the forrester wave™: application outsourcing capabilities ... · conversations with the 65...

The Forrester Wave™: Application Outsourcing Capabilities Of Midsize Offshore Vendors, Q4 2016The 12 Midsize Providers That Matter Most And How They Stack Up

by Somak RoyDecember 14, 2016

FoR ApplicAtion Development & DeliveRy pRoFeSSionAlS

FOrreSTer.COM

Key takeawaysePAM Systems, L&T Infotech, Mindtree, Mphasis, And VirtusaPolaris Lead The PackForrester’s research uncovered a market in which mindtree, virtusapolaris, epAm Systems, l&t infotech, and mphasis lead the pack. Syntel, niit technologies, Hexaware technologies, Globant, Zensar technologies, and luxoft offer competitive options. Sonata Software lags behind.

AD&D Pros Are Looking For Flexibilitythe midsize offshore provider market is growing because more AD&D pros see application outsourcing as a way to address their top challenges. AD&D pros increasingly trust midsize offshore providers to offer greater flexibility and more of a focus on the account than they typically get from major vendors.

Thought Leadership And Innovation Are Key DifferentiatorsAlmost universally, clients told us that they want service provider partners to bring new ideas to the table and challenge thinking — not merely execute the contract. providers with the highest client rating on the “innovation” dimension also feature in the leaders category.

Why Read this Reportin our 33-criteria evaluation of midsize offshore providers with application outsourcing capabilities, we identified the 12 most significant ones — epAm Systems, Globant, Hexaware technologies, l&t infotech, luxoft, mindtree, mphasis, niit technologies, Sonata Software, Syntel, virtusapolaris, and Zensar technologies — and researched, analyzed, and scored them. this report shows how each provider measures up to help application development and delivery (AD&D) professionals select the right partners for their development projects and managed services engagements.

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© 2016 Forrester Research, inc. opinions reflect judgment at the time and are subject to change. Forrester®, technographics®, Forrester Wave, Roleview, techRadar, and total economic impact are trademarks of Forrester Research, inc. All other trademarks are the property of their respective companies. Unauthorized copying or distributing is a violation of copyright law. [email protected] or +1 866-367-7378

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table of contents

Application Outsourcing Priorities Shift In A Digital World

Midsize Vendors Differentiate With Customer Centricity And Flexibility

location And Heritage Still matter For Selecting midsize vendors

Application Outsourcing Capabilities Of Midsize Offshore Vendors Evaluation Overview

evaluated vendors And inclusion criteria

Vendor Profiles

leaders

Strong performers

contenders

Supplemental Material

notes & Resources

Forrester assessed the capabilities of 12 midsize providers of application offshoring services: epAm Systems, Globant, Hexaware technologies, l&t infotech, luxoft, mindtree, mphasis, niit technologies, Sonata Software, Syntel, virtusapolaris, and Zensar technologies. We interviewed these vendors and 65 of their customers.

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FoR ApplicAtion Development & DeliveRy pRoFeSSionAlS

The Forrester Wave™: Application Outsourcing Capabilities Of Midsize Offshore Vendors, Q4 2016The 12 Midsize Providers That Matter Most And How They Stack Up

by Somak Roywith Ashutosh Sharma, Frederic Giron, William martorelli, Arnav Gupta, and Bill nagel

December 14, 2016

http://www.forrester.com/go?objectid=RES127326






http://www.forrester.com/go?objectid=BIO9684





For ApplicAtion Development & Delivery proFessionAls

The Forrester Wave™: Application Outsourcing Capabilities Of Midsize Offshore Vendors, Q4 2016December 14, 2016

© 2016 Forrester research, inc. Unauthorized copying or distributing is a violation of copyright law. [email protected] or +1 866-367-7378

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The 12 Midsize Providers That Matter Most And How They Stack Up

Application outsourcing priorities Shift in A Digital World

midsize application outsourcing providers with offshore and/or nearshore delivery capabilities combine flexibility, agility, lower costs, and niche skills to help AD&D professionals implement the business technology (Bt) agenda. While the role of midsize providers has stayed largely the same, the application outsourcing market itself is in flux, with profound changes in what clients seek from their partners. enterprises have moved beyond cost and delivery efficacy, which are now table stakes.1 they now seek partnerships that will provide guidance beyond technology and beyond the immediate deliverable. AD&D pros seeking application outsourcing services now also prioritize:

