Irene Pimentel

Irene Pimentel

Irene Pimentel is an IBRS analyst who focuses on news and information on the global IT Outsourcing market. Irene provides IBRS clients with up to date information on all outsourcing deals that are taking place helping our clients understand who is winning business in what markets. With over 10 years experience as a management consultant, Irene has worked with some of Australia's largest blue chip companies and public sector organisations. Irene has also worked as a research manager for an IT sourcing consultancy, providing clients with targeted intelligence and advice for their specific IT sourcing transactions.

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Conclusion:

This month, there has again been a focus on skills gaps in the outsourcing industry. There is a shortage of both technology and talent to provide managed services, which are not limited to specific skill sets or functions, but span the range. Businesses are no longer static, but constantly evolving through mergers, acquisitions, new product lines, digital transformation initiatives, and geographical expansion. Vendors have been forced to take more aggressive action in order to balance increased customer demands for products and services with falling staff levels. A more measured, phased approach that will not disrupt company operations and takes into account risks associated with any changes to business frameworks is required. Vendors must cater to both employee and customer priorities. In particular, alternative employee work environments and staff compensation models to attract new talent. Vendors must also have long-term approaches to address shortages while the demand for talent is greater than current supply.


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Conclusion:

This month, the large number of hubs launched, and strategic mergers aimed at innovation have been prominent. Substantial investments have been made in research facilities and acquisitions that can integrate services or assist with the development of new offerings. This reflects customer demand for more functional, innovative, and integrated solutions. Offerings and delivery models that can manage risk, optimise costs, and increase efficiency must differentiate vendors from competitors and requires investment, as well as ongoing innovation and development. Vendors must cater to customer goals to run, grow, and transform businesses with new outsourcing frameworks and offerings. Vendors must also balance the pace of technological change and an increased demand for professional services with the development of targeted, contextual, and robust solutions, which allow for reach into different industries, businesses, and locations.


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Conclusion:

This month, a high level of IT industry executive and senior staff movement, and hires, has been evident. The high demand for IT solutions has driven greater choice for customers when selecting targeted and cost-effective services. Changes that occur in key IT industry areas, particularly senior roles in service providers, must be met with the evolution of these roles to parallel key customer priorities. Customers rely on vendor-based efforts to maintain a solid customer experience. During a time of change, vendors must reassure customers they are focused on driving business results for their clients, as well as themselves.


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Conclusion:

This month, discussions regarding the continued growth of the managed service provider sector have been prominent. There has also been an emphasis on innovative business and service delivery models to slot in with customer needs and internal processes. While providers continue to establish a more stable presence in the industry, allowing for necessary change and consolidation, the service and customer landscape constantly evolves. Customers demand targeted solutions with ongoing vendor support that can integrate with a business’ strategic priorities, adapt to change in a company, or allow for responses when difficulties arise.


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Conclusion:

This month, discussions regarding significant technology industry growth in 2022, particularly the second half of the year, have been prevalent. An increase in sales, design, and implementation projects has been flagged, as well as recurring revenue streams. As customers begin to pull out of uncertainties, there has been a focus on building solutions that are sufficiently scalable, robust, and secure to withstand future unforeseen issues. There has also been an emphasis on increasing value by managing the cost base of projects and promoting business growth. In order to support this type of demand, vendors must take into account customer preferences for building their own solutions that can be integrated into existing products and services, followed by how to assist customers when utilising solutions to generate demonstrable value for organisations.


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Conclusion: This month, discussions regarding partner-led growth through alliances and acquisitions have been prominent. Being selective with these types of relationships can allow for increased access to clients, service providers, and an expanded skills base. However, the rapid deployment of new resources through partnerships and acquisitions can add complexities, reduce visibility and increase security risks when consolidating internal business processes, or products and services. Challenges associated with conflicts and vulnerabilities when bringing organisations together, in any way, must be addressed with ongoing skills growth, as well as resources and management structures to support complex and changing environments.


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Conclusion:

This month, discussions regarding the need for improved security efforts have been prominent. Analyses of security concerns in 2021 have shown a significant increase in cyber security and ransomware attacks. Annual reviews have flagged a changed threat landscape, with attacks increasing in volume and severity. There has also been an escalation in the magnitude of highly targeted attacks, possessing clearer objectives which provoke more serious overall impacts. As attacks have become more prolific and aggressive, organisations are demanding a wider range of higher quality security services that can be tailored to individual needs. Customers are acknowledging that without strategic changes and significant action, the increase in security incidents witnessed in 2021 will continue throughout 2022.


