Outsourcing 2020: Get Your Vision
Right for the Future
Helen Huntley
Vice President, Research

This presentation, includin...
IT’s Impact on the Business Has Increased
Over Time
Past

Present

IT

Future

IT

Business
Business

Business
Present Outsourcing Era – Sizeable Shifts
Internet,
Cloud,
Emerging
Technology

Business
Executing
Deals

Custom
to
Standa...
Future Outsourcing – Leveraged
• Global and Domestic
Delivery Optimization
• Externally Owned Assets

• Leveraged IP/Solut...
Results From the Gartner-Forbes
2012 Board of Directors Survey…

86%

50%

IT's strategic contribution to
the business wil...
Gartner-Forbes 2012 Board of Directors Survey
Top 5 Priorities
1. Attracting new customers
2. Retaining and enhancing
exis...
Evolving CIO Role

What are CEOs
and senior
business
executives’ views
on the quality or
capability they
would most like
t...
Changing Expectations for CIOs, Areas
for Improvement
1. Business Awareness, Understanding
and Acumen
2. Communication Ski...
Challenges for the CIO
IT management improvement
Cost effectiveness
Security and risk management
Proactive change and inno...
The Board and CEOs Rising Expectations will Influence the CIO
"Yes, I'm in line
for CEO succession."
"We brought in
40% of...
2014 – 2020 Represents Significant
Change for the Business and IT

Business Model
Evolution

IT Skills Shift

Emerging Tec...
The Digital Dragon Is Upon Us, 2339 WW
CIOs from 77 Countries Agree
"My business and its IT organization are
being engulfe...
Digital Strategy Is Advancing
Our digital strategy
is our business
strategy
2%

We have nothing we
recognize as digital
st...
The Chief Digital Officer Role Is on the
Rise
Industry
Media
Communications
Services
Banking
Insurance
Retail
Healthcare P...
Nancy
McKinstry
CEO, Wolters
Kluwer
CNBC Interview
2013

"When I took over as CEO
70% of our revenue came
from print produ...
Enterprises Are Also Dealing With The
Rise of Extreme Information

59% 100% 80%
Information is
growing annually

Stored in...
It is Imperative that We Apply Filters
to Distinguish Information of Real Value

270ºC
http://commons.wikimedi
a.org/wiki/...
Information is Everywhere! The Rise of
Strategic Information Management

Transactional
Data

Social

IT/OT

Documents

Ima...
There Are Many Examples of Organizations
Wielding "Information as Strategy"
Iceland provides fish traceability
information...
http://upload.wikimedia.org/wikipedia/commons/b/b7/Best_Buy_Express.jpg

Our Business Models Have Had to Change

Increase ...
Online
sales
increased
130%
Increase Customer Access & Channel Sales

Source: Tesco Home Plus
Increased Ease of Shopping, Differentiated

Source: Tesco
Philip Clarke
CEO, Tesco
2013

"To compete in the
new era of retailing I
believe that Tesco has
to be more than a retail
c...
But - Can We Go Too Far with Technology?
2020 Could Be Very Complicated

• 10 million+ lines of code & IP Addresses
• The ...
Gen Y Entrepreneurs
Think Differently
• Born: 1982-2000
• Increased use and
familiarity media and digital
technologies

• ...
Generation Y’s Business Models Are Different,
Partner Intensive, Our Future is Changing
Soapbox Soaps Founded: 2009 by
two...
SoapBox Soaps Heavily Leverages 30
Partners in its EcoSystem
Career Change
Ahead
Careers in IT and Necessary
Skills Required Will Change
Creation of the "T"-Shaped IT Staff
Business Breadth

Value to the IT Group

Technology Depth

Value to the Business

Crit...
Changing IT Models That Supports the
Business Like Never Before
Driving a New IT Model & Focus
New
Thinking
in IT

Show
Va...
What Else Does the Future Hold that
Impacts Outsourcing?

Expanding
Globalization
of Business

Changing
Value
Propositions...
Global Opportunities – GDP Growth
1.7%

3.0%

2.4%

3.9%

- 0.3 %*

0.9 %*

1.6%

2.7%

7.5%

7.8%

3.1%

3.6%

1.7%

1.9%...
What You Must Do Between Now and 2020?
Today’s Realities

Your Future Relies On:

•
•
•
•

• Harnessing the Power of
Your ...
Outsourcing 2020: Get Your Vision
Right for the Future
Helen Huntley

This presentation, including any supporting material...
Upcoming SlideShare
Loading in …5
×

NASSCOM ILF 2014: Outsourcing 2020 - Get Your Vision Right for the Future: Helen Huntley, Gartner Research

26,034 views

Published on

Published in: Technology

NASSCOM ILF 2014: Outsourcing 2020 - Get Your Vision Right for the Future: Helen Huntley, Gartner Research

