ISG Launches ISG Automation Index™
Research offers first-time measurement of automation's impact on the ITO market
Findings show productivity improving by double digits, leading to 66% cost reduction
Sep 26, 2016, 09:00 ET
STAMFORD, Conn., Sept. 26, 2016 /PRNewswire/ -- Information Services Group (ISG) (NASDAQ: III), a leading technology insights, market intelligence and advisory services company, today announced the launch of the ISG Automation Index™, a new research and advisory service that quantifies for the first time the cost savings and productivity gains from automating information technology and business services.
The ISG Automation Index™ leverages cost and labor data from ISG's proprietary benchmarking database covering sourcing agreements with annual contract value of $10 million or more in which service automation is a core component. Analysis of these data provides a first-time, quantifiable view of how automation is impacting service provider productivity and the commercial relationships providers create with their clients. The initial ISG Automation Index™ report focuses exclusively on the information technology outsourcing (ITO) market.
"Automation in the global sourcing industry has moved beyond theory to become a game-changing reality that is reshaping how work is done," said Todd Lavieri, president of ISG Americas, Australia and New Zealand. "What has been lacking is a quantifiable and empirical measurement of automation's impact on cost savings and productivity improvement – until now. The ISG Automation Index™ provides that first-ever measurement – for the benefit of both buyers and sellers of services."
"With service costs plummeting, we're clearly seeing a buyer's market that is putting tremendous pressure on service providers to deliver more savings to stay competitive," said Steve Hall, partner, ISG Digital Services. "We see productivity improvements fueled by automation accelerating quickly. As automation moves up into higher-order IT processes and out into business operations, it will eliminate a significant amount of work through problem avoidance and self-healing, and with it, a significant amount of the headcount needed to deliver large-scale ITO services."
ISG plans to leverage its groundbreaking research as part of a new advisory service that will help clients fully evaluate the cost and productivity benefits of automating specific IT and business services.
First Report Shows Automation Has a Doubling Effect on Cost Savings
The inaugural report of the ISG Automation Index™ shows that dramatic improvements in productivity fueled by automation can more than double the level of cost savings that can be expected from sourcing IT services. Cost savings range from 26 percent to 66 percent, depending on the service tower, with 14 to 28 percentage points of these savings directly attributable to automation. This higher level of savings compares with typical cost savings of 20 percent to 30 percent from traditional labor arbitrage and process improvements alone.
Automation is improving productivity levels by double-digit percentages across all IT service towers, especially towers in which employees manage physical devices, such as Workplace Services and Network Services. This surge in productivity is having a significant impact on the need for human labor. ISG found as much as a 50 percent decrease in the number of resources required to support certain IT services, with an average decrease of 25 percent across most IT towers. These productivity gains are leading to significant decreases in the cost of service.
"Most automation today is focused on automating repetitive tasks based on standard operating procedures," said Stanton Jones, principal analyst and research director and co-author of the report. "This includes scripts that automate well-defined activities, and automation that brings together multiple scripts to automate entire business processes. However, we are beginning to see the emergence of higher-order automation, in the form of data mining and machine learning, that can make operational decisions without the need for human intervention."
The ISG Automation Index™ is one in an ongoing series of in-depth, data-driven research reports that will examine major trends reshaping the global sourcing industry. To obtain a copy of the complete ISG Automation Index™ report, please contact ISG.
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 and global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 1,000 employees and operates in 21 countries.
For additional information, visit www.isg-one.com.
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SOURCE Information Services Group
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