ISG ISG Provider Lens Report: ADM Services A research report on … · 2017-07-24 · of publicly-available market information from multiple sources. The data collected for this report

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ISG Provider Lens™ Report: ADM Services

ISG

ISG Provider Lens™ Report: ADM Services A research report on aligning enterprise requirements and Provider capabilities

October 25, 2016 1990PGI



About This Report Information Services Group Inc. is solely responsible for the content of this report. Unless otherwise cited, all content, including illustrations, research, conclusions, assertions and positions contained in this report were developed by, and are the sole property of Information Services Group Inc.

The research and analysis presented in this report includes research from the former ISG Dynamic RFI program, ongoing ISG Research programs, interviews with ISG Advisors, briefings with services providers, and analysis of publicly-available market information from multiple sources. The data collected for this report represents information that was current as of March 31, 2016. ISG recognizes that many mergers and acquisitions have taken place since that time but those changes are not reflected in this report.

The lead author for this report is Ashish Chaturvedi; additional authors are Bruce Guptill and Jan Erik Aase. Contributing authors and advisors are Steven Hall and Prashant Kelker. Editing is by Namratha Dharshan, Jan Erik Aase, and Bruce Guptill. Researchers include Ashish Chaturvedi, Uttham Singh, and Kankaiah Yasareni. Design and layout is by Cynthia Batty.

About ISG Provider Lens™ ISG Provider Lens™ delivers leading-edge and actionable research studies, reports and consulting services focused on technology and service providers’ strengths and weaknesses and how they are positioned relative to their peers in the market. These reports provide influential insights accessed by our large pool of advisors who are actively advising outsourcing deals and large numbers of ISG enterprise clients who are potential outsourcers.

For more information, please email [email protected] , call +1.203.454.3900, or visit ISG Provider Lens ™

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Contents

EXECUTIVE SUMMARY .............................................................................................. 4

INTRODUCTION ........................................................................................................... 5

PREFACE ......................................................................................................................... 7

CLIENT ARCHETYPE DESCRIPTIONS ................................................................... 8

METHODOLOGY ........................................................................................................ 11

ARCHETYPES ............................................................................................................. 13

Traditional Archetype ............................................................................... 14

Managed Services Archetype ................................................................... 18

Transformation-Oriented Archetype ........................................................ 22

“Glocal” Talent Archetype ........................................................................ 26

Leveraging Platforms / Accelerators Archetype ....................................... 31

Enabling Digital Archetype ....................................................................... 35

SERVICE PROVIDERS ACROSS ARCHETYPES ................................................. 40

GUIDANCE ................................................................................................................... 43

APPENDIX ................................................................................................................... 45

© 2017 Information Services Group, Inc. All rights reserved. Re-production of this publication in any form without prior permission is strictly prohibited. Information contained in this report is based on the best available and reliable resources. Opinions expressed in this report reflect ISG’s judgment at the time of this report and are subject to change without notice. ISG has no liability for omissions, errors or completeness of information in this report. ISG Insights™ and ISG Provider Lens™ are trademarks of Information Services Group, Inc.



Executive Summary

This ISG Provider Lens™ report summarizes the relative capabilities of thirty-one ADM services providers, and their abilities to address the requirements of six typical, frequently-encountered categories of enterprise user types (“archetypes”). Each archetype represents a unique set of business and technological needs and challenges.

In our research, we found no shortage of providers with capabilities adequate to satisfy the ADM requirements of most user enterprises. That being said, it is rare to find one ADM services provider than can address all ADM needs across a majority of user archetypes. This is due in large part to two core realities regarding the archetypes:

1. The characteristics of each archetype are a moving target over time, because while the core requirements rarely change, the relative importance of different requirements can vary based on business and/or technological environment changes.

2. Multiple archetypes tend to be present in most enterprises, especially in larger firms. As the requirements of each archetype evolve and adapt based on business and technological change, so too does the presence and value of each archetype.

Therefore, user enterprise development leaders, service owners, procurement managers, and developers have an ongoing series of choices when it comes to ADM services provider selection. Balances will need to be struck between optimal business value and relative cost of provider engagement, integration, and management. Market changes, new business models, fluctuating economic factors and more will continually conspire to add to and subtract from user-side needs. For any user enterprise, assuming that one’s organization fits solely within a single archetype, the value received over time from ADM services, will be limited. For providers, slotting customers into a single archetype and not anticipating that their needs will change, can prevent effective value from being delivered, leading to customer frustration and dissatisfaction.

Please note: This report presents services providers’ known capabilities in the context of user enterprises’ typical project needs (i.e., archetypes). This report is not meant to rank providers or to assert that there is one top provider whose abilities can meet the requirements of all clients who identify themselves with a particular archetype.

Executive Summary



Introduction

In just a few short years, application outsourcing has evolved from traditional development practices into highly disruptive, agile-based operating models, making core development a direct competitive advantage for many enterprises. Of course, not all application outsourcing is the same, because not all buyers and users have the same needs.

This report uses research and analysis from ISG’s long-running work with enterprise user clients and IT services providers alike to identify and examine key changes in, approaches for, and buyers of, application outsourcing services, specifically ADM, and then to map what we see in user-side requirements to provider-side offerings and capabilities.

