CIOs-sourcing related changes imminent

MUMBAI, INDIA: A recent global survey of CIOs by Gartner's Executive Programs found that 70 per cent of CIOs will change their technology and sourcing relationships in the next two to three years for a variety of reasons.

"The picture is clear for service providers as clients are struggling to keep up with change," said Eric Rocco, managing vice president at Gartner. "They are strongly considering changing the providers they work with as part of responding to this change. Market share will shift to service providers able to help clients respond to the business and IT opportunities and challenges that are overwhelming more than half of organizations today. Service providers need to convert this picture into an opportunity rather than a threat.

"Digital business is an unstoppable and irresistible catalyst for change - change that will affect the fundamental foundations and baseline assumptions of every business," Rocco said. "The digital business revolution is underpinned and enabled by the macro technology forces of cloud, social, analytics, mobility and the Internet of Things. Not every business fundamental will need to change to the same degree, nor will every technology driver have a role to play in every business scenario; however, businesses that decide to 'wait and see' are likely to become irrelevant."

Digital business requires providers to totally change the way they do things while helping their customers to do the same thing at the same time. This presents significant challenges with equally significant opportunities and risks. Traditional buyers will have a role to play but we will also see the emergence of a new breed of buyers and providers that must address their wants and desires if they are to earn the right to help in the transition.

Gartner believes that assisting clients in digital business transformation will be a driving factor in the majority of IT services opportunities.

"IT spending buying centers across industries have steadily shifted away from the central IT function and to business buying centers," said Mr. Rocco. "Service providers of the future will articulate value in business terms such as key process outcomes and impact to key performance indicators (KPIs). Doing so requires deep vertical industry knowledge, and new go-to-market models."

The IT services market will not grow uniformly. The overall market is forecast to grow 4.6 per cent in 2014. Hardware support is among the lower-growth opportunities in the IT services market. Through proactive and multivendor support models, these services will increasingly collide with outsourcing services.

Cloud-based infrastructure as a service (IaaS) and business process as a service (BPaaS) are the two fastest-growing segments, expanding 44.9 and 12.4 per cent, respectively, in 2014.