IT systems integration services are becoming increasingly important to buyer operations, effectively boosting demand and service prices
Los Angeles, CA (PRWEB) September 09, 2014
Buyer power in this market stems from slowly growing prices due to low market share concentration and low price volatility. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has added a report on the procurement of IT Systems Integration Services to its growing collection of procurement category market research reports.
IT systems integration services have a buyer power score of 3.6 out of 5, which indicates favorable purchasing conditions for buyers. Buyer power in this market stems from slowly growing prices due to low market share concentration and low price volatility. Nevertheless, the low availability of substitutes and high switching costs restrict buyer power to an extent.
“Buyers strongly benefit from stable service prices, further encouraged by the mounting number of new enterprises in the market,” according to IBISWorld business research analyst, Cameron Roark. Systems integration service prices have remained stable over the past three years mostly due to conflicting trends; on one hand, rising external demand drivers have fueled service price growth, on the other hand, the rising level of competition in the market has placed a downward pressure on prices. Rebounding corporate profit and private investment in computers and software are the main downstream demand drivers for IT systems integration services. In addition, low barriers to entry allow a significant number of new entrants into the market, in turn fueling price-based competition.
However, the low availability of substitutes and high switching costs dampen buyer power. There are no direct substitutes for IT systems integration services; as such, buyers cannot leverage cross-service competition to negotiate favorable rates. “Meanwhile, high switching costs prevent buyers from easily falling back to other vendors in the event of unsatisfactory services from the existing vendor,” says Roark. Therefore, it is critical to select experienced and reputable vendors to minimize the risk of potential errors with IT systems.
Service prices are expected to remain stable over the next three years, relieving the pressure on buyers to enter into contacts to lock in prices. Furthermore, low price volatility allows buyers the freedom to place more emphasis on selecting a suitable vendor rather than rushing into a contract to avoid rapid fluctuations in price. Major vendors include Hewlett-Packard Development Company LP, International Business Machines Corporation and Accenture. For more information, visit IBISWorld’s IT Systems Integration Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of IT systems integration services. Systems integration aims to combine subsystems comprised of hardware and software products from multiple vendors into a single system. Systems can be integrated through a variety of techniques, such as computer networking, enterprise application integration, business process management and programming. Systems integration services help businesses align cheaper, preconfigured components and off-shelf software to help meet business goals.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.