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IT Services Outsourcing
Market, Supplier, Risk and
Competitive Intelligence

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  • Category Report with unlimited updates
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Manage IT Services Outsourcing Category with Ai powered
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Abi will answer all IT Services Outsourcing related
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Get up-to-date market and supplier info on IT Services Outsourcing to help you build

Intelligence covers market and price outlook, SWOT analysis, demand & supply drivers, engagement models and Procurement best practices

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Intelligence on category covers the following aspects market outlook, supply market, SWOT analysis, Cost components & Price outlook, Demand and supply drivers, Engagement Models and Procurement Best Practices

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Assess Supplier Risk based on key risk and compliance parameters

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Supplier assessment covers the following parameters Financial Risk, Ethical, Labor, Environmental Compliance, IT Security.

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Supplier assessment is powered by world’s leading data partners including D&B, CreditSafe, Dow Jones, Refinitiv, Orpheus

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Identify right fit suppliers based on your selection criteria including revenue, capabilities, certification, geography

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Select suppliers based on industry, country, classification from a database of 4.2 mn suppliers. Get detailed supplier profiles with supplier capabilities, revenue, certifications, risk ratings

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Benchmark your category performance against peers and the market

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Measure category performance on 15 key parameters across cost, risk and strategy KPIs

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Get information on key factors affecting your supply

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Source Macro Data and Market Indices information from leading data sources across these key areas - Labor Rates, Currency, Energy, Country Risk, Trade Flow/Transportation, Port Data, Tariff, Weather and Epidemics

meet-abi-1

Abi will answer all IT Services Outsourcing related
procurement queries with relevant data points

Abi - AI powered digital procurement assistant

discover-market-info

Get up-to-date market and supplier info on IT Services Outsourcing to help you build

Intelligence covers market and price outlook, SWOT analysis, demand & supply drivers, engagement models and Procurement best practices

1

Intelligence on category covers the following aspects market outlook, supply market, SWOT analysis, Cost components & Price outlook, Demand and supply drivers, Engagement Models and Procurement Best Practices

manage-risk

Assess Supplier Risk based on key risk and compliance parameters

1

Supplier assessment covers the following parameters Financial Risk, Ethical, Labor, Environmental Compliance, IT Security.

2

Supplier assessment is powered by world’s leading data partners including D&B, CreditSafe, Dow Jones, Refinitiv, Orpheus

discover-supplier

Identify right fit suppliers based on your selection criteria including revenue, capabilities, certification, geography

1

Select suppliers based on industry, country, classification from a database of 4.2 mn suppliers. Get detailed supplier profiles with supplier capabilities, revenue, certifications, risk ratings

assess-category-perforamnce

Benchmark your category performance against peers and the market

1

Measure category performance on 15 key parameters across cost, risk and strategy KPIs

source-market-indices

Get information on key factors affecting your supply

1

Source Macro Data and Market Indices information from leading data sources across these key areas - Labor Rates, Currency, Energy, Country Risk, Trade Flow/Transportation, Port Data, Tariff, Weather and Epidemics

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Report Coverage

  • Market Trends
  • Technology & Innovation Trends
  • Global Supplier List and Capabilities
  • Mergers and Acquisitions

Market Size

Global Market Size

$428 Bn

CAGR

5.3 Percent

Market Size North America

$169 Bn

Market Size Europe

$109 Bn

Table of contents

  1. IT Services Outsourcing Executive Summary
  2. IT Services Outsourcing - Overview
  3. Global IT Services Outsourcing Outlook
  4. COVID-19 IMPACT

 

  1. IT Services Outsourcing Market Analysis
  2. Global IT Services Outsourcing Market Maturity and Trends
  3. Global IT Services Outsourcing Drivers and Constraints
  4. Regional Market Outlook
  5. Porters Five Forces Analysis
  6. Market Analysis - IT Services Outsourcing
  7. IT Services Outsourcing - Country-level Risk Analysis

 

  1. IT Services Outsourcing Cost and Pricing Analysis
  2. Pricing Models
  3. Pricing Models Comparison
  4. Cost Model in IT Services Outsourcing

 

  1. Procurement Best Practices
  2. Supplier Engagement Models for IT Service Outsourcing
  3. Sourcing Models for IT Services Outsourcing
  4. Strategy Analysis of Various Sourcing/Engagement Models
  5. Methods to Manage Currency Fluctuations

 

  1. SLA and KPI
  2. SLA Structure for Application Development Services
  3. RACI Structure for IT Services Outsourcing
  4. KPIs to Measure Procurement and Supplier Performance
  5. IT Services Outsourcing - Cost-saving Levers

