EY Reimagines Global Mobility: Human-centric, Tech-enabled and Business-critical

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EY Global Mobility Reimagined 2025, Barcelona: Over two days in Barcelona, EY hosted more than 150 clients and a few industry analysts for its first in-person EY Global Mobility Reimagined conference since 2019. During the event, TBR spoke with EY leaders, EY technologists and EY clients from a diverse set of countries and industries. Nearly all the client attendees serve within their enterprise’s talent, mobility or human resources organizations, and a common vibe throughout the event was the changing challenges facing HR professionals. The following reflects both TBR’s observations and interactions at the event and our ongoing research and analysis of EY. Three themes emerged over the two days of the conference, both from the presentations and in discussions with EY leaders and EY clients. First, rapidly changing technology, particularly AI, permeates every aspect of mobility, but the EY leaders and conference attendees returned repeatedly to the need to keep humans at the core. Second, EY did not emphasize or sell what EY can do but rather kept the focus on clients’ problems. A Tech Connect showcase featured cool new EY software and solutions, but the conference plenaries and breakout sessions never veered into a sales pitch for EY’s solutions. Third, in discussions with EY leaders, TBR heard a clear strategy for continued rapid growth and evolving technology alliances, underpinned by a commitment to managed services.

Humans remain central to mobility, although technology can help

Mobility — moving talent around the world on short- and long-term assignments — is inherently stressful for the employee and risk-inducing for the employer, so while technologies can improve the processes and mitigate risks, the experience remains a human one. Even with generative AI (GenAI) and agentic AI, everyone strives to keep humans fully at the center. Three moments during the conference highlighted this theme.

 

During a breakout session focused on emerging technologies, EY noted that nearly all current mobility-focused technologies and platforms have been designed around corporate requirements and policies. In the near future, technologies will be designed around the employee experience. EY’s new Microsoft Teams app for mobility, described below, provides an example of that shift. Second, during a panel discussion about the ethical concerns around AI adoption, one EY leader noted that even if agentic AI and other tools replace many of mobility professionals’ day-to-day tasks, nothing can replace the human touch, especially during a stressful time like an international relocation. Once again, the technology must enhance the employee experience. Lastly, EY professionals noted during a breakout panel on immigration that employers have had a mindset shift with respect to permanent residency.

 

Previously, employees tried to shift their residency status in a foreign country without assistance from their employer, reflecting employers’ concerns that once established in a country, those employees would be inclined to stay, perhaps necessitating a split with the employer. In some countries — Saudi Arabia was cited as a prime example — annual visa and work permit renewals are both expensive and stressful. Over a long-term assignment, paying for an employee to gain permanent residency could be cost effective and, by demonstrating support and bringing corporate resources to bear, could increase employee retention. Happy employees who stay longer and build better relationships with clients lead to better returns for the company on its investment in talent and mobility.

The event offered a forum for clients to discuss challenges and how they are coping

EY sold without selling. Every session included EY partners describing the firm’s views of the challenges facing mobility professionals and HR teams overall, but, with the exception of the Tech Connect showcase, EY’s capabilities were not front and center. In the majority of sessions, EY’s capabilities and the firm’s ability to help address those challenges simply did not come up. The EY partners focused on setting the overall parameters of the discussion, providing context around the challenges clients face, and then allowing those clients to engage with EY and with other clients about how they are coping.

 

In TBR’s view, this approach separates EY from peers while also reflecting the ethos TBR has observed at other EY events, such as the Strategic Growth Forum. EY provides clients a comfortable space to talk about issues and commiserate, without a hard EY sell. One attendee told TBR the conference made him feel better because his problems were not nearly as dire as the other professionals he spoke with during the event.

 

Navigating GenAI: Insights, Strategies and Opportunities for 2025 — Watch “2025 Predictions for GenAI” on demand now

Mobility practice serves as the glue across EY globally

In sidebar discussions with TBR, EY leaders’ comments reinforced two trends about Mobility — and the firm’s People Advisory Services – overall. First, People Advisory Services is growing ahead of the overall firm. The practice has been investing in managed services capabilities and scale, with an appreciation that noncommoditized managed services will be a significant component of People Advisory Services revenues. Second, Mobility remains an essential part of the glue that keeps EY operating as a global firm serving global clients.

 

In addition, during the event TBR noted a clear emphasis on Microsoft as a strategic partner, but EY noted expectations that other technology alliance partners, including ServiceNow, will become increasingly strategic to Mobility. Regarding the third point, Mobility services have challenged other Big Four firms, in part because — as practiced by EY — the burdens include forced cross-border coordination by and shared resources from separate member firms, managing a plethora of niche providers and technology partners, and deploying a software business model.

 

Countering those burdens, Mobility can serve as a centripetal force, helping align EY’s Tax, Audit and Advisory practices and giving additional weight to the firm’s global capabilities (and leadership, notably). As a complementary service to consulting or tax, Mobility advances EY’s client retention strategies, particularly with its largest clients. Internal benefits and external rewards. Win- win.

Emerging technologies begin to permeate HR

AI could not be ignored, in part because the notion of agentic AI-related disruption was an underlying current throughout the event. While not diminishing the challenges of adopting emerging technologies, EY professionals repeatedly stressed the need to adopt soon, smartly and with a long-term plan in place. In a breakout session, EY professionals used a now/next framework to describe a few trends in emerging technologies (including the corporate requirements and employee experience described above).

 

Currently, HR professionals and employees must wrangle with multiple technologies and platforms to execute on mobility challenges; in the near term, everyone will enjoy streamlined technologies with cohesive data-sharing strategies. Today, HR professionals rely on dashboards to provide analytics on mobility and other People Advisory Services issues, but soon predictive AI-driven analytics will provide insights and quicker decision making, with fewer (or perhaps no) dashboards.

 

Notably, when surveyed during the breakout session, the majority of HR professionals in attendance opted for “streamlined technologies” as their top priority. In a separate session, client attendees said their greatest expectation from AI would be data analytics and enhanced reporting.

A few other technology-centric comments and observations from the event:

  • EY partners said Mobility professionals did not need to wait for the next GenAI update or release — the technology needed is here and can be applied now.
  • Previous notions about data complexity may be outdated as the technology exists now to handle that complexity — HR professionals should focus on what they want to accomplish, not whether their data is perfect. (Side note: in the same discussion, EY partners observed that the biggest roadblock to adoption remains the availability of quality data.)
  • The ethics around GenAI remain … murky. EY partners noted the environmental impact of energy-hungry data centers and suggested a gap exists between innovation and accountability, eventually cautioning for a go-slower approach to AI adoption.

Overall, technology played across every aspect of Mobility with the common theme around enhancing the employee experience and measuring how EY’s Mobility practice can benefit a company’s strategy and employee retention, and even improve relationships with clients. In short: use technology wisely, with help from EY.

EY integrates mobility management into Microsoft Teams

The Tech Connect showcase included nine solutions, most notably EY Mobility Pathway, a corporate mobility management tool; EY Mobility Carbon Tracker, a customizable tool for scenario planning and carbon footprint measuring; and new Microsoft Teams app for mobility, a seat-based SaaS offering deployed as an application on Microsoft Teams. The last one stole the show. Employees do not need to log on to another platform, remember another password or navigate an unfamiliar app, but rather add the new Microsoft Teams app for mobility app to their Teams experience. The software can be configured to clients’ specific mobility needs, such as shipping dates, travel, housing, tax and other elements of the international relocation journey.

 

The new Microsoft Teams app for mobility looks and feels like a Teams app, has all the employer data, and seamlessly — as the employee experiences it — pulls in data and information from the third-party providers the employer uses, such as shipping companies or short-term housing agents. EY partners explained that new Microsoft Teams app for mobility is currently live with a few clients, and will go live soon across more of EY.

