Gartner Says By 2005 One-Third of IT Outsourcing Deals Will Be Measured Using Business, Not Technological Metrics
Analysts Discuss the Future of Outsourcing, IT Management and IT Services at Gartner Symposium/ITxpo 2003
LAKE BUENA VISTA, Fla. October 22, 2003 — As more business units outside of the IT organization make decisions on IT spending strategies, IT outsourcing vendors must cater to non-IT business users, according to Gartner, Inc. IT and its value contribution will consequently be measured in business terms. In fact, Gartner predicts that by 2005, one-third of IT outsourcing deals will be measured using business, not technological metrics.
Gartner analysts presented these findings today, during Gartner Symposium/ITxpo 2003, which is taking place here, October 19 through October 24.
"To achieve these goals and retain relevancy, internal IS functions - and management - will need to alter the way IT is positioned, managed and perceived within the enterprise," said Ben Pring, research vice president for Gartner. "Internal IS organizations must become experts on business processes, their underlying enabling technology and accompanying service life cycle management. ESPs need to respond to this increasing focus on business process by developing business process skills and solutions and by balancing their courting of IT and non-IT staff in their business development activities."
Through 2004, cost reduction will remain the dominant driver in enterprises' IT sourcing strategies. To keep up with this trend, ESPs must choose between offering business propositions focused on low cost and expertise. The majority will be required to focus on being the lowest-cost, or targeted niche, provider.
The search for less-expensive sources of IT services and models for its delivery is leading to the mushrooming interest in global delivery models and offshore resources. "The global delivery model genie is out of the bottle, and U.S. organizations must move urgently to embed this style of delivery/management into all aspects of their operational business models," said Pring. "Managing globally will fast become the norm, and this irreversible megatrend will clearly have a huge impact on enterprises, IT solution providers and organizations in these emerging areas."
Gartner analysts said that buyers and sellers must prioritize their IT spending and offerings on areas where competitive differentiation can genuinely be achieved. Buyers must drive toward the fusion of business and technology. Although this is not a new requirement, it more pressing than ever. The development of sourcing strategies that balance risk and value and anticipate the changes that new delivery and management models will require will also be of high importance.
Gartner analysts said that the focused application of IT, the leverage of global delivery and utility models, the development of sourcing models based on virtualization and the development of more realistic expectations of what real benefits technology can deliver, all coupled with an ongoing reduction of cost, will lead to a leaner, meaner use of IT that will deliver greater real value of IT.
To keep up to date on the latest outsourcing issues, please visit Gartner's Outsourcing Web site at www.gartner.com/outsourcing. This Web site offers content, tools, products and services that are needed to make effective, strategic decisions about outsourcing. When browsing the site, users receive a breakdown of key outsourcing issues, industry trends, and best practices for making smarter business decisions. This area also includes relevant research and links to Consulting and Measurement services. Custom Alerts are also available, enabling users to stay current on new research focused on their outsourcing agendas.
Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with an insightful look at the future of IT. For more than 10,000 IT professionals from the world's leading enterprises, Gartner's annual Symposium/ITxpo events are key components of their annual planning efforts. For more information about Gartner Symposium/ITxpo 2003, please visit www.gartner.com/symposium or call 1-800-778-1997.
About Gartner:
Gartner, Inc. is the leading provider of
research and analysis on the global information technology industry. Gartner serves more
than 10,000 clients, including chief information officers and other senior IT executives
in corporations and government agencies, as well as technology companies and the
investment community. The Company focuses on delivering objective, in-depth analysis
and actionable advice to enable clients to make more informed business and technology
decisions. The Company's businesses consist of Gartner Intelligence, research and
events for IT professionals; Gartner Executive Programs, membership programs and peer
networking services; and Gartner Consulting, customized engagements with a specific
emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in
Stamford, Connecticut, and has 3,700 associates, including more than 1,000 research
analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
