Asset Based Pay

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The Move To An Asset-BasedServices Playb Freeric giro, Apri 16, 2012

FOR: Veor

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Te intersection o cloud, mobile, social, and business analytics is disruptingthe business/I equilibrium, but service providers are stuck in a custom service

portolio structure that lacks broader relevance. Te need or business process

agility is slowly but surely replacing solution customization as the buying

requirement or I services.

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Over the past 18 months, many large SIs have started to take the steps necessary

to revive their solution accelerator programs: ocusing on getting the right skills

in place to proactively manage solutions, acquiring soware assets to complement

their services, and building new oerings that address their clients innovation

challenges.

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Te move to solution accelerators is gaining momentum, signiying the increasing

importance o assets to the I services industry. Providers having dierent

backgrounds, such as consulting, BPO, and outsourcing, are emphasizing the move

to a more modular and scalable solution structure that allows aster and more cost-

eective service delivery.


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2012, Forrester Research, Ic. A rihts reserve. Uauthorize reprouctio is strict prohibite. Ioratio is base o best avaiaberesources. Opiios reect juet at the tie a are subject to chae. Forrester, Techoraphics, Forrester Wave, RoeView, TechRaar,a Tota Ecooic Ipact are traearks o Forrester Research, Ic. A other traearks are the propert o their respective copaies. Topurchase reprits o this ocuet, pease eai [email protected]. For aitioa ioratio, o to www.orrester.co.

FOR VEndOR STRATEgy PROFESSIOnAlS

Why Read This RepoRT

New business success imperatives are pushing clients to change the way they leverage I solutions. I

service providers will have to adapt to these new rules o engagement i they want to remain relevant

to their clients in the long term. Forrester believes that the increased ocus on business innovation will

push service providers to invest more in the development o soware assets that provide strong business

value to multiple clients. Tis is the rst report in a series that examines the evolution o these solution

accelerators. We analyze why the move to these solution accelerators has been slow and describe the steps

an increasing number o service vendors are taking in order to successully grow their solution accelerator

ootprint. Vendor strategists will learn what it takes to implement the organization, governance models,

processes, and tools to support this shi and what skill sets are needed to succeed in the asset-based

services world.

Tabe O Cotets

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A Rae O Ciet A Veor Forces AreFuei The Shit I Services

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notes & Resources

Forrester iterviewe 19 veors a user

copaies, icui Atos, BeariPoit,

Cavasm Techooies, Capeii,

Coizat, CSC, CSS, deoitte, HCl

Techooies, IBm, Ioss, mahiraSata, mastek, mphasiS, nIIT Techooies,

Soata Sotware, Tata Cosutac Services,

TCS iOn, a Wipro.

Reate Research docuets

mobie Is The new Face O Eaeet

Februar 13, 2012

The Coi Upheava I Tech Services

Ju 29, 2010

T M T an at-B src pAsset-Base Services Have Becoe A Prerequisite For Success

b Freeric giro

with Pasca matzke, Joh C. mcCarth, a Rupika mahotra

2

4

6

11

13

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APRIl 16, 2012
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The move To A Asset-Base Services Pa 2

2012, Forrester Research, Ic. Reprouctio Prohibite Apri 16, 2012

The iT seRviCes WoRld is ChaNgiNg To BusiNess iNNovaTioN iMpeRaTives

Te pace o change in the I services world is greatly accelerating; technology innovation no

longer comes in successive waves. Services clients now ace a perect storm o innovation the

interrelationships o cloud, mobile, social, and business analytics are disrupting the precarious

business/I equilibrium. As business rules are rewritten to embrace these new technologies,

service providers will have to undergo a major transormation in order or their value proposition

to remain relevant to their clients. Forrester believes there is a real sense o urgency around

this transormation; as a result, solution accelerators will be some o the key enablers o the

transormation imperative.1 Forrester denes solution accelerators as (see Figure 1):

Internally developed or acquired sofware assets that IT services vendors use to automate a

particular business or aspect o product development or a range o clients. Solution accelerators

provide 30% to 90% o the solution that the client is looking or and are reused across multiple

engagements.

