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How is IT Outsourcing going?

Good news for providers – two thirds of UK organizations expect to outsource at the same level or more over the next two years.  Quoting ComputerWeekly:In total, 65% of all respondents said they will continue to outsource at the same rate or will outsource more, with a third planning to increase their outsourcing, while only 16% said they will outsource less.  Two-thirds (66%) of respondents to the survey said cost reduction was their number-one driver for IT outsourcing, while increased scalability to business needs was cited as a reason by 56%, some 10% more than last year. Just over half (51%) said IT outsourcing was seen as a means of enabling them to focus on their core business.”

They’re happy too – 89% of the relationships are being rated satisfactory.     Cloud provider satisfaction is higher, though – they’re at 96%.    Despite that, a PwC survey says about half – 53% of companies aren’t realizing substantial value from cloud investments.

That said, roughly 80 precent of technology products and services will be built by those who are not technology professionals by 2024, says Gartner.   It added that the current total business-led IT spend averages up to 36 per cent of the total formal IT budget, and that technology providers are now finding themselves increasingly entering markets related to, or in competition with, non technology providers. 

Why do we care?

My story time.  IT outsourcing is popular, will continue to grow… cloud providers are more popular, and there’s more potential in those investments still to come.  And the technology world will not be driven by IT professionals. 

Sounds like all the reasons to be moving into business outcomes to me.     It’s the context that matters to me.    On their own, those data points about outsourcing could be taken as all the good news.    Things are going well!   Celebrate! 

Instead, know that the landscape is changing too – the outsourced work is only a small piece of what technology is being developed and implemented.   And you had better adapt to change with that.