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Have Mainframe Outsourcing Trends Changed Since 2013?

May 6, 2014 5:00:00 AM

by Charles Bystock

mainframe-outsourcing-trends_(2)Over time, the popularity of outsourcing has grown tremendously for companies looking to capture financial and functional efficiencies. Mainframe outsourcing trends have evolved along with the overall business environment, which has been characterized in recent years by rapid technological change and general uncertainty. But have mainframe outsourcing trends changed much since last year?

The biggest trend in mainframe outsourcing for 2014 is more of the same. That is, a continuation of the key themes we saw throughout 2013.

Mainframe outsourcing trends: Retaining more control.

In the “old days” of outsourcing, companies simply handed over certain aspects of their operations to some third-party provider, much as they would engage other professional services such as legal or accounting expertise.

But CIOs have learned that they don’t really want to give up total control just because it might bring cost savings. CIOs and their C-suite colleagues are also concerned about governance issues that grow in importance as regulation increases and operations become more complex to meet the diverse demands of both customers and employees.

So customers are now looking to find that middle ground – albeit a different point on the continuum for different enterprises – that offers optimum effectiveness as well as comfort level.

Companies also expect greater transparency from their providers. And in a growing number of cases, they want their outsourcing providers to be true working partners, not simply service technicians. Closer collaboration can bring benefits to both, ensuring financial stability and growth.

Mainframe outsourcing trends: Increasing automation.

Sweeping technology innovations now enable a broader range of data center solutions than ever before. But new advances also allow far more automation of tasks formerly performed by people. The advent of “higher intelligence” for machines is taking roboticized actions beyond the production floor and into other corporate departments, including IT.

One example cited by some industry-watchers is the Ipsoft Eliza, a “virtual service desk employee” that can learn as it works, respond to emails and telephone calls even for highly technical functions. Could Eliza and her clones replace your provider’s support team?

Expect to see your mainframe outsourcing provider(s) relying more on systems that integrate process automation to streamline their services and improve customer efficiency.

Using automation to reduce the number of man-hours required to perform certain IT functions can lower labor costs. But it can also increase productivity, by enabling highly-skilled and experienced IT professionals to focus on those things machines are still not capable of, adding value for outsourcing providers and their clients.

Mainframe outsourcing trends: Increasing hybridization.

Customization is the new baseline as companies learn they can have mainframe solutions entirely tailored to their unique needs and goals. Hybridization is pervasive for:

  • Solutions – mainframes remain a mainstay for many enterprises, but they’re being combined with distributed systems in enterprise-specific data center configurations.
  • Redistribution of insourced versus outsourced functions – some companies are recapturing formerly outsourced activities or rethinking which functions they want to retain in-house. Some companies are turning away from offshoring toward near-shoring, to be closer to their providers and – they hope -- develop closer working relationships as well.
  • Providers – with mainframe outsourcing trends focused on individualization of solutions, companies are taking advantage of niche providers with valuable specialized offerings to get the greatest value from outsourcing. With multi-sourcing becoming common, the marketplace is seeing more deals of smaller financial magnitude, rather than a single sweeping outsourcing deal which was previously the norm.
  • Pricing – with a wider variety of pricing models coming into play in the last couple of years, companies are also looking to craft their own pricing configuration, so they can get the best deal but also get the most from providers in terms of partnership or innovation.

All these mainframe outsourcing trends add up to increasing individualization of the IT environment. Which of these trends will have the greatest impact on your enterprise in 2014?

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