As 2014 drew to a close, after a year of major IT Transformation and change management activity, I had some time to read a report from market intelligence provider, Information Services Group (ISG), where the marketing firm was reflecting on observations from last year (2014), and where it laid down some of it’s predictions for 2015 in relation to outsourcing.
“Confirming my observations from a number of large global companies whom are preparing to escalate their IT Transformational programmes”, said Craig Ashmole, Founding Director at London based IT Transformation consultancy CCServe Limited, “CIOs need to change their world by moving more out of their comfort zone, they need to start to manage their company business needs focused at delivering services or solutions that drive revenue while growing their core business. CIOs that focus on empire building of the years gone by will be the ones that are looking for new jobs as we progress to 2016 the year of CIO Transformation.”
One of the most notable trends of 2014 was that outsourcing was no longer a Northern European phenomenon; in France, annual contract value (ACV) increased 250% year-on-year. Indeed, ACV reached its highest levels ever across the south of the continent. The ISG report said that it was also witnessing a shift towards ‘deriving greater value from contracts’. Something that’s been at the top of the CIO agenda over the past 18 months.
“Whether this is through Service Integration and Management (SIAM) or utilising Total Business Management (TBM) tools, CIOs are beginning to step away from simple IT management and are moving towards a role that has a greater focus on business alignment, which is critical for maintaining their relevance to the organisation,” the intelligence provider ISG said. “Looking ahead, we expect that the outsourcing market will continue to grow, as organisations slowly regain confidence post-recession,” ISG predicted. “The challenge for buyers will be to understand how they can get the most value from their outsourcing efforts, and to understand the real business impact. We believe that this will start to gain momentum in 2015.”
“CIOs are looking to not be marginalised, and desperately need to sit at the board table as a priority in 2015. Something forward thinking CEOs will understand is that technology should be a business driver and needs to be used as a mechanism to deliver business growth, if done correctly.” Craig Ashmole goes on to confirm. “There are many back office functions that can be better served by the Outsource community and this will provide more time for the CIO to focus on core business revenue growth initiatives.”