Verizon Report Can Shed Light On Why Your Prospects Avoid Outsourcing IT

By Christine Kern, contributing writer

A report from Verizon Enterprise Solutions highlights the changing landscape of IT outsourcing and addresses building partnerships that fit the digital era. The report Better Outcomes for IT Outsourcing asserts that rigid IT outsourcing contracts have stifled innovation, and it proposes a number of ways to build partnerships that help drive business performance and growth.

Businesses — and vendors — need a new model. “The digital transformation that we’re all seeing around us is reshaping industries, transforming customer expectations, and opening up new, previously unimaginable opportunities. This is fundamentally changing what organizations need from their IT function — and consequently how organizations contract with and interact with third-party providers,” the report states.

The report advises businesses to become “digital first” companies, finding new ways to engage with technology partners. And the report counsels IT solutions providers to be agile so they can react to changes — or impending changes — in their customers’ markets. You should not being tied to fixed ways of operating.

IT solutions providers should also be aware that the rise of digital transformation is affecting three important changes in IT sourcing decisions. First, there is growing pressure to measure success: 34 percent of all contact center contracts signed in the last two to three years used a form of hybrid pricing. Of these, 69 percent included some type of outcome-based component, linking the contract to a measure of overall success.

Second, digital transformation relies on flexible computing. In many cases, traditional outsourcing models created an adversarial relationship, in which providers were rewarded for sacrificing quality in favor of savings. Newer models now realize that more sophisticated measures of success are crucial.

And finally, creating smart partnerships can help digital businesses outcompete their rivals, and it is about more than just cutting costs. The report states, “As digital businesses strive to be customer-focused and responsive to change, they need to be able to convey business requirements directly to the partner providing them — and cannot afford to have a middleman slowing them down.”

IT solutions providers that respond to these changing needs with flexibility and proactive services can help strengthen relationships with their clients that transcend those of many of their peers.

To download the report, click here.