For example, Capgeminis Smart Energy Services oering leverages a set o solution accelerators

that the rm accumulated via its acquisition o Skvader Systems. Tese soware assets, combined

with deep domain expertise in the utilities space, allow Capgemini to provide strong smart meter

management services capabilities to its clients. Te value proposition o such solution accelerators

includes higher predictability and lower risk or clients and improved margins or Capgemini.

a Rn of Cnt an vnr Frc ar Fn T sft in src

Te pressure or clients to innovate and dierentiate has been building since the global nancial

crisis began. Forrester believes that new rules o success or clients will generate new types orequirements or their service providers.2 In particular, the need or business process agility is slowly

but surely replacing solution customization as a buying requirement or I services. Te perect

storm o technology innovation around cloud, mobility, social, and business analytics provides both

the drivers and the enabling orces to stimulate wider adoption o asset-based solutions. Forrester

sees the ollowing new client and industry requirements driving this adoption:

Moving rom pure cost-cutting to ocusing on innovation. Data rom Forresters ForrsightsServices Survey, Q3 2011 shows that the need or companies to innovate and grow their business

now has a higher I services spending priority than the need to lower their I operations costs.3

Te combination o the uncertain economy and a more open and more complex competitive

environment is orcing companies to ocus more on innovation to achieve their goals o aster,

more protable business growth and more agile business operations. For I services vendors,

client value is being redened rom delivering cost savings to generating business value

through innovation, the latter o which is the main value proposition o solution accelerators.


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Innovating core business processes and reducing the associated risk. Clients will increasinglydierentiate by how they leverage their systems o engagement, the logical extensions o

their systems o records, and the automation engines o their core business processes.4 One

example o a core business process is clinical data management or pharmaceutical companies.

Companies will also reconsider intellectual property (IP) ownership as part o their eorts to

reduce or eliminate the risk associated with I application investments. What used to be mostly

internal is becoming increasingly open, driven by the need or aster innovation and stronger

dierentiation. As a result, clients want service providers to take on more risk and be more

predictable in the delivery o the nal solution.

Expecting service providers to lead them through the perect storm o innovation. As clientsembrace mobile devices and apps to empower their clients, employees, and partners, they need

their services partners to lead them through the accelerated pace o change.5 Inosys recently

signed a deal with bharti airtel to build and operate its mWallet mobile payment solution. Inosysleveraged its own existing solution accelerators and its strong domain expertise in the nancial

services and telecom sector to build the solution. In this complex business and technology world,

Co-innovation initiatives around soware assets will become more prevalent as in the Inosys/

bharti deal.

Improving the delivery quality, speed, and protability o IT services. I servicesengagements have shrunk dramatically over the past ew years. Services projects related to

mobile or social have a typical contract value o less than $200,000. wo years ago, individual

sales success in an I services rm was dened by one $5 million contract in a quarter.

Nowadays, individual sales success is dened by ve $1 million contracts per quarter. o make

things worse, the lack o talent or example, architects and project managers with experiencein mobility will render traditional operating models difcult to implement. I services

vendors are eeling the pressure to nd new ways to build repeatability and automation which

will drive margin improvements.


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Figure 1 Choosing Te Right Direction With Solution Accelerators

Source: Forrester Research, Inc.71081

Reusable software assets

The building blocks of thesolution delivered to the client

Strong business valueenablers

Accelerate the delivery ofbusiness value (revenue

growth, cost reduction, assetoptimization) to clients

Proactive portfoliomanagement

Require strategic investementsin go-to-market assessmentsand proactive development

Delivery tools used to buildthe solution

Software tools that the clientdoes not use

Code widgets or components

Software assets whose mainvalue proposition is toreplace human eort

(automate work)

Frameworks, templates,and data models

These are not software assets.

Fast lane! Wrong way!

