IT Outsourcing (ITO)
Outsourcing is considered to be highly mature in the IT function and today IT Outsourcing (ITO) represents a global multi-billion dollar market, one that continues to evolve and grow. Indeed since ITO’s emergence in the early 1980’s, it has become the defacto standard approach for firms to Source IT services, albeit the extent to which IT services are Outsourced and how they are Outsourced can vary significantly from organisation to organisation.
The way in which IT is Outsourced has changed dramatically over time reflecting advances in technology and telecoms, the emergence of new technologies, and the development of new commercial and operating models.eg. offshore delivery centres, cloud-computing, data connectivity, Software-as-a-Service (SaaS).
IT Outsourcing providers are continuing to grow and invest in new skills, new competencies, and new technologies. The growth in Cloud deployment coupled with emergence of technology such as the Internet of Things (IoT), Data Analytics, and Blockchain will mean that companies will increasingly look to IT Outsourcing providers to provide the necessary skills and provide scalable solutions at pace. As the shortage in IT skills in the market intensifies more organisations will look to outsource activities previously retained to leverage the outsourcing providers resource pools.
Historically, cost was the biggest driver in IT Outsourcing, whereas today, while it remains a key element, the focus is increasingly on the value delivered with an even greater focus on productivity, quality, speed, and security.
Increasingly Outsourcing agreements are becoming more output/outcome focused, transparent and flexible at both a macro and micro-level, and often with the provider putting more ‘skin in the game’. Application Development work alone may now be provided on the basis of several different commercial and delivery models depending on what is right for any one specific programme.
There continues to be a challenge to manage how to integrate an increasingly multi-sourced IT environment, with service tower models. This is being further complicated by SaaS provision, convergence technology, changes in workplace practices and technologies, and the exploding use of niche applications in the business beyond the enterprise platforms. Service Integration (or SIAM) has been increasingly critical to ensure the effective delivery of services across the enterprise.
The IT Outsourcing role is set to continue to develop and expand in the IT function. Let us help you take advantage of the benefits and get the most out of your IT Outsourcing arrangements. Talk to us.