With 50% of IT outsourcing deals at risk, how are IT Outsourcing providers being perceived?<\/span><\/strong><\/p>\nThe fact that Amazon and Google were the highest perceived ITO service providers on Innovation doesn\u2019t come as a huge surprise, after all they are continually lauded for innovation in the press and don\u2019t carry the breadth of \u201clegacy\u201d service offerings that the other ITO service providers do. However, they were also perceived as being at the top for Execution; in fact just 4 of the other 18 ITO service providers were perceived as well or better than they were for Execution capabilities.<\/p>\n
What we also see, when we look at these results, is that\u00a0the best Executors of IT Outsourcing services are generally also perceived as the most Innovative. It suggests to us that as 50% of enterprise IT Outsourcing buyers seek to churn their current IT service provider in the near future, many are also likely to seek out those positioned to the upper-right which can fulfill their higher-value needs, beyond the bread-and butter executional service delivery.<\/p>\n
It also suggests that in the wake of greater market differentiation in IT services, both in capabilities and commercial performance, those providers lingering in the lower-left face some very significant commercial challenges over the next several years to remain competitively viable.<\/p>\n
We broke the perception map out into 4 quadrants that have some common characteristics:<\/em><\/p>\nMessaging Opportunity.\u00a0<\/strong>\u00a0<\/span>These are the ITO service providers which scored lower on the perception of execution and innovation relative to their peers.\u00a0\u00a0 For these ITO service providers, the task ahead is to increase awareness of their capabilities and, in particular, to highlight investments in innovation for ITO service offerings and perhaps to break away from potential linkages in buyer minds to legacy ITO offerings, especially given the levels of potential market churn that the survey identified.<\/p>\nSolid Delivery.<\/strong>\u00a0\u00a0<\/span>These ITO service providers were perceived as strong execution partners for buyers, but still being perceived as lower than the leaders on innovation, although they were seen as more innovative than the service providers in the first quadrant.\u00a0 This does not mean they are necessarily candidates for churn, although if their areas of execution become less significant going forward, that could spell future trouble.<\/p>\nFuture Promise. \u00a0<\/strong><\/span>Currently an empty quadrant, this area where perceptions of innovation out-strip those of execution, can be the resting space of up-and-coming ITO challengers, whether new or coming up from Messaging Opportunity, where they start rolling out leading edge services before they are necessarily fully time-tested.<\/p>\nTomorrow Today.\u00a0<\/strong>\u00a0<\/span>ITO service providers in this final quadrant are leading the way in terms of buyer perceptions, both on innovation and execution, relative to their peers.\u00a0 An interesting group of asset heavy (Amazon, IBM, Google) as well as asset lite (Accenture, Cognizant, TCS), they have as many or more differences between themselves in terms of offerings and market strategies, as they have anything in common, other than being the service providers best positioned today to take advantage of the high level of potential market churn.<\/p>\nThe Bottom-line: The traditional IT outsourcing market as we know it is being disrupted, and the next year will likely flesh out the thrivers, the\u00a0survivors\u00a0and the also-rans<\/span><\/strong><\/span><\/p>\n