Sourcing IT services "For the journey": The impact of Cloud on outsourcing

Downloadable components »The CIO Brief

For those organisations already outsourcing aspects of their IT, the Cloud delivery model raises operational questions about how best to transition to this lower cost capability and which areas offer the most appropriate point from which to begin the migration.

Ultimately Cloud shifts the focus to delivery of business services rather than delivery of IT solutions. For example, you can take 20-30% of costs out by changing technology, but the majority of long-term cost reduction will come by creating solutions that will enable your organisation to cater “for the journey” of a transforming business or public service. In this way Cloud begins to transform the cost-to-value ratio of delivering IT services.

This CIO briefing paper assesses the ways which Cloud can enable CIOs to source IT services both for future change and for current delivery requirements. It uses the K2 Advisory Delivery Spectrum to look at:

• Developing an IT strategy “for the journey”
• Using Cloud to focus on business service delivery
• Using Cloud delivery as a game-changer for IT services

Market Trends

We wanted to understand the ways in which you as CIO plan to consume IT services in the coming three years. For example, how will you continue to work with outsourcers? What will you want them to do versus what you will do in-house? How will you be adopting Cloud services and Business Process Platforms?

The findings in this study are based on an online survey and telephone interviews conducted in Q3 2011, bringing together the views of 102 senior decision makers. About two-thirds of respondents come from organisations with more than 1000 employees from a variety of sectors.

This paper considers the key trends in the UK 2011-2014, including:

• How will CIOs tackle improvements to end user services?
• What role for in-house IT in integrating Cloud services?
• What is the likely investment pattern for Business Process Platforms?
• How will Cloud ecosystems be used?
• What is the likely evolution of outcome-based contracts?