"Companies are starting to invest more in global business services models, [which combine] the best of shared services and outsourcing under a common governance model. This is seeing processes being offshored in captives by industries that have traditionally been reluctant, such as media and entertainment," says Vasithsha.
Indeed, this year will see a mix of outsourcing models overall. "Most companies need to get the right combination of best talent and most-cost-effective IT services," says Scott Staples, president of Americas at IT service provider Mindtree. "The best sourcing strategies treat outsourcing and insourcing as complementary not competitive, and leverage onsite, onshore, offshore and nearshore options all in the same model."
3. An Increase in Insourcing
"Of the IT services historically outsourced, 20 to 30% will be brought back in-house as buyers are more comfortable to create retained organizations that not only govern the services, but start to move more into operational control of the services," says Stan Lepeak, global research director for KPMG Advisory. Companies will rely on IT service management frameworks like version three of the Information Technology Infrastructure Library to manage the increased insourcing.
But expect the industry press to make a bigger deal about such backsourcing than it deserves, says Wagner of Alsbridge.
4. Service Integration Comes Home
IT leaders have given third parties a shot managing their multi-sourced environments in recent years. In 2014, they'll take on service integration themselves. "Following a period of experimentation with various outsourced models, client organizations will increasingly focus on service integration as an integral core competency and take key functions back in-house," says Lois Coatney, director with outsourcing consultancy Information Services Group (ISG).
"In outsourced models, clients have found they lose visibility and direct control of service management effectiveness, and that they become too remote and unable to fill their fiduciary responsibility. Clients are recognizing that a solid internal service integration capability provides better flexibility and knowledge of the business required to onboard new and specialty service providers," says Coatney.
5. The Cloud Gets Grounded