Obviously, not every user enterprise has the same ADM requirements. In this report, we use six “buyer archetypes” – detailed in the following sections – to identify and assess buy-side requirements for business value versus provider-side offerings and capabilities. The assessment methodology has been developed and refined over several years of working with buyers to understand and articulate their services requirements, and working with providers to understand how those buyer requirements influence the development of - and go-to-market strategies for - suitable solutions.

The capabilities of 31 providers are assessed in this report. Some services providers that are typically included in our work are not included in this

Introduction



report. Some of these service providers were not able to participate, and some declined to participate. They may be included in future versions of this report, based on merit and on the service providers’ willingness to provide current and relevant materials. Readers should not make any inferences based upon a service provider’s absence from this report.

How to Use This Report

The intent of this report is to provide advice that is founded on ISG’s experienced-based, proprietary assessment of service providers’ relative suitability to the typical ADM needs. This advice is then applied across each of the six user archetypes as profiled. No recommendation or endorsement is indicated, suggested, or implied. Clients must make the decision to engage with any provider based not only on their specific, current ADM needs, but also other factors such as cost, culture and timing.

This report is organized as follows:

▪ Client Archetype Descriptions. This section identifies and describes each of the six most common user-side archetypes that we have identified in our ongoing ADM research and analysis.

▪ Methodology. In this section, we outline and explain how the data, analysis, and insights provided in this report were developed and applied.

▪ Assessments by Archetype. These sections first detail each of the six client archetypes, along with the types of service offerings that each typically requires in order to realize the most business value.

Next, these sections present our assessment of the relevant capabilities and positioning of the 30-plus providers surveyed and interviewed in relationship to each archetype - i.e., the relative suitability of the providers for each archetype based on the information that they have provided to us. These assessments are developed using the data, analysis, and comparative methodology described in the previous section.

Introduction



Preface

It should come as no surprise that Luxoft has been named a leader for both the Glocal (Global + Local) Talent and Enabling Digital Archetypes, in this Application Development and Maintenance (ADM) Report. Clients who identify with the Glocal Archetype are seeking service providers who have a strong local presence, common culture and a familiarity with their business environment; and at the same time have global capabilities in their understanding of market trends, disruptive technologies and the agility to meet their business demands. Luxoft has been a provider of choice largely for the US, UK, and DACH, coupled with Scandinavia and Russia because of their nearshore capabilities and cultural and historical similarities to their clients. With the core of their delivery centers in Bulgaria, Poland, Romania, the Ukraine and Russia, they have been delivering local expertise with a global foundation for many years and are currently one of very few Eastern European nearshore providers with sufficient capacity and capability to successfully deliver large-scale Agile projects. They are now expanding that same capability to new geographies through regional nearshore locations in Vietnam, Malaysia, Mexico and India

In the area of digital, Luxoft is best known for their consulting capabilities, delivery of strong systems integration projects and application and embedded software delivery capabilities. Within that area, Luxoft has built a strong set of capabilities in solving niche problems, and creating bespoke solutions rather than focusing on mainstream platforms like SAP and

Oracle. This places them in a very strong strategic position as the world of Digital Business increasingly demands that every business develop some unique software assets to augment their traditional business streams – even in enterprises that previously had no software delivery expertise. Luxoft has been advising and transforming their clients to help them meet their digital business needs for several years. As these development efforts advance, we expect to see Luxoft helping those same customers navigate the shift toward DevOps as well, and to focus on bringing application operations, as well as development to their customers. In their development, operations and UI/UX work, they utilize their custom development strengths to help their clients create the end-to-end ‘digital experience” for their end consumers.

Prashant Kelker

Partner, ISG DACH

Preface



Client Archetype Descriptions

The Client Archetypes used in this report (and in our ongoing advisory and consulting engagements) represent the various types of clients we’ve observed and how we would classify them according to their relative outsourcing maturity and objectives. Each client archetype encapsulates the typical characteristics of a specific type of buyer looking to outsource one or more processes or functions. The use of archetypes enables us to develop sets of characteristics and needs that can be applied uniformly and repeatedly across multiple environments, industries, provider types, and so on, within one service line. In the case of this report, our focus is just for application development and maintenance outsourcing.

The archetypes are not meant to be comprehensive examinations of all potential or likely client situations and requirements. They are meant to provide a simple, relevant, and repeatable set of user-side requirements against which a similarly simple, relevant set of provider capabilities can be assessed.

The archetypes included in our reports are based on the most current marketplace knowledge regarding prevalent buy-side goals, resources, initiatives, and requirements. Archetype characteristics are developed (and refined over time) based on our advisory and consulting work with enterprise clients and IT services providers, and on our global business IT market research and advisory programs.

The Six Archetypes in This Report

1. Traditional Archetype. These clients are mostly focused on cost savings through an FTE-based/staff augmentation model. The majority of such clients are first time outsourcers. ISG assumes such clients have low IT maturity, i.e., inadequately skilled staff or bandwidth to meet the IT needs of their business partners and low outsourcing maturity, i.e., an inability to leverage more evolved ADM sourcing models such as managed services.

2. Managed Services Archetype. The majority of these buyers are 2nd/3rd generation outsourcers that have matured in terms of people, processes and practices. They are looking to engage with multiple service providers in a managed services mode. In these relationships, service providers are required to comply with SLAs/BLAs and comply with agreed deadlines. In this model, the client no longer micro-manages operational aspects, therefore they want to leverage a Service Integration and Management (SIAM) model with their key set of providers to ensure proper monitoring and measurement of productivity. As these relationships mostly follow a fixed-fee pricing




engagement, it is important for the client to have a very well defined service scope.

