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Ten predictions for IT outsourcing in 2016

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Drive Your Business Ten Predictions for IT Outsourcing in 2016
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Page 1: Ten predictions for IT outsourcing in 2016

Drive Your Business

Ten Predictionsfor IT Outsourcing in 2016

Page 2: Ten predictions for IT outsourcing in 2016

2 ©2015 WGroup. ThinkWGroup.com

IntroductionThe IT outsourcing industry experienced several technical developments during 2015, including

greater integration of in-house services, more hybrid off-shoring, and lower cost models for

consultants. Several technologies related

to outsourcing will continue to converge in

2016, including cloud computing, virtualization

applications, and utilities. Cloud platforms

will begin to look the same as this industry

matures, providing the advantages that typically

accompany standardization, including greater

efficiency and reduction in support costs.

Even customers with existing outsourcing

arrangements will benefit from this trend,

especially those with complex IT environments.

Platform standardization will therefore result

in a new operating model for IT outsourcing.

Additional changes will include greater governance regulation and smaller contracts. These

changes will drive IT outsourcing into next year, resulting in these 10 predictions for 2016:

• Increased digitization

• Higher priority on outcomes

• Greater use of multiple

vendors

• Cloud platforms evolve

• Outsourcing shifts from IT to

business

• More cloud workers

• More contract negotiations

• RFP declines

• Greater awareness of supplier

risk

• More data-driven sourcing

decisions

Page 3: Ten predictions for IT outsourcing in 2016

3 ©2015 WGroup. ThinkWGroup.com

1. Increased digitizationThe development of digital business, commonly known as the Internet of things, is

causing many markets to change rapidly, including IT outsourcing. This market is highly

dependent upon capitalizing on the new opportunities that result from increasingly

blurred lines between digital and physical “things,” including organizations, people, and

devices. Industry analysts estimate that 20 to 30 billion entities will be connected to the

Internet by 2020. All of these entities will be communicating with each other in multiple

ways, including transactions and associations. The flow of information will continue

to increase as this number grows, providing new ways of conducting business.

Traditional leaders in IT outsourcing will start to lose their

market advantage to smaller competitors that may have

been virtually unknown a few years ago. This trend will

require market leaders to use their brand-name recognition

to develop other revenue streams that may not be directly

related to their core business. For example, a company

most known for its Internet search engine is currently

developing a driverless car. A leading eyeglass manufacturer

is beginning to mass-produce E glasses, and a shoe

manufacturer is selling personal electronic devices.

The process of global digitalization is just beginning, but it will accelerate as products

and services change in response. Digital businesses must therefore remain agile and

respond quickly to changes in market demand and circumstances to take full advantage

of digitalization. The analog world will remain instrumental for providing data that

developers can analyze when creating digital products and services. The IT department

in these digital businesses will play a key role in introducing these new products and

services in addition to retaining its traditional support role in the back office. They will

also need to deeply engage with customers to remain agile and innovative.

A pace-layered approach to IT outsourcing will become the recommended strategy

for addressing the challenges of digital businesses. This model views IT functions

as running at different speeds, such that an organization treats each function in a

sourcing strategy according to its operating speed. The implementation of a pace-

layered approach typically involves creating an IT department with two modes.

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4 ©2015 WGroup. ThinkWGroup.com

The first mode focuses on the traditional aspects of IT that maintain the

organization’s infrastructure, including data centers, enterprise resource

planning (ERP) systems, and telecommunication networks. The other IT mode

in a pace-layered approach pursues business initiatives, such as marketing and

product development, at the rapid pace that digital technology allows.

The use of collaboration tools also will increase in 2016 as businesses become more globalized.

The transition of work environments from the traditional office setting to one that allows more

collaboration will require employees to work from a greater number

of locations. For example, video conferencing is a highly

effective method of reducing the significance of physical

distance without compromising the experience of a face-

to-face meeting. Visual communications will therefore

become one of the most important aspects of team collaboration.

Globalization also requires an organization to function across multiple political borders, cultures,

and time zones. This aspect of globalization means that organizations must accommodate

individual preferences for collaborative efforts to succeed, requiring the use of digital

technology to share e-mail, social media, telephone, and video content. The use of these

tools to break down communication barriers in business will continue to increase in 2016.

Collaborative technology must truly integrate different organizations, rather than merely allowing

some degree of interoperability. Video conferencing will alter business models and become

the preferred method of communication, instead of e-mail, for many organizations in 2016.

