As with any industry, IT outsourcing continues to evolve, especially with the coming and breaking into untapped markets of new service providers and seasoned service providers today. But with a consistently expanding market comes a growing number of complexities in sourcing, including uncertainties on the continuity of projects for IT service providers.
The good news, though, is that businesses can trust that these changes being introduced would improve delivery of IT outsourcing services.
While maintaining excellence in offered skills and services remains a priority, IT outsourcing will move towards standardization of processes and optimization of cloud-based platforms, as well as data-driven sourcing to keep up with the growing demands of the industry. Rest assured that companies may continue to make the most of shared key business operations, which have been vital in managing costs and enhancing productivity
Sourcing IT in 2015 and Beyond
Here are some important points that businesses who outsource should consider today and moving forward:
1. Clients will make decisions based on data.
Data sourcing will be the core of every business decision, as companies will be able to manage their projects through data measurement and analysis. This is beneficial in such a way that clients’ expectations will be managed accordingly, and enterprises can make calculated decisions based on actual figures and insights.
2. Geopolitical factors will be included in proposals.
IT outsourcing providers will now include risk factors such as economical slumps, political conditions, and weather changes to be included in the plans and resolutions they will propose to clients. The purpose of this is to neutralize the risks that the client will undertake upon reaching an agreement with them.
3. Leaders will be more involved in IT purchases.
The repercussions of one misstep in purchase decisions can be a big loss to the company. And because of this, business leaders and IT experts are expected to get more involved in IT product purchases, since this is very crucial to doing business. Companies should start looking into savings in IT costs based on logical analysis of the purchases to the business based on data, and in choosing excellent service suited to the business needs.
4. Internal IT teams must adapt to the IaaS and PaaS infrastructure.
Most enterprises are making the move to have their general applications hosted in a public cloud through the SaaS model. Ideally, this move reduces IT support costs, as the companies outsource the maintenance of hardware and software maintenance and support. However, bigger companies must be able to do their own application analysis and testing to avoid escalation of costs due to system breakdowns.
5. Request for proposal with bidding process will be scrapped.
RFP through bidding process will completely be eliminated, as they are considered ineffective, time-consuming, and out of place in the fast-evolving IT environment. So, instead, businesses are encouraged to go for instant analysis of business requirements that generates a proposal fitted to speed up the purchasing processes.
6. Clients can expect mobile support for outsourcing providers.
The industry has noted the adoption of mobile usage within enterprises and is working on providing full IT support services for mobile end users.
7. Increase in compliance, legal, and governance obligations for the client
Bundled services will no longer be practiced, as clients are expected to look for different service providers that suitably meet the requirements of each project. The industry will boost up its number of IT outsourcing providers to provide more options for clients.
SaaS providers will be more prominent in the management of integration process, which includes improving efficiencies and productivity. But, as the industry gears for an application-focused approach, companies are expected to comply to stricter requirements, legal, and governance obligations.
8. Contract renegotiation
Since the industry is pushing for a multi-sourcing cloud-based model, service providers and their clients who have already forged business agreements last year will be renegotiating to accommodate the new SLAs.
9. Performance over-pricing
Pricing and services will be standardized. Specialization is key. IT service providers need to offer something different from the others that the clients may need. They will compete based on specialization and unique offerings, instead of pricing. This will help in scaling down costs and in increasing efficiency and productivity level.
10. Outcome-based pricing instead of upfront pricing strategies
IT service providers will be compensated for separate services the clients require based on their performance. Client-Provider relationship is making a shift with the latter being more engaged and responsive to the needs of their clients, and flexible with the pricing options.
Expense model to operational expense model. Clients will free up a significant chunk of money tied in capital infrastructure.
A Necessary Change
Businesses have a lot to look forward to for the last few months of 2015 and beyond. Workload will be distributed more evenly using the SaaS infrastructure, and data sourcing will help enterprises to make calculated business decisions that will potentially reduce costs and supplier risks, and boost quality and efficiency.
Traditional RFP is out, and there’s no other way to go but to adapt using the cloud. Companies who choose to steer clear of it will eventually have to join the wagon. Specialized requirements will be met, and IT providers will be able to respond to client demands accordingly. It’s a win-win for both sides.