 

In TBR’s view, EY made a significant strategic decision in embedding new Microsoft Teams app for mobility into Microsoft Teams and not creating a separate employee-centric dashboard. This keeps employees in an environment they are already comfortable working in and avoids additional stress during a difficult time. EY’s commercial model for new Microsoft Teams app for mobility requires the firm to invest in software support and maintenance capabilities, but feeds into the firm’s overall managed services play.

Immigration rises to C-level topic

An immigration session resonated with TBR, in part because the TBR principal analyst in attendance once stamped visas at a U.S. embassy, but also because of the political issues that were openly discussed. EY partners noted that 2024 was a “super year” for elections globally, and immigration issues featured prominently in election politics in many countries. Extrapolating to global enterprises, EY partners made a convincing case that immigration has become a boardroom issue. EY’s Batia Stein and Chris Gordon noted that chief human resources officers (CHROs) and other executives surveyed by EY said the top option for solving talent gaps is moving talent where it is needed, no matter where on the globe — so, mobility.

 

As described above, assisting with permanent residency can alleviate some employee stress and enhance client and employee retention. In addition, using technology to enhance the employee mobility experience is not simply the right thing to do for employees; EY also believes the Mobility practice can be a business driver. And at a time when compliance issues have become more frequent and fraught, exacerbated by immigration raids and joint immigration and tax audits, Mobility can be a business driver for EY, too.

People Advisory Services global infinity loop reflects EY’s approach to clients’ issues

EY has a visual of its People Advisory Services Tax practice that features an infinity loop with People Advisory Services on one side and People Managed Services on the other, with all the related offerings creating an endless cycle of services, surrounded by EY’s other practices and offerings, such as Strategy & Transactions and Sustainability. The infinity loop helps understand EY’s positioning of its services and, perhaps more importantly, reflects EY’s understanding of its clients’ needs and challenges.

 

Companies keep recruiting, hiring, paying, rewarding, moving, repatriating, retiring and hiring in an endless loop, and EY has capabilities — including consulting, tax and software — that can accelerate movement around that endless loop. EY did not need to say that at the Global Mobility Reimagined conference, as clients understood it already. EY also has a stated ambition to grow People Advisory Services to more than $3 billion by 2031. Absent the worst possible global political and economic scenarios, including a drastic curtailment of global mobility, TBR believes that ambition is perhaps a bit too modest.

TBR Launches ServiceNow Ecosystem Report

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HAMPTON, N.H. (May 29, 2025)

Technology Business Research, Inc., is pleased to announce the launch of the ServiceNow Ecosystem Report, a comprehensive analysis of 10 of the leading consulting and services providers’ evolving relationships with cloud provider ServiceNow within the IT service management, customer service management, creator workflow, finance and supply chain workflow, and HR workflow segments.

 

The ServiceNow Ecosystem Report is the latest addition to our Ecosystem Reports research, which highlights data and analysis from multiple streams of TBR coverage to assess, quantify and model revenues, team compositions, go-to-market strategies and other qualitative insights, including accreditation and training of sell-through and sell-with partnerships, channels or alliances across global ICT markets.

 

The initial publication of this annual report — now available for download — includes data and analysis on the multipartner network, GenAI in SaaS applications, ecosystem opportunities and more. The report features Accenture, Capgemini, Cognizant, Deloitte, DXC Technology, EY, IBM, Infosys, KPMG and Tata Consultancy Services.

 

If you believe you have access to the full research via your employer’s enterprise license or would like to learn how to access the full research, click here.

Highlights from May 2025 ServiceNow Ecosystem Report

Prioritizing the needs of partners and enterprise buyers over internal growth aspirations will position vendors across the ICT value chain as leading ecosystem participants. It sounds like an idea born in marketing, but positive digital transformation (DT) outcomes will require multiparty business networks that bring together the value propositions of players across the technology value chain. By leading with their core competencies, players can establish needed trust among partners and customers alike, increasing their competitiveness against other players that have spread themselves too thin with aspirations of being end-to-end DT providers.

Emergence of multipartner networks will test vendors’ trustworthiness and framework transparency

Prioritizing the needs of partners and enterprise buyers over internal growth aspirations will position vendors across the ICT value chain as leading ecosystem participants. It sounds like an idea born in marketing, but positive digital transformation (DT) outcomes will require multiparty business networks that bring together the value propositions of players across the technology value chain. By leading with their core competencies, players can establish needed trust among partners and customers alike, increasing their competitiveness against other players that have spread themselves too thin with aspirations of being end-to-end DT providers.

 

To better understand these approaches, we have identified three back-office ecosystem relationship requirements that guide how the parties work together.

 

TBR has identified 4 cloud ecosystem relationship requirements that guide how the parties work together

ServiceNow Ecosystem Relationship Best Practices 

Consider PaaS layer and its role in the SaaS ecosystem: As discussed throughout our research, the value is shifting from “out of the box” to “build your own,” and customers clearly believe building their own custom solutions around a microservices architecture will give their business a competitive advantage. Naturally, we expect ServiceNow wants partners to take the lead in Now Assist delivery, but for the global systems integrators (GSIs) to see value, the generative AI (GenAI) has to actually change the business process.

 

Drive awareness through talent development efforts: ServiceNow’s growing portfolio outside the core IT Service Management (ITSM) space is creating new channel opportunities for services partners to capitalize on, compelling them to invest in training and development programs. Gaining the stamp of approval from a ServiceNow certification program enhances services partners’ value proposition, especially in new areas such as the Creator Workflow and Build portion of the ServiceNow portfolio, which positions them to drive custom application and managed services opportunities. Standing out in a crowded marketplace where services and technology providers vie for each other’s attention will elevate the need to invest in consistent messaging and knowledge management frameworks that elevate buyer trust.

 

Prioritize IT modernization ahead of GenAI opportunities and scaling NOW deployment: Some vendors have made GenAI capabilities available only to cloud-deployed back-office suites, meaning customers that are still using legacy systems must first migrate to the cloud before they can adopt the emerging technology. Partners must account for this modernization prerequisite by prioritizing traditional migration services through broader programs like RISE with SAP if they hope to pursue new opportunities over the long term. Reducing legacy technical debt will also free up resources, both human and financial, which will allow for broader ServiceNow portfolio adoption.

 

Set up outcome-based commercial models to scale adoption across emerging areas and protect against new contenders: Aligning commercial, pricing and incentive models that resonate with buyer priorities and achieving business outcomes can allow partners to expand addressable market opportunities, especially as scaling GenAI adoption necessitates greater trust in the portfolio offerings. ServiceNow’s consumption-based model provides a short-term hedge against potential tech-partner disruptors, which may take on the risk to offer similar solutions but are able to better align with services partners’ messaging through the use of outcome-based pricing.

 

 

Consultancy Prediction: Diverging Strategies to Widen the Gap Between Winners and Laggards

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Watch Consultancy Prediction: Diverging Strategies to Widen the Gap Between Winners and Laggards

 

A combustible and pressured consulting market is leading management consultancies to make more significant changes to their strategies than experienced over the past few years. Technology partners, including hyperscalers and software vendors, may not be impacted by direct changes in the near term, but the fallout from choosing the right or wrong strategy will affect how well each management consultancy delivers alongside their ecosystem partners.

 

The primary focus on the Big Four firms will be shared with strategy-led consultancies, including McKinsey & Co. and Boston Consulting Group (BCG) as they navigate the diverging market and face the influence of AI on the traditional consulting model.

 

Join TBR’s Management Consulting team on Thursday, June 26, 2025, for exclusive insights from our upcoming Spring 2025 Management Consulting Benchmark. This semiannual report provides key service line, regional, vertical, and operational data and analysis for 13 learning management consulting firms: Deloitte, EY, KPMG, PwC, Kearney, Bain & Co., BCG, BearingPoint, McKinsey & Co., Oliver Wyman, Accenture, Capgemini and IBM.