The integration of collaborative technology in business applications, communication systems

and workflows will drive the adoption of video conferencing. Space-specific technologies,

including improved SDKs, standards-based videos, and WebRTC, will facilitate the increased

use of video conferencing. Solution-specific to a particular industry will increase the value

of real conferencing, especially in financial services, government, healthcare, and retail.

More companies will shift their work environment from a traditional row of cubicles to a

more open workspace and allow employees a more flexible work schedule. This will result

in the use of digital white-boarding, lighting adjustments, and noise cancellation that will

improve productivity in this new work environment. The combination of these innovations

and a greater need for collaboration will render traditional workspace obsolete.

As businesses become more globalized, the use of collboration tools will increase accordingly.

Page 5: Ten predictions for IT outsourcing in 2016

5 ©2015 WGroup. ThinkWGroup.com

These changes will require workers to

connect to the Internet at any time and from

any location. The trend toward extreme

mobility will result in the number of smart

phones greatly exceeding those of PCs.

Some estimates place the number of

smart phones in use by 2018 at 2.4 billion,

with a ratio of six smart phones

for every PC. The use of

contextual collaboration

will increase in 2016

due to improvements

in communication

between mobile

devices.

This period of

“super mobility” will be

characterized by mobile

devices that provide the tools

employees need to be productive

when they’re not in a physical office, including

voice communication, video conferencing and

content collaboration. These requirements

will result in mobile devices with near field

communications (NFC), Wi-Di, Ultrasonic

and other new wireless technologies.

The small and medium-sized businesses

(SMB) market will adopt collaborative

solutions most quickly due to their particular

need for mobility. SMBs are rapidly migrating

to cloud-based services that provide

content sharing, video conferencing, and

VoIP. A regulatory mandate requires voice

services to be removed from the public

switched telephone network (PSTN) in the

United States within the next five years.

Once this occurs, the need for cloud-based

services will increase dramatically.

Organizations will make greater use of

browser-based collaboration solutions

for simple communication

in 2016. Technologies

like WebRTC will

allow users to

communicate

within their

standard

workflow, thus

simplifying the

collaborative

process. These

technologies

will see greater use

among SMBs, although video

conferencing with advanced functionality

will still require an enterprise solution.

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6 ©2015 WGroup. ThinkWGroup.com

IT outsourcing customers will continue to place higher priority on solutions that align compensation

with their desired outcome. These solutions should make greater use of cloud-based technologies

that allow outsourcing providers to differentiate themselves from their competition. The trend

toward outcome-based pricing will change the way in which providers engage their customers.

IT sourcing will increase in 2016 due to IT’s assumption

of a greater role in an organization’s core business. The

fastest growth will be in smaller IT providers that can

respond quickly to clients with specialized requirements or

clients with requirements that change frequently. Providers

that can exploit the expansion of cloud computing and

mobile devices to scale solutions quickly will have an

advantage in the next year. By comparison, the value

of very large vendors will increase slowly if at all.

The executives who operate modern businesses

are becoming increasingly aware of technology,

which places greater demands on CIOs. This trend

will require CIOs to become more innovative in

integrating cloud-based technologies with existing

systems. They will act almost like technology brokers by advising the organization’s

business units on ways to integrate new technologies. The members of these units will

tend to source technology themselves if their CIO is unable to meet their needs. This

strategy is becoming a faster solution than waiting for IT requests to be fulfilled internally,

due to the growing availability of mobile devices and cloud-computing platforms.

Digitalization is providing CIOs and other sourcing leaders with an opportunity to

drive growth, although it also poses challenges. It allows non-technical personnel

to source technical solutions without formal control by the organization’s IT

department, a phenomenon commonly known as a shadow IT. However, this trend

often results in a loss of organization and integration of IT resources.

2. Higher priority on outcomes

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7 ©2015 WGroup. ThinkWGroup.com

For example, if a CEO fails to adequately implement cloud storage that would allow employees to

access data from mobile devices, the employees will probably subscribe to a third-party service,

such as Google Drive or Dropbox. This results in the storage of proprietary information in a domain

that the business doesn’t control, which could harm the business if that information is disclosed.

IT outsourcing is in the process of transitioning to an adaptive model, meaning that its capabilities

must respond quickly to changes in client requirements. This trend requires client organizations

to group their needed resources into distinct layers according to their expected business

outcomes. This strategy needs to be highly flexible, since internal

systems must be highly integrated with third-party applications. It also

requires greater collaboration with the outsourcing stakeholders.

