STAMFORD, Conn., Sept. 28, 2017 /PRNewswire/ -- The digital
revolution is creating widespread demand for outsourcing services
as enterprises seek to upgrade their technology infrastructure and
modernize many types of business processes, putting 2017 on pace to
set a new record for contract awards, according to the 2017 ISG
Momentum® Market Trends & Insights Service Line Report
published this week by Information Services Group (ISG) (NASDAQ:
III), a leading global technology research and advisory firm.
Enterprises are eager to apply more automation to their IT
operations and business processes, which is driving demand to
outsource, particularly to gain access to robotic process
automation (RPA) solutions. According to ISG Research, nearly half
of enterprises expect to have an RPA system in production by
2019.
Demand also is growing for analytics, artificial intelligence
(AI) and cognitive technologies, all of which are maturing and
becoming applicable to new business use cases. Transitioning to the
cloud also remains a strong outsourcing driver. Approximately one
in six outsourcing contracts has a significant cloud component, the
highest level on record, according to ISG Research.
These developments are driving heavy outsourcing contract
volume, the ISG Momentum® report found. Based on first-half
results, 2017 is on pace to set a new record for the total number
of information technology outsourcing (ITO) and business process
outsourcing (BPO) contracts awarded in a single year, according to
ISG Research.
The ISG Momentum® Service Lines report, which provides in-depth
analysis of the performance of seven leading service lines over the
last 10 years, found strong current demand for many ITO and BPO
services.
The application development and maintenance (ADM) service line
produced the most outsourcing contracts in 2016 and expanded
strongly in the first half of 2017. Enterprise clients want their
outsourcing service providers to help them create DevOps
environments in which automated processes between software
development and IT teams enable software to be built, tested, and
released faster and more reliably. Clients also want their
providers to take more responsibility for application
maintenance.
Data center was another strong ITO service line, with client
demand for colocation and cloud services motivating expanded
outsourcing. RPA demand also was a common theme among BPO service
lines. Clients are looking to service providers to help them apply
RPA for human resources, procurement, finance and accounting and
other operations.
"Whether it is their IT operations or business processes,
enterprises want to change how things are done and are turning to
outsourcing service providers to help them make the changes," said
Paul Reynolds, ISG partner and chief
research officer. "Desire for process improvements and access to
new technologies are strong demand drivers for many ITO and BPO
service lines."
For traditional providers, new technologies are creating both
competition and opportunity. "Although cloud and automation
technologies are increasing competition and margin pressure for
traditional service providers," Reynolds said, "they are also
creating a lot of opportunity by motivating outsourcing. Markets
for many traditional services remain strong, which is contributing
to heavy contract volumes."
The 2017 ISG Momentum® Market Trends & Insights Service
Line Report takes an in-depth look at seven leading ITO and BPO
service lines: application development and maintenance (ADM),
managed network services (MNS), data center, workplace services
(formerly referred to as end-user computing, or EUC), human
resources outsourcing (HRO), procurement, and finance and
accounting (F&A). The service line analysis includes contract
volume, spending level and service provider market share data
broken out by region and client-size segment, with analysis from
ISG advisors and thought leaders active in each discipline.
The report also includes separate coverage that examines the
state of the market for engineering services outsourcing (ESO), a
section that documents how outsourcing spending is being allocated
between traditional and as-a-service delivery, and a chapter that
examines the role automation is playing in the market with analysis
from the ISG Automation Index™.
To view an executive summary of the 2017 ISG Momentum® Market
Trends & Insights Service Line 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.