Watch the below session on management consulting industry predictions to learn:

  • The different strategies management consultancies will take in 2025, and what these adjustments will mean for the consultancies’ partners
  • TBR’s predictions for which approaches will result in above-peer growth and which firms will stagnate or regress
  • How competitors, including IT services companies with consulting capabilities, can calibrate their strategies in the consulting market to take advantage of missteps by the Big Four firms, McKinsey and BCG

Watch Now

 

Excerpt from Consultancy Prediction: Diverging Strategies to Widen the Gap Between Winners and Laggards

Managed services will support overall revenue growth acceleration in 2025 for the vendors covered in TBR’s IT Services Vendor Benchmark

IT services spending will continue as clients switch from innovation to run-the-business managed services opportunities that enable them to operate in challenging market conditions.

 

 

Visit this link to download this session’s presentation deck here.

 

TBR Insights Live sessions are held typically on Thursdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous sessions can be viewed anytime on TBR’s Webinar Portal.

Trump 2.0 and the Rise of DOGE: What Federal IT Contractors and Their Ecosystem Partners Need to Know

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Watch Trump 2.0 and the Rise of DOGE: What Federal IT Contractors and Their Ecosystem Partners Need to Know

Opportunities will emerge after the dust settles from DOGE’s early actions

After an unprecedented four-year bull market in federal IT spending, the Trump administration and its Department of Government Efficiency (DOGE) have sparked widespread fear, uncertainty and doubt about the near-term future of the federal IT and professional services sector.

 

Shortly after the presidential inauguration, the General Services Administration began reviewing ongoing programs, and DOGE canceled thousands of IT and professional services contracts it deemed “non-mission critical.” This move sent shockwaves through the entire ecosystem of federal IT contractors and their partners. Since that time, federal technology vendors — particularly advisory-led firms — have been waiting anxiously for greater clarity and transparency around the Trump administration’s IT budget priorities.

 

In this TBR Insights Live session Senior Analyst John Caucis and Analyst James Wichert discuss current disruptions to federal IT and professional services vendors’ order books and business development. Additionally, the team will look at how the administration’s plan to aggressively leverage digital technologies to make the federal government smarter and more efficient could have a long-term upside for the federal IT community and its commercially centric AI, analytics, cloud and telecom partners.

Watch the below session on expectations for federal IT vendors in 2H25 to learn:

  • The impact of Trump’s second term and DOGE initiatives on federal IT contractors so far
  • How federal IT vendors are pivoting to support the Trump administration’s emerging priorities in AI, cloud, data science, defense technologies, quantum computing and security
  • The implications of shifting federal IT spending patterns and priorities for federal systems integrators’ alliances with ISVs, cloud hyperscalers, OEMs, telecom providers and others

Watch Now

 

Excerpt from Trump 2.0 and the Rise of DOGE: What Federal IT Contractors and Their Ecosystem Partners Need to Know

Multiyear boom in civil IT ended in 1Q25 as DOGE began implementing large-scale cuts to existing awards

Trump 2.0 and the Rise of DOGE

 

Visit this link to download this session’s presentation deck here.

 

TBR Insights Live sessions are held typically on Thursdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous sessions can be viewed anytime on TBR’s Webinar Portal.

 

Data Quality & Governance Pillars, and Ecosystem-led Approach Mark Informatica’s Entry Into Agentic AI

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Building on last year’s theme of modernization, where Informatica highlighted innovations to fast-track migrations from legacy PowerCenter and Master Data Management (MDM) to Informatica Data Management Cloud (IDMC) in the cloud — accounting for over half of Informatica’s business — Informatica World 2025 in Las Vegas was all about agentic AI, and the crucial, yet still sometimes overlooked, role of data. With its ability to apply reasoning to handle more complex, multipart workflows, agentic AI has rapidly emerged as AI’s next frontier. Although agentic AI promises increased productivity, AI agents require a few key elements, including orchestration, a vast knowledge base and governance. With the wealth of metadata in CLAIRE, the AI engine powering IDMC, it was only a matter of time until Informatica used some of its core differentiators to push into the agentic AI space to not only craft a future for more autonomous data management but also to give customers the tools needed to build and orchestrate their own agents.

 

Informatica enters agentic AI race

Informatica employs two strategies relative to generative AI (GenAI): Informatica for GenAI, in which customers use IDMC’s data management capabilities to enable enterprises’ GenAI use cases; and GenAI from Informatica, where customers leverage Informatica’s GenAI offerings. Those products include CLAIRE Copilot, which entered general availability at the event, and CLAIRE GPT, which is used by over 550 clients to streamline tasks within IDMC such as pulling datasets and interacting with catalogs. On the annual conference’s 25th anniversary, Informatica formally entered the agentic AI space with a similar approach, giving customers the ability to consume AI agents within IDMC for more autonomous data management and a tool for letting customers build, manage and orchestrate their own AI agents.

  • CLAIRE Agents: As part of the GenAI from Informatica strategy, Informatica introduced eight new agents to support tasks across the data life cycle. The agents, which are expected to begin preview in 2H25, are Data Quality, Data Discovery, Data Lineage, Data Ingestion, ETL [Extract, Transform Load], Modernization, Product Experience and Data Exploration. Architecturally speaking, these agents will round out the IDMC platform, sitting above the metadata system of intelligence, with CLAIRE Copilot and GPT acting as user experience (UX) overlays, where customers can interact with these agents.

Nearly every facet of IT has emerged as a prominent use case for GenAI, including data management, and customers are looking for ways to streamline more system-level tasks. Provided customers are prepared to move from manual — or even predictive and conversational AI engineering — to agentic AI, these new data management agents can help absorb a lot of back-end data management tasks, including developing the data pipelines and reducing some of the burden on the user, whose primary focus now becomes managing the agents.

 

  • AI Agent Engineering: In agentic AI, the hyperscalers and SaaS vendors are racing to position as the AI control tower. As more vendors push into the PaaS space and the resulting AI agents convolute the applications layer, the question becomes, “Which set of vendors are positioned to abstract that complexity in a governed way?” At the event, Informatica entered the space with the introduction of AI Agent Engineering, a new tool to help users build their own agents using the popular low-code/no-code drag-and-drop experience. Additionally, AI Agent Hub, which acts as a marketplace within AI Agent Engineering, helps users find, manage and connect these agents, including not just Informatica’s CLAIRE agents but also the tools customers are already using to build agents, such as Amazon Bedrock, Azure OpenAI, Google Vertex and Salesforce’s Agentforce. When it comes to building and orchestrating AI agents, customers have a range of options, but one of the compelling things about Informatica entering this space is its ability to provide the federated governance and access controls around these agents without disrupting existing workflows. Governance remains one of the leading barriers to GenAI adoption, and while some overlap will always exist between the hyperscalers and data ISVs, the hyperscalers recognize Informatica’s reputation for helping customers build trust in their data and ability to apply that trust in a vendor-agnostic way.

 

Unlock the potential of generative AI (GenAI) in your enterprise by understanding the critical role of unstructured data management – Watch The Emerging Data Ecosystem on demand now

Ecosystem developments

As we often discuss, Informatica maintains a high degree of neutrality and can effectively work across a range of technology partners without introducing significant overlap. Maintaining its commitment to working within the technology ecosystem, Informatica announced new product integrations across its technology partners, including the following highlights.

