Blue Wolf State of Outsourcing 2013

7/28/2019 Blue Wolf State of Outsourcing 2013

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2012-2013


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Message rom the CEOOutsourcing IT: an idea comes o age

About the SurveyWhere we get our numbers

Key FindingsTakeaways and highlights

Outsourcing StrategiesCost, impact, and control

IT Outsourcing TrendsHow IT delivers value as a service

State o ITOutsourcing BudgetsCurrent and uture spending through 2013

Outsourcing byIT FunctionApplication Services

Application DevelopmentWeb/Mobile DevelopmentApplication MaintenanceApplication Hosting

In rastructure ServicesData Center OperationsDatabase AdministrationNetwork OperationsDisaster RecoveryHelp DeskIT Security

Bluewol Services

The dynamic community o highly skilled, independent experts andexternal service providers that ebb and ow with the resource needso rapid enterprise initiatives. They thrive on challenge, understandbusiness technology and are ready to work.

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2 The State o IT Outsourcing

IT outsourcing is evolving into a strategic tool that re ects todays rapidlychanging business and technology landscape. Once a tourniquet to cutcosts, it has matured and become a business imperative.

outsourcing it an idea comes of message from the ceo

your workforce has changed...

Technology is changing the game again in

many industries, and the companies thatadapt and manage their technology andtalent best will have the competitive edge. CIOsdealing with cloud, big data, social enterprise,and mobile ace big challengesthey cantnd top talent ast enough. Whether they areleading the pack or ghting to keep up with the

leaders, companies who dont modernize both their technology andhow they access talent ace the possibility o extinction.

With a national talent shortage, a competitive tech job market,and rapidly changing business models and cycles, IT decision-makers are turning toward outsourcing or new reasons. Its use

will continue to grow as CIOs increase emphasis on customer

service, employee engagement, and the overall role people plaalongside technology, in driving innovation. By engaging anElastic Work orceinstead o taking on new overheadCIOs empowered with access to the right resources at the right time, can dedicate the proper skills to the task at hand.

As an IT leader, the 2012-2013 State o IT outsourcingreport will help you look at what is happening in the market,how team structures are evolving and how you can leverageyour IT outsourcing budgets to access talent and get the mostbusiness impact.

how do you configure your team?

Michael Kirven , Co-Founder


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Sources:1. 2012-2013Bluewol ITOutsourcingBenchmarkSurvey,May 2012 2. 2011-2012Bluewol Technology Outlook4 The State o IT Outsourcing

survey the key findings

MANAGED SERVICESis the#1 outsourcing strategy orDisaster Recovery, IT Securityand Web/eCommerce services.

top drivers for itoutsourcing in 2012

cloud techn

Productivity & pro tability

Flexibility to turn resources on & o

Access to experts & hard-to- nd talent

The SurveyBluewol commissioned a survey to learn aboutthe current state o IT outsourcing. The surveyaims to address the ollowing undamentalquestion: How are CIOs, Directors, and Managers shifting the way they leverage external providers to deliver capabilities to their business?

RespondentsOur survey includes the insight o over 200 ITdecision-makers rom companies at the SMBto Enterprise level. The report is enhancedby intelligence rom thousands o contract ITplacements Bluewol has made, rom May 2011to May 2012, as well as over 4,000 cloud-basedtechnology implementations.

MethodologyThe survey ocused on two key metrics:1. The requency o IT services being outsourcedor application and in rastructure services.2. The sourcing models utilized to outsourceIT services, such as managed service providers,consulting rms, sta augmentation, o shoreproviders, etc.

Talent comes rom everywhere: inside your walls, outside contractors and external partners. As organizationscontinue to adopt technologies that can be scaled to demand and iterated upon to meet real-time businesschallenges, Bluewol s State o IT Outsourcing Report reveals a greater reliance on outsourced elastic talentwith specialized skills that can readily ex in response to ever-changing market demands.

about the survey

Sales orceEloquaAmazon Web S

o data center opeare managed in the 32% will

increase IToutsourcinginvestments.

48% willhire morecontractors ,rather thanull-time staf.

In the next 12-18 months...

An average o $0.48 o everyoutsourcing dollar is spent onApplication Services.


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Staff AugmentationGain access to a ull range o highly skilled localexperts on demand.Using this sourcing model, companies can add contractors toincrease their output in pace with demand. This is the leastexpensive and most exible approach to outsourcing that allows youto add expertise to your team without increasing overall headcount.With this set-up, organizations maintain control o all resources.

