Welcome to Smart Enterprise Exchange: Outsourcing Wisdom: 9 Global Services Trends for 2012
Posted on November 22, 2011 by Atul
Outsourcing Wisdom 9 Global Services Trends for 2012Posted by Atul Vashistha on Nov 2, 2011 7:26:54 AMOut with the old and in with the new — well, almost! We do see “retro” back in fashion in some areas of the outsourcing market when looking ahead to 2012. What follows are nine key trends that CIOs can expect in the coming year in terms of outsourcing and global services. 1. Demand outlook is bright, with some points to consider. Demand will weaken initially, but then should improve by mid-year. The inhibiting factors and pain points will be:Continued tight budgets.Minimal discretionary spending, with approvals requiring rigorous ROI explanations. The majority of investments will need to show positive ROI within the fiscal year and, as a result, lead times and planning cycles will be short.Most IT budgets will be approved on a rolling monthly or quarterly basis.Systems integration, led by standardization and migration to common global processes, will lead growth. Simplify remains the buzzword for CIOs.Cloud computing offerings will stimulate greater demand for infrastructure outsourcing. Outsourcing providers, therefore, will revamp the architecture of their product offerings to fit the modular needs of a cloud environment. As a result, buyers moving to the cloud will create a big demand for redesigning software architecture, and also for quality assurance and testing services.The ROI of business process outsourcing will continue to be challenged. As providers support clients in this sourcing area, we see a lack of domain skills on their teams hindering deals.Outsourcing by midmarket companies will be on the rise, with much attention paid to platform-based, bundled outsourcing and transaction-based pricing. Typical examples are payroll and hosting services. 2. Operating models are going retro.There are some contradictions affecting the market. On the one hand, clients frustrated with suppliers’ rising costs, governance challenges and uneven performance are exploring in-sourcing more often. At the same time, continued hiring and attrition challenges at global businesses, and overall governance requirements, will accelerate buyers’ move to managed services models. This will need to shake out over the year. 3. Professionalization of outsourcing will increase.Supplier management and governance challenges will also spur the need for professionally trained managers. Programs such as the Certified Outsourcing Professional COP from the International Association of Outsourcing Professionals IAOP, and training workshops will be leveraged more often.Additionally, customers will increasingly see clear differences among suppliers in the services sector versus other outsourced product categories. As a result, high-quality procurement managers will be in greater demand.
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Filed Under: Global Work, Trends, Wisdom