  • Microsoft: Microsoft’s play at the PaaS layer (e.g., Synapse, Power Platform) and ability to extend the Dynamics 365 data model to enable Customer 360 analytics make it an invaluable, somewhat unique partner to Informatica. Reaffirming Informatica’s commitment to Microsoft, CLAIRE Copilot was built using the Azure OpenAI Service. The launch of Microsoft Fabric last year seemed to mark a turning point in the alliance, as Informatica was granted status as an early design partner for Fabric, which has amassed 21,000 paid customers in the span of 18 months. Essentially, this status allows Informatica to make its Data Quality tool available as a native service, so customers can profile and assess data using Informatica as it gets ingested into Microsoft Fabric via the OneLake repository in real time. At the event, Informatica made Data Quality available (in public preview) as its own Fabric application. In addition, as part of its commitment to staying relevant within the Microsoft Fabric ecosystem, Informatica will start supporting Apache Iceberg in Microsoft Fabric, which is important as Microsoft looks to cement its commitment to open standards. These developments come as part of a new strategic agreement between Informatica and Microsoft, which implies not just a focus on R&D but also investment in the joint go-to-market approach. Having Informatica exist as a first-class citizen within the Microsoft stack could make the case for customers to explore other components of IDMC, creating deeper synergies with services partners like KPMG that use Informatica and Microsoft Fabric, both internally and externally for data modernization and transformation.
  • Salesforce*: Though Informatica and Salesforce technically had a preexisting alliance, the partnership was formalized at Informatica World 2025 with the announcement that IDMC will be integrated with Salesforce’s Agentforce. Specifically, Informatica plans to deliver MDM SaaS with Agentforce, effectively putting the 360-degree wrapper around agents that customers build in Salesforce’s platform. As previously mentioned, customers will also be able consume Agentforce via Informatica AI Agent Engineering upon availability later this year. Salesforce sees Informatica as a key player in the market and is looking to strengthen its play in data management and governance in accordance with Agentforce, so this partnership is a win for Salesforce. In turn, Informatica seems to recognize the role Agentforce will play in the AI ecosystem for sales and service use cases, and it will be interesting to see how this partnership progresses and if Salesforce ends up joining Informatica’s seven other, more established technology partners.

On the services side, Informatica continues to cement its value across nine core global systems integrator (GSI) partners, which collectively staff 30,000 Informatica professionals. In 2024, Informatica earned 15,000 certifications, up over 20% year-to-year. Vendor sentiment and our own conversations with enterprise IT decision makers suggest that for AI to effectively scale, data needs to be in the cloud. As such, modernization will continue to be a big focus for Informatica and its partners through 2025. This includes AI-powered modernization and potentially using the new CLAIRE Agents, specifically Modernization, to help migrate on-premises data to IDMC. When it comes to agentic AI, Informatica’s new innovations should open new doors for services partners to not only modernize data management tasks ahead of GenAI deployments but also help clients create new custom agents (using AI Agent Engineering), including those tailored to certain industries, and make them relevant within existing workflows.

 

Between the technology partners and GSIs, Informatica works with a robust ecosystem of partners in a triparty approach, where resources from a hyperscaler, GSI and Informatica are brought together to help customers modernize their data faster and, by default, hasten AI’s time to value. When we survey and speak to alliance decision makers at IT services firms, data management comes up as one of the top areas for partner-led growth, signaling to the ecosystem that they will continue to invest in resources to guide conversations with customers with the technology maturity to address the data foundations ahead of GenAI.

Conclusion

Agentic AI has a lot of promise but also some challenges. The proliferation of AI agents will create more best-of-breed complexity — which we know customers are trying to move away from — and heighten concerns around data privacy and governance. Informatica’s move into the agentic AI space with both CLAIRE Agents and AI Agent Engineering is certainly in step with the market; we all know AI agents do not exist in silos, so Informatica’s ability to work within its ecosystem of tech partners and connect agents in a vendor-neutral way is particularly compelling. Meanwhile, Informatica’s robust engineering relationships with the hyperscalers, as evidenced by Informatica’s Data Quality integration with Microsoft Fabric, will continue to elevate its standing with the big GSIs and foster a compelling triparty alliance approach focused on helping customers get their data ready for AI.

*After Informatica World, on May 27, Informatica entered into an agreement to be acquired by Salesforce. Informatica will continue to operate as a stand-alone entity until the acquisition closes, likely in Salesforce’s FY27. Please see TBR’s Salesforce coverage for further insights.

DOGE Federal IT Vendor Impact Series: Booz Allen Hamilton

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The Trump administration and its Department of Government Efficiency (DOGE) have generated massive upheaval across the board in federal operations, including in the federal IT segment. As of May 2025, thousands of contracts described by DOGE as “non-mission critical” have been canceled, including some across the federal IT and professional services landscape. TBR’s DOGE Federal IT Vendor Impact Series explores vendor-specific DOGE-related developments and impacts on earnings performance. Click here to receive upcoming series blogs in your inbox as soon as they’ve published.

 

BAH finished strong in FY25, but DOGE will create a significant headwind to overall sales growth in FY26

Booz Allen Hamilton (BAH) CEO Horatio Rozanski said during BAH’s 1Q25 and FY25 earnings review on May 23, “All presidential transitions create some degree of near-term disruption followed by opportunity.” Evidence of near-term disruption from DOGE was apparent in BAH’s 1Q25 fiscal results, despite the company’s record revenue, strong profitability, and robust book of business to end FY25 and close out the company’s VoLT (Velocity, Leadership and Technology) growth strategy.
 
VoLT has been an unprecedented success for BAH, driving three consecutive years of double-digit top-line growth; steadily improving profitability; and expanding backlog, which rose from $28 billion to begin FY23 (VoLT’s first year) to $37 billion to end FY25. BAH must now leverage the strong fiscal and operational foundation created by VoLT to successfully navigate a fast-changing federal IT landscape, mitigate the impacts of DOGE’s program cancellations on its business, and position itself to capture the longer-term opportunities that will eventually arise due to the Trump administration’s pledge to lean heavily on digital technologies to increase efficiencies across the federal government and digitally reimagine agency missions.

DOGE will upend BAH’s civilian business in FY26

In FY26, which began April 1, BAH will have to contend with budget cuts, funding delays and organizational restructuring (including significant headcount reductions) by its customers, particularly its civilian agency clients, where business development, procurement and project delivery cycles have slowed. The company has also seen the volume of award activity in the civilian market decline sharply in 1Q25, with further deceleration expected throughout FY1H26.
 
According to TBR’s 1Q25 Booz Allen Hamilton Earnings Response, “the volume of disclosed deal activity plummeted in 4Q24 and 1Q25, a harbinger of tough times ahead for federal IT’s most venerable advisory-led firm.” BAH’s civilian unit also disclosed only a single award in 4Q24 and 1Q25. BAH’s executives indicated that several of its largest civilian IT engagements have been reviewed by DOGE , and the company does not anticipate any cancellations, drawdowns or disruptions to project delivery. However, BAH also noted that five ongoing, large-scale IT programs in the civilian sector have been scaled back due to DOGE’s actions to curb certain agencies’ spending, including a major recompete lost at the Department of Veterans Affairs (VA).
 
Year-to-year top-line growth in BAH’s Civil group has decelerated following 13 consecutive quarters of double-digit growth from 3Q21 through 3Q24. Sales expansion in the firm’s Civil unit fell from 16.1% in 3Q24 to 7.8% in 4Q24, with a further decline, in TBR estimates, to -0.1% in 1Q25. BAH expects a low double-digit contraction in Civil revenue in FY26, with the bulk of the contraction transpiring in FY1H26 (2Q25 and 3Q25). BAH’s Civil unit posted FY25 sales of $4.17 billion, up 5.7% year-to-year from $3.83 billion in FY24. A year-to-year decline between 10% and 12% in FY26 implies Civil sales between $3.57 billion and $3.67 billion, or down between $400 million and $500 million.
 
