Transformational outsourcing getting tougher

This year, we can expect business process outsourcing (BPO) to continue as one of the top IT services hot spots. A trend among the largest suppliers of services such as Capgemini and Accenture has been to leverage their consulting servicesand combine them with traditional outsourcing, resulting in whatone analyst calls a "turbo-charged" affect, called transformational outsourcing.

scoreThis year, we can expect business process outsourcing (BPO) to continue as one of the top IT services hot spots. A trend among the largest suppliers of services such as Capgemini and Accenture has been to leverage their consulting servicesand combine them with traditional outsourcing, resulting in whatone analyst calls a "turbo-charged" affect, called transformational outsourcing.The benefit to these suppliers is that transformational outsourcing contracts can give them an effective monopoly on consulting services for a customer. But standalone consulting players are not going to sit back and watch the big players eat their lunch, says Ovum's Douglas Hayward. " They'll need to disable this turbo-charged monster by driving a wedge between consulting and outsourcing." The battle plan is already underway as the standalones begin to carve out a powerful market niche in opposition to the outsourcers:

We call this the 'trusted adviser' role. They're arguing that CEOs need 'independent' (not from an outsourcer) advice so that they're not pushed around by the big outsourcers. They argue that the latter can't be trusted advisers because they have a 'hidden agenda' to sell their outsourcing services.

In a free research note Hayward details the implications of the in-sourcing backlash and multisourcing on this struggle.

But whileOvum sees grwoth for transformational outsourcing and throws the term around as if it's nothing new, another view (client reg. req.) from Meta Group analyst Stan Lepeak paints a different picture:

Although BPO will remain a major growth engine for the business and IT services marketplace, deal success will remain mixed during the next two to four years, and true transformation efforts will remain rare.

Most user organizations, he says, will still prefer to not directly tie transformation and outsourcing efforts. Perhaps the view from Ovum is more optimistic because Europe has become the new hotspot for outsourcing contracts, which is local territory for the research firm.

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