STAMFORD, Conn., July 10, 2017 /PRNewswire/ -- The digital
revolution is reshaping global demand for sourcing services across
multiple industries, as companies increasingly seek new
technologies to transform their operations beyond traditional IT
and business process services, according to a new vertical markets
report published by Information Services Group (ISG) (NASDAQ: III),
a leading global technology research and advisory firm.
The 2017 ISG Momentum® Market Trends & Insights Vertical
Report finds widespread demand across industries for service
providers able to apply robotic process automation (RPA) to make
business processes more efficient. Consumer-facing verticals are
showing strong demand for solutions that can provide a complete
view of the customer and support omnichannel commerce or customer
service, while there is considerable interest among industrial
companies in Internet of Things applications and engineering and
product development services. Many industries also are exploring
the use of blockchain for financial and supply chain
transactions.
The growing diversity of outsourcing activity across industries
is outpacing overall spending, as average annual contract values
(ACV) for traditional sourcing continue to fall amid increasing
demand for cloud-based as-a-service offerings. Further, many of the
engagements aimed at delivering innovation through new technologies
and processes begin as smaller proof-of-concept projects, and the
resulting ACV as yet does not offset ACV declines in traditional
services.
Consistent with these market fundamentals, ACV for outsourcing
services rose in only five of the 27 vertical industries analyzed
in the ISG report. Software & Services led all verticals with
23 percent year-over-year ACV growth and was also a leader in
attracting first-time outsourcing clients. The other growth
verticals were Media, Drugs & Biotechnology, Trading Companies,
and Hotels, Restaurants & Leisure.
"The drive to digitize is leading companies to experiment with
new processes and technologies, often in pilot projects that are
much smaller in scope and size than traditional outsourcing
engagements. We expect exciting new outsourcing trends and
practices to emerge from the numerous pilots that are occurring in
many industries," said Paul
Reynolds, ISG partner and chief research officer.
"Clients continue to expand their service provider ecosystems,
and it is now relatively common for large multinational service
providers to work side-by-side with small companies that are
focused on a single innovative technology or process," said
Reynolds. "Service providers can find growth in the market by
developing digital solutions for specific industry issues, and by
demonstrating their ability to integrate and collaborate with the
client's other technology providers."
According to the ISG Research report, the largest vertical by
ACV, Telecommunications Services, was more than 200 times larger
than the smallest, Semiconductors (see Figure 1.).
Telecommunications Services and the second-largest vertical
industry for outsourcing services, Banking, together accounted for
slightly more than 40 percent of total ACV.
The complete 2017 ISG Momentum® Market Trends & Insights
Vertical Report provides perspective into the state of outsourcing
in each vertical through interviews with strategists involved in
current outsourcing engagements in that industry, worldwide
spending and market share data that show current levels and up to
10 years of history, and notes how current trends are shaping each
vertical. It includes ISG's exclusive Hunting-Farming Index, which
uses proprietary data to rank each of the 27 verticals on the
strength of its potential to produce new outsourcing clients in the
coming year, and potential for increased spending by clients
already in the vertical.
To view an executive summary of 2017 ISG Momentum® Market Trends
& Insights Vertical Report, click here.
The latest ISG Momentum® report is part of an ongoing series of
quarterly reports that focus on outsourcing activity by service
line, vertical industry and geographic location. To learn about
these or other ISG Momentum® services and information products,
please visit the ISG Momentum® Research page on the ISG
website.
About ISG
ISG (Information Services Group) (NASDAQ: III) is a leading
global technology research and advisory firm. A trusted business
partner to more than 700 clients, including 75 of the top 100
enterprises in the world, ISG is committed to helping corporations,
public sector organizations, and service and technology providers
achieve operational excellence and faster growth. The firm
specializes in digital transformation services, including
automation, cloud and data analytics; sourcing advisory; managed
governance and risk services; network carrier services; technology
strategy and operations design; change management; market
intelligence and technology research and analysis. Founded in 2006,
and based in Stamford, Conn., ISG
employs more than 1,300 professionals operating in more than 20
countries—a global team known for its innovative thinking, market
influence, deep industry and technology expertise, and world-class
research and analytical capabilities based on the industry's most
comprehensive marketplace data. For more information, visit
www.isg-one.com.
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SOURCE Information Services Group, Inc.