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TBR
TECHNOLOGY BUSINESS RESEARCH, INC.
TBR’s Professional Services Business QuarterlySM
Research Highlights and Outlook
Vendors drive BPO growth by acquiring or developing IP and industry-specific offeringsTechnology Business Research (TBR) Quarterly Webinar Series
July 24, 2014
TBR
2 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ Research Highlights: Webinar Presenters
Elitsa BakalovaProfessional Services Analyst
Email: [email protected]: @ElitsaBakalova
Boz HristovProfessional Services Analyst
Email: [email protected]: @boztbr
Patrick HeffernanIT Services Practice Manager and Principal Analyst
Email: [email protected]: @TBR_PatrickH
Ramunas SvarcasProfessional Services Principal Analyst
Email: [email protected]: @rjsTBR
TBR
3 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
• TBR’s Professional Services Practice provides continual coverage of 33 vendors in published quarterly and semiannual reports.• Of those vendors, 30 are included in our IT Services
Vendor Benchmark.o TBR reports are unique for their deep, holistic analysis
of leading vendor businesses.o Financial modeling and TBR insights help customers
gain a better understanding of vendor business models.o TBR reports and webinars are responsive to client time
lines, clear and concise, and provide insights across multiple layers of a vendor’s organization and infrastructure.
o TBR’s strategic assessment provides an impartial check on a vendor’s progress toward its strategic objectives.
Clients are gaining advantages and better understanding revenue opportunities through our reports and their personal relationships with TBR
PSBQ Research Highlights: Webinar Overview
TBR’s IT Services Vendor Benchmark delivers unique insight and value through in-depth analysis in a concise, consumable format
TBR Professional Services Business Quarterly (PSBQ) Portfolio
TBR
4 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 1Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 1Q14
Portfolio: Vendors integrate industry expertise, cloud and analytics into BPO solutions, transforming clients’ operations from cost centers to value creators.
Delivery: Cloud-based delivery models and automation reduce the need for labor resources to deliver services inherent in the low-cost delivery structure.
BPO Performance: BPO growth continues to outpace other services as buyers seek new avenues to trim costs and standardize processes.
Vendors combine industry capabilities, cloud, analytics, and internal IP and tools to maximize BPO revenue and profits
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: BLOG.ENTREPENUERARTS.COM
SOURCE: FREEWORLDMAPS.NET
TBR
5 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 1Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 1Q14
Vendors combine industry capabilities, cloud, analytics, and internal IP and tools to maximize BPO revenue and profits
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: BLOG.ENTREPENUERARTS.COM
SOURCE: FREEWORLDMAPS.NET
Portfolio: Vendors integrate industry expertise, cloud and analytics into BPO solutions, transforming clients’ operations from cost centers to value creators.
Delivery: Cloud-based delivery models and automation reduce the need for labor resources to deliver services inherent in the low-cost delivery structure.
BPO Performance: BPO growth continues to outpace other services as buyers seek new avenues to trim costs and standardize processes.
TBR
6 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
BPO trailing 12-month revenue growth in 1Q14 was driven by vendors’ emphasis on business outcomes and cost savings through provision of horizontal and industry-specific services and integration of analytics and cloud into BPO solutions
PSBQ 1Q14 Research Highlights: BPO Performance
BPO remains more resilient to decelerating IT services industry growth than other service lines due to its favorable value proposition
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
Note: Includes average trailing 12-month service line revenues from TBR’s IT Services Vendor Benchmark; not representative of a total global market view
TBR
7 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
BPO was No. 1 in average TTM revenue growth; however, its growth decelerated in 1Q14 due to factors such as the adoption of Business Process as a Service (BPaaS), which drives down traditional BPO opportunities and shrinks the length and size of contracts
PSBQ 1Q14 Research Highlights: BPO Performance
Operational and business improvements support BPO’s leading revenue growth, while cloud forces vendors to transform their delivery models
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
Note: Includes average trailing 12-month service line revenues from TBR’s IT Services Vendor Benchmark; not representative of a total global market view. Dots indicate year-to-year growth, and arrows indicate directional change relative to the year-ago quarter.
TBR
8 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
BPO growth leaders build scale through acquisitions and platforms for quick delivery and drive revenue expansion by adding industry specialization and analytics to increase value
PSBQ 1Q14 Research Highlights: BPO Performance
BPO leaders expand vertical-specific offerings, while laggards struggle with price competitiveness due to less-developed global delivery models
Growth driven by enhanced industry
expertise
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
Note: Includes average trailing 12-month service line revenues from TBR’s IT Services Vendor Benchmark; not representative of a total global market view. Sphere size reflects volume of TTM revenue.
TBR
9 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Industry expertise, partnerships and cloud enable Cognizant and TCS to outperform counterparts and gain market share in the BPO space
PSBQ 1Q14 Research Highlights: BPO Performance
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
Industry-specific BPaaS for banking, insurance, pharmaceutical and public sector; cross-industry platforms that cover F&A, procurement, human capital management and analytics; and TCS Digital Software and Solutions Group industry-focused solutions all support TCS’ nonlinear growth.
