Archive for the ‘Everest’ Category
The global outsourcing and offshoring market saw significant drops in transaction volumes during the third quarter this year, a substantial decline for the first time in four quarters, according to Everest Group, an advisory and research firm on global services. The sluggish market witnessed 472 outsourcing deals compared to 508 and 516 transactions in the first and second quarters of this year, respectively. Following a record spike in captive announcements last quarter, captive activity also fell back to a more “normal” level of 20 setups. A one-hour webinar will be held November 8, 9 a.m. CST, to present study findings and insights.
Everest Group’s Market Vista: Q3 2011, a quarterly report on global outsourcing and offshoring activity, reports third quarter global transaction volumes reached about US$2.7 billion in annual contract value (ACV), an increase of 6 percent over the previous quarter, primarily as the result of three mega deals signed during the quarter. Compared to Q2 2011, the market saw a decrease in Business Process Outsourcing (BPO) transactions by 12 percent and IT Outsourcing (ITO) transactions by 7 percent.
“The global outsourcing and offshoring market is beginning to show signs of slowing growth in selective areas, but we’ll need to see a few more quarters to determine if this is the beginning of a downturn trend,” said Eric Simonson, managing partner of Research. “Although captive setups dropped during the quarter, the captive continues to be a core component of global sourcing strategies, adoption activity remains healthy, and significant activity is spreading across industry verticals such as manufacturing and healthcare. Despite a decline in transactions, high location activity, particularly by service providers, provides indications that the outlook for the global sourcing market continues to remain cautiously optimistic in the medium term.”
Other third quarter 2011 findings include:
• The BFSI (banking, financial services and insurance) sector continued to lead transaction activity and the MDR (manufacturing, distribution and retail) vertical saw transaction volumes rise 8 percent. While there was a large drop in deals signed by government and defense organizations, the energy and utilities sector saw the largest percentage increase in contract activity.
• Both transactional and ACV volumes marginally decreased in North America and Continental Europe whereas declines were sharper in the United Kingdom and Rest of World (Asia Pacific, Middle East, Africa and Latin America).
• Three megadeals, each valued at over US$1 billion in total contract value (TCV), were signed in the quarter.
• India dominated the captive market but considerable activity also was witnessed in Europe, Middle East/Africa and Rest of Asia. The first captive divestiture of the year occurred during the quarter.
• Offshore activity saw 46 delivery centers established in the third quarter compared to 38 in the previous quarter. Significant activity occurred in India and Africa.
• Service providers’ consolidated revenues increased over the second quarter, but consolidated margins fell over the same period. (Financials lag other service provider activity by one quarter.)
Source: www.top-consultant.com
Founder Peter Bendor-Samuel leads firm through two decades to become leading global consultancy.
Since its founding two decades ago as a small software business helping companies manage outsourcing transactions, Everest Group has emerged to become a leading consulting and research firm on global services that today serves users and providers of global services, country organizations and private equity firms in six continents across all industry categories. Celebrating its 20th anniversary, Everest Group continues to offer strategic assistance to Global 1000 organizations for solving complex problems related to global services, including cloud computing transformation.
“When Everest Group was a young company, we were helping organizations understand how to harness the value of outsourcing, which, at that time, was a business strategy few understood in terms of how to best structure and manage an engagement,” said Peter Bendor-Samuel, CEO, who founded Everest Group in 1991. “Today, Everest Group has evolved its services in concert with the maturation of the global services market. Now, leading companies are focused on capturing more value from their front-, mid- and back-office business support services as they look for solutions that address their major business challenges. Likewise, Everest Group’s focus has shifted. We are helping clients strategically use the next generation of global services, which often depart from past models and philosophies; require broad execution and management across multiple internal organizations and geographical boundaries; and result in significant cost reduction and/or revenue enhancement.
After serving as an executive at EDS, now owned by HP, Bendor-Samuel established Everest Group with two employees with a software product that helped companies manage large outsourcing transactions and with a vision to improve outsourcing services. Two years later, in 1993, Everest Group transitioned to a third-party intermediary consulting firm, becoming a charter member of a small, elite group of boutique outsourcing advisory firms that counseled organizations that were becoming increasingly familiar and comfortable with the practice of outsourcing business operations and functions to third-party service providers.