› Faster time-to-market. cost is still important, but fast execution is even more important for application development projects that serve the Bt agenda.2 AD&D pros are prioritizing whatever reduces time-to-market, whether that’s Agile development and delivery concepts, solution accelerators, nearshoring, or highly skilled technologists who are far more efficient than has been the norm in industrialized development facilities.3 Generations of outsourcing have given enterprises more realistic expectations of labor arbitrage. they are aware of management overheads that cut into the cost differential across onshore and offshore. in addition, clients are wary of service providers’ attempt at underpricing to win deals, which often leads to service quality issues later.

› A more variable cost model. clients told us that they are now reluctant to contract for committed levels of staffing due to ever-shrinking budgets. they want the ability to flex resources up and down according to their needs. this requirement for a variable cost model also influences the choice of pricing model. Acceptance of nonfixed capacity-based pricing for application maintenance and support (AmS) is higher than it was a year ago.4 enterprises are experimenting with application-based pricing, which links the fees to the support tier (as per service-level agreements and support windows) and seasonal or other changes in demand. more than one client reported using per-sprint pricing for app-dev projects.

› Closer cultural proximity. As enterprises adopt agile approaches, many clients with experience dealing with both india-heritage and nearshore vendors feel that the benefits of close physical and cultural proximity outweigh the labor arbitrage advantages of a large offshore contingent. in the words of an executive from a global financial services company, “if distance slows down or adds friction to the delivery process, the pendulum begins to swing in the other direction.”5 While this currently applies to a small proportion of application outsourcing, it has become significant for some clients’ digital transformation journeys.

› Thought leadership. clients expect their service providers to be more than just order-takers; they look for providers to challenge the status quo and bring new ideas to the table. more than half of enterprises said that they want vendors to proactively suggest innovative approaches. enterprises want vendors to bring both the big ideas, such as the automation or SaaS often broached in quarterly review meetings, and the incremental innovation that comes from employees, often




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located offshore.6 clients reported getting the former from onshore delivery teams and account management, frequently representing the best the vendor has to offer, and staffed with personnel tenured enough to understand the client’s business. However, most enterprises reported being less than satisfied with the latter.7

midsize vendors Differentiate With customer centricity And Flexibility

Forrester’s research from an earlier generation of outsourcing cited flexibility, price advantage, and greater control and leverage as the primary reasons for opting for a midsize service provider.8 conversations with the 65 enterprises that the evaluated vendors in this report provided as reference clients indicate that this still holds. AD&D professionals should note that:

› Being “a big fish in a small pond” is still the most oft-cited reason for going midsize. this is an obvious benefit of being a large client of a small provider (see Figure 1). As one client told us: “[Big offshore service provider] is knocking on my door every day, but you have to spend hundreds of millions of dollars with it to get the attention i get from my vendor. We have relationships all the way up to the ceo.” customers listed many cases where a midsize partner swiftly corrected course as soon as they raised a delivery issue, invested in backup resources in anticipation of future hiring, or assuaged concerns about relationship health through a cxo meeting. even groups within large enterprises, which are indeed strategic clients to the biggest vendors, cited a similar rationale. these groups still like the leverage they have over a midsize provider.

› Clients continue to rate midsize providers high on flexibility. Almost 40% of clients cited “flexibility” as a top reason for selecting a vendor. enterprises often said that they chose a particular vendor because of its “willingness to adapt to our ways” at the time of the bid and that it “does not get too fixated on the letter of the contract” in the course of the engagement. With large service providers, enterprises are more likely to run into rigid contractual structures and inflexibility stemming from too many stakeholders. in addition, we often heard that midsize providers are more likely than major systems integrators to focus on the work when plans change and worry less about the minutiae of the master services agreement.

