Market Trends: project services and application-led outsourcing

Table of Contents

EXECUTIVE SUMMARY

• IN A NUTSHELL

SCOPE

• EXAMINING THE STATE OF THE UK MARKET

DEMAND-SIDE TRENDS

• DEMAND HAS REMAINED STRONG
• CHANGES IN CUSTOMER SENTIMENT AHEAD
• PROJECTS TAKE THE BRUNT OF A DOWNTURN
• UPGRADES WILL PROVIDE WORK
• ‘MORE FOR LESS' TO THE FORE, AGAIN
• LESS CHANGE FOR APPLICATION OUTSOURCING
• PUBLIC SECTOR PROVIDES A (SHORT-TERM) LIFT
• FINANCIAL SERVICES NOT ENTIRELY GLOOMY
• MORE STRATEGIC VIEWS OF SOURCING EMERGE

SUPPLY-SIDE TRENDS

• VENDORS ENJOY A YEAR OF HEALTHY GROWTH
• SOA IS THE NEW BLACK
• ERP ACTIVITY PICKS UP AMONG SMALLER BUSINESSES
• PATCHES OF SKILLS PRESSURE TO REMAIN
• OFFSHORE FOCUS MOVES FROM MORE TO BETTER
• TESTING WIDELY VIEWED AS AN AREA OF OPPORTUNITY
• MORE EMPHASIS ON THE ‘C' IN ICT
• CONSULTING STILL IN VOGUE
• VERTICAL EXPERTISE IN DEMAND
• FOCUS ON APPLICATIONS REVENUES
• APPLICATIONS SERVICES GET SIMPLIFIED

MARKET FORECASTS: PROJECT SERVICES

• MARKET COMPOSITION
• 2007 PROVES A YEAR OF GROWTH
• LOOKING FORWARD: TOUGHER CONDITIONS

MARKET FORECASTS: ALO

RECOMMENDATIONS

• PLAN FOR CHANGES IN CUSTOMER SENTIMENT
• EMPHASISE ‘MORE FOR LESS' TO GOVERNMENT
• KISS (‘KEEP IT SIMPLE, SUNSHINE' )
• DEEPEN UNDERSTANDING OF CUSTOMERS AND THEIR CONTEXTS
• TAKE GLOBAL SOURCING TO THE NEXT LEVEL
• ENCOURAGE STRATEGIC SOURCING APPROACHES

MARKET DEFINITIONS

• PROJECT SERVICES
• APPLICATION-LED OUTSOURCING (ALO)

• FIGURE 1 CHANGES IN UK GDP GROWTH FORECAST FOR 2007 AND 2008
• FIGURE 2 TESTING AS PART OF THE APPLICATION IMPLEMENTATION LIFECYCLE
• FIGURE 3 UK PROJECT SERVICES GROWTH FORECAST - PRIVATE SECTOR MARKET ONLY (I.E. EXCLUDING ALL GOVERNMENT/PUBLIC SECTOR SPENDING)
• FIGURE 4 UK PROJECT SERVICES MARKET SIZE AND GROWTH
• FIGURE 5 UK ALO MARKET SIZE AND GROWTH
• TABLE 1 UK PROJECT SERVICES MARKET SIZE (£ BILLION)
• TABLE 2 UK PROJECT SERVICES MARKET GROWTH
• TABLE 3 UK APPLICATIONS-LED OUTSOURCING (ALO) MARKET SIZE AND GROWTH