3. Transformation-Oriented Archetype. The majority of these buyers are 3rd generation outsourcers looking to sunset their legacy systems and applications. Their goals are to have quicker, more closely integrated, and user-friendly applications, platforms, and systems in place. Unlike managed services buyers who look for improvements in processes and systems, a transformation-oriented client is looking to change the environment itself. Such a massive change in the IT environment requires mature service providers that have evolved over a period of time.

4. Glocal (Global+Local) Talent Archetype. These clients are looking to balance the demographics of their current workforce by augmenting their staff with a core set of international talent. Rather than a labor arbitrage play, it is more of a talent refresh and localization play. They are looking to get access to emerging technology talent to co-develop intellectual property, manage proof of concept creation, and develop niche offerings pertaining to a particular market

etc. Additionally, they also require a service provider to have the knowledge of the local regulatory processes.

5. Leveraging Platforms/Accelerators Archetype. These companies are looking to either consolidate their landscapes on to external platforms like SAP HANA / ORACLE or build their own intrinsic platforms (which is most common with Banking, Financial Services and Insurance firms). They are looking to achieve business process expertise through standardization of those processes on a common platform. They want to engage with service providers who have platform cycle know-how, can develop business complementing services (web), and have platform integration skills.

6. Enabling Digital Archetype. These buyers are very customer-centric companies that are trying to create a competitive advantage, enabled through emerging technologies. These buyers can either be mature outsourcers or digitally born companies with multi-channel customer touch points. For these companies, software is a primary medium of rendering services. Rather than reducing costs, they are focused on generating more revenues through the use of IT. Increasing revenue is the major driver behind their outsourcing




strategy. Historically, they have mostly engaged with service providers through fixed-fee pricing models. ISG has observed that as the outcome of such outsourcing deals have more direct impact on a client’s business, there is a surge in adoption of pricing models where the service provider’s fee is directly linked with the business outcome itself.

In this archetype, Digital is defined as ‘adoption and integration of advanced technologies, operations, and business processes that enable organizations to achieve a quicker and seamless flow of bi-directional information/feedback across the value chain, thereby, optimizing the value chain and attaining customer centricity’.




Methodology

As noted above, this report uses six archetypical sets of buy-side client requirements to assess the relative suitability of 31 ADM services providers to meet their needs. Data regarding the providers’ capabilities and positioning was provided to ISG via briefings, interviews and surveys with the providers, including information derived from our “Dynamic RFI” provider survey program.

Thirty-one ADM services providers (SPs) shared their data across different dimensions of ADM through the research initiatives noted above. These dimensions cover their technological competency, preferred engagement models, scope of work performed, adopted delivery mechanisms, industry and regional presence.

Our general methodology is explained as follows:

1. Provider-provided data was categorized and assessed according to the ADM requirements described for each of the six client archetypes. In cases, where provider descriptions and data were not worded precisely as were our archetype requirements, our ADM analysts relied upon their expertise and experience to classify the provider capabilities. For example, the Agile/DevOps capabilities of a service provider are considered to be a direct function of:

▪ How many of the service provider’s current clients require the use of an Agile/DevOps delivery mechanism?

▪ How many certified agile coaches, scrum masters, DevOps engineers does a service provider have?

▪ What percentage of its release cycles take less than a week’s time?

2. Based upon our analysts’ insights and expertise, each archetype capability requirement was weighted based on its relative importance to that archetype’s typical requirements. Weightings for each archetype’s requirements add up to a total of 100%. Specific weightings are not disclosed in this report. The relative importance of each capability requirement is depicted in illustrations at the beginning of each archetype section using differently-sized “wheel” icons.

Methodology



3. Once the relative ability of each provider was assessed for each of the archetype requirements, each provider was then positioned in a relevant quartile (e.g., top 25%, second 25%, and so on). The top quartile was awarded a numerical “capability score” of 4/4; the second quartile earned a score of 3/4, the third quartile scored 2/4, and the fourth quartile scored 1/4.

4. Provider capability scores from Step 3 were then multiplied by the weightings developed for each client archetype requirement in Step 2. The results for each provider were then summed up to develop a cumulative score for each provider. These cumulative scores are not disclosed in this report.

5. The cumulative scores were then used to identify the providers most suited for each archetype’s requirements. These providers are listed alphabetically and briefly profiled in each archetype section. Where relevant, additional providers with noteworthy capabilities are also mentioned (e.g., providers that may have scored well on a specific requirement, but not across all the requirements for that archetype).

Please note: This report simply presents services providers’ known capabilities in the context of user enterprises’ typical project needs. This report is not meant to rank providers or to assert that there is one top provider whose abilities can meet the requirements of all clients who identify themselves with a particular archetype.

The cumulative score for each of the selected service providers against each archetype requirement is represented using Harvey Balls. For example: if a provider is assessed with a score of 4 out of 4, then a full Harvey Ball is utilized to represent their capability against that requirement. Similarly, if a provider is assessed a score of 1 out of 4, then a one-quarter Harvey Ball is utilized, so on and so forth. Figure 1 illustrates this.