Following nearly a decade as a leading advisory firm, Bendor-Samuel published a landmark book in 1999 that laid out the principles of outsourcing and advised on its potential pitfalls. In Turning Lead Into Gold: The Demystification of Outsourcing, Bendor-Samuel advised readers that “outsourcing is here to stay…you may choose to ignore it, but you do so at your own peril – because your competitors are not ignoring it.”
Between 2002 and 2005, Everest Group opened offices in Canada, India, and locations in Europe to serve domestic companies in those regions, as well as multinational corporations, which increasingly subcontracted business processes from lower-cost locations.
A firm believer that deep, updated knowledge is critical for making decisions, Bendor-Samuel invested heavily in research talent and initiatives to solely focus on the rapidly changing global services environment. As a reflection of its industry-leading research capabilities, Everest Group established its research practice in 2005 to provide research, analysis and insights that enable global sourcing managers to navigate through complexities and make clear, effective decisions. In 2008, Everest Group introduced quarterly Market Vista reports that provide data and analysis highlighting key trends and developments in the global offshoring and outsourcing market including outsourcing transaction trends, health of captives, location risks and opportunities and service provider activity.
Over the years, Everest Group expanded services and talent depth in sync with the ever-changing global services industry, including the firm’s recent establishment of its Next Generation IT practice, which includes services to help guide organizations with cloud computing transformation initiatives. The NGIT practice developed and launched Everest Group Cloud Value Assessment Model™ (EG CVAM™), the industry’s first assessment model to provide enterprises a data-driven business case that identifies optimal IT workloads for migration to public, private or hybrid clouds as part of a comprehensive IT transformation.
“Cloud computing is the technological breakthrough that will cause the most disruption in global services this decade. As impactful, disruptive internal and external pressures increase, we continue to evolve our offerings to help clients capture value from the next generation of global services,” said Bendor-Samuel. “Twenty years from now, our firm’s services will no doubt be significantly evolved because global services will never stop advancing; however, our commitment to our clients will remain unchanged.”
Bendor-Samuel credits Everest Group’s success to the firm’s vision, depth of talent and five guiding principles: focus on clients’ shareholder growth; maintain an open mind without presumptions or predetermined agendas; leverage an arsenal of original research; provide a ten-year view for clients and the industry; and ensure organizations take the right first step.
Source: www.top-consultant.com
David Noble, a consulting industry veteran with more than 25 years of energy and private equity industry experience, has joined Everest Group, an advisory and research firm on global services. Adding talent depth to the firm’s fast-growing Energy & Utilities and Private Equity practice areas, Noble brings experience that includes leadership positions with a broad range of international and multinational clients in the energy, natural resources, consumer goods, agriculture, construction and industrial services industries.
“David’s experience and leadership will greatly benefit our energy and utility clients that are challenged with complex regulation, increasing resource costs and unpredictable market conditions that exact pressures on them to find efficiencies and cost reductions quickly,” said Peter Bendor-Samuel, chief executive officer, Everest Group. “Additionally, David brings significant depth of knowledge to our private equity clients, which seek our help navigating a mature global services industry that requires a thorough understanding of offshore assets, commoditization dynamics and changing buyer needs that put many traditional business models at risk.”
Before joining Everest Group, Noble spent 12 years with McKinsey & Company, where he negotiated and led consulting engagements for multinational companies headquartered in the United States. At McKinsey, Noble focused on the development and implementation of growth-oriented corporate, business unit and new venture strategies for technology, natural resource and consumer goods clients. As a leader in the firm’s Energy practice, Noble was directly involved with launching new business units and product lines, as well as numerous acquisitions, market entry strategies and turnarounds for underperforming business units.
Noble’s previous experience also includes serving as managing director of energy investment banking with FMI Corporation, where he led that line of business for a boutique construction- and energy-focused investment banking and consulting firm. Additionally, he led strategy consulting work for several of FMI’s largest clients, each with revenues greater than $1 billion. He also achieved FINRA Registered Representative status.
