Handle your IT outsourcing with care, warns Gartner

“Gartner believes that 2002 could be a record year for signing bad [outsourcing] deals.” So says Robert Brown, senior consultant with analyst Gartner for the enterprise outsourcing market. Even data centre outsourcing remains immature, he says – at best mid-life in the business cycle. So the issues are: in the near future will your service offering still be available; will it be applicable and best suited to your changing needs; and will your service provider still be around? Brown notes that the scale of service change over the last few years will be eclipsed by those in the near future. By 2005, he predicts, outsourcing will be about business solutions, not IT solutions, providing for specific vertical process and business critical requirements – mass customisation of business support outsourcing. External service providers, he says, will partner with technology and service providers to deliver much more inclusive, ‘pre-architected’ mix-and-match business-orientated alternatives to today’s view of disconnected business and IT departments. He describes the changes as a ‘tectonic shift’ in service provision, resulting in a “bewildering array” of possibilities built around the new worlds of exchanges, portals, mobile systems and converged, even commoditised applications and infrastructure offerings. And as the sweet spots for growth and profitability in the service provision market move to follow the business and technology trends, so the attractiveness and availability of the newer service offerings will shift. Best advice: negotiate strategic IT outsourcing deals – not based on today’s tactical requirement or price alone. “No company knows where they’ll be in two years,” says Brown. As infrastructure, applications and business processes change and ever more becomes commodity, change to the business landscape could bite you hard. So ensuring room for manoeuvre on your contract and SLAs is the common sense course. “Only specify your SLAs for the first two years,” advises Brown. “Leave the other five or 10 to be agreed.” To many users this may well seem rather futuristic. Matt Cadieux, for example, infrastructure manager for Jaguar and Land Rover, says that while he is happy with his new ‘break/fix’ outsourcing contract with Sun, and the cost savings and operational efficiencies and improvements that have already resulted, he is not yet looking further. Gartner’s vision of more sophisticated business- and knowledge-driven outsourcing arrangements are not on his radar. For him the issues remain: looking at more intelligent ways of running the infrastructure in terms, for example, of consolidation and standardisation – as well as revisiting application and business process unification.