Press Release

Digital Revolution Reshaping Sourcing Demand Across Multiple Industries, ISG Research Finds

ISG Momentum® Market Trends & Insights 2017 Vertical Report Finds Growing Demand for RPA, Internet of Things, Supply Chain and Product Development Solutions

Company Release - 7/10/2017 9:21 AM ET

STAMFORD, Conn., July 10, 2017 /PRNewswire/ -- The digital revolution is reshaping global demand for sourcing services across multiple industries, as companies increasingly seek new technologies to transform their operations beyond traditional IT and business process services, according to a new vertical markets report published by Information Services Group (ISG) (NASDAQ: III), a leading global technology research and advisory firm.

The 2017 ISG Momentum® Market Trends & Insights Vertical Report finds widespread demand across industries for service providers able to apply robotic process automation (RPA) to make business processes more efficient. Consumer-facing verticals are showing strong demand for solutions that can provide a complete view of the customer and support omnichannel commerce or customer service, while there is considerable interest among industrial companies in Internet of Things applications and engineering and product development services. Many industries also are exploring the use of blockchain for financial and supply chain transactions.

The growing diversity of outsourcing activity across industries is outpacing overall spending, as average annual contract values (ACV) for traditional sourcing continue to fall amid increasing demand for cloud-based as-a-service offerings. Further, many of the engagements aimed at delivering innovation through new technologies and processes begin as smaller proof-of-concept projects, and the resulting ACV as yet does not offset ACV declines in traditional services.

Consistent with these market fundamentals, ACV for outsourcing services rose in only five of the 27 vertical industries analyzed in the ISG report. Software & Services led all verticals with 23 percent year-over-year ACV growth and was also a leader in attracting first-time outsourcing clients. The other growth verticals were Media, Drugs & Biotechnology, Trading Companies, and Hotels, Restaurants & Leisure.

"The drive to digitize is leading companies to experiment with new processes and technologies, often in pilot projects that are much smaller in scope and size than traditional outsourcing engagements. We expect exciting new outsourcing trends and practices to emerge from the numerous pilots that are occurring in many industries," said Paul Reynolds, ISG partner and chief research officer.

"Clients continue to expand their service provider ecosystems, and it is now relatively common for large multinational service providers to work side-by-side with small companies that are focused on a single innovative technology or process," said Reynolds. "Service providers can find growth in the market by developing digital solutions for specific industry issues, and by demonstrating their ability to integrate and collaborate with the client's other technology providers."

According to the ISG Research report, the largest vertical by ACV, Telecommunications Services, was more than 200 times larger than the smallest, Semiconductors (see Figure 1.). Telecommunications Services and the second-largest vertical industry for outsourcing services, Banking, together accounted for slightly more than 40 percent of total ACV.

The complete 2017 ISG Momentum® Market Trends & Insights Vertical Report provides perspective into the state of outsourcing in each vertical through interviews with strategists involved in current outsourcing engagements in that industry, worldwide spending and market share data that show current levels and up to 10 years of history, and notes how current trends are shaping each vertical. It includes ISG's exclusive Hunting-Farming Index, which uses proprietary data to rank each of the 27 verticals on the strength of its potential to produce new outsourcing clients in the coming year, and potential for increased spending by clients already in the vertical.

To view an executive summary of 2017 ISG Momentum® Market Trends & Insights Vertical Report, click here.

The latest ISG Momentum® report is part of an ongoing series of quarterly reports that focus on outsourcing activity by service line, vertical industry and geographic location. To learn about these or other ISG Momentum® services and information products, please visit the ISG Momentum® Research page on the ISG website.

About ISG

ISG (Information Services Group) (NASDAQ: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including 75 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit


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