Figure 1: Provider Capability Scores as Harvey Balls

Score Harvey Ball representation Score 4 out of 4

Score 3 out of 4

Score 2 out of 4

Score 1 out of 4

Source: ISG Research, 2016

Methodology



Archetypes



Traditional Archetype

These users are focused on cost savings through an FTE-based/staff augmentation model. The majority of such clients are first-time outsourcers. ISG considers such clients to have low IT “maturity,” i.e., they tend to be unable to leverage more evolved ADM sourcing models such as managed services.

The typical characteristics of this archetype include:

▪ Their application portfolio, scope of work, or processes are not that well defined to represent a high level of IT maturity;

and/or

▪ They are looking to outsource only the none-core portion of their application portfolio.

They are looking to:

▪ Engage with providers through a staff augmentation model;

▪ Follow a traditional pricing model such as Time-and-Material (T&M);

▪ Build applications from scratch through programming languages such as Java, .net, kicks;

▪ Leverage packaged software solutions.

To meet such requirements, ADM service providers must demonstrate capabilities that include the following:

▪ An FTE-based service that is core to their business;

▪ A focus on a staff augmentation mode of engagement, and working through a T&M pricing model, which are determined through their client concentration (and revenue) in these areas;

▪ A custom development focus (i.e., developing applications based on Java, .net, Kicks), which are determined through their revenue contribution from such activities; and

▪ System integration capabilities (i.e., experience implementing and supporting packaged software from technology vendors such as SAP, Oracle, Salesforce), which are determined through the number of resources engaged and revenue contribution with respect to these practices.

Figure 2 depicts the objectives of a Traditional Archetype client mapped to the required service provider capabilities.




Of the 31 providers included in our research, we found nine that stand out above the others based on our assessment of their capabilities as described in the Methodology section above. The nine, referred to as Archetype Leaders, and their relevant capabilities are presented in Figure 3 and briefly examined as follows.

Figure 2: Client characteristics and required Service Provider capabilities

Note: The size of the wheels highlighting different service provider capabilities are based on their relative degree of importance to the archetype





Archetype Leaders


Archetype Leaders Staff Augmentation Focus T&M Pricing Focus Packaged Technology Capabilities Custom Development Focus

CSC HP Enterprise Infosys KPIT L&T Infotech Mindtree Syntel UST Global ValueLabs

4 Score 4 out of 4 3 Score 3 out of 4 2 Score 2 out of 4 1 Score 1 out of 4

Figure 3: Archetype leader assessments across capability parameters

Note: The service providers mentioned above are arranged in alphabetical order and are not in any rank order





Other Noteworthy Service Providers – Traditional

Obviously, other providers enable and support what the Traditional customer requires, just not to the degree that this archetype typically needs. Noteworthy providers (i.e., service providers excelling in one or more capabilities for Traditional clients) include the following:

Other Noteworthy Service Providers – Traditional Archetype Staff Augmentation Focus T&M Pricing Focus Packaged Technology Capabilities Custom Development Focus

Ciber

HCL Technologies

Tech Mahindra

Virtusa

Cognizant

DATAGROUP

Dell Services (now part of NTT Data)

Fujitsu

Tieto

Virtusa

Capgemini

Ciber

Cognizant

Gallop

HCL Technologies

Hexaware Technologies

ITC Infotech

TCS

Tieto

Unisys

Yash Technologies

Atos

CGI

Fujitsu

itelligence Group

Luxoft

Softtek

Tech Mahindra

Virtusa

Wipro





Managed Services

Archetype

The majority of these buyers are 2nd- or 3rd-generation outsourcers that have matured in terms of people, processes and practices. The typical characteristics of this archetype include:

▪ The clients are looking to engage with multiple service providers in a managed mode

▪ The clients no longer micro-manage operational aspects, therefore, they want to utilize a SIAM model with their key set of providers to ensure proper monitoring and measurement of productivity

▪ The clients have well-defined service scopes


▪ Improve their IT maturity

▪ Strengthen their governance practices

▪ Follow a fixed-fee pricing model to engage with service providers

To meet such requirements, ADM service providers must demonstrate capabilities that include the following:

▪ Experience working on long-term (typically, three years and longer) managed services contracts, which are determined through the revenue contribution from such contracts;

▪ Service Integration and Management (SIAM) capabilities; which are determined through the presence of a separate SIAM practice;

▪ Custom development focus i.e. developing applications based on Java, .net, Kicks; which are determined through the revenue contribution from such activities;

▪ System integration capabilities i.e. to implement and support packaged software from technology vendors such as SAP, Oracle, Salesforce; which are determined through the number of resources engaged and the revenue contribution with respect to these practices; and

▪ Experience in running fixed-fee deals.

Figure 4 depicts the objectives of a Managed Services Archetype client mapped to the required service provider capabilities.

Managed Services Archetype



Of the 31 total providers included in our research, we found 10 standing out above the others based on our scoring of their capabilities as described in the Methodology section above. The ten, referred to as Archetype Leaders, and their relevant capabilities are presented in Figure 5 and briefly examined as follows.

Figure 4: Client characteristics and Required Service Provider capabilities


Note: The size of the wheels highlighting different service provider capabilities are based on their relative degree of importance to the archetype




Archetype Leaders

Managed Services Archetype Archetype Leaders Packaged Technology

Capabilities Managed Deals Experience Fixed-fee Pricing Custom Development Capabilities

Atos Capgemini CGI Fujitsu HCL HP Enterprise TCS Tieto UST Global Wipro

4 Score 4 out of 4 3 Score 3 out of 4 2 Score 2 out of 4 1 Score 1 out of 4 Figure 5: Archetype leader assessments across capability parameters

Note: The service providers mentioned above are arranged in alphabetical order and are not in any rank order. Additionally, all the above service providers offer System Integration and Management (SIAM) services.





