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Zinnov Zones For Digital Services 2016

This document discusses Zinnov Zones ratings for digital services and the enterprise digital transformation landscape. It covers three key areas: the digital journey of enterprises and their evolving organizational structure, investments, and ecosystem leverage; the market landscape for enterprise digital transformation and trends in spending; and the evolution of the service provider landscape and their ratings in Zinnov Zones for digital capabilities.

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This report is solely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov. Zinnov Zones for Digital *Zinnov’s Global Service Provider Ratings have been rebranded to ‘Zinnov Zones’
Market Landscape – Enterprise Digital Transformation Digital Journey of Enterprises Evolution of Service Provider Landscape Zinnov Zones Ratings for Digital Agenda
3 A view on IT investments by enterprises.. Source: Zinnov Analysis Traditional IT IT Modernisation Digital Enablement Enterprise Digital Transformation Operating System Enterprise Application Suites Security Infrastructure Hardware Support Network Support Virtualisation and Cloud based infrastructure Social Media Applications Mobile enterprise application suites Relational databases and Analytics, BI applications Identity management Creating an infrastructure to provide access to business information and manage/run business applications Evolution of legacy IT infrastructure, including both hardware & software, to align with changing business requirements Investments in enabling technologies to support digital use cases and execute data driven business processes Finding newer possibilities to maximize the customer experiences and operational efficiencies Service Oriented Enterprise Architecture Advanced analytics led enterprise applications Big Data Infrastructure Omni-channel Commerce Platforms Digital Marketing Platforms IoT platforms Sensors and Beacons technology4 Application Program Interface Data Lakes High Performance computing architecture Data driven UX Designing Digital Manufacturing Artificial Intelligence Predictive Analytics Natural Language Interaction Image Recognition Robotic Process Automation Robo-advisors Near Field Communication Cryptocurrency Wearable technologies Connected ecosystems Virtual and Augmented Reality
4 Enterprise Digital Transformation Spending Enterprise Digital Transformation Spending EDT market is estimated to be worth $29 Bn globally and is growing at over 30% per annum in times of otherwise stagnating IT spend Source: Zinnov Research 1635 1692 445 845 227 490 29 136 Global Digital Market Spending and Growth ($ Bn) Traditional IT IT Modernization Digital Enablement Enterprise Digital Transformation <1% 2015 2020  Enterprise digital transformation spending forms ~11% of the overall digital market, rest being constituted by expenditure towards digital enablement  BFSI, manufacturing and Retail currently constitute nearly 50% of the overall market for EDT  Nearly 40% of the overall spend is around use cases pertaining to customer targeting and engagement
5 ~$29 Bn EDT market currently drives ~$2 Bn worth of spend with digital service providers Source: Zinnov Analysis Digital Enablement SpendingEnterprise Digital Transformation Spending USD 300-320Mn USD 2Bn USD 15Bn USD 1.4-1.5Bn USD 10Bn USD 69Bn USD 2.3-2.5 Bn USD 15Bn USD 115Bn USD 6-7.5Bn USD 37Bn USD 250Bn 2015 2020 2015 2020 Share of Indian Service Providers Services Consumed Via Digital Service Providers Share of Services in Spending  20% realization of the total addressable Enterprise Digital transformation services market of $70 Bn; 30% realization expected by 2020  80% expenditure of services being made in-house, in addition to a small share of global in-house centers  Indian SPs account for ~15% of the services opportunity currently
6 NA and Europe are the largest contributors to global digital spending; Asian market to become the 2nd largest by 2020 Source: Zinnov Analysis Split of EDT Spend by Geographies North America Banking, Retail, Hi-Tech and Healthcare Europe Manufacturing, Telecom, Insurance Asia Manufacturing, Services, Oil & Gas 14 68 2015 2020 9 30 2015 2020 5 33 2015 2020 South America Utilities, Oil and Gas and Banking Middle East & Africa Oil and Gas, Mining and Agriculture Australia Services, Banking and Insurance 0.6 1.7 2015 2020 0.3 1.7 2015 2020 0.6 1.5 2015 2020  High Concentration of large enterprises  Availability of Top Digital Talent  Large number of Tech Start-ups  High Cost of Digital Talent  High government focus on digital  Availability of Top Digital Talent  High Cost of Digital Talent  Low Economic Growth  Unstable political condition  High IT spending growth  Low cost talent Availability  Major Offshoring and Outsourcing hotspots  Rapid Economic growth  Scarcity of Top Talent  Low cost talent availability  Near Shore Advantage w.r.t US geo  Low Economic Growth  Unstable US government  Low share of large enterprises  Start-up hubs, such as Israel  Near shore advantage w.r.t. European Customers  Geo-political instability  Availability of Top talent  Government focus on digital transformation  Low economic growth  High cost of Digital Talent
Market Landscape – Enterprise Digital Transformation Digital Journey of Enterprises Evolution of Service Provider Landscape Zinnov Zones Ratings for Digital Agenda
