9 IT outsourcing trends to watch in 2013

By Stephanie Overby, CIO |  IT Management, outsourcing

Still expect to see more such deals going forward. "The lure on the part of the customer to be able to further reduce headcount--some in the IT organization will no longer be needed-will likely continue to drive interest in this structure," Krieser says. "Providers will continue to entertain this, despite the risks, because it puts them in the driver's seat in managing the customers IT environment and in the catbird's seat as existing contracts expire or new projects arise."

[Related: Is Integration-as-a-Service the IT Model of the Future?]

7. Transition Troubles Lead to Disputes

"Customers and suppliers will continue to close deals without fleshing out transition and transformation details and plans," says Pillsbury's Oser. "Failed or delayed transitions and transformations will [become] number one area of disputes between customers and suppliers. "

8. Chindia--or Chimerica--Becomes a Reality

"At some point in the near future a large sourcing provider (Indian- or U.S.-based) is going to be purchased by a Chinese company," says Mark Ruckman, outsourcing consultant with Sanda Partners. " This purchase will create a huge shift in the economics of sourcing."

9. Backsourcing Blossoms

Outsourcing pioneer GM made the biggest backsourcing splash this year, with its announcement that it would be bringing 10,000 jobs back in house in coming years. Other IT organizations will follow suit this year.

"Due to a variety of factors, chief among them the realization that some services are better entrusted to employees rather than 'outsiders,' dissatisfaction with vendor performance, and continued erosion of offshore/onshore rate arbitrage benefits, companies will repatriate currently outsourced infrastructure and in some cases, application development services, at a greater pace," predicts Steve Martin, partner with outsourcing consultancy Pace Harmon.

Low-level and routine tasks will remain with third-parties while higher value positions like capacity planning, architecture, and configuration management will move back in.


Originally published on CIO |  Click here to read the original story.
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