Generative AI (GenAI) advancements, changing client requirements, and the need for legacy modernization and regulatory compliance have transformed the European next-generation ADM market over the past 18 months, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Next-Generation ADM Services report for Europe finds GenAI has been revolutionizing the application development landscape by automating complex tasks such as code generation, bug detection and performance optimization, significantly reducing development cycles and improving accuracy. These advances help meet the growing demand for flexible, tailored and scalable ADM solutions that comply with stringent European regulations such as GDPR.

“The continuing trend towards GenAI adoption is driving persistent innovation in development processes,” said Dr. Matthias Paletta, ISG research director and technology modernization solution lead. “The use of GenAI is key to future differentiation and leadership in ADM.”

The adoption of GenAI requires substantial initial investments in infrastructure and training, and challenges enterprises to ensure data privacy and ethical use of AI. Furthermore, integrating such advanced tools with existing legacy systems without disrupting ongoing operations remains a significant hurdle, and educated personnel with key GenAI skills remain sparse and expensive.

GenAI is expected to drive innovation by enabling the creation of advanced predictive models and enhancing AI-driven application capabilities. This technological advancement will foster greater efficiency and innovation, though its exact impact on the next-generation ADM landscape is impossible to predict.

“GenAI can transform legacy code into modern, more efficient, methods with little or no human intervention,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Organizations are using GenAI to help automate the transformation of outdated systems.”

Clients seeking to improve time to market and operational efficiency have widely adopted Agile and DevOps approaches for their ability to enable faster release cycles, enhanced quality and better alignment between development and business goals, the report says.

The larger providers of technology resources are dominating the next-gen ADM space, with global reach and local expertise. Smaller ADM providers have more limited geographical reach, financial resources and technology partnerships, but can be more agile and competitive by focusing on niche markets and offering specialized services and personalized client engagements.

For further insights into the trends and challenges impacting the next-generation ADM market in Europe, including skills shortages, evolving client requirements, security concerns and cost management pressures, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Next-Generation ADM Services report for Europe evaluates the capabilities of 38 providers across four quadrants: Agile Application Development Outsourcing, Application Managed Services, Application Quality Assurance, and AI-enabled Application Development and Maintenance (AI-ADM).

The report names Accenture, Capgemini, Cognizant, HCLTech, IBM and Infosys as Leaders in all four quadrants. DXC Technology and Wipro are leaders in three quadrants each, and Deloitte and TCS are Leaders in one quadrant each.

In addition, T-Systems is named a Rising Star — which ISG defines as a company with a “promising portfolio” and “high future potential”— in two quadrants. Deloitte and DXC Technologies are named Rising Stars in one quadrant each.

In the area of customer experience, Persistent Systems is named the global ISG CX Star Performer for 2024 among next-generation ADM service providers. Persistent Systems earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

A customized version of the report is available from Capgemini.

The 2024 ISG Provider Lens™ Next-Generation ADM Services report for Europe is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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