BAH indicated volume reductions on the five civilian IT programs most directly affected by DOGE would constitute a 300-basis-point headwind to total corporate growth in FY26, with an additional 300 basis points of decline owing to the lost renewal with the VA. BAH expects companywide sales growth in FY26 will be flat to up 4%, implying FY26 revenue between $12 billion and $12.6 billion, with FY26 growth deriving exclusively from the firm’s Department of Defense (DOD) and Intelligence Community (IC) operations. The additional implication here is that BAH’s FY26 full-year revenue would have been between $12.7 billion and $13.2 billion had DOGE not caused the crash in FY26 civilian revenue.
 
According to GX2’s DOGE-Terminated Contracts Tracker, BAH has had 23 contracts worth a total of $155.8 million terminated as of the publishing of this blog, the largest being a $30 million award to implement clinical trial reporting software for the Department of the Interior (DOI) and a $24 million award for data transparency services for the USAspending.gov portal managed by the Department of the Treasury.
 
The remaining cancellations were each worth $13 million or less in TCV and were with Health & Human Services, the Department of Labor, the Department of the Treasury, the Department of Commerce, the Department of Transportation, DOI, the Environmental Protection Agency, and NASA. The cancelled engagements included services related to training coordination and support, operational performance, compliance management, learning management, data visualization, organizational assessment consulting, business process improvement and strategic planning. Based on BAH’s outlook for its Civil business in FY26, TBR believes DOGE’s impact will be far more extensive than implied by the information available on the GX2 website.
 
BAH does expect Civil sales growth will rebound by FY27, and the firm indicated it is already discussing several strategic digital transformation engagements with civilian agencies, which will drive the expected rally. TBR anticipates BAH’s emerging capabilities in AI-assisted coding and agentic AI will factor heavily into these and other future civilian IT projects under the Trump administration.

BAH plans a comprehensive, segmentwide restructuring of its Civil unit beginning in 2Q25

The disruption that has very suddenly overtaken BAH’s civil business has prompted the firm to craft what Rozanski called a “one-time reset” of its civilian operations, including a 7% reduction in global headcount (about 2,500 employees) in 2Q25 that will disproportionately impact BAH’s civilian operations. The decline in civilian award activity has been so abrupt that BAH has not been able to sufficiently redeploy civilian project staff to DOD, IC or commercial sector programs, despite the firm’s expectations that growth will continue in its DOD and IC units in FY26.
 
BAH will cull its bench of civilian-focused consultants and technologists, likely draw down or cancel internship programs, reduce Civil segment management personnel, and realign other aspects of its Civil operations with rapidly eroding project volumes and declining demand from civilian agencies. BAH disclosed total headcount of 35,800 in 1Q25, down 100 sequentially, which the firm indicated was primarily nonclient-facing staff, further suggesting major Civil unit layoffs are on tap for 2Q25.

Growth opportunities will remain for BAH in FY26, though predominantly with the DOD and IC

BAH anticipates continued strong growth in its DOD and IC units in FY26. This is consistent with what TBR has observed in the recent earnings and outlooks tendered by CACI and Leidos, and all three companies, along with other defense- and intelligence-focused federal IT peers, appear to be well aligned with the Trump administration’s emerging defense and national security priorities. BAH is also optimistic that federal IT acquisition reforms will be implemented during Trump 2.0, including a marketwide shift to more fixed-price and outcome-based structuring of IT engagements, which the firm claims it has been advising its federal clients to adopt for several years.
 
The company is working with the General Services Administration to develop innovative ways to transform federal procurement using digital technologies, which could be parlayed by BAH into a multitude of new awards in FY26 and FY27. BAH also intimated it has been preparing for outcome-focused contracting to become more mainstream in federal IT for several years, but this assertion will be brought into question if BAH’s Civil unit suffers a prolonged downturn beyond FY27. BAH expects ample opportunities will remain across the federal space for the foreseeable future to modernize legacy IT systems and integrate emerging technologies to digitally enhance agency missions.

 

TBR’s DOGE Federal IT Impact Series will include analysis of Accenture Federal Services, General Dynamics Technologies, CACI, IBM, CGI, Leidos, IFC International, Maximus, Booz Allen Hamilton and SAIC. Click here to download a preview of our federal IT research and receive upcoming series blogs in your inbox as soon as they’ve published.
 

Oracle Redefines Data Intelligence in Full-stack Approach

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Oracle pivots around data intelligence, owing to its full-stack approach

Oracle has long offered a modern analytics stack tailored to multiple personas and workloads, such as through the Oracle Analytics Cloud (OAC) and Autonomous Data Warehouse (ADW), coupled with the operational data — where the true value exists — in Oracle’s Fusion, NetSuite and Industry Applications. But the 2023 launch of Fusion Data Intelligence (FDI) marked a major shift in Oracle’s analytics strategy and early vision for data intelligence, where data is used not only for static reporting of one-and-done use cases but also for continual predictive insights made possible by AI.
 
As a reminder, Oracle delivers FDI as a single-SKU application, an approach not all peers take, so Fusion customers are connected to their data through the quarterly Fusion updates, potentially causing minimal disruption to the workflow, which is an important enabler of data intelligence. From a technical perspective, FDI also comes with prebuilt AI and machine learning (ML) models, data science capabilities, and even its own separate set of intelligent applications (e.g., Supply Chain Command Center) that are persona-specific, allowing customers to act on a particular use case without leaving FDI, which is now the fastest-growing application across the entire Oracle corporation.
 

Oracle Data Intelligence (Source: TBR)


 
Importantly though, effective data intelligence is about not only the application but also the underlying architecture and whether it can effectively support structured and unstructured data for complex analytics use cases. We all know Oracle Cloud Infrastructure (OCI) has become a critical component of Oracle’s business, and because of the infrastructure layer, Oracle has a top-down advantage that many other players cannot provide.
 
The 2024 launch of Intelligent Data Lake reaffirmed how Oracle wants to further bridge the gap between applications and infrastructure, with an architecture that integrates with ADW and OAC. Essentially, Intelligent Data Lake is a reworking of existing OCI capabilities, such as cataloging and integration, to create a single abstraction layer that, in true data lake fashion, allows customers to query data on object storage, with support for popular data format frameworks including Apache Iceberg.
 
Many peers have been moving more squarely into the data lake space to make it easier for customers to build AI applications on top of a single copy of data. But in the case of Oracle, Intelligent Data Lake serves as the glue between the infrastructure and applications. With Intelligent Data Lake, Oracle has essentially redelivered its analytics tools as part of the Data Intelligence Platform, offering another key layer that could make the case for best-of-breed customers to consolidate more of their data and business intelligence estates on Oracle.
 
Regarding those application components, customers can leverage FDI as a single product, but this extends to NetSuite, Oracle Health (Cerner) and Industry Applications. For instance, last year Oracle launched Energy & Water Data Intelligence, leveraging insights from Industry Applications like Oracle Utilities Customer Cloud Service. More notably, as Oracle pivots around data intelligence, the company is taking steps to help customers access non-Oracle data sources.
 
For instance, last year Oracle launched a native Salesforce integration with FDI so customers can combine their CRM and Fusion data within the lakehouse architecture. This means Oracle customers can access Salesforce data with FDI the same way they can with Fusion. It will be interesting to see if Oracle more aggressively expands the data ecosystem in the future, particularly within the back office, to deliver FDI’s value to those outside the Oracle SaaS base.

