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.
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.
Different end user expectations
Another critical factor will bring change to IT services: what Forrester calls technology populism. Computer-literate end users increasingly look for the same flexibility and ease of use in workplace solutions that they find with consumer services online. They want to go beyond the standardised tech tools found in most enterprises today.
Businesses seeking a response - like the major hospitality chain that launched a "Bring your own PC" program -- are still only at the beginning of this story. There is still much to learn about the necessary changes in hardware support contracts, outsourcing deals, and security services.
What you can do about these changes
Forrester's upcoming Services & Sourcing Forum EMEA 2009 (London, October 22 - 23, 2009) will delve into the services, sourcing, and vendor strategies needed to build out of recession. Meantime, here are three tips to help you benefit from the changing IT services landscape:
• Pilot new ways to buy and implement software. One trial approach might be to allow a small group of end users to "purchase" from an approved SaaS provider, rather than use your standard apps configuration for a given need. This could give you new insights into how to purchase and "market" software for your end users long term.
• Get your existing providers to help you. Instead of simply hammering down prices, challenge your providers to help you with your goals. One member of our Forrester Leadership Boards told us how a day-long session with suppliers, focused on innovation, produced 11 actionable ideas. In return, the providers simply sought fair compensation and access to bid on new work when available.
• Think about how to work with a new class of "enterprise" vendors. New sources of supply are gaining ground: think of the pressure on you to support iPhone users. With Gmail and Google Apps, Google is forcing IT departments to reconsider the provisioning model for basic utilities like email. But new suppliers bring new services and support challenges - like the well-publicised occasional outages suffered by Gmail recently. Working with "enterprise unready" new providers may be one of the prices you pay for helping shape the new corporate standards for future IT services.