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HFS Top 10 High-Tech Service Providers 2019Excerpt for TCS

HFS Research authors:

Elena Christopher, Research Vice PresidentMayank Madhur, Knowledge Analyst

January 2019

© 2019, HFS Research Ltd Excerpt for TCS

“Companies in the high-tech sector are enabling much of the innovation and change occurring across all industries with their products and services while simultaneously pivoting their businesses to ensure they remain relevant and competitive. There is immense pressure on established tech firms to become more nimble, while digital natives are expected to stay ahead of the curve. In either case, it takes an ecosystem to achieve success.”

—Elena Christopher, Research Vice President

Topic Page

What you’ll read

Introduction, methodology, and definitions

Executive summary

High-tech service provider profiles

About the authors

The HFS Top 10 high-tech service provider results

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Introduction, methodology, and definitions

Introduction

! Companies in the high-tech sector are enabling much of the innovation and change occurring across all industries with their products and services while simultaneously pivoting their businesses to ensure they remain relevant and competitive. There isimmense pressure on established tech firms to become more nimble, while digital natives are expected to stay ahead of the curve.In either case, it takes an ecosystem to achieve success.

! In a first of its kind report, the HFS Top 10 High-Tech Service Providers 2019 report examines the role service providers play in the evolving high-tech industry. We assessed and rated the industry-specific service capabilities of 13 service providers across a defined series of innovation, execution, and voice of the customer criteria. The report highlights the overall ratings for all 13 participants and the top five leaders for each sub-category.

! This report also includes detailed profiles of each service provider, outlining their overall and sub-category rankings, provider facts, and detailed strength and weaknesses.

! The report specifically focuses on industry-specific capabilities for the high-tech sector, as defined in our high-tech operations value chain. It does not focus on horizontal IT or BPS services such as application management or finance and accounting outsourcing, which may be delivered to high-tech clients.

Service providers covered in this report

© 2019, HFS Research Ltd Excerpt for TCS7

! Direct feedback from enterprise clients—via

reference checks, surveys,

and case studies critiquing

provider performance and

capabilities.

Voice of the customerAbility to execute! Depth and breadth of industry-specific offerings and expertise—

including capabilities across the high-tech services value chain,

depth of industry knowledge, and level of sector experience.

! Talent and service delivery excellence—ability to attract and

retain qualified talent with relevant industry, process, and

technical expertise; service delivery capabilities including best

practices; focus on continuous improvement and delivery

footprint.

! Relationship management—single face to the customer, formal

relationship and governance structure, and client centricity.

Innovation capability! Industry vision and refinement of go-to-market strategy—

including vision and credibility of strategy, strong understanding of

industry trends, and refinement of capabilities to address industry-

specific challenges.

! Transformation enabled by technology change agents—deployment of intelligent automation, development of internal IP,

and strong partnership ecosystem for best of breed capabilities.

! Co-innovation and collaboration—co-development with clients

and creative commercial models.

Research methodologyThe High-Tech Top 10 report assessed and scored service provider participants across execution, innovation,

and voice of the customer criteria. The inputs to this process were detailed RFIs we conducted with 13 service

providers, reference checks with 31 high-tech clients, briefings with leaders of high-tech services practices

within service providers, HFS surveys with 350 Global 2000 enterprises, and publicly available information

sources. Specific assessment criteria and weighting include:

33.3%33.3% 33.3%


The high-tech operations value chain defined (1 of 2)! HFS developed the industry value chain concept to graphically depict our understanding of the processes and functions that

specific industries engage in to operate their businesses. ! In an effort to focus on the most dynamic segments of the high-tech industry, we have developed an industry value chain for

high-tech operations focused on the following fast growth sub-sectors:– As a service—Cloud-based businesses that offer access to software, infrastructure, or platforms on a subscription or

transaction basis.– Digital natives—Technology-led companies that have built their products and services as well as their business

operations based on digital technologies such as cloud, intelligent automation, and analytics. ! The high-tech value chain includes the following industry-specific processes:

– Sales and marketing—Services focused on optimizing sales and marketing operations across brands and value propositions.