› Midsize vendors are cheaper for all but the most sophisticated of enterprises. enterprises are much happier with the value for money they get from a midsize provider than its ability to innovate (see Figure 2). our conversations with enterprises indicate that india-based midsize vendors retain a price advantage of 20% to 40% relative to india-heritage majors such as tcS and infosys. this is true both for digital customer experience projects and for older packaged software implementation and managed services engagements. the price difference is less for non-india-heritage vendors such as epAm Systems or luxoft, but the advantage still holds. For mature outsourcing organizations with sophisticated vendor management offices that negotiate prices down for all vendors, big or small, the difference is less pronounced. However, for most others it is significant.




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› Niche skills also came up, but less often. midsize providers’ ability to provide niche skills is also sometimes a reason for clients to select them. A large global financial services firm cited pegasystems’ skills as the reason for working with virtusapolaris. A well-known media conglomerate cited industry sector competency as the reason for selecting l&t infotech in a competitive bid. AD&D pros should conduct a thorough survey of the midsize cohort’s catalog of skills for a possible match. Hexaware, for example, has a strong peopleSoft and Workday proposition, with roots in a longstanding relationship with oracle involving human capital management. Sonata Software’s microsoft Dynamics practice is comparable to that of much bigger vendors. A niche skill in a midsize provider offers a rare combination of scale, leadership attention, and flexibility — so AD&D pros should be on the lookout for one.

FIGUre 1 primary Reasons For choosing A midsize vendor

45%

38%

21%

14%

32%

To be a big clientof a small provider

Flexibility Cost Niche skills Others/don’t know

Base: 56 clients of the 12 technology providers featured in this Forrester Wave™ evaluation

“What were your primary reasons for choosing your midsize vendor?”(Multiple responses accepted)




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FIGUre 2 midsize providers Give Great value For money

4.34.0

Value for money The ability to suggestinnovative approaches

“How do you rate your midsize vendor on the following?”

Base: 64 clients of the 12 technology providers featured in this Forrester Wave™ evaluation

(Responses on a scale of 1 [poor] to 5 [excellent])

Location And Heritage Still Matter For Selecting Midsize Vendors

large vendors have honed their global distribution networks over the past few years, but the same is not true for midsize providers.9 An essential part of selecting epAm Systems or luxoft is buying into an eastern europe-centric delivery strategy. When enterprises compare a mindtree with a Globant, a big part of the decision is the india versus latin America question. enterprises often have a policy one way or another. As one client from a north American media conglomerate told us, “We wanted to deal with just one kind of cultural difference, so we decided to go the india way for all of our suppliers.” AD&D professionals evaluating midsize providers should note that:

› european and American vendors have little offshore, Indian vendors little nearshore. the eastern european vendors have just begun their india journey. in late 2016, epAm Systems bought Alliance Global Services, adding a little more than 1,000 engineers. A few months prior to that, Argentina’s Globant acquired clarice technologies, which brought in fewer than 300 engineers. only two of the nine india-heritage vendors featured in this Forrester Wave evaluation have more than 200 nearshore full-time equivalents, and none has more than 1,000. AD&D professionals should therefore study the factors pertinent to delivery from these locations alongside individual vendor capabilities.

› The vendors’ portfolios reflect the constraints of their primary delivery location. the indian market offers a large pool of low-priced talent. naturally, india’s tech industry has focused on service lines that require scale, such as business application implementation, testing, and AmS — and that legacy lives on. none of the non-indian vendors featured in the Forrester Wave evaluation score high on AmS automation; two — Globant and luxoft — offer no SAp, oracle, or microsoft




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Dynamics services. eastern european providers have taken the path of technical virtuosity, and most clients familiar with both kinds of technology providers see the two differently. As one of them told us, “For technically complex projects, we prioritize the eastern european vendor, but when we have to scale from 0 to 60 in six months, indian providers win out.”