Other Noteworthy Service Providers: Managed Services

Obviously, other providers enable and support what the Managed Services customer requires, just not to the degree that our assessment indicates. Noteworthy providers (i.e., service providers excelling in one or more capabilities that meet the need of the Managed Services archetype) include the following:

Other Noteworthy Service Providers – Managed Services Archetype

Packaged Technology Capabilities Managed Deals Experience Experience in Fixed-fee Pricing Custom Development Focus CSC

Hexaware

ITC Infotech

Unisys

Cognizant Virtusa Mindtree

Virtusa





Transformation-Oriented

Archetype

The majority of these user enterprises are 3rd-generation outsourcers, looking to sunset legacy systems and applications as soon as possible, in order to have quicker, closely integrated, and user-friendly applications, platforms, and systems in place.

The key characteristic of this archetype is that they seek to change the environment itself.


▪ Rationalize and Modernize their applications

▪ Create a high degree of collaboration and co-innovate solutions

▪ Form strategic relationships with service providers

▪ Get into a fixed-fee/output based engagement model

To meet these requirements, ADM service providers must demonstrate capabilities that include the following:

▪ Scale of operations; which are determined through the number of resources, delivery centers, revenue, and presence of large accounts;

▪ Consulting capabilities; which are determined through the presence of a separate consulting division and people strength in that division;

▪ Experienced workforce; which are determined through the average experience of all ADM FTEs;

▪ Custom development focus i.e. developing applications based on Java, .net, Kicks; which are determined through the revenue contribution from such activities; and

▪ System integration capabilities i.e. to implement and support packaged software from technology vendors such as SAP, Oracle, Salesforce; which are determined through the number of resources engaged and the revenue contribution with respect to these practices.

Figure 6 depicts objectives of a Transformation-Oriented Archetype client mapped to the required service provider capabilities.

Transformation-Oriented Archetype




Of the 31 total providers included in our research, we found 10 standing out above the others based on our scoring of their capabilities as described in the Methodology section above. The ten, referred to as Archetype Leaders, and their relevant capabilities are presented in Figure 7, and briefly examined as follows.

Note: The size of the wheels highlighting different service provider capabilities are based on their relative degree of importance to the archetype.





Archetype Leaders


Archetype Leaders Scale FTE Experience Consulting Capabilities

Packaged Technology Capabilities

Custom Development

Focus

Fixed-Fee/Output Based Pricing

Construct Atos Capgemini Cognizant CSC Fujitsu HP Enterprise Infosys TCS Tech Mahindra Wipro

4 Score 4 out of 4 3 Score 3 out of 4 2 Score 2 out of 4 1 Score 1 out of 4 Figure 7: Archetype leader assessments across capability parameters

Note: The service providers mentioned above are arranged in alphabetical order and are not in any rank order.





Other Noteworthy Service Providers: Transformation-Oriented

Obviously, other providers enable and support at least some of what Transformation-Oriented clients require, just not to the degree that our assessment indicates as addressing the complete archetype needs. Noteworthy providers (i.e., service providers excelling in one or more capabilities), include the following:

Other Noteworthy Service Providers – Transformation-Oriented Archetype

Scale FTE

Experience

Consulting

Capabilities Custom Development Focus

Fixed-Fee/Output Based

Pricing Construct

Ciber CGI

Dell Services (now part of NTT data)

itelligence Group

L&T Infotech

Luxoft Mindtree

Syntel Virtusa

Datagroup

Luxoft Softtek

Tieto

Unisys ValueLabs

Ciber CGI

Gallop

Hexaware

ITC Infotech

itelligence Group

KPIT

L&T Infotech

Softtek

Tieto

Unisys Yash Technologies

CGI Dell Services

(now part of NTT data) ITC Infotech

itelligence group

Luxoft Mindtree

Softtek

Syntel UST Global Valuelabs

Virtusa

Ciber CGI

Hexaware

ITC Infotech

itelligence Group

Luxoft Mindtree

Softtek

Unisys Yash Technology





“Glocal” Talent

Archetype

This archetype is looking to balance the demographics of their current workforce, by tapping into international talent. The typical key characteristic of the archetype is that, rather than a labor arbitrage play, it seeks more of a talent refresh and localization play

Such users are looking to:

▪ Access emerging technology talent in order to co-develop intellectual property, create proof of concept demonstrations, and develop niche offerings pertaining to a particular market

▪ Work with service providers that have knowledge of the local regulatory processes

▪ Gain access to global resources

▪ Engage in project-based work


▪ On-shore presence; which are determined through delivery presence and employee count

▪ Mode 2 capabilities; which are determined through resources working on emerging technologies/frameworks such as Big data, Mobility, BI & Analytics, Cloud, Agile/DevOps/Lean methodologies, e-commerce etc.

▪ Custom development focus i.e. developing applications based on Java, .net, Kicks; which are determined through revenue contribution from such activities

▪ Experience in undertaking project-based work; which are determined through revenue contribution from this mode of engagement

Figure 8 depicts objectives of a Glocal Talent Archetype client mapped to the required service provider capabilities.