8 Top global enterprises are leading adoption of Digital Transformation initiatives with Forbes 500 companies accounting for 40% of spending Source: Zinnov Analysis Total Digital Spend contribution from Forbes Global 500 - 2015 $ 102 Billion 0.00% 0-100 0 0.5 1 1.5 2 2.5 Global Forbes 500 companies – by decreasing order of digital spend Forbes 500 Digital Spend Contribution Breakup SpendinUSDBillions 10%11%15%18%45% 100 200 300 400 500 Forbes 500 companies 40% Others 60% Share of Forbes 500 Companies in Global Digital Spend
9 Disruptive impact of digital technologies and new entrants has been the highest on BFSI and retail industries Source: Zinnov Analysis Healthcare Telecom Education Utilities Travel & Hospitality Manufacturing Media & Entertainment Retail BFSI StageofDigitalDisruption LowDigital Disruption Digital led Business Enhancements Business DisruptionsTimeline Retail • Automated Warehouse Management • Mobile POS • Personalized marketing • Robotic Sales agents • Customer Churn Analytics • Drone based Delivery • Virtual Shops • Retail 3D printing • Ecommerce/Aggregators BFSI • Personal Financial Advisors • Fraud Detection • Internal Threat Detection • Banking Customer Sentiment Analysis • Crowdfunding • P2P Lending • Cryptocurrency • Payment Wallets • Usage based insurance • Insurance Gamification Media and Entertainment • Data Driven Marketing • Social Media Analytics • Digital Infotainment Solutions • Immersive Virtual Reality • Connected TV • Programmatic Advertising • Online platforms for Aggregated Content Manufacturing • Connected factories • Robotic Workers • Advanced SCM Analytics • Demand Prediction • Virtual Prototyping • Additive Manufacturing • Predictive Maintenance Travel and Hospitality • Connected hotels • Predictive Pricing • Personalized marketing campaigns • In-flight VR entertainment • Alternative Lodging Platforms • Aggregated Hospitality & Event platforms • Travel and Hospitality Aggregators Medium Disruption High Disruption Low Digital Spend Medium Digital Spend High Digital Spend
10 Enterprises are rapidly evolving on three key fronts in order to transform themselves digitally (1/3) Source: Zinnov Analysis 1.ORGANIZATIONAL READINESS • Technology ownership moving beyond the CIO and CTO • Investments by BUs into digital technology uptake Enterprises are increasingly appointing Chief Digital Officers to own and implement digital charter for the organization 220 380 800 1600 2012 2013 2014 2015 APPOINTMENT OF CHIEF DIGITAL OFFICERS (CDO) IN LARGE ENTERPRISES GLOBALLY (2012- 2015) CIO and CTO Lead Technology Uptake in Pre Digital Era Focus on running the shop (Support & Maintenance) Digital transformation ownership extending beyond CIO/CTO office has shifted focus from “running the shop” to driving significant business benefit Technology ownership and budgets moving beyond CIO & CTO 60% 40% 30% 28% 25% 13% 5% BU Heads CIO/CTO CDO CMO CINO/CSO COO CEO STAKEHOLDERS WITHIN LARGE ENTERPRISES WITH LEADERSHIP ROLE IN DIGITAL TRANSFORMATION INITIATIVES New role being introduced into Organizations
11Source: Zinnov Analysis 2.DIGITAL INVESTMENTS Enterprises across industries are setting up digital labs to foster innovation and implement technology • Set up digital innovation labs and CoEs • Investments into hiring of relevant digital talent Despite growth in digital talent, availability remains low Enterprises continue to focus on acquisition and nurturing of talent to support digital objectives 11 34 65 2013 2014 2015 SET UP OF DIGITAL LABS BY LARGE ENTERPRISES 6x growth in 2 years 77% Enterprises feel that the talent crunch is the biggest impediment to going digital 50% Estimated shortage of Data Scientist professionals globally in 2015 Talent Type Availability Hiring Focus Data Scientist UI/UX Consultant Domain Experts Integration Architects Solution Architects 750 1150 2013 2015 GLOBAL AVAILABILITY OF DIGITAL TALENT (‘000) Key Focus Areas of Digital Labs ROBOTICS, IoT, ADVANCED ANALYTICS, DESIGN AND EXPERIENCE, BIG DATA, CYBER SECURITY, COGNITIVE COMPUTING, WEARABLES, VIRTUAL REALITY Enterprises are rapidly evolving on three key fronts in order to transform themselves digitally (2/3)
12Source: Zinnov Analysis, Start up data from Mattermark 3.ECOSYSTEM LEVERAGE Enterprise are leveraging the exploding digital start-up ecosystem for adoption of digital technologies • Partnerships with startups for adoption of digital technologies • Association with universities with focus on digital Universities with high focus on research in digital technologies are being partnered by enterprises Executives from large enterprises believe that small businesses will support growth in a partnership 41% 12 59 203 407 2000 2005 2010 2015 GROWTH IN NUMBER OF DIGITAL START -UPS Contextual Knowledge Management Enhancement of web-based customer engagement In-store Robotic Assistants for Customers Use of AI, Wearables etc. to improve worker safety Massachusetts Institute of Technology      University of Cambridge      Imperial College London      Harvard University      University of Oxford      University College London     Stanford University      California Institute of Technology     Princeton University     Yale University     Design & Experience Big Data & Analytics Internet of Things Cognitive Computing RoboticsTop Global Academic Institutes Passenger focused big data and ML applications Wearable robotsAutonomous vehicle technology Enterprises are rapidly evolving on three key fronts in order to transform themselves digitally (3/3)
Market Landscape – Enterprise Digital Transformation Digital Journey of Enterprises Evolution of Service Provider Landscape Zinnov Zones Ratings for Digital Agenda