Application outsourcing capabilities of midsize offshore vendors evaluation overview

to assess the application outsourcing (Ao) capabilities of midsize offshore providers, Forrester evaluated the strengths and weaknesses of 12 service providers, each with total revenues of less than US$1 billion. After examining past research, user needs assessments, and vendor and expert interviews, we developed a comprehensive set of evaluation criteria. We evaluated suppliers across 33 criteria, which we categorized into three high-level buckets:

› Current offering. We assessed the strengths of the vendors’ digital customer experience and digital operational excellence capabilities, design skills, analytics practice, enterprise resource planning (eRp) capabilities, consulting depth, ability to take greater ownership and offer managed services and alternative pricing models, and global delivery model.10 We also rewarded vendors that focus on a tightly defined set of industry sectors, because it is highly unlikely that midsize vendors can serve a multitude of sectors effectively.

› Strategy. to evaluate the service providers’ strategy, we focused on the pillars of the application outsourcing discipline of the future — mainly AmS automation and product development.11 We also measured the provider’s ability to break out of the midsize pack through a combination of reducing its reliance on top customers, winning large deals, and executing on a well-crafted inorganic growth strategy.

› Market presence. We assessed market presence using a combination of application outsourcing revenues and a measure of how well distributed those revenues are across regions.

evaluated Vendors And Inclusion Criteria

Forrester included 12 suppliers in this study: epAm Systems, Globant, Hexaware technologies, l&t infotech, luxoft, mindtree, mphasis, niit technologies, Sonata Software, Syntel, virtusapolaris, and Zensar technologies. these vendors have (see Figure 3):

› relevance to large enterprises with $1 billion or more in revenue. For inclusion in the Forrester Wave, every service provider had to demonstrate Ao capabilities, serving clients with more than $1 billion in revenues.

› AO revenues of at least $100 million but total revenues less than $1 billion. in order to qualify, each vendor had to have a minimum of $100 million in global application outsourcing revenues. As this Forrester Wave evaluates midsize vendors only, we capped total revenues at $1 billion.




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› Global delivery capability. this Forrester Wave evaluation focuses on vendors that serve businesses in industrialized economies from the low-cost locations of latin America, eastern and central europe, and india. to that end, we did not consider vendors that get the bulk of their revenues from supporting domestic clients or the domestic operations of clients from north America and Western europe (as is the case with some china-based vendors).

› relevance to and interest from Forrester’s client base. vendors also had to be in demand, as measured by the volume of inquiries Forrester receives and competitor mentions.

FIGUre 3 vendor Selection criteria

The vendor should have application outsourcing revenues of US$100 million or more.

The vendor’s total revenues should be less than US$1 billion.

The vendor must generate at least 60% of its revenues from supporting client operations outside the primary country of delivery (e.g., if the vendor’s primary delivery location is Mexico, no more than 40% of its revenue would come from supporting client operations in Mexico).

The vendor must generate at least 30% of its revenue in North America.

The vendor must have generated suf�cient interest among among Forrester clients, as measured by an analysis of inquiries recorded in our internal customer relationship management system.

Vendor inclusion criteria

vendor profiles

this evaluation of the application outsourcing capabilities of midsize offshore vendors is intended to be a starting point only. We encourage clients to conduct detailed service line assessments and adapt criteria weightings to fit their individual needs through the Forrester Wave excel-based vendor comparison tool (see Figure 4).




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FIGUre 4 Forrester Wave™: Application outsourcing capabilities of midsize offshore vendors, Q4 ’16

Challengers Contenders LeadersStrong

Performers

StrategyWeak Strong

Currentoffering

Weak

Strong

Go to Forrester.comto download the Forrester Wave tool for more detailed product evaluations, feature comparisons, and customizable rankings.

Market presence

Full vendor participation

Incomplete vendor participation

EPAM Systems

HexawareTechnologies

Globant

L&T Infotech

Luxoft

Mindtree

MphasisZensar Technologies

Sonata Software

SyntelVirtusaPolaris

NIIT Technologies




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FIGUre 4 Forrester Wave™: Application outsourcing capabilities of midsize offshore vendors, Q4 ’16 (cont.)

All scores are based on a scale of 0 (weak) to 5 (strong).