– As-a-service business enablement—Services designed to enable and operate as-a-service-based business models.– Digital content operations—Processes focused on managing and optimizing content to ensure compliance as well as

enhancement of offerings.– Third-party engagement—Proactive and reactive support services targeting the range of third-party constituents

essential to maintaining and growing business.– Research and development—Functions focused on rapidly developing and improving offerings and related operations.

! This segmentation allows us to track and evaluate many of the emerging services that are driving the hyper growth of companies such as Apple, Amazon, Alphabet, LinkedIn, and Facebook. Examination of these emerging business processes is instructive for the broader high-tech sector as well as any industry grappling with digital transformation.


The high-tech operations value chain defined (2 of 2)! Enabling technologies—As high-tech companies are generally the ones disseminating innovation to the world,

examining their own use of enabling technologies is always instructive. In-scope enabling technologies include RPA and AI, internet of things (IoT), and augmented reality. Our evaluation of these topics will focus on how they are being utilized within high-tech, which service providers are bringing them to the table, and what real business impact is being realized.

! Horizontal IT and business processes—Enterprises in all sectors have a range of consistent business and IT processes that are essential to running their businesses but are executed similarly regardless of industry. We refer to these as horizontal processes and have segmented them by IT and business. Horizontal business processes include elements such as customer engagement and HR. Internal IT processes include functions such as application development and infrastructure management. Our industry-specific coverage of these areas will focus on instances where something unique has been developed for the industry such as user-generated content management services or algorithm training for cognitive agents.

! The traditional supply chain and support elements of high-tech business operations are covered within our manufacturing value chain. Engineering services is addressed in our coverage of industry 4.0.


High-tech operations value chain

Sales and marketing

• Sales operations—product, service, and advertising

• Marketing and engagement

• Analytics• New market expansion• Influencer management

As a service business enablement

• Order management and activation

• SLA management• Usage monitoring and

management• Pricing, billing, and

payments• License and entitlement

management• Uptime and reliability

Digital content operations

• Content moderation and management

• Content classification• Ad moderation• Authentication and

identity protection• Localization• Data security

Third-party engagement

• User support• Partner support• Third-party developer

support• Advertising support• Community management

and engagement• Feedback management

Research and development

• Enhancement• Creation• Innovation• Data optimization• Hypothesis testing—fail

fast• M&A targeting and

integration• Funding and investment

strategies

As-a-service, digital native

Horizontal business processesCustomer engagement l Human resources l Procurement l Finance and accounting l Payroll l Legal and compliance

Horizontal IT processesPlanning, design, and implementation l Application development and maintenance l Infrastructure management l Security

Enabling technologiesRPA l Artificial intelligence l Smart analytics l Blockchain l IoT l Cloud l Mobility l Social media l Augmented and virtual reality

Indu

stry

spe

cific

Hor

izon

tal

Note: Product manufacturing processes are covered in the manufacturing industry value chain


Executive summary


Executive summary (1 of 2)! A first-of-its-kind comprehensive study of 13 service providers serving the high-tech sector: HFS Top 10 High-Tech

Service Providers 2018 report is a first-of-its-kind study in which we rate 13 service providers across elements of service execution, innovation, and voice of the customer.

! The unifying theme across all study participants is a clear focus on what value they bring to tech clients: The tech sector is arguably the most challenging sector to support due to a strong antipathy to “not built here” innovation. Thus any provider that wants to support this sector must come armed with a clear and demonstrable value proposition, a willingness to make investments, and a game plan for a 360-degree relationship.

! The top 10 leaders in high-tech services are TCS, HCL, Infosys, Sutherland, Accenture, Wipro, EPAM, Cognizant, Tech Mahindra, and Genpact. These firms exhibited a strong mix of service execution excellence, applied innovation, and vision, and verified customer satisfaction to rise to the top of our high-tech study.

! Service providers are still evolving their offerings to meet the complex demands of the high-tech sector: We assessed providers’ depth of capabilities across our high-tech operations value chain. As-a-service business enablement is the most mature segment of high-tech offerings. These include services such as order management and activation, pricing, billing, payments, and uptime and reliability. Sales and marketing services are the least mature segment of offerings. These include services such as analytics, sales and marketing operations, and influencer management. Smart analytics-enabled digital marketing services is a strong development area for many firms included in the study.