FDI aligns with partners’ digital transformation ambitions

One of the compelling things about Oracle’s full-stack approach to analytics, from infrastructure up to applications, is that it prevents Oracle from getting caught up in a traditional BI RFP and instead enables the company to sell Oracle Data Intelligence as part of a broader enterprise transformation, which aligns with global systems integrators’ (GSIs) business models. Today, most of GSIs’ Oracle business comes from the applications side, and doing a Fusion SaaS implementation (e.g., ERP, HCM [human capital management]) and then introducing FDI to break down integration barriers and ultimately make those Fusion apps more “intelligent” appears to be a common motion.
 
In some cases, FDI is also displacing different components of a build-your-own data strategy. For example, we recently heard a compelling example from Infosys, which modernized a customer’s analytics stack by migrating from Snowflake and Informatica to FDI, which was then integrated with external systems, including NetSuite. In a scenario like this, it is clear that having a lot of data in the Oracle ecosystem can influence a customer’s decision to consolidate on FDI, but it also speaks to the role Oracle plays on the infrastructure side, as FDI address not only the analytics pieces but also the underlying data tasks, including the data pipelines, and absorb system-level tasks like ETL (Extract, Transform, Load).
 
Oracle’s full-stack approach to analytics makes a compelling case for consolidation, helping partners create value by eliminating disparate integrations and unlocking ROI. This is particularly true for partners that are perhaps willing to abandon the typical tech-agnostic approach and recommend Oracle as the primary choice from a data and analytics perspective. If Oracle engages a broader external data ecosystem in the future, as discussed above, partners will need to make sure they look beyond the applications layer and leverage Oracle’s broad PaaS and IaaS capabilities for custom development use cases.

GenAI Reshapes IT Services Talent Strategy as Vendors Balance Innovation, Ecosystem Alignment and Economic Headwinds

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GenAI training becomes table stakes for IT services and consulting, but specialization remains selective

In the short-to-mid-term, TBR expects generative AI (GenAI)-specific training to become a standard part of an IT services or consulting professional’s basic tool kit, with specialized training around technology partners’ solutions or a company’s own IP and platforms reserved for those professionals dedicated to AI roles. While some may argue every role is an AI role, the near-term reality is that only a select few among the broader professional services talent base will need specialized training, and the associated budgets will decrease in the coming years.
 
In the long term, we expect vendors’ announcements about training their entire workforce will seem less relevant compared to what is on the horizon for GenAI. That change may take a bit longer, in part because training will affect IT services companies’ commercial models.
 
For example, Infosys’ three talent categories — traditional software engineers, digital specialists focused on digital transformation and ongoing support, and Power Programmers — allow the company to balance innovation and growth while calibrating its business and commercial models. The Power Programmers group consists of highly skilled professionals who are responsible for developing products and ensuring that the intellectual property they create and use meets the cost-saving requirements Infosys pitches to clients.
 
While the other two groups follow a traditional employee pyramid structure, the Power Programmers group is much leaner and resembles the business models that many vendors, including Infosys, may aspire to adopt in the future.

Developing a GenAI-ready, partner-aligned workforce allows vendors to demonstrate value as the market evolves toward SLMs, but accounting for new commercial models will force pyramid calibration

According to TBR’s 4Q24 AI and GenAI Market Landscape, “As TBR predicted in the first half of 2024, the trend around IT services companies and consultancies committing to training their professionals on GenAI platforms and solutions specific to their (preferred?) technology partners accelerated as the year went on. IT services companies and consultancies continued moving away from vendor-agnosticism.
 
Technology partners, most notably the hyperscalers, continued to see their IT services and consultancy partners as essential to convincing enterprises to adopt GenAI solutions, generating further demand for technology. And every professional services company TBR covers announced new training or some kind of benchmark achieved in training their talent on GenAI.”
 
Highlighted activities by vendors in TBR’s Spring 2025 Global Delivery Benchmark reflect the direction of the GenAI market, especially as buyers lean on their existing IT infrastructure and systems to ensure they capitalized on their data lakes to build industry- and/or function-specific small language model (SLMs), compelling IT services vendors to build their GenAI skills around tech partners.

  • Accenture, Microsoft and Avanade launched a Copilot practice in November 2024 that houses 5,000 professionals. Additionally, through its collaboration with Stanford University, Accenture launched an on-demand GenAI learning platform that curates AI content from Stanford Online.
  • In October Atos and Amazon Web Services (AWS) established a GenAI Innovation Studio in Pune, India, enabling both companies to collaborate with clients on industry-specific use cases. The studio will offer training and certification programs, hackathons, and AWS DeepRacer competitions, in addition to hosting technology events as the partners try to foster joint innovation.
  • In July HCLTech expanded its learning resources through a partnership with upGrad Enterprise to create a learning program around GenAI development. HCLTech will establish a Data Science and AI Academy of Excellence, providing upGrad’s education frameworks and resources alongside HCLTech’s industry and technology content. In May 2024 HCLTech worked with Google Cloud around HCLTech’s AI Force platform, bringing in Google Gemini’s AI and large language model (LLM) capabilities. Through its collaboration with SAP, HCLTech continues to enhance its positioning around AI technologies. In addition to leveraging the SAP Learning Platform and expanding its certifications, HCLTech opened an innovation lab for SAP Business AI in December. The lab, located in Munich, will provide SAP S/4HANA Cloud, RISE with SAP and SAP Business AI technology to guide clients’ AI adoption and improve business operations.
  • To support joint activities with AWS, IBM Consulting trained 10,000 people on AWS GenAI services through the end of 2024.
  • Wipro expanded its relationship with Google Cloud during 3Q24. The company will leverage Google Cloud’s Vertex AI and Gemini offerings, enabling its employees to help clients with their cloud migrations and GenAI adoption.

 

Vendor Headcount Growth, 4Q23 vs 4Q24 (Source: TBR)

Choppy market demand buys vendors time to adjust staffing pyramids and test new operating models to account for GenAI implications

Headcount growth improved across benchmarked vendors in 4Q24, which was a reversal from a trend that began 12 months ago. The expansion, however, was rather small, with average headcount increasing 0.4% year-to-year in 4Q24, largely due to Accenture adding over 55,000 net-new additions mainly through acquisitions, which skewed the overall direction.
 
Meanwhile, vendors are at the crossroads of adjusting staffing pyramids to account for long-term GenAI implications and operating in a stagnant market where any spend is oriented toward large transformational deals that require quality in service delivery, often achieved through reskilling and/or acquiring partner-certified staff.
 
Securing trust with legacy and large technology alliance relationships as well as investing in knowledge management frameworks are essential for vendors to protect their incumbent positions. Growing technology complexity is accelerating demand for data and AI security capabilities, compelling vendors to build skills that can enable them to operate in both legacy and new GenAI-enabled environments, further challenging their staffing decisions as the opportunity for robots protecting from other robots might seem enticing at first but carries a fair amount of risk in the long term.
 
In the short-to-mid-term, acquisitions and staff rebadging will likely remain the two main levers for any net-new staff additions as vendors focus on reskilling existing staff as they take a wait-and-see approach until macroeconomic conditions improve.
 
We expect one of two scenarios to occur in the next six months: First, vendors remain diligent and continue to calibrate and fine-tune their staffing pyramids, keeping overall headcount flat to declining with one-off strategic acquisitions and/or rebadging to provide a blip in sequential headcount expansion.
 
Alternatively, macroeconomic conditions improve, largely enabled by better-than-anticipated tariff deals paired with deregulations and lower corporate tax rates in the U.S., resulting in an accelerated rebound in discretionary spending. As a result, vendors race back to hire in bulk quickly, forgetting about their GenAI-fueled optimism and the need to adjust operating models to account for GenAI implications.
 
A bonus scenario: Demand for GenAI drives the need for specialized talent, especially as vendors see the opportunity to pursue custom model development. While this might seem counterintuitive to the promise that the tech will supplement coders, the trust in the technology is not there yet, creating an opening for vendors to hire and train at speed.

