A growing number of companies contemplating IT outsourcing in London are considering the use of industrialised low-cost IT services (ILCS) in order to drive down overheads, it has been claimed.
Gartner has advised chief information officers (CIOs) to consider the benefits that adopting this model could provide and highlighted the fact that the costs of ‘running the business’ can be cut through this approach.
It has highlighted the fact that this model also enables CIOs to control the level of risk, integration and customisation that the business experiences.
This recommendation follows on from research earlier this year that found CIOs have identified differentiation and additions to business value as their priorities for 2011, which it claims supports this advice.
Claudio Da Rold, vice president and distinguished analyst at Gartner, highlighted the fact that there are multiple methods that are available for lowering IT delivery costs.
However, he stated that the trend will be towards the use of ILCS as it allows end users to “trade non-essential customisation for better and less expensive services”.
ILCS typically takes the form of no-frills services with additional add-ons that customers can purchase and operate as managed, multi-tenant and ready-to-use services.
These are typically available in fields such as infrastructure, applications and business processes, with very low entry-level prices.
Gartner claims that this is one of the key draws that brings prospects interested in the scalable, automated services.
The analyst has predicted that industrialised services will expand to comprise 30 per cent of the IT services and cloud computing market by 2015, at which point the market will be worth $177 billion (£114 billion).
In its research, Gartner has estimated that the cost of adopting ILCS for email will be approximately $6 per user per month, with entry-level offerings advertised today at between $3 and $4.
Its report stated: “With the email market in flux and the price of traditional in-house/hosted/outsourced mail under pressure by the lower price of cloud email available in the market, the email service is an area in which clear signals of industrialisation and low price points are emerging.”
Other key growth areas that are likely to undergo expansion include the use of infrastructure utilities for SAP, which are built on industrial principles and operate at low price points.
Infrastructure utility services will also benefit from a trend towards industrialised services that Gartner has also predicted will undergo rapid expansion, with a forecast compound growth rate of over 30 per cent for the next three years.
However, Gartner research vice president Frank Ridder has warned that there will not be a total conversion to this model.
He said that many corporate IT projects will remain in-house, with the higher their degree of efficiency affecting the likelihood that this will occur.
Mr Ridder stated that industrialised services will be an important development, however, and will be the next step in the IT services industry’s evolution.
“They are, in fact, the next step in outsourcing and managed-service provision and they span all layers of the IT services value chain: infrastructure, applications and business processes.”
Mike Small, member of the London chapter of the ISACA Security Advisory Group and senior analyst at KuppingerCole, has highlighted the cost savings that adopting a cloud approach more generally can provide.
He stated that private cloud applications have many similar benefits to ILCS, as by IT outsourcing the management processes in this way they retain much tighter controls over both the location and resources used.
Source:http://www.ihotdesk.com/article/800740952/IT-outsourcing-in-London:-Firms-turning-to-ILCS
