Ten developments that will transform IT outsourcing

The IT outsourcing sector will be transformed over the next few years, with 10 developments changing the way IT is delivered and used.

The IT outsourcing sector will be transformed over the next few years, with 10 developments changing the way IT is delivered and used.

Speaking at Gartner's annual outsourcing summit in London, Gartner analyst Helen Huntley stated 10 things that would shake up IT and outsourcing.

Weak global economies, a new generation of workers, globalisation and cloud computing are a few of the trends that will have a lasting effect on IT and outsourcing.

1. The economy

The economy has been so bad in recent years that outsourcing has seen major changes. These include suppliers sharing some of the pain that their customers are suffering and new delivery models emerging to help customers cut costs. "IT would not be where it is today, with the application of new business models, without the tough economic environment," said Huntley.

The uncertain economic situation of late has driven the adoption of new technologies such as cloud computing, as well as new models for paying for services, such as pay-as-you-go.

2. Generation Y

With people born between 1982 and 2000 - known as generation Y - now a significant portion of the workforce, businesses need to have the right kind of technology in place to satisfy them. "We need to entice generation Ys with the right IT or they will go elsewhere," said Huntley.

In June, Cognizant's consultancy arm told Computer Weekly there would be massive changes in how business is done in the future, much of which is driven by the fact that a third of workforces and customer bases will be millennials - the generation of people that have grown up with web technologies.

In its "Future of Work" initiative, Cognizant says the Millennial mindset will change how people communicate in work and with customers, while technologies such as the cloud, mobile and business analytics will change business processes.

3. Globalisation

There are more choices of where to buy IT services, but there are also new risks for CIOs to consider.

Technology today can be delivered from anywhere as a result of the internet. While offshore locations such as India have matured into strategic partners for businesses there is now a breadth of choice. There are service providers in regions such as Asia, Eastern Europe, North Africa and Latin America providing critical services to large corporates in the UK.

4. Sustainability/green IT

Businesses are expected to lower their carbon footprint.

As an example, Huntley noted Alaska Airlines's replacement of paper-based manuals for pilots with iPads loaded with manuals. This meant no need to carry 1,000 sheets of paper in the cockpit. This is good for the environment because less paper is used, less fuel on the aircraft because less weight is on the aircraft, and it is much easier to use.

5. Cloud computing

Huntley made the need for a cloud computing strategy quite clear: "If you have not got a cloud strategy now, get one immediately."

6. Industrialised services

Within the next five years enterprise spending on industrialised services such as software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS) will reach $122bn.

At last year's outsourcing summit in London Gartner said 30% of IT services would be industrialised by 2015.

7. Asset lift

The more that businesses buy IT-as-a-service the less the need for internal assets. By next year, 20% of businesses will have no IT assets of their own.

8. Consumerisation

Consumerisation of IT will not only change the technology used in offices around the world, but also the way businesses interact and serve customers.

9. Unpredictability and risk

With the use of more and more suppliers and new relationships, businesses must dedicate resources to assess the risks associated with working with suppliers.

10. Externalisation

Increasingly, it will be a case of how the IT department can get other companies to do things for you rather than how do you do it yourself. "It's not what you do but how you get things done," Huntley said.

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