Cognizant develops industry expertise in its global delivery model to enhance its domain expertise and builds platform-based BusinessCloud solutions to enrich its BPO offerings. Cognizant will leverage its rapidly expanding footprint in the Philippines to capture BPO opportunities in the U.S. healthcare vertical.
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
TBR
10 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 1Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 1Q14
Vendors combine industry capabilities, cloud, analytics, and internal IP and tools to maximize BPO revenue and profits
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: BLOG.ENTREPENUERARTS.COM
SOURCE: FREEWORLDMAPS.NET
Portfolio: Vendors integrate industry expertise, cloud and analytics into BPO solutions, transforming clients’ operations from cost centers to value creators.
BPO Performance: BPO growth continues to outpace other services as buyers seek new avenues to trim costs and standardize processes.
Delivery: Cloud-based delivery models and automation reduce the need for labor resources to deliver services inherent in the low-cost delivery structure.
TBR
11 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Vendors continue to ramp up internal investment in IP-based solutions while purchasing or partnering with niche companies to fill portfolio gaps
PSBQ 1Q14 Research Highlights: Portfolio
Vendors build industry-specific IP portfolios to differentiate BPO offerings, reduce reliance on labor-based services, and boost revenues and profits
Focus on Outcomes
Accelerating Analytics, Cloud, Mobility Adoption
Integration of Process and Technology
Smaller, Shorter Contracts Shift from Labor Arbitrage to Blended Global Delivery
Research and Development
Mergers and Acquisitions
Joint Ventures and Alliances
Customer Engagements
High RiskHigh Cost
Low RiskLow Cost
Medium RiskHigh Cost
Medium RiskMedium Cost
New services and/or new processes for delivering services
Lead to productivity improvements,new customers, increased profits
TBR
12 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Cloud:BPaaS solutions enhance the value of BPO services by integrating automation and cloud-based delivery.
Capgemini, Cognizant, TCS and Infosys invest in BPO platforms through internal innovation initiatives.
IBM and Xerox bought niche SaaS vendors to bolster BPO offerings around marketing and claims management.
Analytics:Harnessing clients’ data, analytics offerings transform operations from cost centers to value creators.
IBM packages capabilities from Watson Group and prior M&As (Cognos, SPSS) into predictive analytics solutions aimed at business functions such as customer experience, fraud detection and risk management.
PSBQ 1Q14 Research Highlights: Portfolio
Acquisitions and innovation enable BPO vendors to build scale and deliver business value with cloud and analytics technologiesAs traditional BPO services such as call centers become commoditized, vendors buy and develop technology-enabled offerings that add business value by enhancing productivity and delivering actionable data insights
IMAGE SOURCE: LABS.SOGETI.COM IMAGE SOURCE: EHSTODAY.COM
TBR
13 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
BPaaS revenue is less than BPO revenue, but automation of processes and security of private cloud attracts cost-driven, process-focused clients
SOURCE: TBR AND COMPANY DATA
Note: Includes 21 of the 29 vendors covered in TBR’s Managed Private & Professional Services Cloud Benchmark
PSBQ 1Q14 Research Highlights: Portfolio
BPaaS growth is driven by vendors’ targeted marketing, e-payments and HR capabilities; vendors add vertical flavor and analytics to their BPaaS solutions to appeal to customers in key cloud-adopting industries such as retail, healthcare and financial services
TBR
14 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Genpact integrates consulting, technology and analytics and merges them with proven BPO processes for solutions that improve clients’ businesses
Genpact strives to break out of the BPO mold by layering analytics, industry expertise and process re-engineering capabilities over traditional back-office services to solve business problems and reduce operating costs.
PSBQ 1Q14 Research Highlights: Portfolio
Genpact builds platform solutions based on process
knowledge
TBR
15 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 1Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 1Q14
Vendors combine industry capabilities, cloud, analytics, and internal IP and tools to maximize BPO revenue and profits
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: BLOG.ENTREPENUERARTS.COM
SOURCE: FREEWORLDMAPS.NET
Portfolio: Vendors integrate industry expertise, cloud and analytics into BPO solutions, transforming clients’ operations from cost centers to value creators.
Delivery: Cloud-based delivery models and automation reduce the need for labor resources to deliver services inherent in the low-cost delivery structure.
BPO Performance: BPO growth continues to outpace other services as buyers seek new avenues to trim costs and standardize processes.
TBR
16 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 1Q14 Research Highlights: Delivery
BPO headcount continues to decelerate as vendors replace the human component of traditional outsourcing with platform-based solutions
SOURCE: TBR’S GLOBAL DELIVERY BENCHMARK, SPRING 2014
Note: BPO headcount for 14 IT services vendors: Accenture, Atos, Capgemini, Cognizant, Dell Services, CSC, HCLT, HP Services, IBM GS, Infosys, TCS, T-Systems, Wipro ITS and Xerox*1Q14 numbers are based on TTM average, as the fall iteration of the Global Delivery Benchmark is in progress.
