ISG Provider Lens Report Finds Enterprises Shifting to Packaged Technology Solutions and to Managed Contracts digital transformation in the ADM Space
Enterprise demand for application development and maintenance services is evolving, with a growing focus on large-scale digital transformation projects and software-as-a-service offerings, according to a new report published today by Information Services Group, a leading global technology research and advisory firm.
The 2020 ISG Provider Lens™ Next-Gen ADM Service Archetype Report also finds enterprises across the globe interested in ADM services based on packaged technology solutions and in managed application services contracts.
Complexity is driving the need for next-generation ADM services, the report says.
“Combining traditional business software with advanced cloud-based software and services creates massive software complexity that requires new approaches with better technologies, skills and tools,” said Jan Erik Aase, director and global leader, ISG Provider Lens Research. “Enterprises are becoming more aware that their increasingly complex software environments call for standardization, modernization and management beyond their own capabilities.”
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Like traditional ADM services, next-gen ADM includes consulting, design, custom development, packaged software integration, operations and testing. However, as the digital initiatives of client enterprises accelerate, next-gen ADM also needs to leverage automation, artificial intelligence, new methodologies and a more expansive managed services approach, the report says. The scope, delivery mechanisms and outcomes of next-generation services build on approaches that focus on achieving enterprise agility and solving business problems.
The report assesses service providers based on their capabilities to augment traditional ADM services with emerging technologies and methodologies — like agile, DevOps, automation, digital and modernization techniques — to deliver application outsourcing projects. It also assesses provider capabilities in incorporating new approaches to develop and deliver applications that focus on business outcomes.
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The 2020 ISG Provider Lens™ Next-Gen ADM Service Archetype Report examines three different types of clients, or archetypes, that are looking for next-generation ADM services. The report evaluates the capabilities of 21 ADM providers to deliver services to the three archetypes:
Digital transformation: These enterprises seek competitive advantage through innovative use of established and advanced technologies. Rapid development and IT adaptation are important. Revenue increases drive this approach. These customers desire outcome-based pricing, where the service provider’s fee is directly linked to specified IT or business outcomes.
Leveraged packaged software platforms: These enterprises pursue standardized, consolidated and simplified enterprise software applications and associated services. This may involve the enterprise integrating its systems with external platforms like SAP HANA and Oracle, or building their own platforms. In recent years, these customers have increasingly used SaaS-based applications. Providers with experience in third-party automation tools are gaining traction with these customers.
Managed services: These customers seek to achieve IT maturity in terms of Digital Transformation resource utilization, operational processes and business practices by handing over their ADM portfolios to one or more service providers. The providers ensure application reliability and availability as well as associated management. Most engagements follow a fixed-fee or application-based pricing approach, requiring service scope to be well defined. Automation is increasingly used by providers to bring down costs.
Among the providers ISG evaluated, Atos, Capgemini, DXC Technology, HCL, Infosys and Wipro were named leaders across all three archetypes. Accenture, Cognizant, IBM and TCS were named leaders in two archetypes, and LTI and Mindtree were named leaders in one.
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