global delivery market landscape review

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

TBR’s Global Delivery Market LandscapeResearch Highlights and OutlookTechnology Business Research (TBR) Quarterly Webinar Series

Nov. 7, 2012

TBR

2 TBR Quarterly Webinar Series | 11.07.12 | www.tbri.com | ©2012 Technology Business Research Inc.

Erin HichmanAnalyst, TBR’s Professional Services Practice

Email: [email protected] Twitter: @ITSvcsAnalyst

Ramunas SvarcasSenior Analyst and Engagement Manager, TBR’s Professional Services Practice

Email: [email protected] Twitter: @rjstbr

Global Delivery Market Landscape Research Highlights and Outlook

Webinar presenters

mailto:[email protected]


TBR


Global Delivery Questions of 2Q12:

What happened with headcount growth in 2Q12?

Outside of headcount, did vendors do anything to improve support delivery and reduce costs?

What services aspects of delivery impacted operating margin?

Global Delivery Market Landscape Research Highlights and 2013 Outlook

SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES

TBR’s report covers total, onshore and low-cost headcount trends; delivery support investments and profitability drivers

TBR


• TBR reports are unique for their deep, holistic analysis of leading vendor businesses.• Financial modeling and TBR insights help

customers gain a better understanding of vendor business models.• TBR reports and webinars are responsive to

client timelines, clear and concise, and provide insights across multiple layers of a vendor’s organization and infrastructure.• TBR’s strategic assessment provides an

impartial check on a vendor’s progress toward meeting its strategic objectives. • Vendors covered in the GDML study include:

Global Delivery Market Landscape Research Highlights and Outlook: Webinar Overview

TBR Global Delivery Market Landscape Semiannual Report

TBR’s Global Delivery Market Landscape (GDML) reports deliver insight and value through in-depth analysis in a concise, consumable format

TBR


While IT service providers differ in market emphasis and legacy, they all invest in low-cost leverage and automated delivery models

TBR Vendor Segments:

India-centric Vendors• Cognizant, HCLT, Infosys, TCS, Wipro ITS• High low-cost leverage, onshore local hiring,

platform BPO, reliance on freshers

SIs• Accenture, Atos,

Capgemini, CSC, Xerox Services• Vertical expertise, domestic

lower-cost labor, freshers onshore, pyramid management

SIs with Support & Maintenance• Dell Services, HP Services,

IBM GS, T-Systems • Cross-company

capabilities, global integration, consulting

Focus on low-cost leverage,

industrialization and IP asset

development

Global Delivery Market Landscape Research: Vendor Segments Summary

The current goals for the vendors center on revenue expansion in emerging markets and global growth of cloud computing and cloud computing professional services.

TBR




IT Services overall headcount growth is decelerating.


Vendors are investing to try to break the link between revenue growth and headcount additions.


Low-cost leverage is only one factor impacting profitability expansion.



TBR’s report covers total, onshore and low-cost headcount trends; delivery support investments and profitability drivers

TBR











IT services vendors’ headcount growth deceleration is driven by diminished demand coupled with investments to spur nonlinear growth

TBR


Global Delivery Market Landscape 2Q12 Research Highlights: Headcount Growth


IT services vendors anticipate lower demand as a result of fiscal austerity and elongated client decision cycles for engagements in developed markets

Overall headcount growth is slowing as IT services vendors adapt their hiring levels to meet reduced demand expected in the near term

TBR




To accommodate client demand trends with profitability goals, IT services vendors are augmenting their onshore and low-cost headcount mix

IT services vendors reshuffle headcount in regions with high costs and weakened demand, but continue to hire in low-cost regions

TBR




India-centric vendors are focused on onshore hiring in mature markets to gain client face-time, while systems integrators, including those with a hardware component, are hiring more rapidly in low-cost regions to expand delivery capabilities and reduce costs

The mix of hiring by IT services vendors depends on the geographic region and the type of vendor

TBR











Standardized processes and tools coupled with internal initiatives are prime investment areas to break the link between revenue and headcount

TBR


To work toward nonlinear revenue growth, vendors are investing in IP in C&SI, automation in AO, platform-based solutions in BPO and IP-based services delivered remotely in ITO

Global Delivery Market Landscape 2Q12 Research Highlights: Nonlinear Growth


• Accenture: Consulting assets• Infosys: Integrated Project Management

Consulting and Systems Integration

(C&SI)

• Atos: Right-Fit Application Management tool, Workload Automation solution• IBM GS: Application Assembly Optimization• TCS: TCS MasterCraft

Applications Outsourcing (AO)

• Capgemini: Infrastructure Management Operations Center (IMOC)• Wipro ITS: Infrastructure Management Automation Framework (IMAF)• Xerox Services: AMP Core

Information Technology

Outsourcing (ITO)

• Capgemini: Platform-based solutions• TCS: Business Process as a Service (BPaaS)

Business Process Outsourcing (BPO)

To successfully decouple revenue growth and headcount additions, IT services vendors must continue investing in IP

TBR











Leveraging low-cost resources alone will not sufficiently drive long-term, sustainable profitability improvement

TBR


Global Delivery Market Landscape 2Q12 Research Highlights: Profitability Expansion


Low-cost headcount does impact profitability, as the vendors with the highest leverage show the greatest profitabilityVendors leverage low-cost resources; however, external factors such as lost contracts, high onshore costs and slowing revenue streams impact profitability

TBR


Global Delivery Market Landscape 2Q12 Research Highlights: Profitability Expansion


Vendors are investing in an expanded list of factors to generate profitability benefits with varied degrees of successVendors must balance low-cost resource leverage, industrialized delivery methods and higher margin offerings to deliver profitability expansion

TBR








IT services vendors’ headcount growth deceleration is driven by diminished demand coupled with investments to drive nonlinear growth

TBR


Questions?


TBR


For further information, please contact:

Lindy Hanson James McIlroyDirector, Professional Services Practice Vice President, [email protected] [email protected]

Erin HichmanAnalyst, TBR’s Professional Services Practice

Email: [email protected] Twitter: @ITSvcsAnalyst

Ramunas SvarcasSenior Analyst and Engagement Manager, TBR’s Professional Services Practice

Email: [email protected] Twitter: @rjstbr


Follow TBR on Twitter: @TBRinc





TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

About TBR

Technology Business Research (TBR) is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, networking equipment, wireless, portal and professional services vendors.

Serving a global clientele, TBR provides timely and accurate 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.

Contact Us

[email protected] Merrill DriveHampton, NH 03842USA

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.


http://www.tbri.com/

global delivery market landscape review

Technology

tbr research

support delivery

services aspects of

global integration

market emphasis

tbr insights helpcustomers

dell services

hp services