14 Application engineering, and data management and analytics service offerings account for ~70% of service providers’ digital revenue Source: Zinnov Analysis *Figures do not add up to 100% due to overlap among clients across service lines Digital Application Engineering Digital SMAC Applications Mobile/ Web Apps Dev Cognitive Solutions Robotics and Automation Digital Consulting & Transformation Services Customer Maturity Assessment Digital Road map definition Use Case Prioritization Design & Experience Services Customer Experience Mapping U/UX Development Design on new forms Digital Platform Integration API Management Horizontal Platform orchestration Solutions Integration Data Management & Analytics Services Data Architecture ETL, Data Curation Advanced Analytics BI & Data Visualization 38% 33% 17% 8% 4% Digital Application Engineering Data Management & Analytics Digital Platform Integration Digital Consulting Services Design and Experience Services 16% 20% 23% 27% 31% Share of Digital Services – by Service Lines (2015) Share of Clients* (2015)
15 Service Providers need to differentiate across five key aspects in order to become leaders in the digital age Source: Zinnov Analysis Focus on Digital Talent Hiring Creation of Digital Assets Leveraging Digital Ecosystem Agile/DevOps Development Work on new-age delivery models Service Providers must undertake initiatives to upskill internal workforce and hire top talent from to build an able digital workforce Re-usable IPs such as products and accelerators along with a robust lab network is essential for SPs to differentiate themselves in market Service Providers should enhance their digital capabilities by partnering important stakeholders such as start ups and universities Agile/DevOps development methodologies help SPs deliver high quality of services in a smaller time frame and reasonable costs Enterprises are demanding new age delivery models such revenue sharing, risk-reward sharing models forcing SPs to execute on these 1 2 3 4 5 Higher lateral hiring by Digital SPs as compared to IT Service Providers 35% Higher median compensation of Digital employees against IT 20% Of IPs (both Solutions & Accelerators) built by SPs serve BFSI clients 28% Service Providers have Design and UX focus in their digital labs 70% of revenue made through outcome based contracts Expected to grow rapidly as services mature 1% Six Key Digital Talent Categories Approx. 15-20% higher experience in digital workforce vs. IT/ITeS Advantages of Digital Labs  Building cross-technology solutions through inter-BU collaboration  Development Of IPs  Collaboration with ecosystem Three Stages of SP collaboration with startup ecosystem:  Explore and Engage  Partner  Invest and Acquire Few SP partnerships with universities Growth in demand for DevOps skills over last year 70% Need for Dev-ops and Agile Increase in revenue for clients22% 30X Increase in speed of deployment 50X Reduction in software failures Multiple GTM Models being explored by service providers  Consulting partner Led  Customer as a channel  Delivery team led  3-in-a-box/4-in-a-box model  Digital as a separate P&L17% • INTEGRATION ARCHITECT • APPLICATION ARCHITECT • DATA SCIENTIST • DOMAIN EXPERT • UX CONSULTANT • DEVOPS ANALYST Key areas of collaboration include: Advanced Analytics |Mind Controlled Robots |Cyber security | Smart city tech | IoT | Computer Vision | Design
16 Existing capabilities of Product Engineering Service Providers provide them a head start in digital services market Source: Zinnov Analysis Key Advantages of a Product Engineering Vendor Over Incumbent IT Services Vendor PRODUCT ENGINEERING VENDORS’ ADVANTAGES Customer Engagement Focus New Products & Services Digital Stakeholder Connects Design Thinking & Agile New Age Talent Ecosystem Connects >10% of global digital spend will be on new products & services, which is the prime focus of PES vendors Zinnov estimates >$100 Bn spend by 2020 on UI/ UX capabilities, API management & application factories, all strong suits of traditional PES vendors PES vendors have traditionally engaged with both startup and university ecosystem to augment their research capabilities PES vendors employ a large proportion of new technologies and research focussed talent, which is not the case for traditional IT services firms PES vendors were early movers in Agile, Scrum, DevOps and Design Thinking fields Deep connects with engineering organizations, CTO & BUs as compared to IT services firms who have traditionally restricted their engagement to CIO’s
Market Landscape – Enterprise Digital Transformation Digital Journey of Enterprises Evolution of Service Provider Landscape Zinnov Zones Ratings for Digital Agenda
18 Zinnov Zones for Digital – Analysis Framework Source: Zinnov Analysis Zinnov has evaluated participating service providers on two key areas basis which they were plotted on a 2-dimensional matrix Scalability Nurture Zone Breakout Zone Execution Zone Leadership Zone Positioning reflects the scores on Digital Prowess and Scalability Digital Prowess1 Scalability2  Scale of Digital Business  Product Engineering Experience  Digital Clientele  Services Spread  Ecosystem Leverage  Digital Workforce  Digital Assets  Engagement Models Scalability ScaleofDigitalBusiness,ProductEngineeringExperience,DigitalClientele Digital Prowess Services Spread, Ecosystem Leverage, Digital Workforce, Digital Assets, Engagement Models
