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3Q23 INDEX PREVIEW
Cost optimization continues to be the primary driver for IT and business process outsourcing activity across the globe, while discretionary spending remains under pressure.
Questions We’ll Address on the Call
- What’s driving the strong demand for cost optimization? In the Americas, we’re seeing continued demand around larger transactions focused on transformation-led savings, while in Europe, we’re seeing firms pursue cost optimization in response to rising energy prices and interest rate uncertainty. And in the Asia Pacific region, enterprises are focused on optimizing software costs, which continues to put pressure on cloud bookings in the region.
- How will the strong enterprise activity around global capability centers impact the sector? As we discussed last week, the number of client questions and conversations around global capability centers are at an all-time high. And most of this interest is in search of cost reduction and talent. However, the data shows these are the same reasons enterprises are moving away from or even monetizing their capability centers.
- When will we start to see the impact of generative AI? As we discussed two weeks ago, generative AI use cases are maturing quickly in areas like code generation and data migration, with many more use cases on the way. This will have an outsized impact on the biggest service line within the sector – applications development and maintenance.
Register for the Call
I hope you can join Steve, Kathy, Namratha, Alex and me on the 3Q23 ISG Index call next Thursday, October 12 at 9:00 AM ET, where we’ll review these key questions and discuss our forecast for the remainder of the year. You can register here.