it outsourcing trends - 2016 and beyond

IT Outsourcing Trends

2015 & beyond

1. Worldwide IT Outsourcing market

2. Digitalization puts pressure on all organizations

3. Business leads technology

4. Large contract renegotiation

5. New working & pricing models

6. Flexible sourcing models

7. Project management trends

8. Co-opetition between IT service providers

9. Focus on risk

10. Employment strategies

11. New technology trends

Agenda

WORLDWIDE IT OUTSOURCING

$100 BILLIONworth of outsourcing contracts will be

renegotiated in the following year, according to Stanton Jones.

Number of outsourcer per company will

multiply even further

Organizations want in on the cloudMore than half of all UK organizations are using, or planning to use, public cloud

vendors. The satisfaction with these cloud vendors, such as Amazon, Google, Microsoft, Oracle, Rackspace, Salesforce.com and SAP is generally high

Focus on core business is the main driver for outsourcingWhen asked for the main drivers of employing ITO services, 68% of the respondents cited a

need for their companies to focus on core businesses. Organizations looking to outsource more this year are also returning to investing to support the business, after sweating existing

assets during the economic downturn in the late 2000s.

Cloud, utility computing, and virtualization will

converge, and everything will start to

look the same

Businesses will continue to outsource…The market of outsourcing companies is expected to grow. In UK for example 69% of respondents in a

survey say they will continue to outsource at the same rate or even more.

MORE EXPECTATIONS

Digitalization is transforming organizations, putting pressure on organizations to adapt. As a consequence they will replace reactive service providers that lack innovation and business understanding with strategic technology partners that are able to deliver deep

technology driven innovation

BUSINESS LEADS TECHNOLOGY

Technology will be purchased more and more by business leaders rather than IT departments.

Organizations will migrate to a service brokerage model, focusing on rationalization, integration and security

LARGE CONTRACTS RENEGOTIATION

Many customers will replace traditional outsourcing with multisourcing, cloud-based

models

PROCUREMENT PROCESS

The traditional RFP fades in front of emerging procurement methods as it takes too long to define specifications & it

costs too much. Business requirements change and it takes a collaborative approach to identify needs and proactively

define specifications

NEW WORKING MODELS

Labor as a Service

NEW PRICING MODELS

Business outcome based pricing, pricing based on performance

HYBRID OUTSOURCING

Offshoring is no longer the default. A hybrid model that leverages onsite, onshore, nearshore and offshore

tends to be acknowledged as the best sourcing strategy

OUTSOURCING PARTNERS

Managing service providers, due to increasing application focus and the commoditization of infrastructure, will take on characteristics that we see in software portfolio management today -- elimination of duplicated and unused services, allowing for growth, negotiating and negotiating again (…) Integration will be absolutely critical and is likely to be the key differentiator between one organization's IT effectiveness and another's.”

Scott Fueless, principal consultant with ISG

Large deals will disaggregate in smaller ones for more transparency & control and small projects might be aggregated into complex, enterprise wide solutions for better project governance & to achieve business goals. Outsourcers per customers will multiply

even further, making project governance a complex task

”

OUTSOURCING CO-OPETITION

Multi-sourcing strategies will oblige competing service providers to work together to achieve common business

goals. Various organizations already implemented “outsourcing cooperation agreements” that bind service

providers to cooperate at operational level

DATA-DRIVEN OUTSOURCING

Enterprises will choose IT services partners based on cost, project transparency & data to understand

optimization opportunities

DOMESTIC SOURCING & INSOURCING

Domestic sourcing & insourcing will remain in the game, sometimes brought back, especially for projects that require senior, experienced teams, agility, cultural

alignment & local business understanding

PROJECT GOVERNANCE

The growing complexity & diversity of service providers ecosystem transformed project governance into a critical

capability, enabling organizations to manage performance, risk and compliance

PROJECT MANAGEMENT

The day of project management amateurs is over, organizations are struggling to attract entrepreneurial Project Managers.

Projects get more complex therefore PMs need to become masters in coordinating various tasks, teams and sources.

• crowdsourcing (eg: Wazoku Idea Spotlight)• big data (for cost projections or hidden correlations)• methodologies adapted to project scope (high focus on agile)• dedicated collaboration tools/central project hubs (eg: Slack, Yammer,

Salesforce Chatter, Flowdock) gain grounds in front of the traditional emails

• gamification (rewards & points to make boring tasks more enjoyable

INTERNAL SERVICE INTEGRATION COMPETENCIES

The increasing complexity of the multi-sourced environments makes internal service integration

competencies strategic. This enables organizations to keep control, make sure all services are compliant and select easier niche service providers for future needs

FOCUS ON RISK

Integrating supplier risk into business operations Business decisions based on different real-time risk events

FOCUS ON RISK

Geopolitical risks are asserted – caution about countries with political and economic turmoil to avoid disruptions

EMPLOYMENT STRATEGIES

IT service providers will increasingly use gamification to keep employees engaged during the performance of

routine and monotonous tasks

EMPLOYMENT STRATEGIES

BYOD / Work from homeSecurity challenges & strategies

EMPLOYMENT STRATEGIES

Strategic focus on HR strategies, recruitment, talent retention & talent pool creation, SDC &

certification programs;Recruiters need to enter the marketing game

NEW FORMS OF SOCIAL INTERACTION

Communities (online and offline) will form around products and solutions, being the source of new ideas

that develop the product, and a way to recruit new employees.