TBR’s Global Delivery Benchmark

TBR’s Global Delivery Benchmark is a semiannual research program providing efficiency comparisons, assessments and insight into global delivery strategies and investments across 14 leading IT services firms.
 
Vendor coverage for this research includes Accenture, Atos, Capgemini, Cognizant, Conduent, Dell Technologies Services, DXC Technology, HCLTech, Infosys, IBM, NTT DATA, Tata Consultancy Services (TCS), T-Systems and Wipro IT Services (Wipro ITS). Market segments covered include systems integrators (SIs) with support and maintenance, SIs, and India-centric vendors, while service lines covered are application outsourcing, IT outsourcing, business process outsourcing, and consulting and systems integration.
 
Download a free preview of TBR’s latest global delivery benchmark research: Subscribe to Insights Flight today!

DOGE Federal IT Vendor Impact Series: Leidos

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The Trump administration and its Department of Government Efficiency (DOGE) have generated massive upheaval across the board in federal operations, including in the federal IT segment. As of March 2025, thousands of contracts described by DOGE as “non-mission critical” have been canceled, including some across the federal IT and professional services landscape. TBR’s DOGE Federal IT Vendor Impact Series explores vendor-specific DOGE-related developments and impacts on earnings performance. Click here to receive upcoming series blogs in your inbox as soon as they’ve published.

 

Leidos suffered no DOGE-related material erosion to its sales, profitability or order book in 1Q25 and is holding to its FY25 outlook

By all accounts, Leidos was virtually unaffected by the Department of Government Efficiency (DOGE) in 1Q25. In its 1Q25 earnings release on May 6, Leidos announced that revenue rose 6.8% year-to-year, from $3.98 billion in 1Q24 to $4.25 billion in 1Q25. Additionally, margin performance remains robust: Gross margin was 17.8%, up from 15.9% in 4Q24; operating margin was 12.5%, up from 9.6% in 4Q24; and adjusted EBITDA margin (non-GAAP margin excluding taxes, interest, depreciation and amortization) was 14.2%, up from 11.6% in 4Q24. Backlog also hit an all-time high, rising 6.3% sequentially to $46.3 billion in 1Q25.
 
Leidos is standing by the fiscal year 2025 (FY25) outlook it tendered at the end of FY24 and still expects FY25 sales of between $16.9 billion and $17.3 billion, implying growth of between 1.4% and 3.8% over FY24 sales of $16.7 billion. The company is calling for a FY25 non-GAAP EBITDA margin in the mid- to upper-12% range, implying non-GAAP margin will most likely decrease from the FY24 record 12.9%. Leidos reaffirmed all other aspects of its FY25 guidance in 1Q25, underscoring the company’s confidence that it will experience minimal disruption from DOGE to its book of business on profit-and-loss (P&L) statement in FY25.

Leidos is keen to distinguish itself from consulting-focused peers

During Leidos’ 1Q25 earnings discussion, CEO Tom Bell emphasized the company’s chief differentiators while setting itself apart from its advisory-led federal systems integrators (FSIs). Bell opened the call by saying, “This administration’s clear preference [is] to work with firms that solve problems and get things done, not consultants that study problems and publish reports.” He also noted that DOGE’s impact on Leidos’ 1Q25 top line was essentially negligible, at only 1% of 1Q25 revenue, or roughly $40 million — a figure that essentially aligns with what TBR has observed on GX2’s DOGE-Terminated Contracts Tracker, which tracks DOGE-based developments in federal contracting, specifically contract terminations or drawdowns.
 
According to the GX2 website, Leidos has had a total of $56.5 million in contracts terminated by DOGE as of the publishing of this blog. The General Services Administration (GSA) continues to review the contracts held by Leidos and nine other companies* the Trump administration instructed DOGE to initially target in its effort to cut $65 billion in consulting fees the federal government is set to pay in federal fiscal year 2025 (FFY2025) and future years.
 
Bell also commented, “One of the things that we’ve taken a little bit of issue with is the fact that while we’ve been lumped into a consulting review, we’ve never used those words back the GSA. Less than 1% of our revenue could generously be considered consulting revenue.” Leidos’ strong 1Q25 results and willingness to reaffirm its full-year guidance after only one quarter — albeit a very turbulent one for many of Leidos’ competitors — support the notion that Leidos’ portfolio and book of business should remain relatively insulated from major DOGE-related disruptions in FY25.
 
Eleven ongoing contracts in Leidos’ order book were cancelled, the largest being a $25 million program with the Department of Housing and Urban Development for energy and water benchmarking services. Leidos also had five awards worth a total of $31.6 million with the Department of Health and Human Services terminated by DOGE, the largest being a $12 million award to develop models for cancer drug development while the remainder appeared to be mostly research focused. Leidos lost less than $2 million worth of engagements with the Department of Defense for service, mapping, integration and transport services on what appeared to be the $7.7 billion NGEN (Next Generation Enterprise Network) program with the U.S. Navy.
 
In contrast to Leidos’ award terminations, Accenture Federal Services has had over $193 million in cancellations, Deloitte Federal lost over $473 million worth of contracts and IBM has had over $40 million in awards sacked by DOGE.

Leidos’ go-to-market messaging in FY25 will underscore the tight alignment of its portfolio with DOGE’s agenda and the Trump administration’s IT priorities

In FY25 Leidos will tout its mission-critical solutions to enhance outcomes quickly, cost-effectively and at scale for federal agencies. Leidos will accelerate efforts to draw closer to its federal clients, emphasizing how they can more effectively utilize the company’s delivery scale and depth of mission expertise to comply with DOGE’s mandates, the overarching IT objectives of the Trump administration and the enduring need to modernize federal technology infrastructures.
 
Leidos is also very well positioned to continue capitalizing on accelerating demand for faster, more efficient IT-enabled healthcare services for veterans. Sales in the company’s Health & Civil unit rose 8% year-to-year and the segment’s non-GAAP operating income margin was 23.6% in 1Q25, owing to strong project volumes on managed health services contracts. Leidos also expects to win two large-scale, multibillion-dollar health IT contracts over the next one to two years: a follow-on award to the MHS Genesis electronic health record engagement on which Leidos recently achieved 100% deployment, and a subsequent five-year, $1 billion award to the Reserve Health Readiness program to provide commercial health services to all U.S. military reserves (set to conclude in 2026).
 
Finally, Leidos’ executives indicated during the earnings call that the Trump administration and DOGE became much more accessible to the federal IT contracting community during 1Q25 and have indicated a strong willingness to work with the industry in improving operating efficiencies across the federal government. Bell noted, “I’ve sought out and secured more meetings with cabinet members and key administration executives in the last month than I was able to secure during the whole of the last administration. And we’re seeing significant receptivity in those meetings to big ideas we are bringing forward.”
 
Some of those “big ideas” include the Golden Dome missile defense shield (a program with a potential worth of tens of billions of dollars, and that will draw fierce competition from Booz Allen Hamilton) and an upgrade to domestic air traffic systems. Leidos also believes its suite of defense solutions and R&D capabilities is well aligned to the FFY2026 defense budget, which could top $1 trillion.

 

TBR’s DOGE Federal IT Impact Series will include analysis of Accenture Federal Services, General Dynamics Technologies, CACI, IBM, CGI, Leidos, IFC International, Maximus, Booz Allen Hamilton and SAIC. Click here to download a preview of our federal IT research and receive upcoming series blogs in your inbox as soon as they’ve published.

 

DOGE Federal IT Vendor Impact Series: CGI Federal

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The Trump administration and its Department of Government Efficiency (DOGE) have generated massive upheaval across the board in federal operations, including in the federal IT segment. As of March 2025, thousands of contracts described by DOGE as “non-mission critical” have been canceled, including some across the federal IT and professional services landscape. TBR’s DOGE Federal IT Vendor Impact Series explores vendor-specific DOGE-related developments and impacts on earnings performance. Click here to receive upcoming series blogs in your inbox as soon as they’ve published.

