Irene Pimentel

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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.

Conclusion: This month has seen a sharp increase in outsourcing agreements and a broader range of services adopted by customers. Due to globalisation and thus access to new markets and overseas resources through collaboration, vendor offerings are becoming more diverse and tailored to individual customers. This allows for the adoption of stronger digital models from diverse markets, not focused on particular technologies but on business processes and changing customer experiences (CX). This pattern is emerging globally, spanning both large and small businesses. Worldwide, there has been an increased emphasis on CX and recognition that a focus on customer needs as well as a capacity to adapt is necessary to maintain customer engagement and remain competitive in the industry.


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Conclusion: This month, strategic focuses and plans for managed service providers have been prominent. As the current market remains highly flexible and prone to change, vendors must plan ahead while providing customers with tangible business responses to evolving markets. In particular, areas such as security, analytics and digital transformation are set for increased growth this year, as well as associated, offshoot industries that support areas in high demand.


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Conclusion: This month, financial results reporting for the first half of the 2017 financial year have shown steady growth for many IT managed service providers. Vendors that have acquired other companies to enhance or expand service offerings often report positive outcomes, provided those businesses can be successfully integrated with existing operations. Without carefully assessing potential acquisitions and developing a solid transition plan, difficulties can arise because of unsuccessful integration and restructuring efforts. A stringent consolidation plan is required for vendors to incorporate acquisitions and fully exploit specialist products and skills obtained from these investments. It is critical for vendors to assess their own service capacities, capabilities of potential business acquisitions and determine how they can be consolidated to improve service offerings.
In addition, careful planning is required for acquisitions that require business transformation, as well as other potential shifts, such as different target markets or strategic objectives. These efforts can be complex and expensive, but highly beneficial for vendors. There is a need to provide unique, innovative and efficient solutions to customers in a fast-paced and competitive industry, and acquisitions can facilitate this type of market differentiation.


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Conclusion: Prominent this month were agreements and discussions that highlight shifts in the ICT outsourcing market, with increasing demand for targeted solutions to support business functions and long-term goals. These types of offerings have become more common, and are no longer niche services. Set solutions, which are sufficiently flexible to be tailored to individual customers, have become the norm. These solutions bundle a wide range of technologies, associated services and specialist staff, while utilising new business models for the provision of end-to-end services. In order to remain competitive, and facilitate the adoption of new solutions such as the Internet of Things (IoT) vendors are bundling offerings which go beyond the performance of business functions or expanding existing functionality.
Catering to specific goals such as increased customer engagement or the need for monitoring and analysis systems to help with business evolution or protocol development are becoming increasingly popular. Vendors have recognised the importance of portfolios which include extensive suites of strategic managed services that are efficient, diverse and easily customised to individual needs.


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Conclusion: This month saw a focus on the development of improved controls over vendor activities due to the high number of recent outsourced solutions failures and serious impacts on customers. In particular, establishing internal early threat detection teams for initial development phases and more stringent, ongoing reviews. These types of activities flag a change in the outsourcing environment, with increased customer involvement in contract execution throughout all phases of an agreement and set processes to assist with technical issues that may arise before implementation as well as basic contract management. This type of involvement can help minimise risks associated with the adoption and consumption of new technologies and business models, with a greater emphasis on frameworks to circumvent threats as well as respond to them.


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Conclusion: This month saw a focus on customer priorities and greater demand for niche or highly specialised IT services. In particular, there was a shift in IT investment centred on cost savings to ongoing strategic initiatives which facilitate innovation and expansion to maintain competitive advantage. These types of priorities can be advantageous for enterprises hoping to increase operational efficiencies or avoid irrelevancy in changing markets. However, without adequate preparation and thorough assessments of existing and potential environments, large-scale alterations to business operations can be hazardous, negating potential benefits. Risks associated with unforeseen skills deficits, complexities associated with consolidating or replacing environments and business process changes must be considered carefully. An increased uptake of business consultancy services to manage high-level alterations and avert or respond to difficulties indicates an awareness of the necessity to establish solid plans in conjunction with vendors that can be flexible and sensitive to customer needs.


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Conclusion:

Prominent this month were reports of outages and system failures which impacted on critical operations for several businesses and government agencies. These types of failures can become costly with the increased reliance on technology and more complex environments that underpin many basic business processes. Outsourcing agreements and protocols can provide frameworks for averting or responding to service interruptions, but cannot cater to all variables that cause unexpected problems which are difficult to resolve. Triggers for serious disruptions this month have included human error, software misconfiguration, failed fire alarms, contravention of standard consultant protocols and ISP failures which had flow-on effects for large companies which rely on networks. It is not always possible to prepare effective responses for the types of disruptions that are not predicted, making it essential for both vendors and customers to conduct more thorough and regular reviews of environments, as well as establish strict protocols for public responses to avoid further damage to vendors or clients depending on outsourced services.


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Conclusion: This month, the integration of businesses and expanded service offerings has been especially prominent. In particular, the combination of technologies and managed services to provide more variety and highly specialised IT service offerings targeted to customer strategic initiatives. Vendors are reaching beyond service implementation to deliver full, high-value solutions in innovative ways, including partnering with competitors to expand capabilities and improve service quality. This type of flexibility is critical and indicative of an environment where delivery models, innovations and offerings change at a fast pace and underpin high customer demand for new solutions.


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Conclusion: This month, online Census solutions failures prompted the government to launch a review into outsourcer IBM’s performance. Debate regarding causes for the outages commenced, and uncertainties again highlight the need for a solid and structured framework to be established in contractual arrangements, as well as protocols for implementing services and responding to difficulties encountered. Frameworks are more critical now as rapidly changing technologies and solutions are in high demand, combined with the new, often complex customer environments vendors must cater to. Problems can be compounded by an under-appreciation of costs, different vendors working together and time overruns. It seems as though a higher number of contract failures are being reported, but it is a natural output of outsourcers delivering hybrid solutions in large, complex and foreign environments with evolving technologies and solutions. These types of factors that can result in problems for both customer and vendor necessitate a solid legal and operational framework for conducting the contract.


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Conclusion: Discussions regarding new executive appointments, acquisitions and partnerships have been prominent this month with managed service providers adopting a more calculated approach to reformation. In order to meet emerging challenges and demands, vendors must match both operations and offerings to provide solutions which can cater to new customer priorities. These priorities have increasingly dictated vendor investment decisions to build capabilities and portfolios through acquisitions and partnerships with specialist service providers. Heightened demand for industry-specific digital business models has driven much of the investment and transformation; in particular, end-to-end business solutions, digitally unified systems or the provision of new solutions that cannot be obtained using existing customer systems.


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