Asian Companies Will Give Outsourcing A Fresh Look In 2013

Forrester’s team of Asia Pacific (AP) analysts has just published its 2013 IT industry predictions in the IT Industry Disruptions Fuel Renewed Asia Pacific Market Growth report, which covers general IT spending and technology adoption trends. I’d like to call out the key 2013 IT services predictions in this post.

We expect more AP organizations to embrace outsourcing services in 2013 to help them leapfrog the traditional IT skills, process, and technology learning curves necessary to support their business objectives. Our recent Forrsights Budget & Priorities survey in AP shows a high interest for outsourcing services in countries like Indonesia, Malaysia, Singapore, and Japan (see figure below). As AP companies try to manage rapidly rising complexity in both their business strategies and their application and infrastructure environments, they are facing a growing disconnect between business expectations and internal IT capabilities. Senior decision-makers have begun taking a fresh look at outsourcing as a way to bridge this gap.

  • Global expansion strategies are driving the need for world-class IT systems. A growing number of AP companies are no longer satisfied with their domestic markets alone and are developing global ambitions. Indian and Chinese companies in particular have accelerated growth abroad via acquisitions — not only in North America and Western Europe, but also in the Middle East and Africa. As this growth continues, business stakeholders are quickly realizing that their organization’s current internal IT capabilities are not capable of supporting these global ambitions.
  • Organizations are eager to build systems of engagement but lack resources. Business stakeholders across AP like chief marketing officers can’t wait to get their hands on new technologies like mobile and predictive analytics. These systems of engagement help put the customer experience at the center of the business strategy and help businesses better understand and engage with their customers. But investing in these systems of engagement means transforming the front office as well as overhauling back-office systems. In addition to not having the right IT skills in house, AP organizations often lack the cash to invest in such new systems.
  • Cloud economics are attractive, but AP companies need help to reap the full benefits. Over the past two years, Forrester has witnessed rapidly growing cloud awareness and maturity levels in AP. Having said that, a lot of these companies have engaged in a private cloud journey and are stuck at the server virtualization phase due to the lack of adequate internal skills, processes, and IT management capabilities.

As business stakeholders recognize the limitations of internal IT departments, they will increasingly look to leverage transformational IT outsourcing services. But relying on a third-party service provider to help drive IT transformation is not without risks. For successful companies, this will be a multiyear journey framed with well-defined milestones and SLAs.

What do you think? As always, if you think I’ve missed anything particularly important to you than definitely share your thoughts.

Comments

Interestingly whilst

Interestingly whilst developed economies adapt outsourcing/ off-shoring for cost reasons, AP it seems will be adopting for growth reasons.