New ISG Report: Telecom, Banking, Insurance Top Outsourcers

• Utilities, Conglomerates, Hospitality show highest growth among major industry sectors
• Report details trends, buying patterns, business issues across 27 verticals

STAMFORD, Conn., June 28, 2012 ― Information Services Group (ISG) (NASDAQ: III), a leading technology insights, market intelligence and advisory services company, today announced the release of the Momentum Market Trends & Insights 2012 Vertical Industries Report, which  tracks outsourcing spending and analyzes across 27 major vertical industries,  analyzing key business drivers, challenges and priorities by sector.

With $16.5 billion in spending last year, Telecommunications Services was the top outsourcer, followed by Banking, with $10.5 billion, the report found. Together, the two industries accounted for more than one-third of all spending on outsourcing by Forbes Global 2000 companies. The Insurance sector, with $5.3 billion, was third.

“In 2011, annual spending increased in 15 vertical industries and declined in a dozen, and we anticipate spending patterns will swing again in 2012,” said Paul Reynolds, Chief Research Officer, ISG.  “Spending patterns ranged widely, from a 12 percent decline in the consumer durables vertical to a 53 percent spike in utilities, where operators are seeking help to meet new regulatory requirements.”

Industry responses to key technology trends and developments also varied, ISG research found.

“Cloud computing adoption grew but was sharply divided by vertical,” said Reynolds. “Highly regulated industries and those with strong data protection requirements such as Aerospace and Defense and Financial Services remain cautious, while technology-oriented industries are more likely to invest in cloud-based solutions.”

Reaction to social media and mobile technology is similarly mixed, with consumer-facing industries showing the strongest interest in mobile  solutions. “Service providers are being called upon to help create the applications, services and infrastructure to support these emerging capabilities.”

One of the most consistent themes to emerge from the report was an increased focus on business innovation, with clients looking to service providers to lead transformation initiatives, increase Software-as-a-Service (SaaS) implementations and speed BPO adoption.

Cost control remains a leading driver of outsourcing activity, and more and more clients are willing to forego customization for more standardized offerings from service providers in exchange for lower prices. “This development bears watching,” said Reynolds. “As cloud computing and self-service technologies become more mature, they will enable more standardized, platform-type offerings.”

On a related note, clients are also demanding increased cost flexibility and service scalability.  “This reflects growing interest in ‘pay by the drink’ utility models that enable effective demand management,” said Reynolds.

To learn more about the 2012 Vertical Industries Report, contact Paul Reynolds at paul.reynolds@isg-one.com
 

About Information Services Group
Information Services Group (ISG) (NASDAQ: III) is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 700 employees and operates in 21 countries. For additional information, visit www.isg-one.com.