Of the 31 total providers included in our research, we found 9 standing out above the others based on our scoring of their capabilities as described in the Methodology section above. The nine, referred to as Archetype Leaders, and their relevant capabilities are presented in Figure 9 and briefly examined as follows.




“Glocal” Talent Archetype



Archetype Leaders

“Glocal” Talent Archetype Archetype Leaders On-shore Presence Mode 2 Capabilities Project-based work Custom Development Focus Atos CSC Fujitsu HCL Hexaware HP Enterprise Luxoft TCS UST Global


Figure 9: Archetype Leader assessments across capability parameters






Although it does not have delivery presence in offshore locations like India, Luxoft is an excellent candidate for clients looking to leverage Central and Eastern European talent. They report that 75% of Luxoft’s delivery resources have 5 years or more industry IT experience and over 79% have MA degrees or above. Another key strength of Luxoft is the ability to work on Mode-2 activities and custom development project-based work. Additionally, more than 75% of its resources are engaged in mode-2 and custom development activities. The company reports over 11,000 employees mostly located in Poland, Romania, Bulgaria, Russia, Ukraine, Vietnam, and Mexico. Around 42% of their revenue is generated from project-based work. Approximately 85% of application development revenue is generated through custom development work. Luxoft is

particularly strong in the BFSI, Travel & Transportation, Manufacturing, Energy and Telecom & Media sectors.




Other Noteworthy Service Providers: Glocal Talent

Obviously, other providers enable and support at least some of what Glocal Talent clients require, just not to the degree that our assessment indicates

as addressing the complete archetype needs. Noteworthy providers (i.e., service providers excelling in one or more capabilities), include the following:

Other Noteworthy Service Providers – “Glocal” Talent Archetype On-shore Presence Mode 2 Capabilities Project-based work Custom Development Focus

Cognizant

CGI

Capgemini

Infosys

Softtek

Tech Mahindra

Unisys

Wipro

ITC Infotech

L&T Infotech

Mindtree

Softtek

Syntel

Tieto

ValueLabs

Virtusa

Cognizant

Dell

CGI

ITC Infotech

KPIT

Tech Mahindra

Unisys

CGI

itelligence Group

Mindtree

Softtek

Syntel

Tech Mahindra

Wipro

ValueLabs

Virtusa





Leveraging Platforms /

Accelerators Archetype

These companies are looking to either consolidate their landscapes on to external platforms like SAP HANA / ORACLE or building their own intrinsic platforms (like most Banking, BFSI and Insurance firms). They want to engage with service providers that have platform cycle know-hows, can develop business complementing services (web), and have platform integration skills.


▪ Achieving business process expertise through standardization of business applications on common platform

▪ Possessing a combination of legacy and modern apps

▪ Following a cloud-first/cloud-only strategy


▪ Engage with service providers that have platform cycle know-hows,

▪ Develop business complementing services (web)

▪ Leverage 3rd party components


▪ Enterprise integration capabilities, gauged through resource engaged in these activities;

▪ Cloud integration capabilities, gauged through resources engaged in these activities;

▪ Experience in project-based work, which are determined through the revenue generated through this mode of engagement;

▪ Custom development focus i.e. developing applications based on Java, .net, Kicks, which are determined through revenue contribution from such activities; and

▪ System integration capabilities i.e. to implement and support packaged software from technology vendors such as SAP, Oracle, Salesforce, which are determined through resources engaged and revenue contribution with respect to these practices

Figure 10 below depicts objectives of a Leveraging Platforms/Accelerators Archetype client mapped to the required service provider capabilities.

Leveraging Platforms / Accelerators Archetype




Of the 31 total providers included in our research, we found 9 standing out above the others based on our scoring of their capabilities as described in the Methodology section above. The nine, referred to as Archetype Leaders, and their relevant capabilities are presented in Figure 11 and briefly examined as follows.






Archetype Leaders

Leveraging Platforms/Accelerators Archetype Archetype Leaders Enterprise Integration

Capabilities Cloud Integration

Capabilities Packaged Technology

Capabilities Custom Development

Focus Project-based work Atos Cognizant CSC Fujitsu HP Enterprise Mindtree Tech Mahindra Unisys Wipro








Other Noteworthy Service Providers: Leverages Platforms/Accelerators

Obviously, other providers enable and support what the Leveraging Platforms/Accelerators customer require, just not to the degree that our assessment indicates. Noteworthy providers (i.e., service providers excelling in one or more capabilities that meet the need of the Leveraging Platforms/Accelerators archetype) include the following:

Other Noteworthy Service Providers – Leveraging Platforms/Accelerators Archetype Enterprise Integration

Capabilities Cloud Integration

Capabilities Packaged Technology

Capabilities Custom

Development Focus Project-based work

HCL

Infosys

Virtusa

HCL

Infosys

Virtusa

CGI


Hexaware

ITC Infotech

KPIT

Luxoft

UST Global

CGI

Infosys

itelligence Group

Luxoft

Softtek

Syntel

UST Global

ValueLabs

Virtusa

Capgemini

CGI

Ciber

Gallop

Hexaware

HCL Technologies

Infosys

ITC Infotech

itelligence Group

KPIT

L&T Infotech

Softtek

Tieto

Yash Technologies





Enabling Digital

Archetype

These are very customer-centric companies that are trying to create a competitive advantage enabled through emerging technologies. They mostly engage with service providers through fixed-fee pricing models. ISG is witnessing that as the outcome of such outsourcing deals have a direct impact on a client’s business, there is a surge in adoption of pricing models where the service provider fee is directly linked with the business outcome itself.