EPAM

Sys

tem

s

Globan

t

Hexaw

are T

echn

ologie

s

L&T

Infot

ech

Luxo

ft

Mind

tree

NIIT Te

chno

logies

Sonat

a Sof

twar

e

3.92

4.50

4.00

3.95

4.20

4.50

4.27

3.10

4.15

1.70

3.65

4.45

3.30

4.00

4.00

4.00

weight

ing

Forre

ster’s

Tech

nolog

ies

Zensa

r

50%

19%

9%

9%

9%

9%

9%

9%

18%

9%

50%

30%

70%

0%

70%

30%

2.95

4.00

4.50

3.45

2.20

2.50

0.54

2.05

3.35

2.40

3.08

3.25

3.00

1.60

1.00

3.00

2.97

4.20

3.50

1.10

1.40

2.50

2.46

3.70

2.90

3.70

3.27

2.25

3.70

2.00

2.00

2.00

3.94

3.50

3.90

3.95

4.40

4.50

5.00

3.30

3.65

4.00

3.41

3.20

3.50

4.70

5.00

4.00

2.87

4.80

3.40

2.40

1.60

2.00

0.00

2.80

4.20

1.20

2.67

3.30

2.40

3.30

3.00

4.00

4.09

4.00

4.90

4.25

2.80

5.00

2.97

3.65

4.35

4.70

3.98

3.45

4.20

3.70

4.00

3.00

3.04

3.70

3.00

2.40

3.20

2.50

1.19

2.65

3.00

5.00

3.38

3.80

3.20

2.90

2.00

5.00

2.00

3.20

0.60

2.70

0.00

1.50

1.49

0.95

2.40

3.40

1.73

1.55

1.80

2.20

1.00

5.00

Synte

l

Virtus

aPola

ris

3.53

5.00

3.10

3.10

4.40

1.50

3.54

3.25

3.20

3.40

3.35

2.30

3.80

4.10

5.00

2.00

3.98

4.30

3.40

3.90

4.20

4.00

3.89

3.00

4.55

3.70

3.96

3.40

4.20

4.00

4.00

4.00

3.04

3.90

1.50

4.60

3.40

3.00

3.46

1.65

3.20

1.50

2.92

3.20

2.80

2.30

2.00

3.00

Current Offering

Client satisfaction

Design capabilities

Digital customer experience

Digital operational excellencecapabilities

Analytics capabilities

Packaged software implementation

Global delivery capabilities

Consulting and industry sector competency

Pricing and ownership

Strategy

Breakout potential

Agile, automation, and product development

Market Presence

Application outsourcing revenues

Application outsourcing revenue distribution




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Leaders

› Mindtree. mindtree is among the few india-heritage vendors that combine digital customer experience capabilities with digital operational excellence and application management strengths. the vendor is a good fit for enterprises whose digital transformation road map is starting to extend beyond systems of engagement to systems of record, especially those in the financial services, retail, consumer packaged goods, travel, and high-tech and consumer electronics sectors. the vendor is addressing gaps in its business application portfolio with acquisitions including Bluefin for SAp and magnet 360 for Salesforce. clients spoke highly of mindtree’s onsite personnel and the ideas they bring to the table. However, more than one customer told us that they have not seen a similarly strong pipeline of continuous, incremental innovation from the offshore workforce.

› VirtusaPolaris. in late 2015, virtusa made the boldest move yet in the midsize service provider market, buying the similar-sized financial services specialist polaris; it added 8,000 employees and nearly doubled its client count. the combined entities score well across the board on both digital customer experience and traditional application outsourcing disciplines. on the managed services front, the virtusapolaris AmS automation portfolio is among the most comprehensive in the market, covering everything from ticket routing based on natural language processing to anticipating incidents using big data analytics for it operations data. clients rated virtusapolaris highly on its willingness to bring forth ideas for improvement unsolicited, which is unusual for an india-heritage vendor. virtusapolaris is particularly applicable to enterprises from the financial services, telecom, healthcare, and media and entertainment industries.

› ePAM Systems. more than any other midsize vendor, epAm Systems combines digital product engineering competencies and the ability to solve difficult technical challenges with the flexibility and customer centricity advantages of a midsize provider. With roots in software product development, epAm is well suited to enterprises looking to build digital platforms for both B2B clients and consumers and when clients want original ideas on features, usability, solution design, and architecture. enterprises consider epAm an essential pillar of their strategic road map. one client told us that “epAm has been one of our top four strategic decisions, and the list of such decisions includes the cloud.” the vendor does not focus on commodity services; its workforce would be overkill for services like AmS and legacy modernization. lastly, more than one client complained about offshore resources’ language skills. enterprises should therefore work on building the right onsite coordination team.