Executive summary (2 of 2)! High-tech customers are happiest with their providers’ relationship management capabilities: Clients interviewed for

this study consistently rated relationship management as the area in which they are most satisfied with their service provider partners.

! High-tech customers are least satisfied with their providers’ vision and co-innovation capabilities: Reference clients consistently noted that they were disappointed in the level and frequency of innovation and vision being brought to their accounts. While it’s tough to impress high-tech clients, their providers need to continue to earn the right to be considered as partners rather than talent for hire.

! Digital as a descriptor not an offering: By and large the providers supporting high-tech clients have moved beyond using “digital” as an offering description and are instead using it to modify a term like “digital technology” or “digital marketing.” This is not surprising as tech clients have limited patience for hollow terminology.

! Service provider acquisitions to support their high-tech businesses focus on design and analytics: Service providers are buying up design firms to help understand customer journeys and drive user-centric design. Investment in analytics is also strong, and providers want to help their high-tech customers effectively harness data, increasingly coupling analytics with cognitive capabilities.

! Heavy client concentration in the US: While many marquee tech brands are headquartered in the US, there was an overwhelming geographic concentration in North America. Nearly two-thirds of high-tech customers were located in North America, with a quarter in Europe. Asia Pacific remains nascent. The average number of clients was 123.


The HFS Top 10 high-tech service providers results


HFS Top 10 high-tech sector service providers, 2018

Arvato

Sykes

IBM

Genpact

Tech Mahindra

Cognizant

EPAM

Wipro

Accenture

Sutherland

Infosys

HCL

TCS

Execution Innovation Voice of the Customer

#1

#2

#3

#4

#5

#6

#7

#8

#9

#10

#11

#12

#13

Helping tech companies harness innovation and accelerate growth

Helping technology clients navigate operating model disruption

Enabling high-tech companies to increase agility and evolve business models

Driving non-linear growth through efficient operations and strong CX

Helping high-tech companies compete with digital natives

Support tech firms in cultivating digital products, operations, and channels

Enabling high-tech companies to innovate faster

Assisting tech companies to become more competitive through innovation

Leveraging its deep expertise to benefit high-tech clients

Driving CX transformation through digital and domain expertise

Helping technology companies reinvent themselves, starting with itself

Making interesting acquisitions to drive CX and automation for its clients

Supporting the needs of fast-growing tech companies, merging with Saham*

* Profile represents Arvato capabilities pre-merger


HFS Ranking

Ability to execute Innovation capability

Voice of the customer

Depth and breadth

industry-specific service offerings

Talent and service delivery

excellence Relationship management

Industry vision and refinement of

go-to-market strategy

Transformation enabled by technology

change agents Co-innovation and

collaboration

#1

#2

#3

#4

#5

HFS top five high-tech service providers by individual assessment criteria

Source: HFS Research 2018


High-tech industry-specific service capabilities heatmap As a service, digital native

Sales and marketingAs-a-service

business enablement

Digital content operations

Third-party engagement

Research and development

Accenture

Arvato

Cognizant

EPAM

Genpact

HCL

IBM

Infosys

Sutherland

Sykes

TCS

Tech Mahindra

Wipro

Not a focus Emerging Mature

Source: Buyers n= 30; Providers n= 13

• We asked leaders within tech companies to identify

the strengths of service providers across the high-

tech value chain.

• We then asked providers to rate their high-tech-

specific offerings on a maturity scale.

• The heatmap provides a combined view of buyer

experience with providers and provider-identified

capabilities rolled up for each segment.

• As-a-service business enablement is the most mature segment of high-tech offerings. These

include services such as order management and

activation, pricing, billing and payments, and uptime

and reliability.

• The sales and marketing services segment is the

least mature segment of offerings. These include

services such as analytics, sales and marketing

operations, and influencer management.

• Please refer to our high-tech value chain for more

detail on the offerings in each segment.