The current transformation of the IT landscape will require many

changes from vendors over the next five years, especially market

leaders that wish to remain competitive. However, most vendors

don’t yet understand the speed of this transition. Industry analysts

are generally in close agreement that these changes will be highly

disadvantageous for outsourcing vendors that fail to implement an

outcome-based pricing model. The strength of these opinions is

particularly significant given that these analysts receive much of their business from vendors

seeking advice on market opportunities, technological trends, and user requirements in the

outsourcing industry. These unusually blunt assessments are a strong indication that the

changes in outsourcing are so profound that vendors can no longer safely ignore them.

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8 ©2015 WGroup. ThinkWGroup.com

Multi-sourcing will continue to dominate the outsourcing market in 2016.

The trend in IT outsourcing toward smaller contracts and multiple vendors is well underway.

The number of outsourcers per customer will continue to increase dramatically in 2016 due

to the growing popularity of cloud services, especially software as a service (SaaS). This will

result in a corresponding increase in governance requirements, due to the commoditization of

IT infrastructure and increasing focus on applications. The management of service providers

will begin to resemble the current management of software, including the elimination of

unused and duplicate services. Integration between clients and vendors will be critical in this

outsourcing model and often will be the deciding factor in an organization’s choice of vendors.

Multi-sourcing will continue to dominate the outsourcing market in 2016 and the market will be

increasingly competitive, especially for government vendors. Government spending on outsourcing

is greater than that in the private sector, and that disparity should increase further. The number

of outsourcing contracts in the United States is at an all-time high

and will continue to grow during the next year. The most

mature outsourcing customers are more likely to adopt

a multi-vendor strategy, although less mature customers

also are moving toward a multi-sourcing model.

A number of factors affect multi-sourcing in both global and

domestic markets, including the business pace, culture, and specific sourcing model.

Multinational organizations increasingly use a portfolio approach that combines outsourcers

and consultants with an organization’s own IT resources. The growth in multi-sourcing means

that service integration is becoming an essential requirement for outsourcing customers.

Multi-sourcing is generally increasing on a global scale, although the use of multi-sourcing varies

considerably by individual market. For example, both the total contract value of IT outsourcing and

the value of business process outsourcing (BPO) steadily increased in the United States during

2015. However, global outsourcing markets also have recently experienced significant decreases

in the numbers of contracts and their total values. The global market increased significantly in the

first half of 2014, which was followed by an equally dramatic decline in the third quarter of that year.

3. Greater use of multiple vendors

Page 9: Ten predictions for IT outsourcing in 2016

9 ©2015 WGroup. ThinkWGroup.com

Organizations that had signed multibillion-dollar deals in consecutive quarters were unable

to sustain this period of growth, resulting in a pause in the market. Nevertheless, industry

experts expect double digit growth in outsourcing for the entire year of 2015, which is

well ahead of the pace set in the previous year. This trend should continue for at least the

first two quarters of 2016, due to a significant accumulation of transaction activity.

Outsourcing in the public sector grew particularly rapidly in 2015. Government IT spending was

generally on par with spending in the private sector just five years ago, but now accounts for almost

2/3 of the total value of all contracts and BPO value. The total value of contracts in the public

sector is around $40 billion, which represents a 15 percent increase from last year. The significant

majority of this activity occurred in North America, primarily due to an increase in Department

of Defense spending. Other agencies that sought to adopt shared services and consolidate

their data centers also accounted for a significant portion of this increase in contract value.

These factors indicate that smaller deals with multiple vendors should continue to dominate IT

outsourcing. Total contracts and BPO values probably won’t increase in the long term, although

competition on price and value should remain fierce. Process enhancements and technological

innovations are likely to reduce the cost of outsourcing services. These technologies and the increasing

automation of labor will create a shift in material cost that providers need to leverage, especially in

mature markets. They can then bring these solutions into newer markets to attract new buyers.

Page 10: Ten predictions for IT outsourcing in 2016

10 ©2015 WGroup. ThinkWGroup.com

Cloud platforms will begin to mature in 2016, after the rapid growth of many different technologies.

Enterprise-level organizations will begin taking more pragmatic approach toward maintaining

software solutions and infrastructure in the cloud by developing internal expertise in these issues.

