A new report by IDC shows that as more companies adopt cloud services, service providers will be forced to change from their current traditional labor-intensive models to an asset-based delivery model.
The change in business model will arise as a result of the industry’s move to outsourced cloud services and the accompanying performance and relationship expectations of customers, according to the survey, “U.S. Customers Give Outsourcers a Thumbs Up in Performance, But Expectations Are on the Rise with the Move Toward Outsourced Cloud Services." The increased use of new delivery models such as cloud services and SaaS will change customer expectations regarding the performance of their providers and subsequently change their relationship with providers, the study noted.
As a result, traditional outsourcing companies will have to change their current delivery models.
“Perhaps the greatest lesson of the Great Recession is the need for companies to be much more adaptable to changes in the market," said David Tapper, vice president, Outsourcing and Offshore Services Market research at IDC, in a release announcing the study. “This fundamental need is a major force driving considerable shifts in the outsourcing industry – shifts that not only involve provisioning more targeted and innovative solutions, but also involve the transformation of the outsourcing industry from a labor-centric model of service delivery to more asset-based services involving cloud-based outsourcing."
Specifically, the report noted, service providers will need to develop robust road maps that show how customers are looking to adopt these utility-based services that cut across entire organization requirements. Additionally, many outsourcers and providers will need to make major adjustments to their delivery capabilities, partnership ecosystems, business models and service offerings, and will need to examine their roles and position within and beyond the traditional market of IT and business process services, according to the report.