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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: Discussions regarding the increased presence of small-to-medium businesses (SMBs) and start-ups in the IT industry have been prominent this month. Initiatives aimed at generating growth in the sector, such as funding for smaller providers, information exchange and facilities which allow for access to government contracts, are showing clear results. Support for smaller providers that offer specialist services are in high demand, as well as resources and information regarding sustained growth, product development and consumption frameworks. Both vendors, and customers seeking tailored and competitive offerings in a market traditionally dominated by large vendors as well as smaller customers hoping to access quality services, have benefitted.


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Conclusion: This month has seen an increased focus on security threats posed by managed service providers and associated vendors. ICT service providers are attractive targets because they can provide access to a wide variety of customer networks, or can be used as a starting point for other malicious attacks. Compromised commercial or government data, or products which facilitate vendor service provision, can result in serious breaches and unexpected losses. More in-depth reviews of vendor security protocols, products and response measures to threats are required for customers to obtain the best possible protection against attacks launched through their managed service providers.


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Conclusion: This month, there has been an increase in the launch of digital communities or marketplaces which facilitate partner access to resources, information and collaboration in specialist areas. These types of initiatives can be beneficial to both vendors and customers, providing the capacity to identify disparate services and combine them for specific needs or develop new tailored vendor offerings. Products, service offerings, project delivery, financial models and contract structures can be enhanced by targeting individual needs. In an environment where innovation is critical to remain competitive and relevant, these types of initiatives are valuable. They also allow for a clearer and broader perspective when developing solutions.
This kind of transparency can help to address some of the challenges associated with complex outsourcing agreements which result in technical or contract management difficulties. Allowing this kind of exchange can help drive fresh ideas and new approaches to IT outsourcing, as well as more effective customer and partner engagement.


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Conclusion: This month, discussions around the difficulties associated with establishing and maintaining managed services agreements have been prominent. Contract or service failures typically cannot be attributed to one issue, but are usually the output of a number of underlying factors. Inherent technological flaws, security attacks, human error, configuration errors, management procedures and delivery delays amongst a wide range of other factors often combine to result in contract failures and disagreements. These types of complexities and variables, which are often unforeseen, require stronger foundations between vendors and customers when establishing agreements.
More simplistic, outcome-based targets, as opposed to a focus on technological solutions, can often provide a beneficial framework for providers and their clients. Establishing and implementing complex agreements from this perspective can help provide the flexibility required to avoid disagreements as well as resolve problems which do arise.


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Conclusion: This month has seen increased discussions regarding systems integration service uptake and service range. Outsourcing agreements, partnerships and new vendor offerings indicate a heightened demand for services to consolidate disparate software systems and data sets, allowing for greater efficiencies, high-quality information access and analysis. Both customers and vendors have seen value in integrating multiple subsystems and data sets to function as a whole, and the trend towards systems integration service adoption and expanded offerings is expected to rise.


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Conclusion: This month, a number of high-profile systems outages were reported, again flagging risks associated with operating complex IT environments and business functions which rely on these systems. Seemingly minor incidents, or a combination of disparate problems, can result in serious and costly system failures. These problems are exacerbated when issues impact on a company’s service delivery mechanisms and their own customers. This month, a power surge which triggered a global systems outage at British Airways left 75,000 customers stranded, at an estimated cost of $135M. A failure at Westpac left online users unable to access funds for 24 hours, following a similar week-long online and mobile banking failure in November 2016. The Australian Taxation Office has experienced serious service disruptions as a result of three outages in recent months, related to two separate service providers. A review of two failures by service provider Hewlett Packard Enterprise found a number of issues contributed to ATO system collapses and an inability to respond to them, including monitoring systems used to detect operating errors that were not activated, and access to recovery tools required to resolve problems being stored on the network which failed. These types of incidents highlight the impact of unexpected failures and inadequate response measures as well as the need for both vendors and customers to prepare for such events.


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Conclusion: This month, discussions regarding skills gaps and talent shortages in ICT services have been prominent. Difficulties obtaining staff with specialist skills are expected to be apparent throughout 2017, and managed service providers are adopting a more strategic approach to obtaining and retaining qualified staff in key industry areas. The past year has seen a noticeable increase in acquisitions and collaboration between firms to provide services in high demand and maintain market relevance. However, vendors have recognised the need for long-term and strategic solutions to avert, rather than respond to, expected skills gaps. This has resulted in new positions being created dedicated to sourcing and further developing workforce capabilities that are sufficiently flexible to cater to a highly volatile and fluid industry, while providing environments that attract staff. A shift in perceptions of talent acquisition from an expense to a long-term asset investment is also required to ensure vendors can maintain a quality skills base.


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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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