Companies adopt AI for efficiency and quality, study GenAI’s potential for automation and testing, ISG Provider Lens report says.
Growing AI and cloud adoption have shaped US enterprises’ application development and management (ADM) strategies over the past year, according to a new research report published by Information Services Group (ISG).
The 2024 ISG Provider Lens Next-Gen ADM Services report for the U.S. finds that companies continue to focus on cost optimization, which has helped to drive up the use of AI throughout application lifecycles and inspire early implementations of generative AI (GenAI).
“AI-driven ADM services are transforming the operations of US enterprise IT departments,” said Shafqat Azim, ISG partner and Americas lead, Digital Transformation.
“Service providers have enabled clients to modernize ADM through AI with major operational benefits.”
AI tools are automating ADM tasks, improving software quality and reducing downtime, the report says. Benefits can include higher efficiency, increased developer productivity and reduced time to market, along with proactive maintenance.
Quality assurance is a high priority for many US enterprises and GenAI has strong potential in this area. By automating test creation and scenario simulation, it can speed up testing and uncover issues that manual inspections might miss.
While US companies are exploring this potential, they also want to apply quality assurance to GenAI to ensure it will operate correctly and ethically, ISG says.
A growing number of US enterprises seek provider engagements that cover both applications and underlying IT infrastructure, such as servers, networks and cloud services, the report says. These deals ensure applications are optimized for performance, scalability and security, while also reducing costs and streamlining vendor management.
Companies are also increasingly shifting development to major public cloud platforms to create more scalable, resilient and flexible applications, ISG says. Orchestration tools like Kubernetes, along with microservices architectures, containerization and DevOps practices, have helped make this migration possible.
“As market trends and customer needs change, cloud-native development lets enterprises quickly respond,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Greater agility is a key reason companies move application development to the cloud.”
The growing integration of site reliability engineering (SRE) with AI for IT operations (AIOps) practices has led to a significant shift in ADM operations, the report says. This approach uses machine learning and advanced analytics to sift through huge volumes of operational data, giving companies comprehensive insights into system performance.
With it, SRE teams can pre-emptively discover and resolve potential issues and ensure uninterrupted service delivery.
The report also explores other ADM trends in the US including providers’ increasing ability to address industry-specific requirements and the rise of Agile and DevOps practices in continuous testing services.
The 2024 ISG Provider Lens Next-Gen ADM Services report for the U.S. evaluates the capabilities of 51 providers across six quadrants: Agile Application Development Outsourcing, Agile Application Development Projects, Application Managed Services, Application Quality Assurance, Continuous Testing Specialists and AI-enabled Application Development and Maintenance (AI-ADM).
The report names Accenture, Capgemini, Cognizant, Deloitte, HCLTech, IBM, Infosys and TCS as Leaders in four quadrants each. It names LTIMindtree, Tech Mahindra and Wipro as Leaders in three quadrants each. Apexon, Hexaware and UST are named as Leaders in two quadrants each. Birlasoft, Cigniti, Coforge, DXC Technology, Eviden (Atos Group), HTC Global Services, Infinite Computer Systems, Persistent Systems and Qualitest are named as Leaders in one quadrant each.
In addition, Quinnox is named as a Rising Star – a company with a “promising portfolio” and “high future potential” by ISG’s definition – in three quadrants. Hitachi Digital Services is named as a Rising Star in two quadrants. Mphasis and TestingXperts are named as 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-gen 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.
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