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Home Market Research

What Q3 2022 Tech Services Earnings Mean For Technology Executives

admin by admin
December 17, 2022
in Market Research


Forrester has analyzed the Q3 2022 earnings announcements of a basket of leading public companies that provide technology services, including Accenture, Capgemini, Cognizant, EPAM Systems, IBM Consulting, Infosys, Tata Consultancy Services (TCS), and Thoughtworks. These announcements provide insights and valuable implications from which all technology executives can benefit. Here are some of the key points we heard and inferred:

  • Companies will continue to invest in tech through H1 2023. Accenture trimmed its fiscal-year 2023 forecast to 8%–11% (and reconfirmed that forecast today) — about two-thirds of its fiscal-year 2022 projection — but that’s still robust growth. Tech execs: This is another signal that your peers will fund projects; we expect more projects to involve reducing costs through automation and application consolidation in the shift to the cloud.
  • Tech execs continue to accelerate their use of services partners. Most providers’ revenues continued to grow strongly, and none of the CEOs lowered their forecast for the remainder of 2022. They pointed to digital transformation for growth initiatives, cloud migration, cyber, and cost-reduction automation projects driving their business in every region. Tech execs: Your business peers’ appetite for digital transformation is continuing and needs your support.
  • Tech execs are taking a more measured approach to projects. We heard consistently that deals aren’t disappearing, but clients are slowing their pandemic-induced scramble in favor of a more careful approach to transformation. Tech execs: Marshal your growth and cost-reduction investments via milestones with visible outcomes, holding off on the next funding tranche until the milestone is proven.
  • Project costs are going up as providers increase salaries and raise prices. Wage inflation and internal promotions to combat attrition have taken a bite out of providers’ margins. They’re responding by raising prices (or dropping discounts). Tech execs: Expect to see rates rise, so investigate outcome-based contracts where possible to ensure that you get a healthy “quality and outcomes” return for those fees.

In our new report for Forrester clients, we describe what the strategic guidance messages — for example, the shift toward cost takeout transformations — mean for technology executives, as well as services industry news that we found interesting.



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