The Move To soluTioN aCCeleRaToRs has BeeN sloW To daTe

Despite these customer and business pressures, movement toward a more soware asset-led model

has been slow. oday, only a handul o I services vendors leverage solution accelerators efciently

and can relate 10% to 15% o their total revenues to their use o solution accelerators in 2011. Te

large majority o I services rms is still below the 5% mark, signiying that service providerscontinue to struggle to adopt the underlying concept o prepackaging and reuse. In particular,

service providers ace the ollowing challenges:

Too much reaction, not enough action. While most service providers now recognize the needto invest in solution accelerators, they typically ollow a bottom-up, tactical approach to these

investments. Solution accelerators are developed at the business unit level based on existing


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IP developed in past projects. Aer rapidly analyzing the market landscape and potential

opportunity, marketing teams package the IP and sales teams try to resell these assets to clients

with similar pain points but with uncertain success. And most service providers still lack

the orward-looking capabilities that would allow them to anticipate demand and deliver trueinnovation to clients.

Vague denitions and value propositions. oo oen, value propositions center on asterproject completion rather than a keener ocus on business outcomes. Tis invariably takes the

negotiation back to a discussion around how many ull-time equivalents (FEs) the customer

can save by leveraging the asset. Adding to the conusion, service providers tend to be unclear

in how they dene solution accelerators, including soware components that are in act artiacts

o industrialization in the category.

A lack o product management and packaging skills. Architecting, selling, and deliveringsolution accelerators requires a very dierent set o resources: product managers, portolio

managers, and solution architects. Salespeople oen lack the skills or preparation to sell

proactively, and service providers have been slow to invest in the skills necessary to making any

solution accelerator eorts sustainable in the long term.

Vendors are not ready to sell them . . . Most vendors have only launched their solutionaccelerator programs within the past 18 months; a large proportion o them showcase assets

that they are still developing. Most o the soware assets in production have just a handul o

clients demonstrating their limited commercial success. o make things worse, most service

providers counterbalance this lack o commercial availability by claiming that the hundreds

or thousands o artiacts available in their asset repositories are solution accelerators. Te vastmajority o these artiacts are in act widgets or components or which the clients never see

business value. Tis amalgamation conuses the client and undermines the vendors capability

to sell true solution accelerators (see Figure 2).

. . . and clients are not ready to buy them. Most clients are still basically buying personnelqualications rom their service providers. Due to a lack o maturity and experience, they are

still reluctant to purchase soware assets rom those same service providers. While clients trust

companies like SAP, Microso, and other independent soware vendors with the creation and

management o soware IP, the same is not true or pure I service providers.


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Figure 2 Solution Accelerators Leverage Client-Facing Hard Assets


Transition methodologies

Quality assurance methodologies

Templates

These are not solution accelerators.

Consulting methodologies

Process assets

Data models


Delivery tools

Project/portfolio management tools

Collaboration tools

Knowledge management systems

Workforce management systems

Code widgets or components


Customizable software assets that:

Reduce the cost of running a

business process (like claimsprocessing)

Create new sources of revenue (likemobile payments)

Optimize the utilization of businessassets(like smart meters)

Hard assets

Sot assets

IT services vendors internal efciency Clients business or IT value

Target

IP assets

seRviCe pRovideRs aRe ReKiNdliNg soluTioN aCCeleRaToR pRogRaMs

Aer a slow start, service providers now understand that solution accelerators are critical to their

long-term success. Providers have to change how they create and manage these solutions and takethem to market. Over the past 18 months, large systems integrators (SIs) have taken some o the

necessary steps to revive their solution accelerator programs and now boast several solution

accelerators in their portolio (see Figure 3).6 Launched as corporate strategic initiatives sometimes

on the direct orders o the CEOs ofce these renewed programs cover organizational issues, skill

sets, and go-to-market strategies. Forrester has observed service providers doing the ollowing:

Taking a more strategic approach. Solution accelerator programs have to respond to corporateintent. As part o its Inosys 3.0 strategy, in April 2011 Inosys created a product, platorm, and

solutions (PPS) business unit to oversee the development, management, and commercialization

o its portolio o innovative IP-led solutions. Beore it packaged any soware asset, the

company spent several months dening its PPS strategy, putting current and uture client

business requirements at the center o the initiative.7 As a result o this strategic exercise, the

company ofcially launched its Inosys Edge portolio o innovative IP-led soluion oerings

in November 2011. In this example, the corporate intent is to have one-third o the companys

revenue linked to its portolio o innovative IP-led solutions within ve to seven years.


