task Mining Software Market Posts 85%-95% Growth Rate, Remains One of the Fastest Growing Markets in the Intelligent Automation Space—Everest Group

November 16, 2022

Task mining market will see increased adoption, product enhancements, use case expansion, M&A activities, and a wide range of creative partnerships.

DALLAS, November 16, 2022 — Although task mining software solutions are in the early stages of enterprise adoption, the market is growing at an exponential pace—recording 85% to 95% compound annual growth between 2020 and 2021. Everest Group projects 75% to 85% growth in the coming year as rapid adoption continues.

Everest Group defines task mining as a technology that can capture user actions and metadata—such as keystrokes, mouse clicks, activity screenshots, and other system-level activities—across multiple desktops to discover and provide insights into the tasks and activities involved in a process. Adoption of task mining solutions can not only help enterprises achieve cost savings and operational efficiencies by optimizing and automating tasks, but also enhances employee experience through better resource allocation. This has led to task mining being one of the fastest-growing markets in the Intelligent Automation (IA) space.

Task mining can be applied in nearly any industry and offers a range of business, operational and cost benefits to enterprises. Among the most common applications are:

Enabling micro-level process views by capturing all last-mile activities and tasks
Generating workforce insights, such as team productivity and most productive teams by task
Identifying automation opportunities, by leveraging machine learning models and workforce insights on performance, productivity, and frequency
Facilitating the creation of initial automation workflows for the opportunities identified.
Creating process discovery documents that can be leveraged internally to develop process understanding as well as robotic process automation (RPA) scripts.

Scaling automation initiatives and increasing employee productivity are the most important factors driving task mining adoption. Other major drivers include optimizing operations and decreasing costs. The top two strengths of task mining solutions cited by enterprise buyers are ease of product use (79%) and workforce intelligence (50%).

These findings and more are detailed in Everest Group’s recently published report, “Visualizing Business Operations at the Micro Level – Task Mining State of the Market Report 2022.” This research provides a detailed view of the task mining market by analyzing it across market size and adoption trends, solution characteristics, product capabilities and trends, provider landscape, and outlook for 2022-23.

“Early adopters of task mining solutions already rate their solutions quite high for impact on cost and operational efficiency and for ease of use,” said Amardeep Modi, vice president at Everest Group. “Plus, solution providers are continuing to advance the capabilities and use cases of the software and complementary services to help enterprises achieve greater business value. We will certainly see accelerated adoption of task mining solutions in the near term. In addition, we’ll see quite a bit of dynamic movement within the ecosystem, with mergers and acquisitions as well as partnerships of all kinds involving technology providers, implementation partners, resellers, large service providers, and complementary technology companies.”

Additional Market Highlights

North America is the largest adopter by region (57%); Europe (31%) and Asia Pacific (11%) follow in share of market.
Banking, Financial Services and Insurance (BFSI) (39%), hi-tech and telecom (16%), and healthcare and pharma (13%) are the leading adopters by industry.
Finance & Accounting (F&A) (29%) and industry-specific processes, particularly in BFSI (23%), telecom (6%) and healthcare (5%), drive the majority of task mining deployment and growth.
Large enterprises (with revenues exceeding US$5 billion) are the largest adopters (62%).

***Download a complimentary abstract of the Task Mining State of the Market Report.***

Everest Group Unveils Its 2022 List of Top 50 Engineering Services Providers

November 15, 2022

Capgemini, HCL Technologies and Alten top the leaderboard of ES service providers as ER&D outsourcing bounces back with double-digit growth in 2021.

DALLAS, November 15, 2022 — Everest Group today released the fourth annual edition of the Everest Group Engineering Services Top 50™, a ranking of the world’s largest third-party providers of engineering services (ES). The ranking is based on revenues and year-on-year growth.

Topping the 2022 list of ES providers are these 10 leaders:

Capgemini
HCL Technologies
Alten
Cognizant
Akkodis
Accenture
AFRY (ÅF Pöyry)
Wipro
Tata Consultancy Services
EPAM

*** Download a complimentary copy of the 2022 Everest Group ES Top 50 list and analysis ***

Engineering services include all activities (spanning software, embedded, mechanical and manufacturing engineering functions) that support the design, development, testing and management of products, both hardware and software.

