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Cloud Computing: Outsourcing will assume a more defined role in the cloud era

Cloud is forcing CIOs to manage a more complex, hybrid environment that includes externally provided cloud services along with their own IT services and older legacy applications.

Overview

Making your business cloud-centric, to cite a common analogy, is as simple as flipping a switch. Unfortunately, this conveniently ignores the fact that enterprises require much more than just raw power.

Cloud computing is certainly simplifying some aspects of information technology. It’s also forcing Chief Information Officers to negotiate a more complex, hybrid environment that includes externally provided cloud services along with a business’ own IT services and legacy applications.

This “new normal” requires consultants bring an ability to provide sound advice on appropriate business model design based on multiple service providers. They also need to harness the innovations arising from the interaction of these providers.

As such, we believe we’re at the cusp of a new era in outsourcing.

Given the challenges the cloud presents, the role of the value-added outsource provider—while it may change—is not going away any time soon.

Analysis

We see a few key challenges: for one, integrating data across multiple services.

Part and parcel to that is gaining an understanding of the end-to-end business process being serviced, so a business can be confident its employees and customers will be properly served.

This requires specialized skills in service integration, as well as processes and tools that automate and monitor IT to ensure coordination and oversight between outsourcers and internal functions.

In short, it means not just integrating cloud services, but all the services IT provides the business.

As businesses increasingly rely on the cloud, we envision three classes of outsourcing services and providers emerging:

  • Utility providers—Their value proposition will focus primarily on efficiency and cost.

  • Business function providers—These are niche providers with deep expertise in a particular function, such as sales, HR or customer support.

  • Orchestrators—These will help businesses become “cloud enterprises” that are more dexterous because they can adapt their designs on the fly.

Recommendations

What life in the cloud will look and feel like in the years ahead remains unclear.

But it’s indisputable that the rules of the game have and will continue to change—and that businesses will live in a hybrid of IT and legacy systems for the foreseeable future.

Business leaders aiming for success in this environment will need to change how they manage IT and business operations.

They will be forced to carefully assess the risks involved with deploying new technologies, and understand, at an ever more granular level, the capabilities of their outsource providers.

Most importantly, they will need to learn to operate in a multi-sourced environment—one where the integration of the different components promises to take on greater importance than ever before.

Authors
Jack Sepple is Accenture’s global cloud computing lead and Bhaskar Ghosh is global lead of Application Outsourcing for Accenture.

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