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Supporting solution accelerator management with governance, processes, and tools.Vendors are moving rom solution accelerator projects managed at the business unit level to

more integrated programs that benet rom companywide governance, processes, and tools.

Case in point: ata Consultancy Services (CS) created a component engineering group in

January 2010; one o the groups goals is to manage the lie cycle o all solution accelerators,

measure the success o the solution accelerator portolio, and promote the creation and reuse o

soware assets. Tis group also operates an IP management system a set o integrated tools

that acts as the backbone o the CS solution accelerator program.

Making new types o investments to strengthen go-to-market and sales programs. Withproduct managers in place, a more ocused set o oerings, and better-designed go-to-market

strategies, vendors can increase their sales o higher-value solution accelerators. Product

manager incentives are typically based on the revenue they generate and the number o clients

they sign to a particular solution. Product managers augment the capabilities o the sales teamand drive the sales o these solutions. NII echnologies has named product managers or each

one o its Process-Easy solutions, such as Assure-Easy and Banking-Easy. In addition to hiring

product managers, one o the key success actors o solution accelerator commercialization is

how quickly the client can experience the solution. Service providers are increasingly investing

in experience or concept centers in which they can showcase their solutions.

Acquiring ready-made assets to jump-start the solution accelerator programs. Serviceproviders have acquired a number o independent soware vendors over the past 24 months

(see Figure 4). Tese acquisitions provide service organizations with the product-led culture,

skills (including product management and product engineering), and soware assets they

need to build solution accelerator programs. Case in point: Mastek kicked o its solutionaccelerator initiative in the insurance space with the acquisition o Systems ask Group (SG)

in 2008. Te company believed that its long-term success hinged on domain expertise and went

beyond a core set o I skills so it was important to have a more asset-led culture. Stean Van

Overtveldt, chie engineer at Mastek, said: With a long history o delivering IP-led solutions,

acquisitions such as SG brought us some ready-made product IP as well as the domain skills

and processes that have enabled us to build out our IP-led services business in property and

casualty insurance.

Making special investments in solution accelerators to navigate through the innovation storm. As clients accelerate their investments in mobile applications, the number o releases across

Apple iOS, Android, and other mobile OS platorms will increase dramatically every year.

raditional application development and management models cannot meet these time-to-market

expectations. Forrester sees more service providers starting to develop solution accelerator

strategies to ace up to time-to-market pressures. For example, CanvasM echnologies, a wholly

owned subsidiary o ech Mahindra, has developed a broad range o solution accelerators to

accelerate the delivery o applications like mobile banking, mobile wallets, and mobile couponing.


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Figure 3 Solution Accelerators Aect Te Entire I Services Ecosystem


Company Asset Main verticals Value proposition

Accenture AccentureCommunicationSolutions

Telecom Grow revenue by improving billing eciency

BearingPoint HyperCube All Grow revenue and reduce costs via better insights into clientoperations

BT Field ForceAutomation

All Optimize asset utilization by empowering and monitoringeld workforce and assets

Capgemini Smart MeteringManagement

Utilities Optimize asset utilization by managing large eets of smartmeters

Cognizant iComp All Reduce the cost of sales

CSC PetroleumEnterpriseIntelligence

Oil and gas Optimize asset utilization via access to an integrated view oftechnical, operational, and nancial information across theenterprise

Deloitte Deloitte Digital All (Australia) Grow revenue, reduce costs, manage risk, and gain insightsvia a set of business apps delivered as SaaS

HCLTechnologies

FinEdge Banking Grow revenue by delivering a better customer experience forbanking customers

IBM Emptoris All Reduce costs by managing suppliers, contracts, and expenses

Infosys mWallet Banking,telecom

Grow revenue with mobile payment services

Logica Solvency II Insurance Reduce costs by improving IT system compliance

MahindraSatyam Warranty ClaimsManagement Manufacturing Reduce the cost of warranties and grow revenue byincreasing client satisfaction

MastekLimited

Elixir Insurance Grow revenue by accelerating the time-to-market of newinsurance products

Mphasis Winsure Insurance Grow revenue by accelerating the time-to-market of newinsurance products

NIITTechnologies

Monalisa Airlines Grow revenue by improving airline revenue accounting andleak prevention