▪ Mature outsourcers or digitally-born companies with multi-channel customer touch points

▪ For these companies, software is a primary medium of rendering services


▪ Generate more revenues through the use of IT, rather than saving cost

▪ Create client-centric solutions with the goal of seamless touch point experiences

▪ Achieve enterprise agility


▪ Agile/DevOps capabilities, which are determined through presence of specialists and current client work in this area;

▪ Automation capabilities, which are determined through the level of automation achieved in executing tasks and processes i.e. execution of regression, performance, user acceptance, system and compliance testing phases;

▪ Experience in running fixed-fee and outcome-based engagements; which are determined through the revenue contribution from these mode of engagement;

▪ Custom development focus i.e. developing applications based on Java, .net, Kicks, which are determined through revenue contribution from such activities; and

▪ Mode 2 capabilities, which are determined through resources working on emerging technologies/frameworks such as Big data, Mobility, BI & Analytics, Cloud, Agile/DevOps/Lean methodologies, e-commerce etc.

Figure 12 depicts objectives of an Enabling Digital Archetype client mapped to the required service provider capabilities

Enabling Digital Archetype



Of the 31 total providers included in our research, we found 10 standing out above the others based on our scoring of their capabilities as described in the Methodology section above. The ten, referred to as Archetype Leaders, and their relevant capabilities are presented in Figure 13 and briefly examined as follows.







Archetype Leaders

Enabling Digital Archetype Archetype Leaders Automation

Capabilities Agile/ DevOps

Capabilities Experience in Fixed-fee/Outcome Model

Custom Development Focus Mode 2 Capabilities

Atos CGI ITC Infotech Luxoft Mindtree Syntel UST Global ValueLabs Virtusa Wipro








Luxoft has strong skills in UX, UI, and Human Machine Interfaces, primarily in the Automotive sector. The company reports they have also built horizontal CoEs focused on Big Data, IoT, and application security. Additionally, Luxoft has created data visualization dashboards geared towards the BFSI sector. Approximately 75% and 15% of its existing client projects follow Agile and DevOps models, respectively. The company reports 500 scrum masters, 350 certified agile coaches, 300 certified DevOps engineers. It generates 54% of its revenue from a fixed-fee pricing model. Approximately 20% of the tasks across test phases are automated.

Approximately 85% of its revenue is generated from custom development activities and 75% of their FTEs are engaged in Mode 2 activities. Luxoft is a major player in Europe with sizable delivery presence in the US as well.




Other Noteworthy Service Providers: Enabling Digital

Obviously, other providers enable and support at least some of what Enabling Digital clients require, just not to the degree that our assessment indicates as addressing the complete archetype needs. Noteworthy providers (i.e., service providers excelling in one or more capabilities), include the following:

Other Noteworthy Service Providers – Enabling Digital Archetype

Automation Capabilities Agile/DevOps

Capabilities Experience in Fixed-fee/

Outcome-based Pricing model Custom Development

Focus Mode 2 Capabilities

Capgemini

Cognizant

CSC

Dell Services (now part of NTT

data)

Fujitsu

Gallop

Hexaware

HCL

HP

KPIT

Softtek

Tech Mahindra

Tieto

Unisys

Capgemini

CSC

Gallop

HCL

HP

Infosys

Tech Mahindra

Tieto

YASH technologies

CSC

Ciber

Datagroup

Fujitsu

Gallop

HCL

Infosys

itelligence Group

Softtek

Unisys

TCS

Yash Technologies


Fujitsu

Infosys

itelligence Group

Softtek

Tech Mahindra

Fujitsu

Hexaware

L&T Infotech

Softtek

HCL

TCS

Tieto




Service Providers Across Archetypes

Service Providers Traditional Archetype Managed Services

Archetype Transformation-

Oriented Archetype “Glocal” Talent

Archetype Leveraging Platforms/

Accelerators Archetype Enabling Digital

Archetype

Atos ✓

Capgemini ✓ ✓ ✓ ✓✓ CGI ✓ ✓✓✓✓ ✓✓✓ ✓✓✓

Ciber ✓✓ ✓✓✓ ✓ ✓ Cognizant ✓✓ ✓ ✓✓ ✓ CSC ✓ ✓✓✓ DATAGROUP ✓ ✓ ✓ Dell (NTT Data) ✓ ✓✓ ✓ ✓ ✓✓


Indicates Leaders Indicates Noteworthy Players (number of check marks indicate degree of alignment with the capability requirements of each client archetype)








Archetype

Fujitsu ✓✓ ✓✓✓✓ Gallop ✓ ✓ ✓ ✓✓✓ HCL Technologies ✓✓ ✓✓✓ ✓✓✓✓ Hexaware ✓ ✓ ✓✓ ✓✓ ✓✓ HP Enterprise ✓✓ Infosys ✓ ✓✓✓✓ ✓✓✓ ITC Infotech ✓ ✓ ✓✓✓ ✓✓ ✓✓

itelligence Group ✓ ✓✓✓✓ ✓ ✓✓ ✓✓ KPIT ✓ ✓ ✓✓ ✓ L&T Infotech ✓✓ ✓ ✓ ✓ Luxoft ✓ ✓✓✓✓ ✓✓