› L&T Infotech. india-based l&t infotech is unusual among midsize firms in being part of a conglomerate; this parentage manifests itself in deep domain knowledge. A major oil firm told us that the vendor is the rare partner that can supply engineers with knowledge of upstream issues. the parent company, larsen & toubro, does indeed have an oil and gas business. l&t infotech consistently scores above average across digital customer experience, digital operational excellence, analytics, and business applications. it’s a good fit for enterprises from the sectors it focuses on: finance, manufacturing, oil and gas, life sciences, and media and entertainment — especially when the ask involves more than technical skills and warrants industry sector expertise.




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› Mphasis. india-based mphasis has had an eventful ownership history.12 the vendor scores well in both digital customer experience and digital operational excellence and has the most experienced contingent of business consultants in the midsize cohort. mphasis also has the highest industry concentration among vendors in this Forrester Wave evaluation; financial services accounts for more than 80% of its revenues. even within the financial services sector, the vendor focuses on a set of tightly defined microverticals — consumer banking, wealth management, insurance, and mortgages. mphasis is a good fit for situations where creating the right experience requires strong knowledge of financial industry processes.

mphasis declined to participate in the Forrester Wave evaluation process. We have included it based on its market presence and our knowledge from past analysis and publicly available information.

Strong Performers

› Syntel. many clients spoke highly of the vendor’s willingness to bring new ideas that improve on the status quo. As one testing client put it, “they are not order-takers; Syntel pushed back on the defect rate we were willing to accept, which seems high in retrospect.” its SyntBots platforms are among the most comprehensive AmS automation platforms in the midsize market; its automation pilot program, encompassing more than 20 clients, is one of the largest in the midsize segment. the vendor received reasonably high scores across the application outsourcing spectrum and is a good fit for enterprises from the financial services, healthcare and life sciences, insurance, retail, and logistics sectors. Syntel’s design capabilities lag its technical competencies in the digital customer experience area.

› NIIT Technologies. niit technologies scored higher than its india-heritage peers on outsourced product development, specializing in B2B products such as a cargo-handling product for an air transport client. niit is a clear fit for areas such as business process management, big data, and omnichannel development, where it scores well. its AmS portfolio and packaged software implementation portfolios are also credible. niit’s clients are highly concentrated in the travel and transportation, financial services and insurance, and media sectors, which together account for more than 80% of its revenues. However, more than one customer voiced concerns about the vendor’s record of proactively proposing innovative approaches. lastly, niit technologies’ level of customer advocacy and willingness to take risks stood out in interviews with reference clients.

› Hexaware Technologies. mumbai-based Hexaware had a leadership change in 2014 after a private equity takeover the year before. the service provider has since reformulated its strategy; it now goes to market with “shrink it, grow digital.” Hexaware’s AmS automation portfolio is among the more well-rounded ones in the market in terms of the “shrink it” portion of the message; the “grow digital” part is less differentiated. Hexaware scored below average on the digital customer experience. in terms of strengths, the service provider has a strong oracle practice, with a particularly long history of serving human capital management and talent management needs. its Workday practice is noteworthy. Hexaware focuses on the manufacturing, transportation and travel, insurance, and capital market verticals.




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› Globant. Globant focuses on combining design, Agile development, and product engineering to create digital consumer experiences. it is the only participating vendor other than epAm Systems to have bought a specialist design firm (WAe).13 Globant has a number of household name brands, such as national Geographic, as clients and has a strong footprint in the gaming industry. the vendor’s primary delivery centers are in latin America, which aligns well with its target market’s requirements for time zone overlap. north American enterprises building consumer-facing web or mobile applications are the right candidates for Globant. However, the service provider does not offer many of the staples of the application outsourcing industry like services around SAp, oracle, or microsoft Dynamics solutions.

