Feb 2010
IT Industry Trends 2010
2010 will be an exciting year for CIO’s to prove the worth of IT. Market analysts such as Gartner and the IT press are indicating the following trends:
“A surge in Public Sector Outsourcing”
The public sector is on tender hooks waiting for the inevitable cost cutting process that will follow the General election. This will no doubt lead to reviews of IT spend, a drive for more shared services and there is even early evidence of some off-shore outsourcing. An example of this is the Lancashire Council £1.9bn shared services project.
“Green shoots of recovery leading to an expansion of capacity”
In the private sector the main focus for the last year, during the recession, has been the ‘bottom line’. Cost has been king, there has been an emphasis on savings in all cost including IT and improved margins. However, as we move forward into the year, and the promise of an easing of the recession, there will be a focus on expansion of capacity to support growth and the ‘top line’ sales. The extraordinary short term measures taken to reduce costs in 2009 will need to be replaced by sustainable measure so that businesses do not get left behind.
“Why it pays to go green”
There is a lot of talk in the press about the carbon reduction commitment regulations and the impact on business. The bottom line is that it makes sense to consider the initiatives that can reduce energy usage as a way of saving cost. The solutions also fit well with other initiatives CIO’s will be reviewing as part of the 2010 innovation agenda, such as cloud computing and virtualisation.
“CIO’s to focus on innovation and the customer experience”
From our experience, given the above trends for 2010, the CIO will need to focus on innovation and the customer experience. Initiatives, such as cloud computing and social computing in the workplace to reduce customer engagement costs, are examples that will need to be considered. These, by their nature cannot be internal services and the first consideration will be to find the right supplier. It is key to get the right relationship and governance in place and to keep the service lean.
With this backdrop, CIO’s will need to measure the true value of IT via benchmarking and quality reviews such as customer satisfaction surveys to enable budgets to be defended.
The Recession – How Grange helped customers to succeed…
Within the last 6 months Grange has been focused on the challenges that our customers have faced as part of the recession. Here is a summary of what we have helped our customers to achieve:
● Utility Company – recommended a number of key actions to improve the value for money & fit to business requirements of IT.
● Healthcare Company – provided a structure and evaluation framework to ensure IT decisions are aligned with business needs and affordability.
● Food Industry – improved IT service delivery and mentoring of key staff including IT Director to ensure they achieve their goals.
● Automotive Industry – carried out an outsourcing procurement & transition implementation that has provided a more business focused helpdesk and infrastructure service.
IT industry Update
With the HP takeover of EDS starting to show encouraging results, there will be further convergence in the industry. In fact Gartner has predicted that 20% of businesses will own no IT assets by 2012.
Gartner has made 2 recent acquisitions to widen its grip on the market
● Burton Group – targeting IT Managers and operational staff.
● AMR Research – supply chain.
Useful Link
The economist published a good high level step by step guide to outsourcing process. Click on the link below:
‘Your guide to outsourcing and offshoring in a recession’ by Lyonsdown Media – http://www.noa.co.uk/index.php/site/portal/