As BPO becomes more commoditized, the additional value of integrated cloud and analytics solutions into BPO deals will increase revenue per employee, since cloud and analytics solutions are grounded in technology, not people
Cloud and analytics as business disruptors for vendors
TBR
17 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 1Q14 Research Highlights: Delivery
Investments in cloud-based BPO platforms enable TCS and Cognizant to climb up value chain as IBM rebalances workforce to position for growth
SOURCE: TCS AND TBRSOURCE: COGNIZANT AND TBR SOURCE: IBM AND TBR
Delivery automation enables vendors to grow profits faster than revenue; margins are influenced by companies’ abilities to quickly adjust to changing market dynamics with outcome-based solutions
TCSCognizant IBM
TBR
18 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSP Research Current Topics 1Q14 Report Key Themes• Select Vendor Reports:o Accenture o Atoso Capgeminio Cisco Serviceso Cognizanto CSCo Dell Serviceso Fujitsuo HP Serviceso IBM Global Serviceso Infosyso TCSo T-Systemso Wipro ITSo Xerox
• Select Benchmarks: Business Intelligence Services Vendor, Global Delivery, Healthcare IT Services, Management Consulting, Public Sector IT Services, Managed Private & Professional Services Cloud
Analyze how IT services vendors position to take advantage of the changing security landscape. Assess vendors’ security offerings and how offerings are scaled.
Identify vendor talent management strategies. Highlight the recruitment channels being used to attract graduates such as campaigns and partnerships with universities. Identify training and skill development and leadership and career development. Assess strategies for improved utilization and attrition.
Understand IT services vendors’ near-term outlook for Canada and LATAM and strategies for local market expansion. Identify the verticals being targeted by IT services vendors in Canada and LATAM and the service offerings gaining the most traction among clients in the region.
Security
Talent Management
Canada andLATAM
PSBQ Research Highlights: 2Q14 Key Topics
TBR will analyze IT services vendors’ investments and strategies to expand in security, Canada and LATAM and successfully manage talent
TBR
19 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Questions?
PSBQ 1Q14 Research Highlights
TBR
20 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
James McIlroy Vice President of SalesEmail: [email protected]: 603.929.1166
TBR IT Services Vendor Benchmark Webinar Contact Information
Twitter: @TBRincSlideShare: www.slideshare.net/TBR_Market_InsightYouTube: www.youtube.com/user/TBRIChannelLinkedIn: www.linkedin.com/company/technology-business-research
Elitsa BakalovaProfessional Services Analyst
Email: [email protected]: @ElitsaBakalovaTelephone: 603.929.1166
Boz HristovProfessional Services Analyst
Email: [email protected]: @boztbrTelephone: 603.758.1882
Patrick HeffernanIT Services Practice Manager and Principal Analyst
Email: [email protected]: @TBR_PatrickHTelephone: 603.758.1834
Ramunas SvarcasProfessional Services Principal Analyst
Email: [email protected]: @rjsTBRTelephone: 603.758.1833
TBR
21 TBR Quarterly Webinar Series | 7.24.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSP Syndicated Research CoverageTBR Professional Services Practice Syndicated Coverage
*Semiannual publication
IT Services Vendors Public Sector Vendors Benchmarks(Benchmark XLS data also available)
• Accenture• Atos• Capgemini• CGI*• Cisco• Cognizant• CSC• Dell• Fujitsu• HCL Technologies• HP• IBM Global Services• Infosys• Tata Consultancy Services• T-Systems• Unisys• Wipro IT Services• Xerox
• Booz Allen Hamilton*• CACI International*• General Dynamics IS&T*• L-3 Communications*• Leidos*• Lockheed Martin IS&GS*• ManTech*• Northrop Grumman IS&TS*• Raytheon Intelligence, Information
& Services*• SAIC*
• Global Delivery Benchmark* • Healthcare IT Services Vendor
Benchmark• IT Services Vendor Benchmark • Management Consulting Benchmark*• Public Sector IT Services Benchmark• BI Services Benchmark*• Managed Private & Professional Services
Cloud Benchmark
Management Consulting Vendors• Bain & Company*• Boston Consulting Group*• Deloitte Consulting*• McKinsey & Co.*• PwC*
Healthcare IT Services Vendors• Accenture Healthcare IT Services*• CSC Healthcare IT Services*• Dell Healthcare IT Services*• HP Healthcare IT Services*• IBM Healthcare IT Services*
TBR
TECHNOLOGY BUSINESS RESEARCH, INC.
About TBR
Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators.
Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.
TBR has been empowering corporate decision makers since 1996.
To learn how our analysts can address your unique business needs, please visit our website or contact us today.
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This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.