SonataSoftware

SonnetSCOR Logistics Reduce costs through better insights into supply chaineectiveness

TCS Med Mantra Healthcare Grow revenue by reducing the costs of running a hospital

TCS iON iON All Grow revenue, reduce costs, and optimize assets via a set ofhorizontal and vertical SaaS applications

Wipro Marketing MixModeling (MMM)

Consumerproduct goods

Optimize marketing activities

WNS Verifare Airlines Grow revenue by improving airline revenue accounting andleak prevention

HP CentralView Telecom Grow revenue by improving customer loyalty and retention


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Figure 4 I Services Vendors Are Strengthening Teir Asset-Based Practices Via M&A


Buyer Target Date Description Vertical

Accenture Duck Creek Technologies

2011 Software solutions for the property andcasualty insurance industry

Insurance

Accenture CAS 2011 CRM and mobility solutions focused on retailexecution and trade promotions for theconsumer products industry

Consumer productsgoods

Accenture Acceria 2010 Aftersales management solutions Automotive,manufacturing

Accenture CadenceQuest 2010 Customer analytics technology andconsulting

Retail

Atos MSL Group 2012 Sports and major events-related solutions Services

Atos-Uda Yunano jointventure

2011 SaaS solutions All

Atos VentureInfotek

2010 Payment processing solutions Banking

BearingPoint Infonova 2003 CRM and billing solutions Telecom and media

BearingPoint Escience/HyperCube

2012 Business analytics All

Capgemini Prosodie 2011 Multichannel transactional ows of operators(phones and mobiles; Internet; payment andprepayment)

Banking, retail, telecom

Capgemini Skvader 2010 Smart metering management solution Utilities

Capgemini Aive 2011 Miscellaneous vertical applications for theItalian markets

Financial services,transportation,manufacturing

Capgemini IBX Group 2011 eProcurement solutions All

Cognizant marketRx 2007 Sales and marketing analytics solutions Pharmaceuticals

CSC iSOFT Group 2011 Healthcare solutions Healthcare

Deloitte Oco 2011 Business analytics solution (SaaS) All

Deloitte MarketPoint 2011 Analytic suite for energy market modelingand price forecasting

Utilities

Dimension

Data

Xigo 2012 Telecom expense management solution All


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Figure 4 I Services Vendors Are Strengthening Teir Asset-Based Practices Via M&A (Cont.)


Buyer Target Date Description Vertical

IBM CuramSoftware 2011 Social enterprise management software Public sector

IBM PlatformComputing

2011 Load sharing facility software Utilities

Infosys McCamishSystems

2009 Policy administration solution and BPOservices

Insurance

Genpact Akritiv

Technologies

2011 SaaS order-to-cash solution All

MahindraSatyam

Dion GlobalSolutions

2012 Financial services solutions Financial services

MastekLimited

Systems TaskGroup

2008 P&C insurance industry in the areas of policyand billing administration, claims processing,and point-of-sale administration

Insurance

MastekLimited

SEG Software 2010 Provider of policy administration systemscovering the individual and group life, health,and annuity insurance products

Insurance

Mphasis Wyde 2011 Insurance policy administration product Insurance

Mphasis Eldorado 2005 Health benet management product Insurance

NIITTechnologies

Preferr 2010 Electronic health records and referralmanagement platform

Healthcare

NIITTechnologies

Softec 2008 Airline revenue accounting and operationsproducts

Travel and transportation

SonataSoftware

TUI Infotec 2006 Travel and transportation solutions Travel and transportation

Wipro Gallagher 2008 NetOxygen is loan origination and processingsoftware

Banking

IBM Emptoris 2011 Supply chain analytics All

IBM DemandTec 2011 SaaS retail analytics solution Retail

HCLTechnologies

CapitalStream 2008 Straight-through processing (STP) solution Banking


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soluTioN aCCeleRaToRs aRe oNe MaNiFesTaTioN oF a BRoadeR shiFT