19 Digital Prowess Parameters explained Source: Zinnov Analysis  Services Spread  Ecosystem Leverage  Digital Workforce  Digital Assets  Engagement Models Capability of delivering end to end services across the five key domains of digital technology services, namely – a) Consulting b) Design and Experience c) Application Engineering, 4) Platform Integration & 5) Data Management and Analytics Leveraging digital ecosystem through acquisitions or partnerships with niche technology start-ups and prominent digital technology platforms | Strong connects with leading universities and academic institutes having focus on research in digital technologies| Relevant acquisitions in the digital space Availability of digital skills such as Domain Experts, Data Scientists, UI/UX Consultants & Solution architects | High proportion of lateral hires and best in class fresh talent | Certifications & Trainings in digital platforms & technologies | Proportion of workforce with PhD | Avg. experience of Digital Workforce Focus on creation of Digital Labs and Centres of Excellence, Intellectual Property (IPs), products, accelerators, tools and frameworks across digital technology areas Ability to deliver across all types of engagement models including T&M, Fixed Price and Outcome based models, thus catering to digital native customers | Execution of projects on agile practices Digital Prowess is further constituted of five key parameters: The cumulative score of enterprises based on the Digital Prowess axis is used for classifying the service providers on one of the Zinnov Zones below- Nurture Zone Breakout Zone Execution Zone Leadership Zone Scalability has further been broken down into three key parameters as mentioned below-  Scale of Digital Business  Digital Clientele  Product Engineering Experience Total Digital Revenue and Headcount across digital technology service lines | Geographic spread of revenue across key hubs of digital services demand Width of digital client portfolio | Existence of large marque clients and a higher number of large value accounts within the digital clientele Revenue and headcount in product engineering services, thus signifying intensity of PES experience (critical for scaling up digital business due to expertise across product development, design and R&D) Cumulative Score on the Digital Prowess parameters defines the horizontal position of Service Providers within the framework Cumulative Score on the Scalability parameters defines the vertical position of Service Providers within the framework
20 Zinnov Zones for Digital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Overall Ratings Scalability ScaleofDigitalBusiness,ProductEngineeringExperience,DigitalClientele Digital Prowess Services Spread, Ecosystem Leverage, Digital Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds Ascendum *IGATE was acquired by Capgemini. Current positioning does not include Capgeminig details and is based on IGATE data only
Digital Consulting and Transformation Services Ratings across 5 service lines: Design & Experience Services Digital Application Engineering Services Digital Platform Integration Services Data Management & Analytics Services Provider 1. 2. 3. 4. 5.
22 Zinnov Zones for Digital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Digital Consulting and Transformation Services Ratings Scalability ScaleofConsultingBusiness,ProductEngineeringExperience,Clientele Digital Prowess Vertical Spread, Ecosystem Leverage, Consulting Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain InnomindsPactera Hexaware Happiest Minds *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
23 Zinnov Zones for Digital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Design & Experience Services Ratings Scalability ScaleofD&EBusiness,ProductEngineeringExperience,Clientele Digital Prowess Design & Experience Services Spread, Ecosystem Leverage, Design Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
24 Zinnov Zones for Digital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Digital Application Engineering Services Ratings Scalability ScaleofAppEngg.Business,ProductEngineeringExperience,Clientele Digital Prowess App. Eng. Services Spread, Ecosystem Leverage, App. Development Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds Ascendum *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
25 Zinnov Zones for Digital Source: Data shared by participant companies, Zinnov Research Nurture Zone Low High Digital Platform Integration Services Ratings Scalability ScaleofPlatformIntegrationBusiness,ProductEngineeringExperience,Clientele Digital Prowess Platform Integration Services Spread, Ecosystem Leverage, Integration Workforce, Digital Assets, Engagement Models Breakout Zone Execution Zone Leadership Zone EPAM Persistent Systems Mindtree Luxoft Ness Software Engineering Services L&T Infotech SyntelIGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
26 Zinnov Zones for Digital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Data Management & Analytics Services Provider Ratings Scalability ScaleofDataMgmt.&AnalyticsBusiness,ProductEngineeringExperience,Clientele Digital Prowess Data Management & Analytics Services Spread, Ecosystem Leverage, Analytics Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
Bangalore 69 "Prathiba Complex", 4th 'A' Cross, Koramangala 5th Block, Bangalore-560 095. Phone: +91-80-41127925/6 Singapore Level 42, Suntec Tower Three 8 Temasek Boulevard Singapore 038988 Phone:+65 6829 2123 Texas 21, Waterway Ave Suite 300 The Woodlands TX-77380 USA Phone:+1-281-362-2773 Beijing Meilifang Tower 4, Entrance 4, 10/F #1003, 11 Beiyuan Shuangying Road, Chaoyang District, Beijing China 100012 Thank You Gurgaon Office: First Floor, Plot no. 131, Sector 44, Gurgaon-122002, Phone: +91 124 4420100 California Office 3080 Olcott Street Suite A125, Santa Clara, CA 95054 Phone: +408-716-8432

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Zinnov Zones For Digital Services 2016

  • 1.
    This report issolely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov. Zinnov Zones for Digital *Zinnov’s Global Service Provider Ratings have been rebranded to ‘Zinnov Zones’
  • 2.
