Outsourcing is becoming more personal, and large customers will increasingly look to outsourcers to supply their technology innovation rather than just commodity services, claimed Guy Hains, president and CEO European Group, Computer Sciences Corporation (CSC).
Speaking at an Intellect outsourcing event in the opulent setting of Claridges, the Mayfair hotel noted for its Gordon Ramsay eaterie, Hains' words were more measured than those of the legendary restaurateur, perhaps, but no less bullish about the need for quality service.
There will be a “massive shift” and a “speed up”, he said, identifying the surface trends of full scope-outs, the emergence of smartsourcing, and a face-off between nearshoring and offshoring as characterising the year ahead for us all.
Identifying an '-ation' near future of globalisation, commoditisation and consumerisation, Hains pointed to “the reality of market services” and claimed that personal outsourcing was on the rise, foreseeing “a personal gateway into public services”.
Blowing away the mist of rhetoric from Hains' speech, what he was saying is that as Web 2.0 technologies and socially-networked behaviour becomes the norm, this will impact on executives' expectations of their technology systems and influence the way they use them.
This, he suggested, should be a challenge to the industry to provide much greater depth and innovation, particularly in recessionary times when, three years down the line, company structures might have changed radically. “Major players could suppress that supply coming through, or be an enabler for it,” he said.
However, that other major buzzphrase, the green agenda, is not yet a major trend within the industry, he said – at least, not in itself. At present, he claimed, it is merely a catalyst for commodity services in the global and increasingly consumer-led market.
In an aside, Hains identified China as being very much the sleeping dragon of outsourcing. In three years' time, he said, that country will be producing four million graduates a year that have both English language and IT skills.
By contrast, he said, the UK remains well placed in the industry, but “we are not getting the quality of graduates we were five years ago”. The solution is to seek “more right-brained people. We need more creative innovation, and to be living in the Web”. As an industry we need “to be seeking out and working with a new skill set”, he said.
If these are the external market forces at work around our industry, then what of the internal influences within client companies? Security is without doubt the number-one concern for customers, said Hains, and should be considered at every stage of an implementation, including its strategy, the policy climate, and the privacy of all personal data collected. The risk, he warned, is that “if [security] is not addressed, it will slow down executive courage”.
Of course, a concomitant of that problem is that customers will seek to pass risk down the supply chain, which could make smartsourcing less attractive to some enterprises than simply dumping commodity services demand onto a single large supplier. On the other hand, in sectors where technology is a fast-moving and enabling layer, customers will be much more comfortable with smartsourcing.
All of this boils down to one thing for our industry's clients, said Hains: the IT director in the boardroom is on the hook for innovation, especially when 60% of the IT budget moving forward will be spent on outsourced services. In such a climate, suggested Hains, enterprises will increasingly look to outsourcing companies to supply innovation.
• Intellect was formed in May 2002 following the merger between the Computing Services and Software Association (CSSA) and the Federation of the Electronics Industry (FEI). As an organisation, Intellect works in three significant areas: helping member companies to be top performers; providing insights into members' markets and supply chains; and working with Government and regulators to create the most favourable business environment.