› Zensar Technologies. in market presence and sheer size, india-based Zensar ranks in the middle of the pack, but it punches above its weight in digital customer experience, mainstream business applications, and business intelligence. its oracle practice is particularly strong. Across these service lines, Zensar’s proposition stands out, especially in managed services, with a relatively full-featured AmS automation portfolio. clients spoke highly of the service provider’s customer advocacy and flexibility, although Zensar’s user experience (UX) design and architecture competencies lag its software platform skills. Well-defined tech-only projects in retail, banking, and manufacturing would be the right fit for Zensar.

› Luxoft. With its center of gravity in eastern europe, luxoft does not focus on AmS or eRp implementation. However, it stands out with its product engineering capabilities and focus on the high-value part of the application outsourcing spectrum; financial services account for nearly 70% of its revenues. luxoft gets the bulk of its product engineering skills and its unique (in this group of vendors) human/machine interface and embedded software competencies from its automotive practice. However, luxoft’s mediocre design scores do not seem to indicate that UX skills have fully crossed over from its automotive practice. technically complex projects — especially in financial services, but also in telco, energy, and travel and aviation — would be a good fit for luxoft.

Contenders

› Sonata Software. Sonata has a few clear areas of focus, such as microsoft Dynamics services, SAp Hybris, mobile app development, and analytics. the vendor focuses on three key industries: travel (tour operators, online travel agencies, corporate travel); retail (hypermarkets, groceries, apparel); and consumer packaged goods. Sonata has acquired a few vendors specializing in niche markets, such as its recent purchase of i.B.i.S., a US-based microsoft Dynamics service provider. in addition, the tech provider scores higher on digital customer experience than its overall size would suggest. Sonata would be the right fit for systems of engagement and omnichannel projects in its target industries. this is primarily from a technical standpoint; Sonata did not score well on design.




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Supplemental material

Online resource

the online version of Figure 4 is an excel-based vendor comparison tool that provides detailed product evaluations and customizable rankings.

Data Sources Used In This Forrester Wave

Forrester used a combination of multiple data sources to assess the strengths and weaknesses of each solution. We evaluated the vendors participating in this Forrester Wave, in part, using materials that they provided to us by november 4, 2016.

› Vendor surveys. Forrester surveyed vendors on their capabilities as they relate to the evaluation criteria. once we analyzed the completed vendor surveys, we conducted vendor calls where necessary to gather details of vendor qualifications.

https://go.forrester.com/apps/

http://forr.com/1einFan

http://www.forrester.com/Analyst-Advisory/-/E-MPL172

https://www.forrester.com/events?N=10006+5025




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› Customer reference calls. to validate product and vendor qualifications, Forrester also conducted reference calls with a total of 65 current customers.

The Forrester Wave Methodology

We conduct primary research to develop a list of vendors that meet our criteria to be evaluated in this market. From that initial pool of vendors, we then narrow our final list. We choose these vendors based on: 1) service proposition’s alignment with client requirement; 2) customer success; and 3) Forrester client demand. We eliminate vendors that have limited customer references and products that don’t fit the scope of our evaluation.

After examining past research, user needs assessments, and vendor and expert interviews, we develop the initial evaluation criteria. to evaluate the vendors and their products against our set of criteria, we gather details of product qualifications through a combination of lab evaluations, questionnaires, demos, and/or discussions with client references. We send evaluations to the vendors for their review, and we adjust the evaluations to provide the most accurate view of vendor offerings and strategies.

We set default weightings to reflect our analysis of the needs of large user companies — and/or other scenarios as outlined in the Forrester Wave evaluation — and then score the vendors based on a clearly defined scale. We intend these default weightings to serve only as a starting point and encourage readers to adapt the weightings to fit their individual needs through the excel-based tool. the final scores generate the graphical depiction of the market based on current offering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product capabilities and vendor strategies evolve. For more information on the methodology that every Forrester Wave follows, go to http://www.forrester.com/marketing/policies/forrester-wave-methodology.html.