Te move to solution accelerators will gain momentum but will be just one example o the

increasing importance o assets to the I services industry (see Figure 5). Non-SI vendors are

investing in and building their asset-based oerings as part o innovation-led strategies. Forrester

expects our denition o solution accelerators to change to adapt to the specicities o each

operating model. As such, the undamental tenets o solution accelerators will also play out in the

dierent I service categories. Te value propositions o these asset-led oerings will also change

to adapt to the requirements o the primary buyers in each service line. Tis shi to asset-based

services will aect the entire spectrum o I services (see Figure 6):

Consultants will harness the power o business intelligence assets. Consulting rms likeDeloitte and BearingPoint have invested in building out their business analytics capabilities in the

past two years. BearingPoint acquired the HyperCube product earlier in 2012 and has now

embedded this asset into its consulting engagements. Te value or clients lies in more actionableconsulting outcomes. For BearingPoint, it is a competitive dierentiator, as it allows the rm to

merge domain expertise and consulting experience with deep business analytics capabilities.

Product engineering services will leverage sofware assets to improve protability. Productdevelopment services vendors will leverage assets to reduce their time-to-market and increase

their relevance to clients via proactive and domain-led services.8

BPO services vendors will become sofware asset-based platorm operators. Businessprocess outsourcing (BPO) vendors, which leverage traditional linear operating models that

link revenue growth to growth in human resources, have been struggling to improve their

bottom lines. Price competition rom oshore destinations like the Philippines has also pushedIndian vendors to embrace nonlinear growth strategies that leverage soware assets. Tese

assets automate service delivery and can be used by multiple clients, which will improve

vendor protability. Here, also, the value proposition o such oerings is tightly coupled with

the domain expertise o the service provider. Case in point: WNS Revenue Recovery solution

or airlines leverages its Veriare soware asset as well as its domain expertise in the travel and

leisure sector.

IT outsourcing players will leverage multitenant assets. Te value proposition o a traditionalinrastructure and application outsourcing engagement always missed opportunities to develop

signicant economies o scale. Innovation in this service category will increasingly ocus on

the optimization, automation, remote monitoring, and orchestration o I assets. Vendors are

investing in multitenant architectures and assets; they will run as-a-service oerings on top

o these architectures and assets to provide true economies o scale. For example, Capgemini

signed a ve-year partnership with EMC to provide storage-as-a-service to its clients on a

common and repeatable architecture.


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Figure 5 Solution Accelerators Are One Maniestation O A Broader Asset-Led Shi


Business process

automation

Hardware assetoptimization

Granular andhighly

customizedoerings

Productized andstandardizedoerings

Solution accelerators

Widgets,connectors,

andcomponents

Managed, hosted, or public

as-a-service offerings

Customized

infrastructureservices

Customizedapplication

services

Figure 6Solution Accelerators Aect Te Entire I Services Portolio


Consultingrms

Systemsintegrators

Productdevelopment

servicesrms

Businessprocess

outsourcers

Assets

IToutsourcers


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R e c o m m e n d a t i o n s

seRviCe pRovideRs Need To ChaNge TheiR CulTuRe

Managing soware assets and managing people are two very dierent disciplines. o be successul in anasset-led services play, service providers will have to undergo an important cultural shi. In particular,

Forrester believes that I services rms need to:

Learn rom their sofware product partners. Independent soware vendors are the expertsin creating, managing, and selling soware assets. Service vendors need to learn the soware

industrys best practices around release management, upgrade management, and ull lie-cycle

management o soware assets.

Build incremental value or their clients. Building client intimacy takes on a whole newmeaning with the move to asset-based services. Service providers need to engage more

requently with key clients by including them in innovation committees, where clients can

experience the latest advances in soware assets and how those assets can generate value or

them. Te goal is to generate incremental value or the client that will act as a hook and make

them come back or more.

Choose their bets wisely. Services rms need to go beyond repackaging custom projectsolutions and build new assets that have reusability as a central design point but they also

need to choose careully where to invest. Developing soware assets is an expensive and risky

activity, and Forrester believes that risk appetite will be correlated with the strength o the

service providers balance sheet. Vendors need to continuously conduct thorough market

intelligence and competitive intelligence exercises to assess demand and the competitivelandscape.