Previously, as vice president of strategy and development at Gavilon Group, David led the strategy formulation and corporate development processes for an international commodities business purchased by private equity investors from ConAgra Foods. He led strategy development processes for each of three Gavilon business units, energy, agriculture and fertilizer, and also led the development process of an aggressive five-year strategic growth plan.
Noble also spent five years as a consultant to public and private energy, technology and business and industrial services companies and investment funds. In that same period, he was an early investor and board member of FreeMarkets, Inc., which conducted a successful initial public offering in December of 1999 (Nasdaq: FMKT) and was eventually sold to Ariba, Inc., (Nasdaq: ARBA) in 2004. Also during this period, Noble was an investor and board member of Summit Energy Services, Inc., a privately held provider of energy management and sustainability services, until the company’s sale to private equity firm Weston Presidio in 1997 (Summit Energy was recently sold to leading French energy management company Schneider Electric). Finally, he founded and continues to manage Weston Pass Partners, a firm focused on acquisitions of oil and gas mineral interests. In addition, David has worked with venture capital and equity partners organizations, where he has generated and evaluated investment opportunities, negotiated financial structures and terms. He also served on the boards of directors of portfolio companies.
David earned a MBA from the Harvard University Graduate School of Business Administration and a Bachelor of Science degree in electrical engineering from the Massachusetts Institute of Technology.
Source: www.top-consultant.com
Global sourcing of Business Process Outsourcing in the financial services sector (FS BPO), a US$16-18 billion market comprising nearly 40 percent of the US$40 billion global sourcing market, has the potential to grow nearly 15 times its current market size to reach US$250 billion, according to a study by Everest Group, a global consulting and research firm. The report includes an analysis of market size, growth and potential of global sourcing of FS BPO across the banking, capital markets and insurance segments.
Everest Group’s study, Role of Global Sourcing in Financial Services BPO, includes an analysis of labor savings and other factors that have propelled FS BPO adoption into the rapid growth stage. Global sourcing of BPO in the capital markets segment represents the fastest growth area, driven by the emergence of high-end judgmental work and analytics. Insurance BPO demand is being fueled by a greater need for analytics, an increased need in the United States for healthcare services resulting from a growing customer base spurred by reform legislation, and Solvency II implementation in the European Union. BPO adoption in the banking sector is led by United States firms that are increasing global sourcing to meet fiscal performance pressures as well as address the lack of opportunity in new account acquisitions offset by loan modification servicing needs.
“BPO emerged as the key growth driver in the 2010 third-party financial services outsourcing market with nearly a 50-50 split between ITO and BPO contracts as opposed to a 70-30 split in 2008-2009,” said Saurabh Gupta, vice president, Research. “In the current economic scenario where financial services companies are facing competitive pressures and are reconsidering their cost bases, BPO across industry-specific processes in banking, capital markets, and insurance is generating much interest. Our analysis finds the medium to long-term growth outlook to be significant and robust.”
“Despite significant challenges, such as constraints in the United States associated with the Troubled Asset Relief Program (TARP) and new data protection measures in the European Union, the impact on global sourcing has been minimal,” said Rajesh Ranjan, research director and co-author of the report. “Financial services firms and service providers have adapted and properly mitigated against new and emerging challenges.”
Other study findings include:
• Most financial services companies are adopting hybrid global sourcing models by leveraging third-party service providers, captives and shared services.
• Third-party global sourcing in FS BPO is growing at 20-plus percent annually.
• Banking BPO accounts for nearly 50 percent of the overall scale of global sourcing operations within FS BPO.
• Capital markets, the fastest growing segment for FS BPO, saw year-over-year growth of 40 percent in 2009-2010.
• India, Philippines and China are mature locations for FS BPO, while Eastern Europe, Central America and South America are witnessing the fastest growth.
• In India, scale of global sourcing for FS BPO continues to grow at 20-plus percent, with growth expanding to Tier-2 and Tier-3 cities for mature services in banking and insurance.