    Market Landscape –Enterprise Digital Transformation Digital Journey of Enterprises Evolution of Service Provider Landscape Zinnov Zones Ratings for Digital Agenda
  • 3.
    3 A view onIT investments by enterprises.. Source: Zinnov Analysis Traditional IT IT Modernisation Digital Enablement Enterprise Digital Transformation Operating System Enterprise Application Suites Security Infrastructure Hardware Support Network Support Virtualisation and Cloud based infrastructure Social Media Applications Mobile enterprise application suites Relational databases and Analytics, BI applications Identity management Creating an infrastructure to provide access to business information and manage/run business applications Evolution of legacy IT infrastructure, including both hardware & software, to align with changing business requirements Investments in enabling technologies to support digital use cases and execute data driven business processes Finding newer possibilities to maximize the customer experiences and operational efficiencies Service Oriented Enterprise Architecture Advanced analytics led enterprise applications Big Data Infrastructure Omni-channel Commerce Platforms Digital Marketing Platforms IoT platforms Sensors and Beacons technology4 Application Program Interface Data Lakes High Performance computing architecture Data driven UX Designing Digital Manufacturing Artificial Intelligence Predictive Analytics Natural Language Interaction Image Recognition Robotic Process Automation Robo-advisors Near Field Communication Cryptocurrency Wearable technologies Connected ecosystems Virtual and Augmented Reality
  • 4.
    4 Enterprise Digital Transformation Spending EnterpriseDigital Transformation Spending EDT market is estimated to be worth $29 Bn globally and is growing at over 30% per annum in times of otherwise stagnating IT spend Source: Zinnov Research 1635 1692 445 845 227 490 29 136 Global Digital Market Spending and Growth ($ Bn) Traditional IT IT Modernization Digital Enablement Enterprise Digital Transformation <1% 2015 2020  Enterprise digital transformation spending forms ~11% of the overall digital market, rest being constituted by expenditure towards digital enablement  BFSI, manufacturing and Retail currently constitute nearly 50% of the overall market for EDT  Nearly 40% of the overall spend is around use cases pertaining to customer targeting and engagement
  • 5.
    5 ~$29 Bn EDTmarket currently drives ~$2 Bn worth of spend with digital service providers Source: Zinnov Analysis Digital Enablement SpendingEnterprise Digital Transformation Spending USD 300-320Mn USD 2Bn USD 15Bn USD 1.4-1.5Bn USD 10Bn USD 69Bn USD 2.3-2.5 Bn USD 15Bn USD 115Bn USD 6-7.5Bn USD 37Bn USD 250Bn 2015 2020 2015 2020 Share of Indian Service Providers Services Consumed Via Digital Service Providers Share of Services in Spending  20% realization of the total addressable Enterprise Digital transformation services market of $70 Bn; 30% realization expected by 2020  80% expenditure of services being made in-house, in addition to a small share of global in-house centers  Indian SPs account for ~15% of the services opportunity currently
  • 6.
    6 NA and Europeare the largest contributors to global digital spending; Asian market to become the 2nd largest by 2020 Source: Zinnov Analysis Split of EDT Spend by Geographies North America Banking, Retail, Hi-Tech and Healthcare Europe Manufacturing, Telecom, Insurance Asia Manufacturing, Services, Oil & Gas 14 68 2015 2020 9 30 2015 2020 5 33 2015 2020 South America Utilities, Oil and Gas and Banking Middle East & Africa Oil and Gas, Mining and Agriculture Australia Services, Banking and Insurance 0.6 1.7 2015 2020 0.3 1.7 2015 2020 0.6 1.5 2015 2020  High Concentration of large enterprises  Availability of Top Digital Talent  Large number of Tech Start-ups  High Cost of Digital Talent  High government focus on digital  Availability of Top Digital Talent  High Cost of Digital Talent  Low Economic Growth  Unstable political condition  High IT spending growth  Low cost talent Availability  Major Offshoring and Outsourcing hotspots  Rapid Economic growth  Scarcity of Top Talent  Low cost talent availability  Near Shore Advantage w.r.t US geo  Low Economic Growth  Unstable US government  Low share of large enterprises  Start-up hubs, such as Israel  Near shore advantage w.r.t. European Customers  Geo-political instability  Availability of Top talent  Government focus on digital transformation  Low economic growth  High cost of Digital Talent
  • 7.
    Market Landscape –Enterprise Digital Transformation Digital Journey of Enterprises Evolution of Service Provider Landscape Zinnov Zones Ratings for Digital Agenda
  • 8.
    8 Top global enterprisesare leading adoption of Digital Transformation initiatives with Forbes 500 companies accounting for 40% of spending Source: Zinnov Analysis Total Digital Spend contribution from Forbes Global 500 - 2015 $ 102 Billion 0.00% 0-100 0 0.5 1 1.5 2 2.5 Global Forbes 500 companies – by decreasing order of digital spend Forbes 500 Digital Spend Contribution Breakup SpendinUSDBillions 10%11%15%18%45% 100 200 300 400 500 Forbes 500 companies 40% Others 60% Share of Forbes 500 Companies in Global Digital Spend
  • 9.