Set and communicate goals, execute the plan, measure progress, and repeat successes. Temove to asset-led services will happen over the long haul; reaching maturity will take time due

to the challenges that important cultural shis raise. As a consequence, it is important to link

the asset-based strategy to an ambitious corporate intent that is supported by the executive

management o the company, including the CEO. Tis intent, and the goals related to it, need to

be openly communicated so the leadership is accountable or this shi.


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suppleMeNTal MaTeRial

Cmn intrw Fr T Rrt

Atos

BearingPoint

CanvasM echnologies

Capgemini

Cognizant

CSC

CSS

Deloitte

HCL echnologies

IBM

Inosys

Mahindra Satyam

Mastek

MphasiS

NII echnologies

Sonata Soware

ata Consultancy Services

CS iON

Wipro

eNdNoTes

1 As I services rms verticalized their oerings starting around 2003, they saw patterns o common

processes across client organizations and opportunities to capture those or gains in productivity. However,

they soon realized that its not only important to build such productivity tools, but that competitive

advantage will come rom selecting the right spaces in which to build such tools or the maximum client

benet. Building a solution accelerator strategy seemed a natural next step in the process. See the October

29, 2007, Solution Accelerators Will Disrupt he I Services Landscape report.

2 Forrester has described these new success actors in previous research. In the new era: companies are

orced to ocus on core competencies and value-add; the volatile economy puts a premium on the agility

o business processes and I systems; experience and service replace the product in the customer value

proposition; and the I budget is dramatically recast to ree up more money or innovation. See the July 29,

2010, he Coming Upheaval In ech Services report.

3 Fiy-six percent o the respondents say that the need to innovate and grow their business will signicantly

aect their rms I services spending in 2012, whereas just 40% cite the need to lower I operational costs.Source: Forrsights Services Survey, Q3 2011.

4 Systems o engagement come rom multiple existing systems that are stitched together to improve the way

companies interact and communicate with their customers, partners, and employees. Source: Georey

Moore, A Sea Change in Enterprise I, AIIM, January 17, 2011 (http://www.aiim.org/Research/AIIM-

White-Papers/Systems-o-Engagement).
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5 Mobile is not simply another device or I to support; rather, it is the maniestation o a much broader

shi to new systems o engagement. Tese systems o engagement help rms empower their customers,

partners, and employees with context-aware apps and smart products. o remain vital in this business

technology reormation, CIOs must step up and work with other executives to establish an ofce o thechie mobility ofcer to implement an enterprisewide mobile strategy. Tis team will coordinate the

business and technology investments under a design or mobile rst mantra that delivers our immediate

benets: 1) uel protable growth with stickier oerings and mobile sel-service; 2) move aster along the

mobile learning curve; 3) aggregate mobile project budgets to und needed engagement technology; and 4)

grow rom an I group ocused on systems o record to a business technology group ocused on systems o

engagement. See the February 13, 2012, Mobile Is he New Face O Engagement report.

6 Tis report ocuses on the asset-based strategies o the leading suppliers o I services. In developing this

report, Forrester sought to interview a variety o rms. In choosing this ocus, Forrester acknowledges that

there are other service suppliers that play an increasingly important role in the area o asset-based services.

7 Source: Inosys (http://www.inosys.com/building-tomorrows-enterprise/pages/index.aspx).

8 A series o major business, technological, and supplier changes is driving a undamental transormation

in the market or product development services. As our research unveils, wholesale buyers will gradually

move rom a tactical rudimentary sta augmentation model to a more mature and collaborative ully

outsourced approach, which Forrester denes as product development services 2.0 (PDS 2.0). Tis report

describes how the market will go through this paradigm shi in the next ew years and the necessary steps

vendor strategists will need to make to take advantage o this transormation. In particular, we describe the

wholesale changes required to the providers business and go-to-market strategies as well as the necessary

investments in solution accelerators and vertical/domain expertise. See the June 10, 2011 he Reinvention

O Product Development Services report.
http://www.forrester.com/go?objectid=RES60544http://www.forrester.com/go?objectid=RES58298http://www.forrester.com/go?objectid=RES58298http://www.forrester.com/go?objectid=RES58298http://www.forrester.com/go?objectid=RES58298http://www.forrester.com/go?objectid=RES60544


17/17

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