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endnotes1 in multiple iterations of applications outsourcing, clients have attempted to cut more costs — to the point where

increased, dramatic cost savings are becoming more difficult for clients to achieve. As a result of this trend, however, we see more attention shifting toward the alternative benefits and value that customers can get from an outsourced provider. clients that used to only focus on the cost-savings opportunity from offshore workers are now just as likely to highlight the staffing flexibility or the access to new technology business solutions. As one client noted, “the value equation has to generally be more effective since, as a fifth-generation outsourcing outfit, we can’t rely on cost saving every time.” See the Forrester report “Applications outsourcing customers Weigh in on Best practices And Key Success Factors.”

2 customer-obsessed firms are customer-led and insights-driven. they move fast rather than perfectly, and they are connected to serve increasingly powerful customers. cios wield a critical asset: the business technology to win, serve, and retain customers. this report identifies the top technologies for your business technology agenda, including






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systems of insight to understand customers and systems of engagement to win, serve, and retain them along every step of their journeys. See the Forrester report “the top technologies For your Business technology Agenda, 2016.”

3 With the increasing speed of technology innovation, enterprises are facing time-to-market pressures, and looking to service providers to shorten timelines. See the Forrester report “Selecting A product Development Services provider.”

4 in early 2016, Forrester estimated that about half of AmS relationships run on time and materials, and the majority of the other half specifies a defined capacity or a managed outcome. See the Forrester report “Bring your Applications management Services into your Digital Future.”

5 A 2013 survey of 149 agile practitioners found that more than half of agile teams are either colocated or located within a time difference of 2 to 4 hours. See the Forrester report “offshore Agile comes of Age.”

6 SaaS: software-as-a-service.

7 this is consistent with what clients of large service providers have told us in the past. A 2013 report based on 69 reference client conversations observed that the widespread hope that suppliers will distill the lessons learned across their customer engagements and deliver them to customers’ doorsteps is just that — a hope, and a forlorn one at that. customers of Ao suppliers must instead extract value by managing vendors actively, including encouraging them to say no. See the Forrester report “Applications outsourcing customers Weigh in on Best practices And Key Success Factors.”

8 A 2007 report on midsize providers cited the following reasons for looking beyond the tier one systems integrators — costs, rigidity, client’s degree of influence over the service provider, and client service shortfalls. See the Forrester report “not the Usual Suspects: cost, Quality, And client Service Benefits From midtier providers.”

9 Accenture employed 70,000 in india five years ago. iBm currently employs more than 150,000 there. tcS’s workforce in latin America numbers 14,000; infosys’ in poland is close to 2,300.

10 A digital experience delivery platform is defined as software to manage, deliver, and optimize experiences consistently across every digital touchpoint. See the Forrester report “techRadar™: Digital customer experience technologies, Q1 2015.”

in addition, we define digital operational excellence as the capabilities designed to enhance customer experience through converting operational tasks, information flow, and documentation to digital formats, reducing low-value and non-value-added activities that involve people, documents, and data. See the Forrester report “techRadar™: Digitizing operational processes, Q2 2015.”

11 in Forrester’s 14-criteria emerging market evaluation of software product development services (pDS) vendors, we identified the 11 most significant providers — epAm Systems, Globallogic, Hcl, infosys, mindtree, ness technologies, pactera, persistent Systems, Symphony teleca, tcS, and Wipro — and researched, analyzed, and scored them. this report details our findings about how well each vendor fulfills our criteria and where they stand in relation to each other to help sourcing and vendor management professionals select the right partner for their software product development initiatives. See the Forrester report “the Forrester Wave™: Software product Development Services, Q1 2014.”

12 eDS acquired the vendor in 2006, and Hp’s acquisition of eDS in 2008 brought mphasis to the Hp fold. Hp became both the owner and the biggest client. Hp’s share of revenues reached a peak of just over 70% in 2011, and now stands at about one-quarter. in addition, the company was put on the block. Finally, private equity group Blackstone bought mphasis in early 2016.

13 in may 2016, Globant bought the 40-employee service design specialist WAe. Source: “Globant acquires WAe to continue advancing in the creation of digital journeys,” Globant press release, may 24, 2016 (https://www.globant.com/new/globant-acquires-wae-continue-advancing-creation-digital-journeys).















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