    9 Disruptive impact ofdigital technologies and new entrants has been the highest on BFSI and retail industries Source: Zinnov Analysis Healthcare Telecom Education Utilities Travel & Hospitality Manufacturing Media & Entertainment Retail BFSI StageofDigitalDisruption LowDigital Disruption Digital led Business Enhancements Business DisruptionsTimeline Retail • Automated Warehouse Management • Mobile POS • Personalized marketing • Robotic Sales agents • Customer Churn Analytics • Drone based Delivery • Virtual Shops • Retail 3D printing • Ecommerce/Aggregators BFSI • Personal Financial Advisors • Fraud Detection • Internal Threat Detection • Banking Customer Sentiment Analysis • Crowdfunding • P2P Lending • Cryptocurrency • Payment Wallets • Usage based insurance • Insurance Gamification Media and Entertainment • Data Driven Marketing • Social Media Analytics • Digital Infotainment Solutions • Immersive Virtual Reality • Connected TV • Programmatic Advertising • Online platforms for Aggregated Content Manufacturing • Connected factories • Robotic Workers • Advanced SCM Analytics • Demand Prediction • Virtual Prototyping • Additive Manufacturing • Predictive Maintenance Travel and Hospitality • Connected hotels • Predictive Pricing • Personalized marketing campaigns • In-flight VR entertainment • Alternative Lodging Platforms • Aggregated Hospitality & Event platforms • Travel and Hospitality Aggregators Medium Disruption High Disruption Low Digital Spend Medium Digital Spend High Digital Spend
  • 10.
    10 Enterprises are rapidlyevolving on three key fronts in order to transform themselves digitally (1/3) Source: Zinnov Analysis 1.ORGANIZATIONAL READINESS • Technology ownership moving beyond the CIO and CTO • Investments by BUs into digital technology uptake Enterprises are increasingly appointing Chief Digital Officers to own and implement digital charter for the organization 220 380 800 1600 2012 2013 2014 2015 APPOINTMENT OF CHIEF DIGITAL OFFICERS (CDO) IN LARGE ENTERPRISES GLOBALLY (2012- 2015) CIO and CTO Lead Technology Uptake in Pre Digital Era Focus on running the shop (Support & Maintenance) Digital transformation ownership extending beyond CIO/CTO office has shifted focus from “running the shop” to driving significant business benefit Technology ownership and budgets moving beyond CIO & CTO 60% 40% 30% 28% 25% 13% 5% BU Heads CIO/CTO CDO CMO CINO/CSO COO CEO STAKEHOLDERS WITHIN LARGE ENTERPRISES WITH LEADERSHIP ROLE IN DIGITAL TRANSFORMATION INITIATIVES New role being introduced into Organizations
  • 11.
    11Source: Zinnov Analysis 2.DIGITAL INVESTMENTS Enterprisesacross industries are setting up digital labs to foster innovation and implement technology • Set up digital innovation labs and CoEs • Investments into hiring of relevant digital talent Despite growth in digital talent, availability remains low Enterprises continue to focus on acquisition and nurturing of talent to support digital objectives 11 34 65 2013 2014 2015 SET UP OF DIGITAL LABS BY LARGE ENTERPRISES 6x growth in 2 years 77% Enterprises feel that the talent crunch is the biggest impediment to going digital 50% Estimated shortage of Data Scientist professionals globally in 2015 Talent Type Availability Hiring Focus Data Scientist UI/UX Consultant Domain Experts Integration Architects Solution Architects 750 1150 2013 2015 GLOBAL AVAILABILITY OF DIGITAL TALENT (‘000) Key Focus Areas of Digital Labs ROBOTICS, IoT, ADVANCED ANALYTICS, DESIGN AND EXPERIENCE, BIG DATA, CYBER SECURITY, COGNITIVE COMPUTING, WEARABLES, VIRTUAL REALITY Enterprises are rapidly evolving on three key fronts in order to transform themselves digitally (2/3)
  • 12.
    12Source: Zinnov Analysis,Start up data from Mattermark 3.ECOSYSTEM LEVERAGE Enterprise are leveraging the exploding digital start-up ecosystem for adoption of digital technologies • Partnerships with startups for adoption of digital technologies • Association with universities with focus on digital Universities with high focus on research in digital technologies are being partnered by enterprises Executives from large enterprises believe that small businesses will support growth in a partnership 41% 12 59 203 407 2000 2005 2010 2015 GROWTH IN NUMBER OF DIGITAL START -UPS Contextual Knowledge Management Enhancement of web-based customer engagement In-store Robotic Assistants for Customers Use of AI, Wearables etc. to improve worker safety Massachusetts Institute of Technology      University of Cambridge      Imperial College London      Harvard University      University of Oxford      University College London     Stanford University      California Institute of Technology     Princeton University     Yale University     Design & Experience Big Data & Analytics Internet of Things Cognitive Computing RoboticsTop Global Academic Institutes Passenger focused big data and ML applications Wearable robotsAutonomous vehicle technology Enterprises are rapidly evolving on three key fronts in order to transform themselves digitally (3/3)
  • 13.
    Market Landscape –Enterprise Digital Transformation Digital Journey of Enterprises Evolution of Service Provider Landscape Zinnov Zones Ratings for Digital Agenda
  • 14.