 

  1. Technology Developments
  2. Robotic Process Automation
  3. Artificial Intelligence (AI)
  4. Predictive Analytics and Machine Learning
  5. Service Integration and Management

 

  1. RFP Questions
  2. Application Managed Services

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Global IT Services Outsourcing Market Outlook

  • The global IT services outsourcing market revenue clocked $428 Bn in 2019. However, the COVID-19 pandemic has adversely affected the market revenue pool and is thus anticipated to slump. While the previous expansion rate of IT outsourcing market size was expected at an 8% CAGR until 2023, the figure has been adjusted to 5.3% CAGR due to COVID-19 induced stressors.
  • Western Europe, North America, Asia Pacific (APAC) countries including China, India, Australia, and Singapore, have high market maturity, and Latin America (LATAM) are expected to be the future growth-driving markets for IT services outsourcing.

IT Services Outsourcing Best Practices

The SLA structure for application development service consists of three main parts:

  • Contract Definition: This specifies the terms and termination of the contract, dispute resolution terms, and proprietary rights of the technology involved in the service.
  • Performance Measurement: This specifies the application specifications, functionalities of the tool to be developed, in terms of KPIs and warranty provisions.
  • Work Payment: This explains the phased payments during the development cycle and the respective payment options.

Global IT Services Outsourcing Market Maturity

  • The IT outsourcing industry is currently in the evolution phase, primarily driven by changes in demand (technology, and cost-effectiveness), thereby, shifting from the existing markets such as Western Europe, North America, and APAC to least-penetrated markets such as LATAM and the Middle East and Africa (MEA).
  • In 2017, 700+ ITO contracts worth more than $130 Bn and 150+ BPO contracts worth $25 Bn were signed across the world.

Global IT Services Outsourcing: Drivers and Constraints

Drivers

Emerging technologies/outsourcing needs

  • The global IT outsourcing market is driven by end-user computing services and technologies such as process automation and virtualization. These factors, along with an increase in security service outsourcing and cloud adoption, will continue to drive the market over the next 3–5 years.

 

Increase in adoption

  • Increasing vigilance regarding data security and customer-centricity in projects, particularly in BFSI and aerospace & defense industries, are fuelling the demand for IT services outsourcing. 
  • The market is also mushrooming given the ever-growing demand for consultancy-associated projects. The rising need for expertise in formulating and simplifying IT tactics, business architecture advisory, portfolio consulting, and ensuring efficient and fluid digital transformation is further boosting the IT outsourcing market size.

Delivery centers in offshore locations

  • Companies, such as IBM and Capgemini, are setting up delivery centers at low-cost offshore locations, like the Philippines, China, Brazil, Poland, Mexico, etc. The Indian vendors, such as TCS, HCL, etc., no longer possess this offshore advantage.

 

Increasing competition in the market

  • Currently, the IT outsourcing services are dominated by Top 8-10 Tier 1 players. However, there has been an increase in competition from Tier 2/3 players in the market owing to demand from mid-size enterprises.

Constraints

Breach of intellectual property

  • Protecting IP is one of the major challenges confronting the global IT outsourcing services market. Outsourcing business-critical tasks to other countries’ raises IP concerns, given several risks associated with theft, misuse of trade secrets, or loss of IP rights.
  • Service providers are limited to work on the products of their customers and they don’t possess any ownership. Any innovation that emerges out as a result of the work carried out belongs to the provider. Therefore, the enterprises that outsource their services always have concerns about IP loss as the providers serve multiple customers, including their competitors.

Volatile labor market

Volatility in the labor industry is another factor that is adversely affecting the IT outsourcing market. This is being shaped by:

  • The continuous movement of low-cost labor offshore.

  • Shortage of highly skilled workers in terms of digital technologies.

Rise in GICs

Further, the rise in the number of global In-house Centers (GICs) of organizations is hampering the growth rate of the global IT outsourcing market. Nasscom has revealed that in FY2019, about 1,250 MNCs globally established over 1,750 global capability centers (GCCs) in India.

Market Analysis - IT Services Outsourcing

Shift toward third-party vendors

  • Traditionally, enterprise resource planning (ERP) players such as SAP and Oracle have been deriving huge chunks of revenue from maintenance fees. This has compelled buyers to engage with third-party vendors such as Rimini Street and Spinnaker for maintaining and supporting the ERP system to optimize costs.
  • Buyers’ preference to engage with third-party system integrators for infrastructure management instead of OEMs such as IBM and HP will continue as third-party suppliers offer a quality of service similar to that provided by OEMs at a lower cost.
  • Increasing cloud adoption: Increase in SaaS adoption is expected to lower the demand for application maintenance outsourcing. This has influenced several suppliers to invest in cloud-based offerings to stay competitive in the market.
  • In the IT application outsourcing vertical, suppliers are experimenting with new models, including risk-shared partnerships.
  • IT outsourcing buyers are increasingly looking for more vertical expertise from their suppliers.