Mindtree ✓ ✓✓✓ ✓✓









Archetype

Softtek ✓ ✓✓✓✓ ✓✓✓ ✓✓ ✓✓✓✓ Syntel ✓✓ ✓✓ ✓

TCS ✓ ✓✓ Tech Mahindra ✓✓ ✓✓✓ ✓✓✓ Tieto ✓✓ ✓✓✓ ✓ ✓ ✓✓✓ Unisys ✓ ✓ ✓✓✓ ✓✓ ✓✓ UST Global ✓ ✓✓

ValueLabs ✓✓ ✓✓ ✓

Virtusa ✓✓✓ ✓✓ ✓✓✓ ✓✓ ✓✓✓

Wipro ✓ ✓✓

Yash Technologies ✓ ✓✓ ✓ ✓✓





Guidance

This research report has highlighted the multiple archetypes that we are encountering in the era of Digital IT. The overwhelming pattern emerging across these archetypes is that technology now affects organizational decisions more than ever. As an example, a simple decision to use Salesforce will raise questions like “Should SFDC be your platform for partnering with your ecosystem? And, how do we organize most effectively when today’s platform decision becomes tomorrow’s product decision?”

Therefore, these archetypes not only lend themselves to categorize situations that enterprises find themselves in, but also to differentiate between the various types of problems or opportunities that they are intending to solve.

The archetypes also have a definite “crawl, walk, run” pattern to them, and therefore any solutions to address these archetypes must be accompanied by the appropriate change management & transformation planning required for the stage of the archetype (crawl, walk or run).

Enterprise Leadership Actions:

▪ Avoid a one-size-fits-all approach to solving problems. Each problem or opportunity will fit a certain archetype. Develop the organizational ability to identify the correct archetype(s) for each situation to select the correct engagement and execution models.

▪ Do your enterprise architecture homework. A high-level, pace-layering exercise will identify the systems of engagement which should attract the investment and focus. These are the candidates for the Leveraging Platform/Accelerators Archetype. Do not forget that today’s systems of record can be tomorrow’s systems of intelligence. Use the Transformation-Oriented Archetype to modernize and deliver the required advanced analytics and data driven insights.

▪ Prepare for multi-modal sourcing. Each engagement model with any provider should depend on the relevant pace-layered enterprise architecture. Systems of Innovation will need special niche vendors and fail-fast lab-execution models. Seek these out using the Glocal Talent Archetype. Separate Systems of Innovation out from the rest of the systems which are better served by the Managed Service Archetype.

▪ Plan for Innovation & Transformation. Large Digital transformations and undertakings should be treated as a mixture of Transformation-oriented and Enabling Digital archetypes. These are best run as Digital transformation programs within inbuilt innovation management.

▪ Enable the change. Don’t forget the enabling process workflows. Lofty DevOps & Agile projects and operating model are designed keeping core IT processes in mind. One often forgets the RFP & purchasing workflows, let along the finance & accounting departments & regulations. The best DevOps & Agile intentions can come to a grinding halt with Waterfall finance & accounting processes.

Guidance



Provider Leadership Actions:

▪ Go beyond the technology and solution and provide the right operating model. The days of a one-size-fits-all delivery model are numbered. Each archetype will need a separate delivery model.

▪ The skin in the game in each archetype is different. Offer value based deals. Success in each archetype is defined differently – and this will impact both key performance indicators and how value is perceived (and priced).

▪ Chart your roadmap. Treat this report as where ISG sees your offerings as they are perceived today. This is not cast in stone; target your offering and go-to-market approaches based on the archetypes that you want to cater to. Tailor the offerings till there is a laser focus on the value that the archetypes demand.

▪ Archetype both client & opportunity. The archetype patterns in this report can be applied interchangeably to client organizations as well as to individual opportunities within those client organizations; use the insight and guidance in this report to differentiate between them. This will affect how client relationships are managed as well as how each opportunity is evaluated.

▪ Be the change agent that your client needs. Each archetype addresses a different challenge and a problem or opportunity might be a mix of archetypes. Define your value add not just on the offered solution, but on the way you enable your client’s journey from one archetype to the next.

Guidance



Appendix

Additional Relevant ADM Service Providers

The capabilities of 31 providers are assessed in this report. Some services providers that are typically included in our work are not included in this report. Some of these service providers were not able to participate, and

some declined to participate. They may be included in future versions of this report, based on merit and on the service providers’ willingness to provide current and relevant materials. Readers should not make any inferences based upon a service provider’s absence from this report.

Other Relevant Service Providers Headquartered

Country Other Relevant Service Providers

Headquartered Country

Other Relevant Service Providers Headquartered

Country

Accenture Ireland Infinite Computer Solutions India Pactera China BearingPoint Netherlands Indecomm Global Services India Persistent Systems India

Birlasoft India LiquidHub US Rolta India

Computer Aid Inc US Mastek India SoftServe US

Camelot Information Systems China Mphasis India Sonata Software India

ChinaSoft China Neoris US Sonda Brazil

Endava UK Neusoft China Stefanini IT Solutions Brazil

EPAM Systems US NIIT Technologies India TIVIT US

Getronics Netherlands NTT Data Japan T-Systems Germany

IBM US Quinnox US Zensar Technologies India

Appendix




ISG (Information Services Group) (NASDAQ: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including 75 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data.

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October 2016

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ISG ISG Provider Lens Report: ADM Services A research report on … · 2017-07-24 · of publicly-available market information from multiple sources. The data collected for this report