After contracting slightly (-1.7%) in 2020, the global Engineering, Research & Development (ER&D) industry grew 10.3% in 2021. The companies in the Everest Group Engineering Services Top 50 collectively represented 86% of this market, accounting for more than US$55 billion of outsourced spending in 2021.

“Engineering services outsourcing bounced back strongly in 2021,” said Akshat Vaid, vice president at Everest Group. “This can largely be attributed to an amalgamation of multiple factors, including a continued push towards digital engineering; revival of certain industry verticals, such as aerospace/defense and automotive; and investments into themes such as platform engineering, 5G, sustainability, metaverse, and COVID-led initiatives to optimize manufacturing operations with technology, among others. From the service provider perspective, the growth in ES outsourcing has added more fuel to the war for skilled, deployable talent with deep domain understanding, resulting in unmanageable attrition and increased talent costs. Service providers also continued to scale capabilities and delivery footprint through M&A endeavors, with more than half of the companies featured in the Top 50 list engaging in M&A.”

Other highlights:

The Top 5 ES companies based on revenue alone are Capgemini, HCL Technologies, Akkodis, Alten and Cognizant.
The Top 5 fastest growing ES companies were Globant, Encora, Persistent, EPAM and Alten.
Europe continues to hold a major share (42%) of the providers in the Top 50 list, followed by Asia Pacific at 32% and North America at 24%.
In 2021, more than 50% of the firms listed in the ES Top 50 report engaged in merger and acquisition activities. Providers continued to acquire companies to increase scale, boost capabilities and gain access to markets and talent. These activities have driven ES service providers’ valuations to record highs.
Broad-based providers’ share of ES Top 50 revenue continues to increase at the expense of pure-play providers, as broad-based providers use growth in ES to offset the low headroom for growth in IT and business process services. Broad-based providers’ share accelerated from 49% in 2020 to 67% in 2021.

The Everest Group Engineering Services Top 50 is based on both revenues and year-on-year growth. Revenues comprise 75% of the composite score used for ranking. Growth comprises 25% and has two sub-parameters: absolute growth (measured as change in ES revenue in US$ million and accounting for 12.5% of the composite score) and percentage growth (measured as percentage change in ES revenue and accounting for the final 12.5% of the composite score).

In the Fight for Talent, It’s Employee Experience for the Win—Everest Group

November 9, 2022

Driven by talent war, Great Resignation, and demand for hybrid working models, enterprise HR experts rank ‘enhanced employee experience’ as a key priority.

DALLAS, November 9, 2022 — Multi-process human resource outsourcing (MPHRO) deals are on the rise again in 2022 as enterprises seek end-to-end services that include talent acquisition and development and that keep employee experience at the core. Accordingly, MPHRO providers are continuing to make investments in next-generation technologies, automation and analytics, and are also adding an experience layer to their products to provide a seamless, integrated experience to users. Everest Group projects that this focus on employee experience, reskilling and digital transformation will drive a 7-9% growth in the MPHRO market by 2026.

According to Everest Group research, 42% of MPHRO buyers cite “enhanced employee experience” as a key priority for the HR function. The only priority ranking higher (53%) is “digitizing HR processes through next-generation technologies such as automation.”

These findings and more are detailed in Everest Group’s “MPHRO State of the Market Report 2022—Entwining Employee Experience and MPHRO in the New Normal.” The report explores key demand trends, solution characteristics, the service provider landscape and the outlook for 2023.

“Enterprises are facing a perfect storm when it comes to their HR operations,” said Priyanka Mitra, practice director at Everest Group. “On the heels of the pandemic and the Great Resignation, organizations are battling for talent, trying to upskill and reskill existing employees, undergoing digital and cultural transformations to retain talent and offer the hybrid working models that employees want, and adopting next-generation solutions to stay ahead of competitors. MPHRO providers can be highly valued advisors and partners in addressing these challenges. We’re already seeing a rise in the number of providers that offer end-to-end services and an integrated platform comprising core HR, talent management, workforce management, service delivery, and employee experience solutions.”