  1. 1. Outsourcing 2020: Get Your Vision Right for the Future Helen Huntley Vice President, Research This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole us e of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally prote cted, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
  2. 2. IT’s Impact on the Business Has Increased Over Time Past Present IT Future IT Business Business Business
  3. 3. Present Outsourcing Era – Sizeable Shifts Internet, Cloud, Emerging Technology Business Executing Deals Custom to Standard ITO/BPO Selective Sourcing IT Vertical Specialization Business Shorter Deal Duration Global Delivery
  4. 4. Future Outsourcing – Leveraged • Global and Domestic Delivery Optimization • Externally Owned Assets • Leveraged IP/Solutions • Micro Verticalization • Multi Provider Aggregation • External Innovation through Strategic Suppliers • Redefinition of Leading Suppliers
  5. 5. Results From the Gartner-Forbes 2012 Board of Directors Survey… 86% 50% IT's strategic contribution to the business will increase in the next two years Agree that IT is the way to change the rules of business competition
  6. 6. Gartner-Forbes 2012 Board of Directors Survey Top 5 Priorities 1. Attracting new customers 2. Retaining and enhancing existing customers 3. Focusing on core competencies 4. Maintaining competitive advantage 5. Fostering innovation
  7. 7. Evolving CIO Role What are CEOs and senior business executives’ views on the quality or capability they would most like to see improved in CIOs? Data: Gartner CEO and Business Executive survey
  8. 8. Changing Expectations for CIOs, Areas for Improvement 1. Business Awareness, Understanding and Acumen 2. Communication Skills 3. Vision & Big Picture 4. Situational Awareness, Realism & Pragmatism 5. Efficiency & Productivity 6. Leadership 7. Investment, Value & Financial Acumen 8. Flexibility 9. Innovation 10. Integrity, Trust & Accountability
  9. 9. Challenges for the CIO IT management improvement Cost effectiveness Security and risk management Proactive change and innovation 5% Speed and agility Keep pace with technology 4% Core responsibility excellence Cloud modernization 2% Add business value beyond IT cost Mobile business enablement 2% Business productivity improvement Tech selectivity and hype filtering 1% Integrated change management Social media business enablement 1% Simplification Other Balance local and global needs Engagement/ 4% No reply User friendly systems focus communication 3% Talent management 7% IT demand management Regulation agility Incorporate new tech trends 14% Business understanding/awareness Business strategy alignment Rev. growth + end customer focus Business process focus Competitive advantage focus Anticipate/predict business need 9% 6% 3% 2% 2% 1% Deliver better Business 49% focus 23% 8% 8% 5% 5% 5% 4% 3% 3% 2% 2% 2% 1% 1% 1%
  10. 10. The Board and CEOs Rising Expectations will Influence the CIO "Yes, I'm in line for CEO succession." "We brought in 40% of new product revenue." "Predictive markets and gaming psychology help us uncover brilliant ideas." "Innovation catalyst teams keep us several steps ahead of our competitors." "We are all about differentiation. We seize advantage." CIO “We must hire IT resources with business skills." “Expanding into new markets and geographies will drive our business growth." “How do we change the rules of competition."
  11. 11. 2014 – 2020 Represents Significant Change for the Business and IT Business Model Evolution IT Skills Shift Emerging Technology Growing Information DIGITAL PRESSURE Evolving CIO Role Nexus of Forces
  12. 12. The Digital Dragon Is Upon Us, 2339 WW CIOs from 77 Countries Agree "My business and its IT organization are being engulfed by a torrent of digital opportunities. We cannot respond in a timely fashion, and this threatens the success of the business and the credibility of the IT organization." "The IT organization has the right skills and capabilities in place to meet upcoming challenges." 4
  13. 13. Digital Strategy Is Advancing Our digital strategy is our business strategy 2% We have nothing we recognize as digital strategy 14% 49% have a digital strategy Digital strategy is an integrated part of our main business strategy, 32% We have a digital strategy, separate to our main business strategy 16% Data: Gartner CEO and Business Executive survey We have some strategy in that area, but not called out as digital, 37% "To what extent does your organization have a digital strategy today?"
  14. 14. The Chief Digital Officer Role Is on the Rise Industry Media Communications Services Banking Insurance Retail Healthcare Providers Government Manufacturing & Natural Resources Wholesale Trade Education Transportation Utilities %CDOs 21% 13% 11% 10% 9% 9% 5% 5% 5% 3% 3% 4% 1% Gartner predicts a tripling of the CDO role by 2015 9
  15. 15. Nancy McKinstry CEO, Wolters Kluwer CNBC Interview 2013 "When I took over as CEO 70% of our revenue came from print products. 10 years later over 75% of our revenue come from online, software and services."
