by: Sarah Joson
Wednesday, July 10, 2013 | Outsourcing News |
The Vertical Industries Report, a supplementary study of the Market Trends & Insights Report created by market research firm Momentum Group, was recently discussed at info.ISG-One.com by Momentum’s Chief Research Officer Paul Reynolds. The data collected came from hundreds of client engagements and numerous factors through 27 different industries.
It was found that there’s minimal difference in net value based on year-over-year spending across several industries. However, the study found notable movements such as the 36-percent drop in annual spending for an industry, while posting a remarkable growth rate of 17 percent.
Here are the other findings from the report:
The financial services industry is the top market in outsourcing.
In the past year, major increase in outsourcing spending and adoption was posted by key verticals in the financial industry. They are said to be looking for better and easier solutions for their current customers and potential clients. Moreover, financial institutions that are new to outsourcing are also believed to be shopping around for outsourcing services and providers.
Traction in the retail and utilities vertical improves.
A 19-percent rise in average annual outsource spending was seen for buyers in the utilities segment over the past three years. For the retail segment, it was 12 percent during the same period. However, it is predicted that clients in the utilities industry will further increase spending because of infrastructure upgrades and new technology that were postponed due to the fiscal crisis. In line with that, the utility sector is projected to go through several mergers and acquisitions brought about by heavy margin and cost pressure. Meanwhile, clients in the retail sector are aiming at improving their online activity and mobile marketing.
Clients prefer niche providers.
Clients nowadays are favouring niche providers to avoid issues and challenges. They believe that the strategies suggested by these providers will be more appropriate for their business. Furthermore, they do not mind contracting with smaller players, as long as these providers are the best for a specific industry.
New factors are being considered in the decision-making process.
Agility and scalability are some of the factors that the clients are looking for. Although cost reduction is still a major motivator, they want to be more flexible and scalable when the market is rooting for it.
The influence of going digital for businesses.
Businesses want access to opportunities from "emerging" technologies like mobile, social media, Big Data, and the cloud. They see it as new tools to improve operations and marketing strategies without having to spend more on capital. But some are still cautious as these are seen to put the business data and security at risk.