November 11, 2011: A recent report by Everest Group indicates that IT Application Outsourcing (AO) service providers who offer services to Insurance companies accounts to large portion of the annual contract value (ACV) and Total contract value (TCV).
A study conducted by the Everest Group evaluated the abilities of 18 top outsourcing service vendors for IT applications in the insurance sector. The 18 organizations which formed the background of the study contributed to about $5.3 billion in revenue and employed 66,000 full time employees in 20 countries. While these organizations dominated the market in terms of revenue and the off shore leaders witnessed increased revenue and transaction activity.
PEAK stands for Performance Experience Ability Knowledge and it is matrix used to differentiate organizations into Leaders, Major Contenders and Emerging Players.
Based on the matrix, Accenture, Cognizant, CSC, IBM and TCS were identified as leaders. Wipro, HCL, CGI, Infosys, HP, Capgemini, L&T Infotech, and Mphasis were categorized major contenders. Atos, Hexaware, Mindtree, softtek and Syntel were identified as emerging players.
The global slowdown has affected the leaders as organizations resorted to control over spending. But outsourcing providers who offered specialized services benefited as buyers went on to execute contracts to meet specialized requirements. When the global economy started to improve and grow, the leaders were back in business as organizations started to outsource their business functions.
According to the report leaders had set of specialized exclusive solutions that were offered for Application Outsourcing delivery. It says that major contenders have improved their service delivery capability by introducing product partnership that are relevant to the sector and by expanding through acquisitions. Emerging players focused on application services and offered customized services to suit the requirements of the Application Outsourcing buyers. The global delivery footprint of the leaders is much larger when compared to others.
According to Jimit Arora, research director, buyers have to be ready to cope up with changes in the service provider landscape. With the improvement in the economic conditions service providers have become increasingly confident and are looking for M&A in stay ahead of the competition. So outsourcing buyers should be updated in terms of changing service provider strategies and should assess it based on the impact it has on the organization.
Everest group plans to release 15 reports based BFSI industry, highlighting the ITO and BPO themes.