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Conclusion:

This month has seen increased discussions regarding the need for digital transformation in the face of changing customer needs. Distributed workforce environments, ongoing shifts in operational structures, and the need to respond to customer demands quickly have driven the need for transformation efforts. Reduced costs, improved service levels, and differentiation have become priorities for organisations, with a focus on utilising technologies that can support business changes whilst retaining the resiliency of internal solutions. Organisations are also prioritising reduced infrastructure deployments and the elimination of dependency on technologies that can become dated, unstable or unable to support changes in business operations. Vendors have found the provision of adaptive platforms that are tightly integrated are in high demand. Service providers need to leverage a range of solutions that can slot together and are sufficiently flexible to adapt and be altered to meet changing customer needs quickly, all at once maintaining solution resiliency.


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Conclusion: This month has seen an increased focus on discussions regarding supply chain disruptions. While demand for ICT products and associated services remains strong, if supply chain issues cannot be averted or accommodated, disruptions experienced can have an adverse impact on a business’ ability to operate. Supply chain issues, as well as sudden shifts in supply or demand can impact on sales and general company operations. To ensure the continued delivery of business-critical products and services, digital transformation efforts are required to reduce the impact of supply chain disruptions and minimise effects on business operations. Vendors can assist with establishing protocols, supply chain resilience and maintenance as well as ensure a well-managed supply chain remains a business priority.


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Conclusion: This month has seen a rise in outsourcing project implementations. In particular, the completion of migration, consolidation and transformation efforts have been prominent. Whilst this work is critical, developing, then commencing and conducting successful projects can be difficult. After completion, ongoing monitoring and assessment of projects is required. Without careful planning and strategic approaches to align new projects with business objectives, organisations can be vulnerable to technical capability gaps, as well as inappropriate systems and tools that fail to fulfill technical objectives. Hasty, short-term solutions can result in partially implemented or inadequate systems that can decrease a company’s ability to innovate, reduce the capacity to respond to competitive threats, and excessive, unexpected costs. When planning projects, it is important to engage specialists that can assist with a strategic, long-term approach to project planning, implementation, and ongoing review.


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Conclusion:

This month, discussions regarding mergers and acquisitions have been prominent, in particular the high level of activity in ICT services companies. A number of companies have attributed growth to past acquisitions, announced intentions to acquire particular firms or flagged acquisition activity as a strategic priority. Associated actions, such as rebranding, restructuring, and capital raising efforts have also been discussed. The need to remain competitive in current environments, utilising mergers and acquisitions to help evolve businesses has become clear. These transactions can be highly beneficial when expansion plans include re-engineering core business lines, or developing new and targeted specialisations. However, when looking into acquisitions, it is important to plan carefully, intertwine activities with current company strategies and ensure a balance between a company’s existing strengths and stretching newly acquired specialities.


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Conclusion:

This month, discussions regarding security threats to third party suppliers have been prominent. With malicious actors targeting new technologies and work methods, it has become critical for customers to assess and conduct ongoing reviews of third party supplier security prior to establishing partnerships, particularly critical systems providers. A rigorous security strategy and ongoing maintenance is required to safeguard customer data and internal systems. Third party suppliers require the ability to deal with irregular activities, as well as technical controls and policies that correlate with their customers. Supplier vulnerabilities can result in operations and compliance risks, necessitating professionals to develop, implement and audit third party risk management strategies and processes. It also requires security professionals to conduct ongoing audits, establish plans for third party incident responses, and the implementation of restricted access mechanisms. Customers can strengthen their resistance and attack containment mechanisms with professionals to help detect, analyse, contain, and respond to security threats.


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Conclusion:

This month, discussions regarding security threats to managed services providers (MSPs) have been prominent. In the past, cyber criminals and ransomware gangs have targeted MSPs to gain access to corporate networks. Outsourcing IT administration can leave clients vulnerable when MSPs are given highly privileged access to customer systems. Remote management tools can also leave vendors open to attacks. It is imperative that MSP offerings and managed services provide a comprehensive and dedicated suite of technologies and skills to defend vendor security. A clear strategic approach for clients is necessary in order to address the difficulties associated with recent security threats.


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Conclusion:

This month, discussions regarding changes to company structures and operations have been prominent. An increased demand for transformation and internal enhancements has prompted managed service providers to further develop their firms. Streamlining and redeveloping customer products and offerings to meet specific targets has been a particular focus, as well as using predictive techniques and tools to respond to customer needs. In an effort to meet demands, service providers require transparency with customers, and improved offerings for their clients and business partners. This will assist vendors when delivering products, services and support to their customers, and drive their productivity and growth.


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