Everest Group analyzed FS BPO capabilities of 15 service providers for each business segment. Service providers with the strongest global sourcing capabilities are Genpact, HP and TCS for banking BPO; Infosys BPO, TCS, and Wipro for capital markets BPO; and Accenture, EXL Services, and WNS for insurance BPO. Other services providers examined in the study were Capgemini, CSC, eClerx, HCL, Intelenet, Syntel and Xchanging.
Source: Top-Consultant
| A stronger economy brought new contract activity in the multi-process Human Resources Outsourcing (MPHRO) market and a strong rebound in mid-market adoption in 2010, according to the Human Resources Outsourcing Annual Report 2011 published by Everest Group, an advisory and research firm on global services. Everest Group projects the MPHRO market will grow by 8-10 percent and reach around $3.35 billion in 2011.
Despite positive signs of increased activity with 46 new deals signed in 2010, average contract size and term length continued to decrease, largely due to a decrease in the number of processes outsourced within new deals. Last year, annual contract value (ACV) grew by US$170 million to reach approximately US$3.07 billion. Market activity was driven by new deals as well as by several extensions. In addition to an increase in new MPHRO contracts last year over 2009, there was a substantial drop in terminations, pointing to the stabilization of deals. “Cost reduction remains the top driver for MPHRO adoption; however, managing compliance, greater alignment between HR and business, and access to technology are increasingly important,” said Rajesh Ranjan, research director “With an improving economy, greater buyer confidence, and a more robust and healthy service provider landscape, we expect to see 8 to10 percent market growth this year. We also expect to see increased adoption by industries that have been slow to adopt MPHRO, such as insurance and technology, and continued strong adoption by mid-market buyers.” Other report findings include: • North America remains the leading MPHRO adopter while Europe increased its share of adoption by 33 percent. Asia Pacific, experiencing rapid economic growth, also saw an increase in deal signings. • In recent years, the share of financial services and manufacturing adoption decreased while healthcare and energy verticals saw increases in deal signings. • In spite of a decrease in process scope, geographic scope of MPHRO deals is increasing, particularly those signed by multi-national buyers. • While technology continues to play a significant role within MPHRO deals, inclusion of IT components decreased last year. • Global sourcing in MPHRO continues to increase with India remaining the most popular offshoring location; however, Southeast Asia and Eastern Europe are quickly emerging as major offshore locations. • Mid-market buyers, strongly affected by the recession, staged a strong comeback in 2010, drawn to MPHRO for lower cost propositions as well as access to expertise to manage complex compliance requirements and technology with minimal or no up-front investment. • Payroll and benefits are the most commonly included processes in MPHRO contracts. Everest Group’s Performance/Experience/Ability/Knowledge (PEAK) matrix classified Accenture, ADP, NorthgateArinso, Aon Hewitt and IBM as market leaders that further strengthened their positions. Everest classified ACS-Xerox, Capgemini, Capita, Ceridian, HP, Infosys, Logica, TCS, Wipro, and Caliber Point as major contenders. Also classified in the report are emerging players Genpact, HCL, Neeyamo and Xchanging. Everest Group also highlighted five service providers as 2010 MPHRO Market Star Performers: ADP, Accenture, NorthgateArinso, Aon Hewitt and Infosys. Last year, these service providers demonstrated the strongest movement forward across the following two dimensions: • Market success in 2010 based on ACV growth, number of contract signings and value of contract signings last year • Capability advancements in 2010 based on expansion of scale, scope, delivery footprint and technology investments The Star Performers designation relates to year-on-year performance for a given service provider and does not reflect on overall market leadership positions. Those identified as the 2010 Star Performers include both leading service providers and major contenders. “We expect to see more consolidation this year as service providers that continue to struggle to gain new clients will likely exit the MPHRO market or be acquired,” said Ranjan. “Partnerships will play a key role for service providers, particularly with regard to improving offerings in areas of global payroll, recruitment and United States benefits.” Everest Group’s analysis includes multi-process HRO contracts with a minimum of three HR processes covering 3,000 or more employees that were signed as of November 2010. |
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Source: Top-Consultant