The border land between Cloud Computing and outsourcing has always been fairly porous, but now the Cloud is actively redefining IT sourcing services.
According to a new research study by K2 Advisory, Sourcing IT services ‘for the journey’: The impact of Cloud on Outsourcing, CIOs are now looking for outcome-based Cloud contracts from vendors, horizontal business process platforms to outsource their non-differentiated systems.
In turn, this demands a beefing up of in-house integration skills within internal IT Departments to transform them into what K2 refers to as “Business Service Brokers for Cloud-delivered services”. The flexibility of the Cloud is changing the dynamics of outsourcing arrangements.
Because of the speed at which services can be provisioned, CIOs need to consider to what extent their internal IT department is acting as a service broker. This means that understanding how the Cloud ecosystem for IT suppliers and outsourcing providers develops will be fundamental to IT strategies.
A third of organisations are already forging ahead to build their own in-house integration skills for Cloud-delivered services, although 43% of the market do not expect to address integration issues for another one to two years. Over the next two years, the number of CIOs seeking help to integrate SaaS with legacy systems, and/or SaaS, will grow as Cloud strategies develop and usage increases.
K2 Advisory research shows that a third of organisations believe that the real challenge for them could kick-in by 2013, while a further 12% expect 2012 to be the year they require assistance. Either way, the data suggests that 2012 will be a pivotal year for many organisations as they look to conduct a sizeable shift towards Cloud services, or as they start to tackle the integration challenges that are emerging following investments made this year and into 2012.
More than half of CIOs surveyed expect their internal IT capability to provide a service integration platform and skills to provide business agility around the use of Cloud services, as this is not something they wish to outsource.
Nearly two-thirds of CIOs interviewed said they would use a business service platform either because it would deliver the most cost-effective solutions in selected non-differentiating areas – such as HR, Payroll, Finance and Procurement – or because it was used by their fellow industry players.
K2 also detects a clear preference of broad horizontal business services, rather than sector-specific capabilities. CIOs are keen to embrace the IT cost reduction in these areas without constraining organisational development. Highly differentiated systems designed to deliver high added value, are seen as less of a good fit for standard Cloud delivery.
Source:http://www.businesscloud9.com/content/cloud-and-outsourcing-impact-cios-and-sourcing/6446