 

While DOGE had no material impact on CGI Federal’s top-line growth in 1Q25, bookings growth was likely impeded by its actions

CGI corporate tendered its 1Q25 earnings on April 30 with estimated* quarterly revenue of $401 million for CGI Federal (the company’s U.S. Federal operations), representing 8.9% year-to-year growth.
 
A strong inorganic tailwind from the company’s 3Q24 strategic acquisition of Aeyon, the largest peer purchase in company history, continues to bolster CGI Federal’s top-line growth. We estimate Aeyon will add between $140 million and $150 million in inorganic revenue (on a full-year basis) for CGI Federal once the acquisition is fully integrated from a revenue standpoint. The company contributed roughly $40 million to CGI Federal’s top line in 1Q25. The integration period, which began in 3Q24, is set to end in 2Q25.
 
While top-line growth remained robust, CGI Federal’s bookings dipped below CA$300 million for the first time since 1Q21, falling to CA$231 million ($161 million USD, est.) in 1Q25 from CA$357 million ($255 million USD, est.) in 4Q24. While seasonal contraction in bookings is typical in CGI Federal’s order book from the fourth calendar quarter of one year to the first calendar quarter of the next, the decline observed in 1Q25 may be due to DOGE’s actions in the federal IT market. CGI’s executives indicated during the company’s 1Q25 earnings discussion that since the November election and January administrative transition, federal agencies have preferred smaller-scale “bridge” contracts rather than multiyear renewals to keep current work ongoing until there is greater budget clarity in federal IT procurement.
 
Corporate level days sales outstanding (DSO) was down to 34.28 in 1Q25 from 35.12 in 4Q24. DSO in 1Q25 was also the lowest receivables collection time TBR has observed since CGI posted DSO of 33.44 in 1Q21.  While company executives declined to provide a specific DSO figure for CGI Federal, they noted that neither invoice approvals nor payments from federal market clients were taking longer than usual to obtain. CGI corporate also placed greater emphasis on improving receivables collection in FY25 (which commenced in calendar 4Q24), particularly in its U.S. federal operations as a hedge against any post-election turbulence in the federal budget process.

Strategic M&A in 2024 buffered top-line growth and better aligned CGI Federal’s portfolio with DOGE’s efficiency agenda

Acquiring Aeyon enhanced CGI Federal’s digital modernization capabilities and provided the company greater access to civilian, space and homeland security agencies. Aeyon was an aggressive acquisition that enhanced CGI Federal’s portfolio and delivery scale in IT modernization at the time of the purchase and has positioned CGI Federal strongly to capitalize on DOGE’s goal to drive greater efficiencies in federal operations by leveraging AI, analytics, automation, big data and cloud technologies, all capabilities expanded by the Aeyon purchase.
 
Aeyon’s civilian clients include the Federal Aviation Administration (FAA), which awarded CGI Federal a contract in April 2025 worth up to $186.4 million to migrate the FAA’s Notice to Airmen (NOTAM) system to a cloud-based environment. Obsolete and antiquated legacy hardware and software in the NOTAM system have been blamed for numerous air traffic stoppages that have disrupted thousands of flights and cost airlines millions since 2023.
 
Additionally, Aeyon expanded CGI Federal’s footprint in the Department of Defense (DOD), which could bode particularly well for CGI Federal as the Trump administration indicated in early April plans to submit a FFY26 (federal fiscal year 2026) defense budget request that could top $1 trillion for the first time in history, up from $895 billion in FFY25 and $841 billion in FFY24. CGI Federal does not build weapons platforms or munitions, but it offers robust proprietary solutions such as Sunflower (cloud-based asset management) and Momentum (financial management) that have relevance for DOD agencies and services branches looking to enhance fiscal and supply chain management, especially to comply with DOGE-related mandates. CGI Federal also provides defense agencies cybersecurity solutions.
 
Lastly, acquiring Aeyon expanded CGI Federal’s presence with NASA and other space-related areas in the federal market, in which the Trump administration plans significant budget increases, primarily to support global defense and intelligence operations but also to increase the resilience of IT systems used by federal law enforcement agencies.

CGI Federal expects greater emphasis on outcome-based contracting during Trump 2.0

CGI Federal generates over 50% of its revenue from outcome-focused engagements, typically contracts structured as fixed-price awards. Federal IT contractors can expect a general shift from cost-plus to fixed-price arrangements as agencies adopt a more outcome-focused mindset regarding new IT outlays. When the federal IT procurement environment begins focusing more on outcome-based contracting, it will shift more risk of cost-overruns or delivery delays to the vendors — a potentially margin-erosive scenario for federal system integrators (FSIs) that fail to maintain strong program execution.
 
CGI Federal is confident it can adapt to outcome-focused contracting in federal IT but is uncertain how quickly the transition can be completed. CGI Federal has been a perennial margin leader in TBR’s Federal IT Services Benchmark due to its traction with its ever-expanding suite of homespun intellectual property (IP)-based offerings like Sunflower and Momentum, and demand for these offerings will at least endure, but likely increase, under DOGE.

CGI Federal is on DOGE’s federal consultancy ‘hit list’ but may fare better than other advisory-led FSIs

The General Service Administration (GSA) continues to review contracts held by CGI Federal and nine other companies** the Trump administration instructed DOGE to initially target in an effort to cut $65 billion in consulting fees the federal government is set to pay in FFY25 and future years. According to GX2’s DOGE-Terminated Contracts Tracker, which tracks developments in federal contracting, CGI Federal has had a total of $13.4 million in contracts terminated by DOGE as of the publishing of this blog. For comparison, Accenture Federal Services has had over $193 million in cancellations, Deloitte Federal lost over $473 million worth of contracts, and IBM has had over $40 million in awards canceled by DOGE.
 
Only five total awards in CGI Federal’s book-of-business are listed as cancelled on the GX2 website, the largest termination being a $6 million contract for application development services for the Federal Communications Commission.  Other cancellations, albeit small in scale and total value, appear to have hit CGI Federal in its asset and financial management wheelhouse. These contracts include a $4.6 million cancelled deal for digital asset management solutions with the GSA, a $2 million contract to operate a procurement platform for the Department of Justice, an award worth $785,000 for asset management services with the Department of Transportation, and a $66,000 contract for property management software with the Federal Mediation and Conciliation Service.
 
CGI Federal claims it only generates 2% of its sales from “discrete consulting services,” which TBR assumes is a reference to the type of management or strategic consulting services most vulnerable to DOGE. The $13.4 million in DOGE-related cancellations represents less than 1% of CGI Federal’s trailing 12-month revenue of $1.55 billion (as of 1Q25).
 
*CGI corporate reports its fiscal data, including business line revenue, in Canadian dollars (CAD). TBR estimates fiscal information for CGI corporate and CGI Federal in U.S. dollars by multiplying the reported quarterly data in CAD by the average exchange rate for the quarter as provided by www.x-rates.com (0.696539 in 1Q25). CGI Federal reported sales of CA$575.5 million in 1Q25, or $401 million U.S. dollars (USD).

**Accenture Federal Services, Booz Allen Hamilton, Deloitte Consulting, General Dynamics IT, Guidehouse, HII Mission Technologies, IBM, Leidos, SAIC

 

TBR’s DOGE Federal IT Impact Series will include analysis of Accenture Federal Services, General Dynamics Technologies, CACI, IBM, CGI, Leidos, IFC International, Maximus, Booz Allen Hamilton and SAIC. Click here to download a preview of our federal IT research and receive upcoming series blogs in your inbox as soon as they’ve published.