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U.S. Enterprises Seek Help with Application Development During Pandemic

U.S. Enterprises Seek Help with Application Development During Pandemic
ISG Provider Lens™ report sees growth in outsourced app development and maintenance services as companies look for business transformation

The COVID-19 pandemic has driven new demand for outsourced application development and testing services in the U.S., with many service providers seeing significant growth the past two years, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

“Many U.S. enterprises are putting a new focus on application development practices, processes and culture, including performance measurements and team dynamics”

The 2021 ISG Provider Lens™ Next-Generation Application Development and Maintenance Services Report for the U.S. finds that, even during the pandemic, many U.S. enterprises continued their journeys toward agile modernization and transformation to address challenges related to the supply chain, customer engagement, workforce collaboration and product delivery.

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“Many U.S. enterprises are putting a new focus on application development practices, processes and culture, including performance measurements and team dynamics,” said Shafqat Azim, Digital Strategy and Solutions for ISG. “They are turning to next-generation ADM providers to help them meet these goals.”

To deal with the pandemic, many ADM providers pivoted to working remotely, using virtual meetings, instant messaging and cloud services to collaborate and close business deals, the report says. Many service providers also restructured their contracts to provide more financial flexibility and outcome predictability to enterprise clients.

While ADM delivery became mostly virtual and remote during the pandemic, many service providers in the U.S. are also seeking to enhance their onshore or nearshore workforce, the report adds. In many cases, they are trying to mitigate problems related to time zone differences, and in some cases, they are working to maintain business continuity across regions still experiencing the negative effects of the pandemic.

In addition, many service providers have built accelerators and their own tools and platforms to expedite the continuous integration and continuous delivery (CI/CD) pipeline, application releases and DevOps integration. The commercial off-the-shelf product-set for DevOps is continuously expanding, and providers are training their resources on these technologies. However, the report finds less than half of agile development teams are using DevOps successfully.

Providers with robust methodologies, established processes and hands-on experience with automation tools are performing better than counterparts that fail to provide these capabilities, the report adds.

Many U.S. enterprises are interested in application transformation services, the report says, and are looking to enhance their ability to solve business challenges and harness opportunities through meaningful digital solutions. As part of their transformation initiatives, enterprises are expecting service providers to coach, train and upskill their employees on new ways of working and offer next-generation technologies.

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In addition, cloud adoption and modernization are becoming an integral part of most application transformation deals, the report adds. Enterprises are now inclined to elevate their engagement maturity by tracking business KPIs and outcomes as part of their application development and maintenance strategies.

The report sees several trends related to application development. Client business models are rapidly evolving by leveraging open ecosystems and architectures based on application programming interfaces and microservices. At the same time, service providers are moving from a project-based to a product-based design thinking approach.

In the area of application management, DevOps is expanding to DevSecOps, BizDevOps and AIOps to focus on security, business alignment and operational excellence. Providers and clients are increasingly adopting robotic process automation, IT process automation, bots, AI and machine learning to drive efficiency and effectiveness. Industrialization with virtual or remote delivery models is also gaining significant traction.

The 2021 ISG Provider Lens™ Next-Generation Application Development and Maintenance Services Report for the U.S. evaluates the capabilities of 39 providers across five quadrants: Application Development and Scaled Agile, Agile Development Specialists, Managed Application Services, Application Quality Assurance and Continuous Testing Specialists.

The report names Accenture, Capgemini, Cognizant, HCL, Infosys, TCS and Wipro as Leaders in three quadrants and Coforge, Hexaware, Tech Mahindra and UST as Leaders in two. Atos, Birlasoft, Cigniti, LTI and Persistent Systems are named Leaders in one quadrant.

In addition, LTI was named a Rising Star—companies with “promising portfolios” and “high future potential” by ISG’s definition—in two quadrants. Cybage was named a Rising Star in one quadrant.

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[To share your insights with us, please write to sghosh@martechseries.com]

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