ISG Forecasts Top Americas Sourcing, Operational Trends for 2013

       ISG Forecasts Top Americas Sourcing, Operational Trends for 2013

Sea change in sourcing dynamics underway, cloud growth to continue

Key verticals face changing operational landscapes

PR Newswire

STAMFORD, Conn., Dec. 13, 2012

STAMFORD, Conn., Dec. 13, 2012 /PRNewswire/ -- Information Services Group
(ISG) (NASDAQ: III), a leading technology insights, market intelligence and
advisory services company, today identified seven top trends that will define
the sourcing and operational agendas of Americas CIOs and their business
enterprises in 2013.

"2013 is shaping up to be a year of significant change," said David Whitmore,
Vice Chairman, ISG, and President, ISG Americas. "We see a sea change underway
in sourcing dynamics, the continued growth of cloud continuing and a changing
operational landscape in key verticals. While some of the particular
challenges our clients face will vary, a consistent imperative will be to
develop and implement strategies that significantly improve efficiency,
facilitate managerial oversight and transparency, and enhance

The seven trends ISG identified are based on a survey of the firm's sourcing
experts and industry specialists:

Automation will transform the economics of outsourcing. Outsourcing has
historically achieved cost efficiencies principally by moving jobs to low-cost
labor centers. Today, a new model is emerging that deploys tools, platforms
and software that automate tasks and functions previously performed by humans.
As a result, the competitive advantage of offshore service providers – skilled
resources at low cost – will become less important. Expect to see new players
emerge as both buyers and providers create new business models to integrate
and manage these capabilities.

HR and e-mail will drive cloud computing growth. In 2013, several big-name
global brands will overcome commercial and contracting barriers associated
with cloud computing and move their workforce administration, payroll and
messaging platforms to multi-tenant SaaS delivery models. As mature and
largely commoditized technologies, HR and collaboration are both ideally
suited for the SaaS model. Expect HR organizations to look to SaaS to
decrease reliance on corporate IT and provide a more compelling new experience
for employees. For IT and procurement organizations, SaaS-based email will
reduce costs and licensing overhead.

"Hoteling" of global networks will become more prevalent. As BYOD and mobility
requirements continue to drive bandwidth demand in 2013, large organizations
will adopt new approaches to manage their global data and telecom networks.
Businesses are becoming more conscious of connect-from-anywhere demand from
users and are thinking globally about how they buy bandwidth. An emerging
"hotel" interconnect model allows an enterprise to tap into a large hosting
facility and then provide regional interconnects for best-in-class pricing.
Rather than relying on one provider to deliver global services, the hotel
model requires enterprises to assume greater ownership of assembling and
managing the network, increasing the importance of effective multi-vendor
management practices and governance processes.

Risk mitigation will top the agenda for financial services firms. In response
to regulatory and compliance pressures, financial services organizations will
focus on governance and operational transparency to assess, monitor and
mitigate risk. Next year will likely see stricter audits and more regulation
of third-party relationships. Regulators will require more evidence of service
provider management, as well as evidence of defined governance processes. Many
organizations today are lacking – in resources, in data and in connection of
data to action.

Insurers will aim high but must overcome legacy barriers. Insurance
organizations will aim to centralize and standardize operations across
multiple business lines. Rather than having one set of operations for life
policies and another for auto, they'll seek rationalization to drive
significant efficiency gains. In a similar vein, insurers' sourcing strategy
is shifting from staff augmentation to a managed services model. But
implementing these initiatives will require overcoming substantial cultural

Healthcare payers will adapt to a new order. Tier one payers will add to their
group portfolios while also increasing their focus on individual policies. As
a result, operational dynamics will change, creating demand for new products
and for greater granularity in underwriting. And as consumers start buying
individual plans, they will demand transparency into costs, service quality
and health outcomes. Tier two payers, most notably the regional Blues, must
catch up in terms of basic operational efficiency. This will mean more
benchmarking, against peers as well as against competitors, as the Blues aim
to understand where they have a chance to compete. We will see a move to
rationalize myriad administrative systems, implement governance processes,
transition from staff augmentation to shared services and manage internal
demand for services.

Savvy pharmas will use M&A to drive improvement. The M&A activity that many
major pharmaceutical companies are engaging in presents an opportunity to
standardize operations and rationalize software portfolios. Because an M&A
initiative requires an organization to document the utilization of all
software licenses and associated support agreements, the process will
encourage some companies to go a step further and deploy a software
rationalization initiative. In addition, regulatory requirements will drive an
increased focus on data management, tiering and retrieval strategies.

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 800 employees
and operates in 21 countries.

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SOURCE Information Services Group (ISG)

Contact: Andrew Park, ISG, +1-919-259-9252,; or
Gwennie Poor, Cohn & Wolfe for ISG, +1-212-798-9842,
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