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BLOG: Outsourcing IT a prominent trend across Asia in 2012

Mark Smith | Dec. 21, 2011
Outsourcing IT infrastructure allows companies to focus on their core business while ensuring the quality of their IT systems and operation.

Gartner's top 10 trends that will affect infrastructure and operations in five years include virtualization and cloud computing. Additionally, IDC predicts that by 2015, 20 per cent of enterprise application spending will be hosted on the cloud.

Given the current global economic situation, IT leaders in Singapore and the rest of Asia will continue to look at reducing costs and achieving maximum return on investments in 2012. Speed to market will also continue to be critical to IT deployment as companies will focus on ensuring growth by creating new customers and expanding into new markets. As such, achieving strategic priorities through outsourcing IT infrastructure will be a prominent trend in Asia come 2012.

A recent independent study commissioned by Savvis that surveyed global IT decision makers showed that 27 per cent of IT leaders plan to outsource their IT infrastructure in 2012. This number looks set to grow over the next few years, especially in Singapore. In fact, the survey found that within the next 10 years, 75 per cent of Singapore IT decision makers are expected to outsource the majority of their IT infrastructure and more than half of these leaders will opt to move their infrastructure to the cloud.

Outsourcing IT infrastructure allows companies to focus on their core business while ensuring the quality of their IT systems and operation. The many other benefits of outsourcing IT include lower costs, the ability to scale up and down, access to specialised services, increased competitive edge and staffing flexibility.

Singapore leads the shift to IT outsourcing in Asia

When compared to companies in the US, Singapore companies’ lack of legacy systems urges leaders to outsource IT as quickly as they can. Singapore is catching up with the mature markets, like Australia, which have led the way in outsourcing IT infrastructure. China and India are only slightly behind Singapore and we are witnessing an increase in demand for managed services, specifically in India, as more enterprises seek advanced IT infrastructure capabilities.

The rise of the pay-as-you-go model

As companies adjust to and recover from the global recession, business leaders are no longer interested in just keeping their IT operations running smoothly. They are now seeking to implement the appropriate solutions that will help them adapt and grow. Companies want capacity when they need it, and they prefer to only purchase it when they want it. As such, we are seeing more IT outsourcing vendors moving toward a pay-as-you-go model that provides more flexibility and agility in companies’ IT deployment.

Allaying security concerns through the use of hybrid cloud models

Security has been an important factor that leaders consider when it comes to outsourcing infrastructure. Over the past few years, however, companies have become a lot more comfortable with their information running in an external data centre or “in the cloud.” This can be attributed to an increase in the utilisation of hybrid cloud models to host applications. Hybrid cloud models allow confidential fields to reside within an organisation's firewall and only be visible to users within it, while outside the firewall, only non-sensitive fields are accessible.

Driving business priorities with cloud

As most IT strategies are now closely mapped to business strategies, outsourcing solutions that offer a positive impact on a company’s performance are gaining the most momentum in the market. When IT is not core to the business, high-performing companies selectively outsource IT if it is perceived a high-velocity enabler of their business or non-strategic function of their IT organisation. This allows leaders to focus resources away from IT and direct to activities that are critical to the success of the company. These companies have quicker speed-to-market, leaner costs and the ability to create new products, services and capabilities that provide an advantage over the competition.

The ultimate objective of outsourcing IT is not just to reduce costs, but to drive business priorities. IT delivery models such as cloud are a strategic choice for companies of all sizes that want to satisfy a diverse end-user base and greater flexibility.

To effectively capitalise on cloud computing solutions in 2012 and beyond, organisations will need to transform their thoughts about the role of IT and revamp their IT departments to better understand when to leverage a more standardised, cloud-based model and when to retain assets and expertise in-house. IT leaders need to be aware that cloud is a tool that will help optimise spending amidst shrinking budgets while accelerating growth and productivity.

Mark Smith is managing director of Savvis Asia.


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