Cloud-based solutions to storage and processing will continue to be the preferred choice within

specific functions, although more general solutions are more likely to use other approaches.

For example, hybrid sourcing is becoming a more common method for providing IT

services. This model combines both insourced and outsourced services as an alternative

to pure outsourcing. Hybrid sourcing is particularly popular with organizations in

the financial and public media sectors. Its primary advantage is its ability to support

growing organizations as their skills in outsourcing governance mature.

Additional changes in cloud computing include optimizing new applications

for a cloud-based infrastructure. Outsourcing strategies for these applications

will progress more quickly since early adopters will have greater influence in

establishing policies that will exempt them from governance processes.

Another option for managing outsourcing solutions is to port

existing applications to a cloud platform. This approach requires

each application to be analyzed and tested individually to

ensure that it can maintain the required service level agreement

(SLA). Individual application testing is necessary to use the

infrastructure efficiently, thus avoiding terrible costs that could

cause the business case for this strategy to fail. Porting existing

applications will be particularly challenging in complex IT

environments with a heterogeneous application portfolio.

Amazon Web Services (AWS) is a good example of a company that can expect to

increase its enterprise layer significantly in 2016. However, these organizations will

need to address their well-founded concerns regarding business continuity and security

when expanding their enterprise layer. Many organizations may abandon the use of the

term “cloud,” considering it to be a marketing term with little technical meaning.

4. Cloud platforms evolve

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11 ©2015 WGroup. ThinkWGroup.com

ID service providers will also need to specify a particular service model when offering a

particular infrastructure service, such as infrastructure as a service (IaaS), platform as a service

(PaaS), or SaaS. Additional qualifiers will become more necessary when discussing these

services, including dedicated, off-premises, on-premises, shared, private, and public.

The number of general-purpose cloud service providers should decline sharply during 2016. The major

providers – Amazon, Microsoft, and IBM SoftLayer – will gain market share and eliminate the smaller

cloud platforms. Google will start to develop into a major player for enterprise-level outsourcing,

due to its use of state-of-the-art technology that scales services easily. DigitalOcean, Aliyun and

other smaller players are highly innovative, but will still experience difficulty in competing with larger

cloud-service providers. Many other providers will begin terminating their cloud services in 2016.

Cloud-service customers should start selecting

providers that will survive this winnowing process,

now that this market is beginning to mature. Smaller

providers will receive less revenue as users begin

seeking the larger providers, thus causing the

smaller providers to shut down. In turn, this process

will drive more customers to the larger providers.

Many industry experts predict that no more than eight major providers will remain by the end of

2016, along with a few minor players. Cloud service is a capital-intensive business, meaning

that the winners will tend to be those providers with the largest checkbooks. Many of the current

providers will find that their capital is insufficient to remain in the market during 2016.

Cloud-service customers should start selecting providers that will survive the winnowing process taking place, now that the market is beginning to mature.

Page 12: Ten predictions for IT outsourcing in 2016

12 ©2015 WGroup. ThinkWGroup.com

The trend toward business as the driving force in outsourcing will cause enterprises to become their own software vendors.

As more manufactured products embed technology, the primary driving of IT outsourcing

will continue to shift from IT leaders to business leaders. Product engineers will begin

treating IT services as a required purchase, so they will assume direct control over those

contracts. This trend will be detrimental for those service providers that don’t understand

the importance of considering infrastructure to be a service rather than a product.

The short-term result will be a shift in power in the outsourcing market to suppliers with

new buyers. The request for proposals (RFPs) and subsequent bidding traditionally

associated with these contracts will no longer be necessary as IT outsourcing transitions

to a service brokerage model. IT departments will be able to assume control over the

services that business units have acquired on their own, thus eliminating shadow IT.

The most compelling cases for this strategy will be those in which the IT department can

demonstrate a cost savings through improved service measurement and integration.

The trend toward business as the driving force in outsourcing will cause enterprises to become

their own software vendors, as opposed to the current approach of using cloud providers and

outside vendors. Enterprises are therefore increasingly likely to use open-source software

solutions. The majority of the largest global organizations should include digital transformation as

a core strategy by the end of 2017. These enterprises will more than double their capability for

software development by 2018 due to their pursuit of digitalization strategies. Furthermore, the

majority of their software developers will focus on digitalization applications during this period.

