ISG Poll: Service Providers Expect Automation Will Lead to Significant Work Force Reductions

One third believe job cuts could top 25%

Automation, Mobile and IoT expected to be biggest investment areas

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Sep 30, 2015, 10:00 ET

STAMFORD, Conn., Sept. 30, 2015 /PRNewswire/ -- Nine out of 10 global sourcing professionals polled at the recent Sourcing Industry Conference (SIC) hosted by Information Services Group (ISG) (NASDAQ: III), a leading technology insights, market intelligence and advisory services company, say they expect advances in automation will lead their companies to shed jobs in the next five years. A third of respondents expect job losses to exceed 25 percent of their current work forces by 2020.

SIC 2015, held September 28-29 in Dallas, brought together more than 170 representatives from the world's leading service providers to discuss and debate the future of the global services industry. The record turnout for SIC 2015 comes at a time when the industry is experiencing significant disruption from emerging technologies and the ongoing transformation to digital business models.

Ninety percent of those polled by ISG said they expected automation to result in some job losses in next five years, with the largest number (32 percent) saying they expect employment reductions to exceed 25 percent of their current work force (Figure 1.). Only 4 percent said they expected no job cuts, while 5 percent thought automation would actually create more jobs.

Figure 1.

"Given the rise of process automation – essentially software bots that can perform repeatable tasks – and the future promise of cognitive computing and autonomics, these findings come as no surprise," said Todd Lavieri, president of ISG Americas, Australia and New Zealand. "What the results don't reveal is the many new jobs we see being created to support the future of digital business and the growth of the As-as-Service economy.

"One thing is clear: the age of labor arbitrage is coming to an end, and a whole new era of digitized service provision is taking its place. That shift will create many benefits for our clients, as they transition to a digital state that is more secure, delivers more capabilities at lower cost, and continuously reveals new market opportunities and enables future growth."

Service providers will need to continue investing in new digital capabilities in partnership with their clients to bring about the full benefits of this digital transformation, Lavieri said.

The service providers attending SIC 2015 were asked about the areas in which they expected their firms to make the largest innovation investments in the next five years. In line with expectations about the growing use of automation, the greatest number said their firms would make the largest investments developing their automation capabilities, followed closely by mobile technologies and the Internet of Things (see Figure 2).

Figure 2.

Under the theme, "Future Smart. Achieving Success in the Digital World," participants at SIC 2015 reviewed the current market forces and emerging technologies that are threatening to upend traditional sourcing and service models. They also explored strategies that will help them ride this disruptive wave and evolve their offerings for greater success in the age of the digital enterprise.

As part of the event, Martin Ford, founder of a Silicon Valley-based software development firm and author of two books, including The New York Times bestseller, Rise of the Robots: Technology and the Threat of a Jobless Future, delivered a keynote address on the impact of technology on global business, discussing findings and observations from his book.

Bill McNee, chief executive of Saugatuck Technology, a research and analyst firm that ISG acquired last month, also was among the speakers at SIC. McNee gave a presentation on the current mega trends that are driving change in business computing.

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 900 employees and operates in 21 countries.

For additional information, visit www.isg-one.com.

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SOURCE Information Services Group