ISG Provider Lens™ report finds ADM services likely to be disrupted with UK's exit from the EU
Rules could limit free flow of workers and services
Short-term demand could spike, challenging providers
LONDON, Oct. 5, 2018 /PRNewswire/ -- Brexit is likely to disrupt the UK and Europe applications development and maintenance (ADM) services markets in the coming months, with the impact felt most notably in the banking, financial services and insurance (BFSI), healthcare and life sciences (HCLS) and manufacturing sectors, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The ISG Provider Lens™ Next-Gen ADM Services Quadrant Reports for the UK and Europe find that Brexit is creating huge uncertainties for both customers and providers alike. Multinational providers may have to adapt to new rules and tariffs and prepare for a rush of short-term work as customers scramble to adapt their ADM programs to meet extensive new requirements.
"At present, there is no clear answer as to what exactly will happen and what agreement the UK will reach with the EU," said Barry Matthews, partner, ISG UK, Ireland and Netherlands. "The majority of companies in the UK have not yet begun preparing for Brexit, and there are growing fears of supply-chain disruptions. As for providers, the large ones should be able to cover most situations that arise, but smaller UK-based providers may struggle with the changing market dynamics."
The ISG report found UK banks already moving headcount out of the UK and building new centers of excellence in other EU countries. Brexit is sure to create much higher application adoption, testing and maintenance workloads in extremely short time periods. It is unclear how IT departments will cope with the increased workloads, even with the support of their ADM providers, the report said.
Regulatory and security concerns are at the top of the list for HCLS companies, especially when it comes to processing and analyzing customer/patient data. Brexit will complicate matters, the report said, as multinational providers with limited local presence and knowledge of local market specifics will struggle to meet ADM requirements in the UK.
Most manufacturing companies, with their highly integrated, just-in-time production processes, will also struggle to have their next-gen ADM needs met in the UK, both because of limited on-the-ground resources and the anticipated spike in development, testing and maintenance demand associated with Brexit. Much of the British automotive industry, for instance, with German ownership of such brands as Mini, Rolls-Royce and Bentley, is already planning to move production lines and administrative support out of the UK in anticipation the free flow of people and services will be impacted by Brexit.
The Europe and UK reports also examine the changing dynamics of the next-gen ADM services market, which is being impacted by greater demand for applications in such areas as analytics, Internet of Things (IoT), cloud-native architecture, Software-as-a-Service (SaaS)-based offerings, security, customer experience, mobile and more.
Key trends include rapid application development to keep pace with the demand for new apps and features; the need for providers with globally distributed agile and "full-stack" capabilities; the rise of "DevSecOps" where security is being built into new apps; automated and industry-specific testing capabilities; the use of intelligent automation to diagnose, predict and remediate non-linear problems, and, with more cloud-native apps, the need for migration and maintenance capabilities across cloud platforms.
The ISG reports also examine next-gen ADM trends impacting the BFSI, HCLS and Manufacturing markets.
The report on Europe evaluates the capabilities of 26 ADM providers serving the European market, while a similar UK report evaluates 31 ADM providers serving the UK market. Each report examines provider capabilities across six quadrants: Next-Gen ADM, Agile Development, Continuous Testing, Next-Gen ADM – BFSI, Next-Gen ADM – HCLS, and Next-Gen ADM – Manufacturing.
In Europe, Capgemini was the only provider named a market leader across all six quadrants; DXC Technology and IBM were named leaders in five of the six. For the UK, Capgemini was named a leader in each of the six quadrants, with IBM earning that distinction in five of the six.
The ISG Provider Lens Next-Gen ADM Quadrant Reports are available to ISG Insights™ subscribers or for immediate, one-time purchase on these webpages: Europe and UK.
About ISG Provider Lens™ Quadrant Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers serving the U.S., Germany, Australia, Brazil and the UK, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
The series is a complement to the ISG Provider Lens Archetype reports, which offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types. An ISG Provider Lens Archetype report on Next-Gen ADM services will be published next month.
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. For more information, visit www.isg-one.com.