CIO - 1. Smaller Deals. A decade-long decline in the size of IT services contracts continues. While the number of mega-deals and midrange contracts awarded each year has remained fairly stable since 2002, the number of those worth $100 million or less has more than tripled, according to outsourcing consultancy Information Services Group (formerly TPI).
2. New Pricing Models. With continued pressure on their profit margins, outsourcing providers are considering more innovative--and often riskier--engagement models, including joint ventures, business-outcome-based pricing, revenue-sharing arrangements, and dedicated centers of excellence.
3. Multi-Sourcing Wranglers. CIOs have largely rejected broad, single-source deals in favor of a best-of-breed outsourcing model that uses a variety of specialty firms. But that doesn't mean they've figured out how to manage the multi-sourcing beast. Some IT organizations are hiring people to bring the necessary management skills in-house. But IT service providers are also setting themselves up as services integrators that will oversee multiple providers and manage end-to-end delivery. Time will tell how well this fox-watching-the-henhouse model plays out.
4. Increased Focus on Security. It's only a matter of time before a major IT service provider suffers a public security breach. Outsourcing companies are looking for new and better ways to protect data--their own and their customers'--says Mark Ruckman, an independent outsourcing consultant at Sanda Partners. In the meantime, security liability limits have become one of the most contentious negotiation issues between outsourcing customers and vendors today.
5. Cloudsourcing. The outsourcing deal pipeline is getting a boost from such next-generation delivery models as cloud offerings and remote infrastructure management, says consultancy Everest Group. Service providers are trying to address some of the technical and perception issues that have delayed widespread adoption of cloud services.
Read more about outsourcing in CIO's Outsourcing Drilldown.
- Why Projects Fail CIOs are expected to deliver more projects that transform business, and do so on time, on budget and with limited resources.
- The New Business Case for Video Conferencing: 7 Real-World Benefits Beyond Cost-Savings This whitepaper provides insight into the value of video conferencing in today's business environment, and how organizations are using visual collaboration to find...
- Gartner Magic Quadrant for Client Management Tools The client management tool market is maturing and evolving to adapt to consumerization, desktop virtualization, and an ongoing need to improve efficiency.
- Audit Ready and Asset Optimized: The Solid Promise of an Intelligent Software Asset Management Solution In this paper Frost & Sullivan examines the benefits of enterprise-grade Software Asset Management solutions, and how these solutions serve as the convergence...
- LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users?
- On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy... All IT Outsourcing White Papers | Webcasts