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9 IT outsourcing trends to watch in 2013

Stephanie Overby | Dec. 19, 2012
This year the IT services industry saw a mixed bag of merger and acquisition activity (and regret), a more globally dispersed marketplace, increased focus on business outcomes, and--of course--more cloud build-up (and disappointment) than you could shake a stick at.

Expect providers generally to give in more to demands of pricing flexibility for IT services in the new year, says Filippone. "Look for transaction-based pricing to evolve in order to support improved process automation, and healthy innovation pools to fuel early stage investments in automation and cloud-based technology."

5. Third-Generation Deals Enter Uncharted Territory

As mature outsourcing deals come up for renewal, customers will face novel challenges. Those that are swapping providers may find the transition is as difficult as the initial outsourcing, says Helms of K&L Gates. And European companies will have to deal with acquired rights directive (which requires each member nation to provide protection for employees in the event that some part of the business in which the employee works is transferred to another entity) when considering a change in vendor. transfers from one service provider to another service provider.

"Most customers will resign with their incumbents given the operational risk and financial constraints associated with moving to a new supplier," says Pillsbury's Oser

6. The Service Integrator Model Is Tested

This year saw the cautious introduction of the service integrator model, in which one provider manages the rest. "Time will tell if they will work, despite the best advice in structuring," says Krieser of K&L Gates. All eyes will be on the state of Texas, one of the first IT organizations to give it a go.

Still expect to see more such deals going forward. "The lure on the part of the customer to be able to further reduce headcount--some in the IT organization will no longer be needed-will likely continue to drive interest in this structure," Krieser says. "Providers will continue to entertain this, despite the risks, because it puts them in the driver's seat in managing the customers IT environment and in the catbird's seat as existing contracts expire or new projects arise."

7. Transition Troubles Lead to Disputes

"Customers and suppliers will continue to close deals without fleshing out transition and transformation details and plans," says Pillsbury's Oser. "Failed or delayed transitions and transformations will [become] number one area of disputes between customers and suppliers. "

8. Chindia--or Chimerica--Becomes a Reality

"At some point in the near future a large sourcing provider (Indian- or U.S.-based) is going to be purchased by a Chinese company," says Mark Ruckman, outsourcing consultant with Sanda Partners. " This purchase will create a huge shift in the economics of sourcing."

9. Backsourcing Blossoms

Outsourcing pioneer GM made the biggest backsourcing splash this year, with its announcement that it would be bringing 10,000 jobs back in house in coming years. Other IT organizations will follow suit this year.


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