Top Services Trends for 2011 and Beyond
Through 2010 Saugatuck interviewed well over 100 services providers and 200 IT and business executives on their plans related to ITO and BPO adoption and how the Cloud will impact both supplier offerings and buyer preferences. These qualitative interviews, enhanced by our rich quantitative surveys conducted with research partner Bloomberg Businessweek, provide us with unique insights into market movements. With this data, Saugatuck has prepared its top predictions for the consulting, IT, and BPO services market for 2011 and beyond.
Please find the top three trends out of ten we identify in our most recent Strategic Perspective, Top Services Trends for 2011 and Beyond:
1. By 2015, 50 percent of new outsourcing deals will be significantly Cloud enabled. Technology platforms (enabled by Cloud IT) have emerged as the newest value lever for services leadership and adoption will continue in 2011 at a rapid pace. Services providers are responding to a new set of value dynamics and benefits related to Cloud Computing. Cloud IT may help evolve an outsourcing market that is riddled with inflexibility, commoditization and a lack of innovation. More standardized Cloud Computing building blocks such as IaaS, PaaS, and SaaS are providing credible and better alternatives to traditional IT. And as are result, services providers will increasingly leverage standardized technology platform alongside process expertise and global labor availability to bring value to clients.
2. By 2015, Business Process Utilities will emerge as the preferred means of consuming horizontal/commoditized BPO offerings such as F&A, Procurement, and HR and select vertical opportunities (e.g., Navitaire/airline reservations). While Business-Process-as-a-Service (BPaaS) is the umbrella term that is being increasingly used by analysts, vendors and other influencers to capture services innovation enabled by Cloud IT, BPUs are the pinnacle of Cloud IT abstraction. BPUs are “service platforms that provide relatively standardized business processes, delivered from a one-to-many architecture and have many customers subscribing to these services” Traditional outsourcing models, while not going away will not provide the multiplicative benefits offered from BPUs including economies of scale from standardization, process maturity and technology utilization across clients. This rise in BPUs will transform not only the outsourcing market, but will lead to the next evolution of business process accountability, driving the responsibility for both IT and business process innovation to a set of BPU providers.
3. By 2013, “non-traditional” service providers with specific vertical and business IP will aggressively enter the BPaaS market. Saugatuck’s position is that “non-traditional” services provider may be the logical front-runners in the race for extending niche vertical servicesfrom the cloud to clients. These specialists such as ActiveHealth Management live and breathe vertical IP, having most probably outsourced non-differentiatedservices already to traditional services providers. Over the near term, many traditional consulting firms and IT solution providers will begin to work with non-traditional services providers to transform the markets in which they compete, bringing partners, channels and customers together. Providers like IBM want to help clients become cloud based services providers and monetize their infrastructures. Traditional services providers will be willing to “white label” services to help new service providers get to market more quickly.
Clients who would like read the complete Strategic Perspective click Top Services Trends for 2011 and Beyond(824MKT, 17Dec2010)