5. Outsourcing shifts from IT to business

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13 ©2015 WGroup. ThinkWGroup.com

The role of corporate IT will change more in the near future than it ever has before, which is a

disconcerting prospect for many leaders in this field. IT officers have long wanted a seat at the

corporate table and will have that opportunity to directly influence policy in the next few years.

The transition of IT as the core driver for an organization’s business will set high expectations

for these leaders. CIOs who can rise to this challenge will enjoy

greater success in this new role, while those who can’t

are likely to be discarded for someone who can.

The trend toward digitalization may result in a reduction

in outsourcing for organizations specializing in this

area. For example, a company that has outsourced

its initial development of mobile applications is likely

to determine that it can’t build its digital business to

the enterprise level by relying on external consultants.

This strategy would be prohibitively expensive in the

long run, since outsourcing inevitably results in some

inefficiency due to miscommunications and false starts.

Page 14: Ten predictions for IT outsourcing in 2016

14 ©2015 WGroup. ThinkWGroup.com

Cloud services and autonomics will continue to become more highly integrated in

2016, resulting in a greater number of cloud workers or so-called smart robots. These

workers will contribute to the view of labor as a service, as clients and service providers

make greater use of them. Due to their flexibility in meeting client requirements on-

demand, virtual agents and intelligent tools are easy to host on all platforms.

The increased use of cloud workers will generate interest in autonomics in general and its effect on

the momentum toward outsourcing in particular. It’s also part of the overall trend toward outcome-

based pricing in IT outsourcing. Clients will be more likely to have a choice of cloud services,

allowing them to process each workload on the most appropriate platform. This strategy contrasts

with the current practice of using a centralized platform that provides dedicated infrastructure for

all of the client’s needs. The transition toward more specialized platforms will drive the growth

of cloud brokerage software, which streamlines cloud services through the use of analytics.

The increase in cloud workers will provide the cloud-sourcing supply chain with greater

visibility, since more business leaders will be purchasing technology services. They will be

more likely to assume direct control over outsourcing contracts as more consumer products,

appliances, and vehicles contain embedded technology. This trend will result in a greater

number of business leaders who view IT services as a core purchase. However, many

organizations that use shared services will experience challenges in making this transition.

6. More cloud workers

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15 ©2015 WGroup. ThinkWGroup.com

7. More contract renegotiationOutcome-based pricing is especially favorable for increasing the number of cloud

workers to solve some of the challenges of upfront costs when contracting with

a third party. The contracts that were renegotiated in 2015 were worth over $100

billion, and this figure will increase in 2016. For many customers, the purpose of

these renegotiations is a multi-sourcing cloud-based model for IT outsourcing.

The high demand for software developers is another reason that so many customers

are renegotiating contracts. CIOs need a staff that can implement the software

needed to develop an organization into a digital enterprise. However, the latest

applications use a greater variety of databases, frameworks, languages, and

execution environments than traditional software. Therefore, software development

in the future will require participation by a greater number of developers.

More than half of organizational IT spending will be for third-

party technologies by 2017, including services

and solutions. This figure will exceed 60 percent

by 2020. This trend will blur the line between

vendor technology and enterprise technology,

as both types of organizations implement technology

based on the operation of the respective organizations.

The scarcity of qualified developers will require the leaders of enterprise organizations to

change their mindset dramatically. Managers have traditionally viewed the IT department

as a cost center and primarily focused on controlling the budget, especially with respect to

salaries. Developers have historically been treated as interchangeable commodities, but

managers will now increasingly likely to view developers as critical resources. This trend

will place qualified developers in a stronger position for dictating their own terms.

The mere fact that an organization isn’t physically located in a traditional technology

center like Silicon Valley won’t necessarily protect it from the loss of IT talent in 2016.

The demand for these staff members will remain extremely high, especially among

organizations whose core business is IT. The increasing use of outsourcing will contribute

toward the need for more developers, regardless of geographical location.

By 2020, more than 60% of organizational IT spending will be for third-party technologies.

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8. RFP declinesThe traditional use of RFPs to procure IT resources will decline in 2016. The length of time and

cost of this procurement method will become prohibitive in a highly dynamic business environment

where requirements often change by the time a client receives proposals from service providers.

Enterprise marketplaces and other new purchase methods will replace RFPs in the near

future, especially for IT outsourcing. The RFP model is a particularly poor fit for an industry

that deals with emerging technologies, which enterprises may be slow to adopt. The use of

products such as wearables and Google Glass requires a purchase strategy that permits a close

collaboration between clients and service providers.

