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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.

Especially noticeable in December was the large number of purchases and collaborative agreements in the IT service provider sector. Vendors aiming to expand their customer base and service offerings, reach and scale as well as exploiting new technologies they have no access to are adopting alternative approaches to business growth and sustainability. This underscores the need for the industry to remain flexible and be aware of industry changes, demands and evolving areas that can benefit their customers


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There has been much discussion this month with regard to IT in the Banking and Financial Services sector. Projects and plans to expand internal IT structures have largely been in response to increased and changing customer needs and demands. The high level of activity and discussion regarding IT in this sector illustrates how evolving technologies and customer awareness and desire to access these new technologies can transform internal infrastructures and how IT service providers must respond positively to these demands. IT service providers catering to these new needs need to address issues such as internal support systems, protocols and IT decision-making and make significant increases in IT investment. This is particularly evident as service providers restructure, extend capacities and begin to offer new services in respect of cloud and security.


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This month there has been a lot of discussion regarding the importance of innovation, in the approach to both technology and business strategies. While this has been flagged previously it is even clearer when examining the IT industry activity this month, in particular company buy-outs, new product and service offerings, investments in development and company growth. Collaboration between companies in the provision of specialised service offerings and in discussions about new standards and protocols for evolving technologies and solutions were also noticeable. These activities are both driven by, and drive, the need to innovate in the current climate, the need to address user concerns in the uptake of new solutions and a desire to maximise the benefits of using new solutions.


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September has seen a noticeable rise in the number and value of outsourcing deals, particularly in the provision of communications and network infrastructure. Other IT news was centred mainly around the change in government. Pre-election, there was much discussion on the Coalition’s proposed strategies and plans, and after the election, predictions regarding the impact of the change on the ICT industry. Commentary and opinion was largely positive and focused on increased confidence and business-centric policies which are expected to drive evolution and growth in the ICT industry.


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The majority of IT outsourcing contracts this month include the provision of cloud-based services, and issues relating to cloud adoption. A large number of service providers and consultancies have announced the acquisition of specialist divisions, partnerships and collaborative agreements for the sharing of information and expertise for companies outsourcing IT. A number of training initiatives, workshops, and information sharing arrangements between vendors, industry service providers, and governments have taken place.This benefits both vendors and customers when outsourcing in an environment where a large degree of flexibility and constant development is required to accommodate new technologies and solutions. By expanding existing capacities or strengthening service offerings companies are providing a greater range and higher quality specialist services for a changing market.


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July has seen a noticeable rise in the number and range of outsourcing deals. An interesting development is the move to smaller service providers who are being engaged to provide targeted and specialised services. This flags a trend in the outsourcing industry which has been evolving for some time, as the desire to realise the benefits of new technologies across diverse commercial environments is necessitating specialist support skills and increased company flexibility from prospective vendors.


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While discussions around company and service offering expansions have been common in the past few months the real consideration of the implications of these developments was prominent this month, In particular the demand for new and highly specialised service offerings in response to increased business complexities, new technologies and solutions and problems emerging because of these issues. For instance, the demand for consultants to copy company data, manage data retention and review and reduce stored data has risen dramatically as the accumulation of large amounts of data is becoming problematic for organisations. Enhanced technologies and solutions or different problems necessitate services to support them which in turn results in new tools and outsourcing services providing stability to growth markets, and the development of new ones.


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This month, there has been a lot of discussion regarding security and ICT systems. These discussions have ranged between risks, new product offerings, need for greater awareness, specialist security company expansions and security responses. This has been interesting in relation to outsourcing as the discussions have adopted a more holistic approach, with security not being seen as an individual component of IT operations, but rather one which should be integrated with other areas. For instance, aging technologies or system protocols which can potentially cause major security problems, are not seen as distinct with both the problem and response measures intertwined. The types of specialist skills necessary to address security issues caused by existing technologies and practices as well as evolving markets and technologies will inevitably result in a growth in products and service provision in this area.


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This month, there has been a lot of discussion regarding cloud computing services, in particular new offerings launched by a number of companies globally. More interesting for outsourcing however is talk around technical, legal and administrative vulnerabilities when contracting out IT services. The continuation of the Queensland Health Payroll review, which has flagged problems that can arise when procurement processes are not properly scrutinised, is just one example of these problems.It is clear that many of these vulnerabilities are still not properly considered by companies when outsourcing or off-shoring and are often caused by a failure to properly monitor vendors.


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Especially interesting this month was the start of the Queensland Health Payroll System Commission of Inquiry, which is investigating outsourcing arrangements with IBM and the system’s failure that caused significant havoc and extreme cost overruns. Initial findings indicate there were some serious problems with several areas of the procurement process, including insufficient time to review IBM’s proposal, no verification of the technologies that IBM founded the payroll system on, and a failure to effectively monitor the procurement process. This highlights the dangers, and extreme roll-on effects a lack of planning and management in the procurement process can have on an outsourcing arrangement, and re-emphasises that exercising tight management control, including thorough reviews, is just as critical at the beginning of the contract process as after the agreement has commenced.


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