Heads up on major IT services issues for 2009

Heads up on major IT services issues for 2009

New BPO models, cloud computing, quality assurance, and vendor management will top IT services agendas, says Ovum

Ovum says the impact of the slowing economy on BPO business models, the convergence of IT and telecom services, and the continued importance of quality and security are among the top issues IT service providers will face in 2009. “The Ovum Eight’ compiled by the IT advisory and consulting firm, are the main issues that will impact ICT vendors, their partners and end users.

“In this challenging economy, IT services providers will need to navigate a host of new and continuing challenges as they attempt to maintain and grow their business,” Eamonn Kennedy, head of Ovum’s IT services team, says in a press statement.

The Ovum Eight are about:

Competing for the Cloud: Cloud computing can encompass and potentially disrupt “traditional” models of infrastructure and applications outsourcing, third-party managed services and SaaS-powered services. Cloud computing is quickly becoming one of the most competitive markets in all of IT as services firms attempt to leverage these technologies and others to deliver new value-added services to the market. Customers, meanwhile, have seen and heard plenty of marketing messages around Cloud computing, but are now searching for answers as to what IT and business benefits could ensue.

Quality assurance and information security: The worsening economic environment is driving demand for improved value from applications, applications-led outsourcing and other IT services. In practical terms, this means demonstrable and sustainable cost effectiveness and reduced time-to-market. Pressure is therefore growing on developers and outsourcing service providers to raise the twin bars of quality assurance, namely ensuring products and services are fit for purpose and being right first time.

High-pressure IT: All IT services vendors will argue that their IT delivery is done under high pressure, although for many this is more hyperbole than truth. Ovum believes high pressure IT is about delivering IT services on the biggest stage, under the highest level of scrutiny, and with no room for mistakes.

Retained organisations: Outsourcing decisions driven by short-term requirements to save costs are potentially the most difficult kinds of contract for retained organisations to derive business benefit from. Negotiated in haste and not necessarily with a medium- or long-term strategic intent, such contracts will require significant skill on the part of retained organisations in order to make them work effectively for the client organisation while also delivering the savings they have really been put in place to achieve.

Fixing BPO: In 2009 white-collar business process outsourcing (BPO) will overshadow the importance of IT in the outsourcing market. Consolidation among IT services and BPO companies will bring the two industries ever closer. IT vendors that do not have a considered stake in the BPO market, either directly or indirectly, will miss out on a sea change in the way that IT and IT services are delivered to client organisations.

Waste not, want not: The efficient use of people and resources should be a core discipline for all CIOs, IT managers and IT services providers. It means a focus on disciplines such as ITIL and a drive to improve infrastructure maturity – to standardise, consolidate and rationalise IT infrastructure and processes. Now there are new demands for IT to improve its efficiency – around energy, the environment and IT’s consumption of resources.

Enterprise 2.0: Enterprise 2.0 is about enabling stakeholders to affect services and offerings and achieve more meaningful business-driven interactions between people and systems through community collaboration, sharing and “debating” of ideas, concepts, services and products. This all sounds great from a philosophical perspective, but how is it going to deliver business benefits to the adopters of such technologies?

Economic flux: Even in the darkest reaches of a recession, clients will continue to expect quality services delivered at appropriate pricing levels with continual improvements to both. It is vital that vendors retain a sense of perspective: The recession will end; demand for IT services will recover.

Ovum says it is not suggesting economic conditions will turn around in a few months and it will be back to business as usual. But it notes, "The market will continue to evolve and vendors’ strategies must evolve with it."

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