  16. 16. Enterprises Are Also Dealing With The Rise of Extreme Information 59% 100% 80% Information is growing annually Stored information is doubling YOY Of data is unstructured 2B 275 Individuals on the Web (30% of global population) Exabytes per year in Global IP traffic Audit, archive and recovery is increasingly complex
  17. 17. It is Imperative that We Apply Filters to Distinguish Information of Real Value 270ºC http://commons.wikimedi a.org/wiki/File:FirePhoto graphy.jpg That which changes your decision or course of action MATERIAL INFORMATION http://commons.wikimedia.org/ wiki/File:Tastant_l%27aigua_d %27una_piscina.jpg INFORMATION http://commons.wikimedia.org/wiki/File:PIA02405.jpg DATA 28ºC That which reduces uncertainty -55ºC Measurement
  18. 18. Information is Everywhere! The Rise of Strategic Information Management Transactional Data Social IT/OT Documents Image Audio stIM Video Mobile Text Search Engine Strategic Information Management – The Purposeful Application of Superior and Distinctive Information for Competitive Advantage
  19. 19. There Are Many Examples of Organizations Wielding "Information as Strategy" Iceland provides fish traceability information for consumers on time of catch, trawler and sea location. Walmart collects sustainability information and is defining a standard index of measurement for food and CPG. Copenhagen Airport collects location information from people's Wi-Fi devices — so it can model for better passenger flow and punctuality.
  20. 20. http://upload.wikimedia.org/wikipedia/commons/b/b7/Best_Buy_Express.jpg Our Business Models Have Had to Change Increase Channel Sales & Change Customer Experience
  21. 21. Online sales increased 130% Increase Customer Access & Channel Sales Source: Tesco Home Plus
  22. 22. Increased Ease of Shopping, Differentiated Source: Tesco
  23. 23. Philip Clarke CEO, Tesco 2013 "To compete in the new era of retailing I believe that Tesco has to be more than a retail company. We have to become a technology company too."
  24. 24. But - Can We Go Too Far with Technology? 2020 Could Be Very Complicated • 10 million+ lines of code & IP Addresses • The need for operational training growing • The US Government is proposing “distraction guidelines” for automakers
  25. 25. Gen Y Entrepreneurs Think Differently • Born: 1982-2000 • Increased use and familiarity media and digital technologies • Influenced by the rise of instant communication technologies, and social networking sites • Peer-oriented due to easier facilitation of communication through technology
  26. 26. Generation Y’s Business Models Are Different, Partner Intensive, Our Future is Changing Soapbox Soaps Founded: 2009 by two 22 year olds Mission: “Buy a Bar, Donate A Bar" Empower Consumers to Change the World through Everyday Purchases Business Model: •Heavily Leverage Partners, Manage Integration Tightly •Extensive use of Mobile and Cloud Technology •Minimize CAPEX and OPEX •Brand Awareness - Strong Social Networking and Social Marketing
  27. 27. SoapBox Soaps Heavily Leverages 30 Partners in its EcoSystem
  28. 28. Career Change Ahead Careers in IT and Necessary Skills Required Will Change
  29. 29. Creation of the "T"-Shaped IT Staff Business Breadth Value to the IT Group Technology Depth Value to the Business Critical Skills Needed • Business Acumen • Vertical Specialization • Supplier Evaluation & Selection (More buy, less build) • Supplier Integration/Mgmt. • Digital Workforce Engineering
  30. 30. Changing IT Models That Supports the Business Like Never Before Driving a New IT Model & Focus New Thinking in IT Show Value for Money Enable New Business Value Create Extended Value IT • ROI • Risk Mgmt. • Vendor Mgmt. There are no IT projects, only business projects IT provides services at marketcompetitive prices IT is agile; it IT drives provides new business capabilities performance, when the measured business with KPIs like needs them market share and EPS • Governance • It's no longer what you do, it's how you get it done through externalized sourcing
  31. 31. What Else Does the Future Hold that Impacts Outsourcing? Expanding Globalization of Business Changing Value Propositions Changing Requirements Source: www.botinacalls.com
  32. 32. Global Opportunities – GDP Growth 1.7% 3.0% 2.4% 3.9% - 0.3 %* 0.9 %* 1.6% 2.7% 7.5% 7.8% 3.1% 3.6% 1.7% 1.9% 5.1% 6.5% 3.0% 3.6% 2.4% 3.3% 4.7% 5.0% 5.5% 5.4% Forecast: 2014 v 2013 Real GDP Growth = + 3.4% +2.4% 31 * = European Union Source: IHS Global Insight August 2013 Note: Smaller Sized Numbers = GDP Growth in 2013 versus Bar / Larger Numbers = Forecast GDP Growth in 2014
  33. 33. What You Must Do Between Now and 2020? Today’s Realities Your Future Relies On: • • • • • Harnessing the Power of Your Information • Mobile computing • Social and gaming capabilities • Changing Your IT Staffing Vision • Partnering with the Right Suppliers • Using Emerging Technology to Your Business Advantage Budget Traditional projects Legacy support Customization Requirements • Aging technology • Traditional skills and staffing IT = Business
  34. 34. Outsourcing 2020: Get Your Vision Right for the Future Helen Huntley This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole us e of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally prote cted, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

×