This past week, I attended two HR events at opposite ends of the Las Vegas strip: HR Technology conference and SuccessFactors’ SuccessConnect client event. Together, they attracted ~14k HR leaders, practitioners, vendors, analysts, thought leaders, and clients, and had the common theme and purpose of showcasing the latest HR technologies and innovations that are enabling employ[...]

  NelsonHall is conducting an analysis of the needs of IT services clients to understand their IT and business priorities and how the growth of digital is impacting their business. In a survey of ~1,000 IT services clients across 17 industries and every region of the world, NelsonHall has identified distinct patterns of user intentions, both in terms of how clients plan to change their[...]

  In this video, NelsonHall’s David McIntire reports from day one of the 2017 SAP Sapphire Now user conference with his thoughts on how SAP is expanding its core business footprint.    [...]

Over the last few years, the global benefits market has continued to evolve as vendors have launched offerings to address the needs of multinationals. Essentially, there have been two main approaches: Providing global brokerage and consulting services Providing a global technology offering with optional local administration services. The global brokerage and consulting model has been [...]

In December 2015, we published two blogs about M&A activity in the IT services industry in 2015 (here are the links for Part 1 and Part 2). This blog examines M&A activity in IT services in Q1 2016 and sets our expectations for the rest of this year. In short, 2016 started off with a bang, with two very large IT services acquisitions announced in the first [...]

Last week, Cognizant released results for Q4 and full year 2015. At first glance, results looked strong. Q4 revenues were $3,232.5m, up 17.9% y/y, up 16% in CC, and adjusted operating margin was 19.6%, up 18 bps y/y and in the middle of the company's target range of 19%-20%. If we look at Q4 2015 revenue performance in Cognizant’s two largest vertical groups: Financial Services,[...]

As discussed in a recent blog, acquisitions in Recruitment Process Outsourcing (RPO) have become increasingly aggressive year-on-year, and the pace of M&A activity shows no sign of diminishing, with three deals already done in January 2016: TrueBlue’s acquisition of Aon Hewitt’s RPO business The completion of the merger between Pontoon and its sister company, hyphen Orion[...]

For years, Aon Hewitt has been focused on strengthening its HR outsourcing capabilities around its principal offerings of benefits administration, HR BPO/multi-process HR outsourcing (MPHRO), and RPO services. However, over the last year, Aon Hewitt has sold several businesses as part of a larger restructuring plan: Payroll in Asia Pacific was acquired by Everstone Capital and is now operati[...]

HRO has been one of the most active markets for acquisitions in recent years and 2015 was no exception, with ~30 acquisitions across all HRO service lines (up from 25 in 2014). M&A activity in benefits administration has remained high, while RPO acquisitions have become increasingly aggressive year-on-year. However, payroll M&As have also been ticking along nicely. One notable event was Ev[...]

As the year winds down, it’s a good time to reflect on the significant activities in the HRO market in 2015 and consider the likely shape of things to come in 2016. Overall, HRO contract activity is up ~11% y/y in 2015.  Renewals and contract extensions account for 25% of that activity, vendor changes ~20%, and new deals 55%. Regional and global multi-country contracts continued[...]

The most important development in U.S. banking BPS in the last five years has just been announced (it may still not pass the U.S. Congress, but this analyst believes that too much pressure will be applied by industry for Congress to block it). The announcement is that the signatories to the Trans-Pacific Partnership (TPP) have reached an agreement on the terms of the trade agreement and will no[...]

Though we’re only just into fall, the nature of activity in the Benefits Administration market in 2015 provides important pointers to key strategic focus areas in 2016. In the U.S., the emphasis will continue around Health & Welfare (H&W) services, stemming from the Affordable Care Act (ACA). In 2015, tier two H&W specialists such as Businessolver and TASC launched ACA reporti[...]

Cognizant Q2 2015 results: Revenues were $3,085.1m, up 22.6% y/y, and up 25.5% in CC EBIT margin was 17.7%, down 171 bps y/y but up 50 bps sequentially Adjusted EBIT margin was 19.8%, down 122 bps y/y, but the same as in Q1 Non-GAAP operating margin, which excludes stock-based compensation expense and acquisition related expenses, was 20.2%, slightly above the target range of 19% to 20[...]

In early May, IBM and SAP announced a partnership to provide enhanced HR software and services to each other’s clients.  On June 5, IBM Kenexa and SAP SuccessFactors execs held a call to further explain the rationale for the partnership and its expected benefits. This includes integration and access to each other’s HCM software, allowing clients to select the offering that best me[...]

It seems like yesterday that the concept of a private health insurance exchange was novel: it’s hard to believe that active exchanges have been available from benefits consultancies for three years, and that retiree exchanges are nearly 11 years old. Here’s a quick update and review of how the private exchange landscape has changed in this short time. Active exchanges are mu[...]

Employee Value Proposition (EVP) is about more than creating a nice-looking career page with exciting reasons why candidates should join a company. It is also about empowering recruiters to use their corporate brand flexibly for individual candidate situations. This is well known to recruitment processing outsourcing (RPO) companies. However, an effective EVP can go even further. In a candidate[...]

This week NelsonHall held its quarterly IT Outsourcing (ITO) Index webcast to report on the latest developments in ITO contract activity and present an analysis of spending activity for IT services, professional services (i.e. consulting and systems integration) and ITO. Background ITO Index data shows a steady (but non-linear) decline in Total Contract Value (TCV) from 2002 onwards. The lev[...]

At Cognizant’s European analyst event in Berlin, the topic of digital transformation and in particular its Horizon 3 services dominated discussions. Horizon 3 services now represent a NelsonHall estimated 10% of revenues (~$1.0bn in 2014). Horizon 3 includes new services such as digital services as well as new business models and new sectors/new geographies. Digital Transformation Cogn[...]

Barely two months into the year and there has been lots of activity across the benefits administration market, including new contracts, contract expansions, and M&A activity.  Contracts have come out of the U.S. and Europe, including the U.K. and the Netherlands. U.S. activity has come from both the private and public sectors, with deals ranging from as few as 800 employees to mor[...]

A strong end to 2014 for Cognizant, with the disruption of Q2 results (due to client specific issues) now a fading memory. Q4 2014 revenues were up 16.4% y/y, up 13% y/y excluding Trizetto. And non-GAAP operating margin of 19.4% was within its targeted range. Q4 2014 revenue breakdown by vertical (and actual revenue growth) was: Financial services: $1,121m (+12.4%), with strong gr[...]