On the surface, the market comprising third-party providers offering application services appears to be stagnating in the past. However, Everest Group has discerned an evolution in this seemingly “unchanging” market. This is not only limited to extracting more cost benefits, service-level redesign, or “best-of-breed” approach.
Application services evolved from sole focus on immediate cost savings through low-cost resources and headcount reduction to structured contracts and global delivery. Going forward, the changes will be structural in nature and this will require a reevaluation of contracts, flexible pricing models, as-a-service delivery, and customized commercial engagements.
Buyers will require service providers to develop an “ownership” mindset where they are accountable for a complete business function that is delivered through an application. The focus will be on total cost of ownership, flexible engagements, contract enhancements, viewing applications in business context, and transparency.
This report lays down the journey of application services from its cost-focused past to its business-function- and agility-inspired future. It makes a case for reducing the focus on fuzzy business outcomes and increasing the effort to streamline multiple activities. This will eventually result in a high-value engagement that creates real business impact.
Note: this report is from 2012. See our most recent R2R research report.
The Finance & Accounting (F&A) function comprises three end-to-end processes – Procure-to-Pay (P2P), Order-to-Cash (O2C), and Record-to-Report (R2R). This report focuses on…