The vendors of legacy IT services face poor

prospects in the near future. One industry expert

estimates that about one-third of today’s IT vendors

will not exist in their present form by 2020. They will

either be out of business completely, acquired by

other corporations, or greatly reduced in size.

This process is well under way and will continue in 2016. For example, Dell recently

announced its intention to acquire EMC, which promises to be the largest high-tech

acquisition in history. Citrix plans to sell its GotoMeeting unit, resulting in a 10 percent

reduction in its workforce. Hewlett-Packard split itself into two independent businesses.

These examples are just indications of the upheaval that awaits legacy vendors, especially

the largest ones. In addition to the decline in RFPs, additional problems affecting legacy

IT giants include poor growth, lack of earnings, and unfavorable exchange rates. The

growth history of these vendors is a particularly strong sign of their bleak future.

These difficulties don’t represent a problem that might be solved with layoffs or replacing

the CEO. Instead, they’re a sign that the IT industry is changing, and legacy vendors

aren’t delivering the necessary solutions. This industry is undergoing a restructuring

that will be accelerated by private equity, which is a new method of obtaining financial

backing in the tech world. While high-tech businesses are accustomed to rapid

change, this inevitable restructuring will be particularly painful and prolonged.

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17 ©2015 WGroup. ThinkWGroup.com

9. Greater awareness of supplier riskOrganizations are likely to devote more effort toward managing IT supplier risk in 2016.

The risk of a supplier failure is increasing dramatically as customers become more

informed about a business’s supply chain. Many organizations began to integrate the

monitoring of supplier risk into daily operations during 2015. Discussions on supplier

risk have previously been restricted to quarterly meetings, but they will now affect key

business decisions in real time. Economic and political turmoil in Russia, Ukraine, and

elsewhere will become critical considerations in a global IT outsourcing environment.

Client organizations have traditionally monitored locations that could be geopolitical risks in IT

outsourcing. However, responsibility for this function is shifting to shared services and sourcing

teams, since they primarily affect service providers. This approach will be more common as

service disruptions increase due to shrinking labor pools, legal changes, and a generally poor

economy in areas that have historically provided the talent for IT outsourcing.

The fixed-fee contract is the traditional pricing model for application

development and maintenance (ADM) outsourcing. This model

generally requires clients to pay a specific amount of money

to obtain a specific amount of work. Clients prefer the fixed-

fee model since they are more likely to receive the services

they paid for, while providers appreciated this model’s ability

to indicate the appropriate staffing required for each deal.

However, the managed-service model is gaining popularity

for IT outsourcing. This model focuses on meeting the client’s

requirements, regardless of the staffing and servicing methods that the provider uses.

Managed services benefit the clients because they typically cost significantly less than

fixed pricing in the long term. Clients often report that they are able to cut IT outsourcing

costs in half over the course of five years by switching to managed services. Suppliers

benefit from managed services by obtaining increased flexibility and the opportunity

to increase profit margins in exchange for the greater risk of this pricing model.

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10. More data-driven sourcing decisionsData analysis will play a larger role in making outsourcing decisions. The process of

identifying opportunities for maximizing the return on investment (ROI) in outsourcing

has become more challenging as sourcing has become more complex. This trend has

resulted in a greater need to rely on analytics rather than expert advice. The use of

analytics will need more accurate data and greater cost transparency to realize its full

benefits. It also will require clients to use a greater number of service providers.

Outsourcing decisions are more likely to be based on big data in

2016. It’s important to understand that big data does

not refer to a data set of a particular size. Instead,

it refers to a data set that’s large enough to prevent

traditional techniques, such as a relational database,

from adequately storing, retrieving, and manipulating the data set.

The intense interest in big data is due to the growing realization that analyzing a large amount of

data can provide new insights or insights that would otherwise be ignored in favor of intuition.

Major cloud providers are actively engaged in meeting the challenges of analyzing big

data. IBM’s Watson is one of the most well-known machine-learning services used for

this purpose, although AWS, Google, and Microsoft have rolled out similar offerings.

The most obvious result of this trend will be to increase the value of large providers that

can afford to host machine-learning services. Big data will therefore continue to remain

an important factor in enterprise-level IT outsourcing for the foreseeable future.

In 2016, outsourcing decisions are more likely to be based on big data.

Page 19: Ten predictions for IT outsourcing in 2016

Drive Your Business

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