Predictions for IT Outsourcing in 2010?
TPI 4Q09 report indicates recovery in IT Outsourcing market and signals a growth in confidence in decision making withing the business sector predicting an increase in the number of new initiatives and growth in demand for outsourcing services in 2010.
While, the National Outsourcing Association argues that business confidence is still fragile and companies still reluctant to engage in new outsourcing relationships and will be more focusing rationalizing existing relationships.
So what we will see in 2010: strong demand for IT Outsourcing with mega-deals signed or caution and delays in decision-making? And what will be the role of Cloud Computing?
Answers (6)
Amit G.
Business Strategist, InnoVentor and a part of team called God's Children
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Sergey,
I suppose Cloud computing is still some time to go..The last years investments have yet not been recovered completely. Most companies are blocking their calendars based on the Q2 2010 predictions of their company's sales. And believe many of them would be forming their own IT teams rather than source from outside.
In Outsourcing ' Near-shoring' will pick up first, then far-shoring...
Best Regards
Mike C.
Delivering Business Solutions through Smart Technology Application
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Sergey,
While I believe that outsourcing will continue, I think the model will also continue to change from "lump sum" outsourcing to "specialized" or "process-oriented" outsourcing. The "mega-deals" seem to be too expensive, too disruptive and unsustainable.
I see cloud computing as a delivery component of the mentioned "specialized" offerings.
Jason A.
Director, Business Development at TEKsystems Global Services
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The great thing about outsourcing is it has so many faces. Over the last 10 years every company was trying to land new logos and get the mega-deal but now the target market is the mid-size companies that had to have a reduction in force over the last couple years. These companies are still in a fragile setting and have a lot of work that still needs to get done but are running so lean that they can not get to all of the business demands while keeping the Lights on Doors Open.
They are not looking for full outsourcing but for a combined effort where they can get the advantages of a variable capacity model whether it be onsite, offsite, nearshore or offshore. They need outsourcing companies to not bring in a cookie cutter approach but to work with them to create a individual solution for each customer or need.
Of course there will still be a need for the mega-deal when companies have a need that falls outside of their core-compentency of IT.
Cloud Computing now is what CRM/ERP was in the early 2000's, the cutting edge companies are making the investment to leverage a different way to utilize technology, while a majority of companies are eith dipping their toes in the water to see what it can do for them, and the others are definately in the wait and see mentality.
I do believe the IT outsourcing market is growing again throgh 2010 but a slow roll from a entry back into it with Staff Augmentation, slowly moving to a managed service model, and in some cases leveraging a full outsource model.
Got to agree with Jason - seeing the same type of things, in signed deals, hiring activity for large BPO/ITO firma (spotty and slow moving) and other discussions here onLI and elsewhere... similar across other functional verticals I think.
If our business is any indicator the answer is that more companies will look to out source various IT work. Too many IT organization are now over loaded with tasks that can be done using technology and at a fraction of what a FTE costs. Also, this outsourcing allows IT professionals to concentrate on what are the more critical challenges and fire drills.
Becky S. suggests this expert on this topic:
I met Jim many years ago and have followed his career to this org, his latest, which is an outsourcing firm. When you speak with him he will give you information not infomercials.