Service provider profiles


Capabilities across the high-tech value chainSales and marketing As-a-service business enablement Digital content operations Third-party engagement Research and development

TCS: Using its Business 4.0 framework to help technology companies harness innovation and accelerate growth

Relevant acquisitions and partnerships Key clients Global operations and resources Recent developments in support of high tech

Acquisitions:• W12 Studios (2018)Partnerships:• Oracle, Microsoft, IBM, SAP, Adobe, Salesforce• Analytics and big data: Cloudera, MapR,• Technology partners: Hortonworks, Informatica,

MongoDB, OpenText, Pentaho, Qlik, Tableau, Teradata, Splunk

• Cloud applications: ServiceNow, Ericsson, AWS • RPA: Blue Prism, Pegasystems, UiPath, Worksoft• IoT: Cisco, GE, Intel, Juniper Networks, Qualcomm• Cybersecurity: Symantec, Securonix,

MetricStream, CyberArk, Veracode, SailPoint, RSA

Number of high-tech clients: • ~175 Key clients: • Seven of the top 10

fortune 500 software firms• Nine out of top 10

semiconductor companies • Four of the top five

networking companies• Three of the Big Four

HFS estimated headcount:• ~30,000Delivery and innovation resources:• Operations in 32 countries

across 220 delivery centers• Pace Port - Launched in Tokyo

in November 2018, it is the first of several new global hubs for research, innovation, and digital transformation services

• December 2018: Collaboration with Red Hat to build solutions that accelerate customers’ digital transformation

• October 2018: Canon Europe worked with TCSand IBM to improve its customer experience with a cloud-based platform

• September 2018: Engagement with Maxim Integrated Products focused on CRM sales transformation

• September 2017: Established Center of Excellence with Intel to accelerate AI technology adoption.

Strengths Development opportunities

• Delivering solutions tailored by sub-sector: TCS’ technology and services business covers computer platforms, software, industrial electronics, devices, networks, semiconductors, and professional services. It has developed specific offerings foreach sub-sector such as monetizing IoT in industrial electronics or enabling predictive maintenance in semiconductors. Its tech business has the largest headcount of all providers in the study and serves as a bellwether for innovation for its othersectors.

• Co-innovation: Tech sector companies do not accept slideware—they want demos. To accommodate this, TCS leverages its co-innovation network (COIN), product engineering depth, and innovation centers to show clients the art of the possible. Examples include its Digital Reimagination Studio in California, its Business Solutions Lab in Ohio, and its IoT CoE in Hyderabad, which is a collaboration with Intel. While these centers support many sectors, high-tech is a core focus.

• Use of intelligent automation: Clients commended TCS’ use of intelligent automation in its engagements, both for driving operational efficiencies, and for embedded functionality in products. This is its Machine-First Delivery Model.

• Don’t forget the “why”: TCS’ has a staggering array of tech capabilities and associated IP. However, so much of its messaging is focused on what clients need to do and how, rather than why. Solving for “why” will ensure alignment with outcomes.

• Forge relationships beyond IT: TCS has cultivated many strong partnerships with IT and engineering leadership within its clients. It needs to complement this with inroads to COO, CMO and CISO functions

Dimension Rank

HFS Top 10 position #1

Ability to execute

Industry-specific offerings and expertise

#1

Talent and service delivery #2

Relationship management #5

Innovation capability

Industry vision and GTM strategy #4

Technology-enabled transformation

#1

Co-innovation and collaboration #2

Voice of the customer #1

Not a focus Emerging Mature

About the authors

HFS Research authors

Elena Christopher drives the industry-specific research agenda for HFS, digging into the major trends impacting each in-scope industry and the implications for business process and IT services. Elena’s industry coverage areas are High-Tech, Banking and Financial Services and Telecommunications.

As a complement to her vertical focus, she leads HFS’ coverage of automation with an emphasis on robotic process automation (RPA) helping to identify and articulate the value proposition for this important change agent and its intersection with other emerging value levers.

[email protected]@ElenaLChristoph

Mayank Madhur is a Knowledge Analyst at HFS Research, supporting different practice leads in area of Industry Research, IoT and Blockchain by working on secondary research, data analysis, PoVs and research writing.

[email protected]@mayankmadhur25

Elena Christopher| Research Vice President Mayank Madhur| Knowledge Analyst

mailto:[email protected]

https://twitter.com/ElenaLChristoph

mailto:[email protected]

https://twitter.com/mayankmadhur25

Defining future business operations

HFSResearch.com | @HFSResearch

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