    14 Application engineering, anddata management and analytics service offerings account for ~70% of service providers’ digital revenue Source: Zinnov Analysis *Figures do not add up to 100% due to overlap among clients across service lines Digital Application Engineering Digital SMAC Applications Mobile/ Web Apps Dev Cognitive Solutions Robotics and Automation Digital Consulting & Transformation Services Customer Maturity Assessment Digital Road map definition Use Case Prioritization Design & Experience Services Customer Experience Mapping U/UX Development Design on new forms Digital Platform Integration API Management Horizontal Platform orchestration Solutions Integration Data Management & Analytics Services Data Architecture ETL, Data Curation Advanced Analytics BI & Data Visualization 38% 33% 17% 8% 4% Digital Application Engineering Data Management & Analytics Digital Platform Integration Digital Consulting Services Design and Experience Services 16% 20% 23% 27% 31% Share of Digital Services – by Service Lines (2015) Share of Clients* (2015)
  • 15.
    15 Service Providers needto differentiate across five key aspects in order to become leaders in the digital age Source: Zinnov Analysis Focus on Digital Talent Hiring Creation of Digital Assets Leveraging Digital Ecosystem Agile/DevOps Development Work on new-age delivery models Service Providers must undertake initiatives to upskill internal workforce and hire top talent from to build an able digital workforce Re-usable IPs such as products and accelerators along with a robust lab network is essential for SPs to differentiate themselves in market Service Providers should enhance their digital capabilities by partnering important stakeholders such as start ups and universities Agile/DevOps development methodologies help SPs deliver high quality of services in a smaller time frame and reasonable costs Enterprises are demanding new age delivery models such revenue sharing, risk-reward sharing models forcing SPs to execute on these 1 2 3 4 5 Higher lateral hiring by Digital SPs as compared to IT Service Providers 35% Higher median compensation of Digital employees against IT 20% Of IPs (both Solutions & Accelerators) built by SPs serve BFSI clients 28% Service Providers have Design and UX focus in their digital labs 70% of revenue made through outcome based contracts Expected to grow rapidly as services mature 1% Six Key Digital Talent Categories Approx. 15-20% higher experience in digital workforce vs. IT/ITeS Advantages of Digital Labs  Building cross-technology solutions through inter-BU collaboration  Development Of IPs  Collaboration with ecosystem Three Stages of SP collaboration with startup ecosystem:  Explore and Engage  Partner  Invest and Acquire Few SP partnerships with universities Growth in demand for DevOps skills over last year 70% Need for Dev-ops and Agile Increase in revenue for clients22% 30X Increase in speed of deployment 50X Reduction in software failures Multiple GTM Models being explored by service providers  Consulting partner Led  Customer as a channel  Delivery team led  3-in-a-box/4-in-a-box model  Digital as a separate P&L17% • INTEGRATION ARCHITECT • APPLICATION ARCHITECT • DATA SCIENTIST • DOMAIN EXPERT • UX CONSULTANT • DEVOPS ANALYST Key areas of collaboration include: Advanced Analytics |Mind Controlled Robots |Cyber security | Smart city tech | IoT | Computer Vision | Design
  • 16.
    16 Existing capabilities ofProduct Engineering Service Providers provide them a head start in digital services market Source: Zinnov Analysis Key Advantages of a Product Engineering Vendor Over Incumbent IT Services Vendor PRODUCT ENGINEERING VENDORS’ ADVANTAGES Customer Engagement Focus New Products & Services Digital Stakeholder Connects Design Thinking & Agile New Age Talent Ecosystem Connects >10% of global digital spend will be on new products & services, which is the prime focus of PES vendors Zinnov estimates >$100 Bn spend by 2020 on UI/ UX capabilities, API management & application factories, all strong suits of traditional PES vendors PES vendors have traditionally engaged with both startup and university ecosystem to augment their research capabilities PES vendors employ a large proportion of new technologies and research focussed talent, which is not the case for traditional IT services firms PES vendors were early movers in Agile, Scrum, DevOps and Design Thinking fields Deep connects with engineering organizations, CTO & BUs as compared to IT services firms who have traditionally restricted their engagement to CIO’s
  • 17.
    Market Landscape –Enterprise Digital Transformation Digital Journey of Enterprises Evolution of Service Provider Landscape Zinnov Zones Ratings for Digital Agenda
  • 18.
    18 Zinnov Zones forDigital – Analysis Framework Source: Zinnov Analysis Zinnov has evaluated participating service providers on two key areas basis which they were plotted on a 2-dimensional matrix Scalability Nurture Zone Breakout Zone Execution Zone Leadership Zone Positioning reflects the scores on Digital Prowess and Scalability Digital Prowess1 Scalability2  Scale of Digital Business  Product Engineering Experience  Digital Clientele  Services Spread  Ecosystem Leverage  Digital Workforce  Digital Assets  Engagement Models Scalability ScaleofDigitalBusiness,ProductEngineeringExperience,DigitalClientele Digital Prowess Services Spread, Ecosystem Leverage, Digital Workforce, Digital Assets, Engagement Models
  • 19.
