At the recent TCS Innovation Day held in New York, NelsonHall had an opportunity to talk to TCS about how it approaches its research and innovation function, balancing longer-term open-ended research and more immediately applicable innovations to evolve how it delivers services. (For more on the event itself, see the blog by Andy Efstathiou here). TCS has developed an overall appr[...]

NelsonHall recently attended the TCS Innovation Forum 2019 in New York. The forum demonstrated clear progress in TCS’ thinking and approach to Business 4.0 since last year’s conference – TCS has identified human engagement and buy-in with the principles of Business 4.0 as critical to successful implementation and value realization in business transformation. And human buy-in [...]

  In recent years, many IT services firms have been aggressively acquiring new capabilities in creative areas such as design. One of the key challenges they face in acquiring such firms is managing what can be a significant culture gap between the flexibility of small creative firms and the regimented, industrialized nature of a global IT services firm. Successful acquisitions strik[...]

  Since the financial crisis, regulators have been tightening the KYC processes banks are required to undertake. Enhanced KYC requirements have been applied across many regulations, including MiFID, PSD2, and ultimate beneficial ownership requirements (U.S. CDD Rule). And, as compliance requirements have increased, banks have spent increasing amounts of time and resources on addressing[...]

  In the past five years, NelsonHall has observed software testing services vendors adapting their portfolio around digital testing, focusing initially on agile and DevOps, and with a sense of urgency given the accelerating adoption of agile development methodologies. The transformation towards DevOps/continuous testing is ongoing, with most vendors now having their DevOps testing buil[...]

  Here I look back at how M&A activity has impacted the IT services industry over the past year and make a few broad predictions for the type of activity to be expected in the next twelve months. 2016 had been marked by some large M&A announcements, with: Hardware companies moving out of services:  HPE announcing the sale of Enterprise Services to CSC (completed i[...]

NelsonHall recently attended a TCS analyst event in Boston, the theme of which was Business 4.0: Intelligent, Agile, Automated, and on the Cloud. A few months ago, soon after Rajesh Gopinathan took over as CEO, TCS undertook its first major service line revamp for many years (we provided details of this in our Quarterly Update on TCS – see here). As such we were keen to learn more about [...]

Many Blockchain services vendors have observed that up to 75% of proofs of concept for Blockchain fail to meet their goals. Analysis of drivers for such widespread failure indicates that the initial use case was flawed because it was constructed to justify experimentation rather than solve business challenges. However, TCS has focused its Blockchain efforts on developing uses cases that can dr[...]

  Initiatives around incorporating intelligent technologies to automate and create efficiencies across different HR processes is a top priority for many vendors. To date, RPA has made the most headway, e.g. in payroll for forms management, in benefits for pension calculations, in recruiting for scheduling a candidate’s interview or resume scanning, and in learning for proces[...]

M&A activity in IT services is set to take a new direction in 2017. Here, I reflect on M&A activity by the largest IT services vendors in 2016, with its emphasis on mega deals, and look ahead to 2017, which is set to be the year of digital & security tuck-in acquisitions. Large M&As in 2016: IT Conglomerates and Defense Firms Divest IT Services Arms Large-scale M&am[...]

  In recent years, the software development life cycle has become increasingly automated as IT service vendors seek to drive greater efficiencies in software development and maintenance, and increase their ability to scale. This is true for testing as well as for wider software development support. Initially, as elsewhere, the increasing automation of testing was based on the develo[...]

  Over the last five years, banks have been focusing their operational investments and executive mindshare on compliance, and in this time the cost of compliance activities has increased ten-fold. Also, in the last three years, the focus for compliance has been on customer profile activities that utilize reference data – e.g. Know Your Customer (KYC), Anti-Money Laundering (AML),[...]

  Smart Cities is one of the fastest growing segments within the burgeoning internet of things (IoT) outsourcing market. Currently worth just ~$140m, NelsonHall forecasts the global market for Smart Cities IoT outsourcing to grow by 75% CAGR over the next five years, taking it to ~$2.15bn by 2020. IoT is being applied in commercial buildings and homes, and in urban infrastructures s[...]

Much of the current buzz in the industry continues to be centered on RPA, a term currently largely synonymous with automation, and this technology clearly has lots of life left in it, for a few years at least. Outside service providers, where its adoption is rapidly becoming mature, RPA is still at the early growth stage in the wider market: while a number of financial services firms have already [...]

Yesterday evening provided what was possibly the biggest surprise in the IT services industry for some time: the news that Hewlett Packard Enterprise (HPE) is spinning off its Enterprise Services business via a Reverse Morris Trust (RMT) to HPE shareholders, for the business to be able to merge with CSC in a tax-efficient manner. Firstly, here are a few of the details of the transaction, which [...]

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 [...]

TCS recently introduced 360 Degree Assurance (360), an AI-based IP, based on analyzing data gathered from several sources across the IT software development life-cycle. Current use cases cover defect root cause analysis and for test case optimization. 360 follows the introduction last year by TCS Assurance Services Unit (ASU) of NETRA, proprietary IP which helps automate the Dev-to-Ops cycle. N[...]

There has been a recent spate of acquisitions and partnerships among Financial Services BPS vendors which reveals interesting trends. These include the following deals from 2015: HCL and CSC: Two JVs were formed, whereby HCL will operate and expand the existing Core Banking business of CSC. The first JV will focus on account management and delivery governance while the second [...]

CSC has just laid out the financial targets of the standalone business which will retain the CSC moniker when the U.S federal company, CRSA, breaks off.  As well as CSC’s global commercial business, it includes non-U.S. public sector businesses (~$700m revenues in FY15). In its FY15 (ending March 31, 2015) this part of CSC achieved revenues of $8.1bn, and an adjusted operating margin[...]

Will CSC invest nearly $1.2bn in M&A in the space of a few months? Or will Capita progress with a bidding war? CSC has sent a letter to the Xchanging board outlining its interest in making a cash offer of 170p per share for Xchanging stock. This would constitute a premium of 6.3% over Capita’s October 14 offer of 160p per share. CSC’s offer is dependent on Xchanging not [...]