Forum

CLOUD COMPUTING

As the industry becomes more and more comfortable working with the cloud, the industry is becoming even more comfortable with the benefits of standardization -- increased efficiency, virtualization, reduced support costs. Thus, even in bespoke outsourcing arrangements, there may well be more similarity than difference, both within a single company's formerly complicated IT environment, and across companies --both client and provider. The cloud, utility computing, and virtualization are converging to create this new operating model that will become the new paradigm for IT outsourcing.

Joshua'Konvisser,'Pillsbury'Winthrop'Shaw'Pittman

”

Cloud comes down to earth

SMART MACHINES MOVING UP THE VALUE CHAIN

As artificial intelligence evolves, development and implementation of robot like technologies will be used to automate tasks and processes currently performed manually in house or through outsourcing partners

• We'offer'discrete'solutions'to'known'business'challenges'and'build'bespoke'solutions'for'your'specific'requirements.

• Our'delivery'models'encompass'the'full'range'of'development'options'and'our'ability'to'engage'from'nearshore'with'UK'presence,'as'required,'gives'you'full'control'over'costs.

• We'offer'a'refreshing'approach'to'commercials,'enabled'by'our'unique'structure.

• Our'final'building'block'to'deliver'the'right'business'solutions'for'you'is'in'depth'knowledge'of'your'industry'sector.'This'means'we'talk'your' language'and'understand'the'business'impact'of'our' solution.''''

Banking Insurance

HourlyT&M

ApplicationDevelopment

.NET, Java,?PHP/LAMP,?C/C++Amazon,Windows?Azure, SalesforceIos, Android,Windows?Phone,?Blackberry,?HTML5

Ruby?onRails, Python,?EmbeddedSoftware,Databases, Sharepoint,?SAP,Microsoft, Oracle,Other Technologies

ApplicationTesting

ApplicationSupport

ITConsultancy

ProjectManagement

BusinessAnalysis

Fixed Price

Nearshore

Agile

System Integration

Information Security

EnterpriseMobility

WebApplications

CRM?&Loyalty

MobileApplications

BusinessIntelligence

Cloud Strategy

eCommerce?Development

CloudMigration

Big?DataConsultancy

Big?Data?Dashboards

Iterative Waterfall Prototyping

Onshore Combined

SLA?driven TeamAugmentation

DedicatedTeam

Leasing ITC Retail eCommerce Travel Healthcare Media

B U S I N E S S S O L U T I O N SIndustryExpertise

CommercialModels

EngagementModels

DeliveryModels

DiscreteSolutions

CoreTechnologies

CoreServices

• Our'client'list,'representing'key'industry' sectors,'reflects'Euro'IT'Groups’'ability'to'deliver'high'quality,'on'time,'services'to'organisations from'worldwide'recognised brands'through' to'innovative'startups.'Euro'IT'Groups'adaptability,'based'on'repeatable'processes,'is'just'one'of'the'reasons'these'organisations choose'us'as'their'IT'specialists.

• Each'of'these'clients'can'be'referenced'and'our'specific'engagements'with'them'are'captured'as'Case'Studies.''

• These'clients'and'our'successful'engagements'are'the'reason'why'we'can'be'confident'we’re'the'right'choice'as'your' IT'specialist.

CLIENTS

Banking,Financial&'Leasing

Travel'&'Accomodation

ITC STARTUPS BPO OTHERS Retail'&'Wholesale

eCommerce Insurance Healthcare

Our*Clients

Banking,Financial&'Leasing

Travel'&'Accomodation

ITC STARTUPS BPO

OTHERS Retail'&'Wholesale eCommerce Insurance Healthcare

Our*Clients

TECHNOLOGY• Euro'IT'Group’s'unique'structure'means'we'have'access'to'every' IT'application'technology'you'may'

require,'from'traditional'technologies'in'the'Java'and'.Net space'to'leading'edge'technologies'driving'innovation' in'areas'such'as'Big'Data,'business'intelligence'and'Mobile'.

• Maintaining'up'to'date'skills'in'such'a'wide'variety'of'technologies'is'practically'impossible'for'an'in'house'team'and'traditional'vendors'are'constrained'by'their'structure'and'existing'teams.

• By'taking'a'refreshing'approach' to'our'organisations,'Euro'IT'Group'can'confidently'engage'you,'the'client,'from'the'starting'point'of'being'technology'agnostic.'We'will'work'with'you' to'understand'your'problems,'challenges'and'requirements'and'only' then'agree'what'technology'solution'is'right'for'you.

• The'technologies'on'the'right'reflect'our'current' skills,'but'we'will'constantly'enhance'this'to'take'advantage'of'new'technologies'entering'the'market.

TECHNOLOGY

PARTNERSHIPS

Why*us

Proven'track'record'in'delivering'complex'projects

We'offer'a'well'balanced'blend'of'technology'skills,'domain'knowledge,'hands'on'experience,' effective'methodologies,' complex'language'skills'and'a'great'passion'for'converting'business' ideas'into'technical' products

Western'business'culture,'excellent'English'language'skills,'French,'German,'Italian,'Hungarian'speaking'resources

Convenient'locations'and'favorable'time'zones

Proof'of'capability'based'on'low'cost'pilot'projects

Capability'for'fast'project'initiation'and'delivery

Well'defined'and'documented' software'development'process

High'focus'on'staff'trainings,'employee' satisfaction'and'an'effective' recruitment'process'– stable'qualified'teams

CONSOLIDATED OUTSOURCING

Contact:'office@euroitgroup.com