Technology Developments

The IT outsourcing market is constantly evolving and incorporates new technology updates and innovations very quickly. Innovation and new developments affect the global IT outsourcing market very quickly. This report details the latest innovations as well as how it has affected and is likely to continue to affect the global IT outsourcing market. Innovations in the business and contract models also affect the IT outsourcing market dynamics.

Why You Should Buy This Report

The report provides you with the IT outsourcing market overview, drivers and constraints, regulatory and technological trends, etc. It offers Porter’s five forces analysis of the global IT outsourcing market. The report provides insights on IT outsourcing market size, market share, and price trends, to name a few. It delves into the IT outsourcing market that is vital to get an overall perspective of past historical trends and the reasons behind them as well as understand the reasons for the market forecasts. The major drivers and constraints of the IT outsourcing market are listed and explained. The peculiarities of the IT outsourcing industry that fuel its growth are detailed for a complete understanding. The global market overview and global IT outsourcing market trends are illustrated and explained.

Moving forward, the IT outsourcing market research study offers a comprehensive analysis of the unique aspects and market dynamics of each region. The market size, rules and regulations as well as the key players in the region are detailed. The market maturity and preferred verticals such as near-shore outsourcing, offshore development, business process outsourcing (BPO), application development & maintenance, IT subcontracting, IT offshoring (ITO), KPO, HRO, and LPO for each region are specified. This report analyzes the dynamics of the import of IT outsourcing services as well as the countries that provide or export the services, along with the leading global players in the industry.

Further, it provides details of new innovations in the IT outsourcing industry and their impact on the entire industrial landscape and future trends.

 

 

It Services Outsourcing Frequently Asked Questions

  1. At what CAGR is the IT services outsourcing market expected to grow by 2022?
  2. As forecasted by Beroe’s market research, outsourcing of the global IT services is expected to grow at a CAGR of 6 percent to reach $531 billion by 2022.
  1. What was the valuation of the global IT services outsourcing market in 2017?
  2. According to the industry analysis reports from Beroe, in 2017, the global IT services outsourcing market was valued at $405 billion.
  1. Which regions have high maturity in the global IT services outsourcing market?
  2. The high market maturity regions are Western Europe, North America, and some parts of the APAC, such as China, India, Australia, Singapore. Besides, some parts of Latin America are anticipated to become the growth driving markets in the future.
  1. Which countries have medium maturity in the global IT services outsourcing market?
  2. Some of the countries with medium market maturity are New Zealand, Canada, Argentina, Chile, Egypt, Peru, Columbia, Romania, Poland, etc.
  1. Which is the impactful cost component in the IT services outsourcing market?
  2. The service provider’s delivery cost constitutes more than 60 percent of the total cost.
  1. What are the KPIs in the IT outsourcing market?
  2. The KPIs in the IT outsourcing market include response time, resource turnover, application breakdown per day, network availability, and percentage of work offshored.
  1. Who are the top global service providers in the IT outsourcing market?
  2. Accenture, Capgemini, Cognizant, Fujitsu, HP Enterprise, IBM, Infosys, NTT Data, Oracle, SAP, Tata Consultancy Services are the top global IT outsourcing service providers.
  1. What are the price-determining factors in the IT outsourcing market?
  2. The price-determining factors in the IT outsourcing market include customer maturity, contract size, services, supplier relationship, and service capability.
  1. What are the different outsourcing pricing models in the IT services market?
  2. The pricing models in the IT outsourcing market are time and material pricing, fixed pricing, transaction-based pricing, and outcome-based pricing.
  1. What are the best practices in IT services outsourcing?
  2. In application development service, the service level agreement structure is formed of three main parts: · Contract definition specifying the terms and termination of the contract · Performance measurement · Work payment
  1. Which factors are responsible for driving the evolution of the IT outsourcing industry?
  2. The evolution of the IT outsourcing industry will continue to be driven by factors, such as changes in demand for technology, cost-effectiveness, etc. leading to the shift from existing markets to least penetrated markets.
  1. What was the valuation of the ITO and BPO contracts signed across the world in 2017?
  2. According to Beroe’s market analysis reports, in 2017, more than 700 ITO contracts and 150 BPO contracts worth $130 billion and $25 billion respectively.

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