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10 outsourcing trends to watch in 2015

Stephanie Overby | Jan. 7, 2015
This year brought the IT outsourcing industry an increase in hybrid offshoring, a greater focus on in-house service integration, a new lower-cost consulting model, smaller deals, and bigger governance requirements.

8. The RFP Fades

Speaking of traditional IT procurement processes, the tried-and-true RFP process will begin to lose its luster. In today's dynamic era of technology change, the traditional RFP simply takes too long and costs too much. By the time the proposals come in, the business requirements have often changed.

Look for new purchasing processes, such as enterprise marketplaces, to take the place of RFPs. "Imagine floating a 'request for food' every time you're deciding on a restaurant," says Pratham Mittal co-founder of VenturePact, a marketplace connecting providers with customers.

"Emerging technologies are not a good fit for the RFP model. There are new technologies coming up every day that enterprises may not understand. Think Google Glass. Think wearables. Big companies need to collaboratively work with service providers to really figure out how this can be used in their enterprise."

9. The Cloud Comes Down to Earth

Okay, we predicted last year that the cloud would get grounded. In 2015, it will.

"Enterprises will take a pragmatic approach to cloud-provided infrastructure and solutions, gaining confidence and building internal expertise along the way," says Andy Sealock, partner with outsourcing consultancy Pace Harmon. Cloud-based solutions will continue to serve as point solutions within given functions, while more general cloud computing and storage solutions will progress down two distinct paths. "The first path, which will progress faster, is for new applications that can be designed from the beginning to optimize cloud infrastructure.

Early adopters may set official policies whereby they need an exception from the governance process to not develop new apps optimized for the private or public cloud," Sealock says. "The second path addresses porting existing apps over to cloud infrastructure. For large, complex Fortune 2000 IT environments with a very heterogeneous application footprint, this requires app-by-app analysis and testing to ensure that it will perform and maintain SLAs, and that it won't inefficiently use the cloud infrastructure and run up variable costs that will sink the business case."

"Amazon Web Services and Softlayer are both well positioned to see significant growth at the enterprise layer," says Hall of ISG. Companies will have to get past their security and business continuity concerns. And they may abandon the term "cloud" altogether. Companies will recognize "that the term no longer means anything at all," says Fueless. "Providers and pundits will need to specify [Infrastructure-as-a-Service] IaaS, [Platform-as-a-Service] PaaS or SaaS at a minimum, with qualifiers like dedicated, shared, public, private, on-premises, off-premises to participate in any useful discussion of infrastructure services."

10. The Sourcing Decision Becomes Data-Driven

"Data and analytics will play a central role in sourcing advisory," predicts Vashistha of Neo Group. "As the complexity of sourcing rises and clients become increasingly sophisticated, the need to find the next set of opportunities and optimization will benefit greatly from analytics and not just expert advice."

 

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