Notable MPHRO Trends in 2022:

The MPHRO market was valued at approximately US$5.4 billion in 2021. An increased focus on experience, reskilling and digital transformation along with complex compliance and cost takeout will drive the market to approximately US$7.5 billion by 2026.
North America and EMEA (Europe, Middle East and Asia) dominate the HRO markets as greater than 70% of the new deals emerge from those signing regions. Increased activities in Asia Pacific and Latin America regions are being observed.
The share of deals in the retail sector bounced back. Manufacturing, hi-tech and IT, and healthcare are other industries having a sizable number of new deals.
There has been a marked increase in the inclusion of more processes in the MPHRO deal as buyers seek end-to-end solutions. Digital HR services have experienced more demand owing to ongoing digital efforts by clients.

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Everest Group Advocates New Paradigm for IT—’Systems of Growth’—A Platform-based Model Centered on Revenue Enablement

November 1, 2022

DALLAS, November 1, 2022 — The role of an IT team is no longer as “simple” as keeping the infrastructure running efficiently; today, IT organizations also are charged with driving business growth, change and innovation and meeting sustainability targets. To be able to innovate and differentiate at enterprise speed and scale, IT organizations must adopt Systems of Growth thinking, according to Everest Group.

What is Systems of Growth thinking?

Systems of Growth thinking is when both enterprise and IT leadership view the role and scope of the IT organization as a vehicle to fuel, manage and/or respond to disruption at enterprise scale and speed. An IT organization that adopts Systems of Growth thinking strives not only for operational efficiency, but also to contribute directly to business growth. Within a System of Growth, IT doesn’t just run applications; it manages platforms. An IT System of Growth doesn’t merely “own” the infrastructure, it orchestrates it. An IT System of Growth focuses on being a revenue enabler rather than a cost center.

“As organizations across industries claim to be technology firms, CIO and IT leaders are getting a seat at the table to shape the organization’s growth strategy,” said Ronak Doshi, partner at Everest Group. “A platform-based operating model that measures the platform for its growth and experience outcomes is at the center of the Systems of Growth thinking.”

“Traditional enterprise budgeting methods look at IT spend as a percentage of revenue to account for upkeep and maintenance of systems, and this leads to a constant struggle to find budgets for change initiatives,” said Nitish Mittal, partner at Everest Group. “An organization with a Systems of Growth mindset looks at IT spend as a lead indicator for future growth, and its IT funding model is based on growth and experience return on investments.”

“IT organizations struggle with legacy applications and siloed systems,” said Chirajeet Sengupta, partner at Everest Group. “Systems of Growth thinking helps them break enterprise siloes and use the power of hybrid cloud infrastructure, the enterprise data lake and AI/ML to orchestrate platforms that drive revenue expansion.”

Why is a Systems of Growth mindset critical today?

With increasing disruptions to traditional business models and the rapid adoption of exponential technologies such as Web 3.0, the metaverse and 5G, enterprises need a new technology strategy to compete in the market. Systems of Growth strategies are vehicles to fuel, manage and/or respond to disruption at enterprise scale and speed.

To remain competitive, enterprises using Systems of Growth thinking will:

Track and respond to the technological disruption that is happening both inside and outside their defined industry boundaries. (Most disruption elements permeate industry boundaries.)
Balance their “change versus run” priorities.
Enable collaboration with a broad set of ecosystem participants, which could be internal and/or external to the enterprise. In fact, most use cases will be inter-enterprise and/or inter-industry implementations, with a few contained intra-enterprise use cases serving as the exception.
Adopt a platform-based operating model to orchestrate technology and the ecosystem. This model is designed with software at the center and services wrapped around it to deliver each transaction.

Systems of Growth thinking will result in product, channel and business model innovation appropriately shaped by the nature, scale and complexity of disruptions.

In its Digital Services State of the Market Report for 2022, “Systems of Growth – Building a Platform-based Operating Model to Innovate and Differentiate at Enteprise Speed and Scale,” Everest Group investigates the reasons why enterprises should adopt a Systems of Growth strategy, which involves investments in data, platforms, customer journeys, process maps and ecosystems.

***Download a complimentary abstract of the 2022 Digital Services State of the Market Report***

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