    19 Digital Prowess Parametersexplained Source: Zinnov Analysis  Services Spread  Ecosystem Leverage  Digital Workforce  Digital Assets  Engagement Models Capability of delivering end to end services across the five key domains of digital technology services, namely – a) Consulting b) Design and Experience c) Application Engineering, 4) Platform Integration & 5) Data Management and Analytics Leveraging digital ecosystem through acquisitions or partnerships with niche technology start-ups and prominent digital technology platforms | Strong connects with leading universities and academic institutes having focus on research in digital technologies| Relevant acquisitions in the digital space Availability of digital skills such as Domain Experts, Data Scientists, UI/UX Consultants & Solution architects | High proportion of lateral hires and best in class fresh talent | Certifications & Trainings in digital platforms & technologies | Proportion of workforce with PhD | Avg. experience of Digital Workforce Focus on creation of Digital Labs and Centres of Excellence, Intellectual Property (IPs), products, accelerators, tools and frameworks across digital technology areas Ability to deliver across all types of engagement models including T&M, Fixed Price and Outcome based models, thus catering to digital native customers | Execution of projects on agile practices Digital Prowess is further constituted of five key parameters: The cumulative score of enterprises based on the Digital Prowess axis is used for classifying the service providers on one of the Zinnov Zones below- Nurture Zone Breakout Zone Execution Zone Leadership Zone Scalability has further been broken down into three key parameters as mentioned below-  Scale of Digital Business  Digital Clientele  Product Engineering Experience Total Digital Revenue and Headcount across digital technology service lines | Geographic spread of revenue across key hubs of digital services demand Width of digital client portfolio | Existence of large marque clients and a higher number of large value accounts within the digital clientele Revenue and headcount in product engineering services, thus signifying intensity of PES experience (critical for scaling up digital business due to expertise across product development, design and R&D) Cumulative Score on the Digital Prowess parameters defines the horizontal position of Service Providers within the framework Cumulative Score on the Scalability parameters defines the vertical position of Service Providers within the framework
  • 20.
    20 Zinnov Zones forDigital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Overall Ratings Scalability ScaleofDigitalBusiness,ProductEngineeringExperience,DigitalClientele Digital Prowess Services Spread, Ecosystem Leverage, Digital Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds Ascendum *IGATE was acquired by Capgemini. Current positioning does not include Capgeminig details and is based on IGATE data only
  • 21.
    Digital Consulting andTransformation Services Ratings across 5 service lines: Design & Experience Services Digital Application Engineering Services Digital Platform Integration Services Data Management & Analytics Services Provider 1. 2. 3. 4. 5.
  • 22.
    22 Zinnov Zones forDigital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Digital Consulting and Transformation Services Ratings Scalability ScaleofConsultingBusiness,ProductEngineeringExperience,Clientele Digital Prowess Vertical Spread, Ecosystem Leverage, Consulting Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain InnomindsPactera Hexaware Happiest Minds *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
  • 23.
    23 Zinnov Zones forDigital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Design & Experience Services Ratings Scalability ScaleofD&EBusiness,ProductEngineeringExperience,Clientele Digital Prowess Design & Experience Services Spread, Ecosystem Leverage, Design Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
  • 24.
    24 Zinnov Zones forDigital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Digital Application Engineering Services Ratings Scalability ScaleofAppEngg.Business,ProductEngineeringExperience,Clientele Digital Prowess App. Eng. Services Spread, Ecosystem Leverage, App. Development Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds Ascendum *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
  • 25.
    25 Zinnov Zones forDigital Source: Data shared by participant companies, Zinnov Research Nurture Zone Low High Digital Platform Integration Services Ratings Scalability ScaleofPlatformIntegrationBusiness,ProductEngineeringExperience,Clientele Digital Prowess Platform Integration Services Spread, Ecosystem Leverage, Integration Workforce, Digital Assets, Engagement Models Breakout Zone Execution Zone Leadership Zone EPAM Persistent Systems Mindtree Luxoft Ness Software Engineering Services L&T Infotech SyntelIGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
  • 26.
    26 Zinnov Zones forDigital Source: Data shared by participant companies, Zinnov Research Nurture Zone Breakout Zone Execution Zone Leadership Zone Low High Data Management & Analytics Services Provider Ratings Scalability ScaleofDataMgmt.&AnalyticsBusiness,ProductEngineeringExperience,Clientele Digital Prowess Data Management & Analytics Services Spread, Ecosystem Leverage, Analytics Workforce, Digital Assets, Engagement Models EPAM Persistent Systems Mindtree GlobalLogic Luxoft Ness Software Engineering Services L&T Infotech Syntel IGATE* Tech Mahindra Infogain Innominds Pactera Hexaware Happiest Minds *IGATE was acquired by Capgemini. Current positioning does not include Capgemini details and is based on IGATE data only
  • 27.
    Bangalore 69 "Prathiba Complex", 4th'A' Cross, Koramangala 5th Block, Bangalore-560 095. Phone: +91-80-41127925/6 Singapore Level 42, Suntec Tower Three 8 Temasek Boulevard Singapore 038988 Phone:+65 6829 2123 Texas 21, Waterway Ave Suite 300 The Woodlands TX-77380 USA Phone:+1-281-362-2773 Beijing Meilifang Tower 4, Entrance 4, 10/F #1003, 11 Beiyuan Shuangying Road, Chaoyang District, Beijing China 100012 Thank You Gurgaon Office: First Floor, Plot no. 131, Sector 44, Gurgaon-122002, Phone: +91 124 4420100 California Office 3080 Olcott Street Suite A125, Santa Clara, CA 95054 Phone: +408-716-8432