Service Integration and Management Market Overview
Global service integration and management market was valued at $2,995.3 million in 2017 and is forecasted to witness a CAGR of 9.4% during 2018–2023. Service quality enhancement leading to process efficiency, and cost reduction and value enhancement are the two key factors driving the growth of this market, globally. On the basis of solution, the service integration and management market has been categorized into business and technology. Between the two, technology solutions held a larger revenue share, of over 57%, to the market in 2017. This can be majorly attributed to huge investments in SIAM-as-a-Service and technological advancements in service integration and management.
EUROPE SIAM MARKET, BY SOLUTION, $M (2013–2023)
Based on service, the market has been divided into assessment and advisory; consulting and implementation; and integration and automation, among which, consulting and implementation services contributed the largest revenue share, accounting for 45% of the service integration and management market, in 2017.Most of the players operating in this market prefer partnering with consulting firms to remain updated on latest product/technology releases in the market.
Although the size of an organization does not necessarily dictate the number of suppliers it manages, these models are mostly incorporated by large organizations into their businesses. These models are implemented as a substantial part of the strategic sourcing initiatives by large organizations across diverse industries.
On the basis of industry, the market has been categorized into telecom and IT; BFSI; retail and manufacturing; energy and utility; and transportation and logistics. This framework helps the retail and manufacturing industry to reduce the cost of enterprise systems across the manufacturing value chain. It also establishes best practices across vendor management, service management, and risk and compliance management. During the forecast period, the service integration and management market is expected to witness the highest growth in this industry, because of the rapidly increasing demand for these frameworks that aid in optimizing operational efficiencies, lowering costs, and streamlining working capital management processes in a multi-supplier environment.
The service integration and management market is also picking up the pace in energy and utility industry and is reflecting a healthy growth potential during the forecast period. Most of the companies in this industry outsource their infrastructure and applications to multiple vendors, which in turn, complicates their IT processes and escalates the total cost of ownership. Owing to these factors, energy firms are increasingly considering adoption of a single platform (SIAM model) to efficiently manage IT service providers and synergize their individual contributions.
Globally, Europe held the largest share in the market in 2017, on account of the growing need of organizations to adapt their IT system infrastructure to the changing information services environment in the region. Europe’s service integration and management market is one of the most developed and mature markets across the globe, with an extremely competitive supply base. In many European countries, services are commoditized and organic growth is hard to find. Therefore, companies in the region focus on innovation in order to ensure continued growth and profitability.
Service Integration and Management Market Dynamics
The increasing adoption of governance, risk, and compliance (GRC) management solutions is a recent trend in the service integration and management industry. Players in the industry are rapidly adopting GRC management solutions to achieve consistency in their governance and control functioning, in both external and internal services. For instance, Wipro Limited is focusing on the creation of a common governance and interaction platform and gating mechanism to enable governance in the end-to-end service delivered by the vendors in its multi-vendor outsourcing framework.
The adoption of GRC management solutions is on the rise because of the various benefits they offer to the vendors and consumers of these frameworks. The benefits include visible definition and application of a governance framework and steady assurance of services and service providers. Many players operating in the service integration and management market are offering unified intelligence for all GRC activities and end-to-end support for cross-industry GRC processes and automated business application controls. For example, Oracle Corporation offers financial governance, risk management, GRC accelerator, environmental compliance, and fraud- and error-reduction solutions.
Service quality enhancement due to multi-vendor outsourcing is a key factor driving the growth of the service integration and management market. Adoption of these frameworks lead to the enhancement of service quality, which, in turn, encourages companies to shift their focus from the achievement of their routine contractual targets to service improvement and R&D. Because of improved service quality, organizations can achieve their service-level targets and resolve organizational problems in time. These factors are leading to the increasing adoption of multi-vendor outsourcing frameworks by various businesses. Organizations adopting these frameworks are witnessing increased customer satisfaction because of improved service quality.
Rising management issues in cross-functional teams can be viewed as a major factor hindering the growth of the service integration and management market. In the multi-vendor outsourcing model, cross-functional teams comprise employees from different service integrators and service providers, and from the customer organization, in some cases. There can be major goal differences between individual service providers and the customer organization. These differences may have a deep impact on the performance of cross-functional teams. For example, a non-SIAM technical company may give priority to the resolution of technical issues over communication with customers. But if the company adopts the service integration and management model, it may shift its focus and priority toward customer communication and engagement.
Lack of flexibility in business models can be viewed as an opportunity for the growth of the service integration and management market. Many organizations face flexibility issues while implementing changes in their process flow, which often generates the need for a flexible model such as multi-vendor outsourcing. For example, in 2011, Capgemini realized that the Texas Department of Information Resources (DIR) was facing misalignment of expectations toward service providers, which resulted in inflexible service delivery and high-level consumer dissatisfaction. After realizing this issue, the company implemented multi-vendor outsourcing methodologies, standardized toolsets, and processes in the functions of the DIR. This resulted in an increased consumer satisfaction level, followed by improvement in business model flexibility.
Service Integration and Management Market - Competitive Landscape
Companies like International Business Machines Corporation (IBM), HCL Technologies Limited, Accenture PLC, TCS Limited, Hewlett Packard Enterprise (HPE), Capgemini, Wipro Limited, DXC Technology Company, and Atos SE are closely ranked in the leader segment in the market rankings. Most of these suppliers are India-centric, which makes APAC a strong ground for the service integration and management market growth. Companies such as HCL, TCS, and Wipro are competing for higher ranking and market leadership by providing sophisticated and industry-specific outsourcing capabilities. Established global players, such as Accenture, Atos, and Capgemini, on the other hand, are competing with companies like HP and DXC Technology Company on the basis of different outsourcing services.