New directions for IT services

Even at a time when spending cutbacks seem the most potent symbol of change, hype about tech innovation continues unchecked. But for IT services, at least, talk of innovation genuinely goes beyond hype. Here's why:

Changing global demographics
Many factors drive globalisation - cost often being dominant for IT services. But demographics may yet matter more. The UK's shrinking IT workforce will be a constant challenge to CIOs for years to come.

The UK today has a median age between 40 and 45. But in India, with its half-billion working population, half the people are under the age of 27. The Philippines has a median age of 22.3 years. No wonder these countries have won leading roles in the global delivery of IT services.

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Demographic pressures will drive a continued need for globalisation of the labour pool - despite political rhetoric to the contrary. All large companies will need to adapt to this reality - and the changing IT structures it implies.

New delivery models
New models -- like software-as-a-service (SaaS), solution accelerators (pre-built code that systems integrators use to kick start client projects), and cloud services - blur the differentiation between products and services. Buyers appreciate the resulting financial and time-to-value benefits, along with other advantages like improved scalability for varying usage. One utilities firm bought into SaaS partly for its lower costs, but also to harness its quicker service deployment to business users.

Services using new models like cloud computing may bring enterprise benefit, but they compete with traditional outsourcing or managed services. For example, a bundle of pre-packaged cloud services may increasingly serve to replace the custom-built outsourcing provision of today. That means more complexity of choice in the sourcing process.