Consulting FirmsNeed to trans orm, how do you get started?Sometimes the best solution or companies is to outsource entireprojects to consulting rms with proven methodologies. In this set-upthe consulting rm becomes a partner to the company and has all the

necessary competencies to complete the project. Not all consultingrms are created equal: make sure your partner has domainexperience and deep business process and technology expertise.

Managed Service ProvidersFree up internal resources or outsource ongoinginnovationall at a predictable monthly cost.In this outsourcing model companies engage with partners on aclearly de ned set o IT services. Most managed service providers billan up ront set-up ee and an ongoing at or near- xed monthly ee,which bene ts their clients by providing them with predictable ITcosts and a air amount o control.

Cloud-Based ProvidersAn emerging delivery model or outsourcing maylie in the clouds.Cloud as a delivery modelwhich can be implemented in weekmodi ed on the y, and abandoned just as quicklyis gainingmomentum. Businesses are leveraging the cloud to outsourceapplications (Sales orce, Google Apps, Eloqua), data storage, aeven the management o entire data centers to third-party prov

Offshore ProvidersAccess a highly skilled low-cost global work orce.Decades ago, companies began relocating IT in rastructures rothe US to India, China and Eastern Europe. The business modelseemed simple. Take advantage o the best and the brightest

in developing nations or a raction o the cost. As the o shoreoutsourcing market matured, mixed results have CIOs re-evaluthe IT services and unctions they choose to outsource this way.

Partial outSourcingTurn over a speci c IT operation, rather than theentire IT unction.Instead o outsourcing an entire IT unction, organizations thatpre er to retain a certain level o expertise in-house can identi yskill gaps that can be easily separated into smaller processes. Thparts o projects are outsourced, and the chosen partner has dresponsibilities and obligations to the company.

outSourcing strategies impact, cost, & controlWhen making decisions about sourcing talent or projects, initiatives, and growth, IT leaders must not onlythink about what to outsource, but HOW to outsource. Consider the overall cost to the organization, themeasurable impact the sourcing model will bring the business and the ability to control/customize the solutionprovided. I you just need a ew experts to execute within your ecosystemuse sta augmentation. Need awhole team with a proven methodology? Consider a best o breed consulting or managed service partner.

High Medium-High Medium Lowbusiness impact

Sta Augmentation

Partial Outsourcing

Managed Services

O shore Providers

Cloud-Based Providers

Consulting Firms

c o s t

ability to control/customize resources


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how it delivers value as a serviceIT outsourcing trends

Sources:1. 2012-2013Bluewol ITOutsourcing BenchmarkSurvey, May 20128 The State o IT Outsourcing

Applications enable companies and their work orces to be efcient,

responsive, and to deliver consistent value to their customers. Asthe needs o your business change, your applications must scaleand be customized.

73% o our surveys respondents currently outsource applicationservices at least partially, and 30% are planning to outsourcemore in the next 12-18 months. Within our own practice, 40% oour technology stafng placements all into application services.Implementations o hosted applications such as Sales orce, Eloqua,Google Apps, as well as Amazon Web Services (AWS) or web hostinghas grown rapidly year-on-year.

applicationservices

infrastructureservices

There is no question that without a sound, secure, and responsive

in rastructure, a companys ability to operate would be signi cantlyhindered. In rastructure requires 24/7/365 connectivity and close tozero margin or error.

IT In rastructure Services are outsourced by 62% o our surveysrespondents, with 37% indicating they will increase outsourcingor sustain investment in the next 12-18 months. Additionally,33% o Bluewol s technology stafng placements all intoIn rastructure Services.Outsource

ApplicationServices

OutsourceIn rastructure

Services

application services infrastructure services


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Sources:1. 2012-2013Bluewol ITOutsourcing BenchmarkSurvey, May 201210 The State o IT Outsourcing

329

527

4813372

How is the use o

contractors expectto change over th12-18 months?

How much o your annual IT budgetallocated or outsourcing?

INCREASE

DECREASE

NO CHANGE

NOT SURE

INCR

DEC

NO C

NOT

How is this expected to

change over the next12-18 months?

How much o your IT outsourcingbudget is allocated towards Applicationand In rastructure Services?

I nf r a

s t r u c t ur e

S er vi c

e s

A p pl i c

a t i on

S er vi c

e s

state of IT outSourcing budgetsCurrent and Future Spending through 2013Budgets or application and in rastructure outsourcing are on the rise. Curious to know how your peersare spending their IT outsourcing dollars? At a glance, the rate at which organizations outsource applicationservices is somewhat similar across business size. However, or in rastructure services, SMBs outsource morerequently in order to take advantage o the economies o scale that outsourcing provides. How does youroutsourcing strategy measure up?

infrastructure Servicesapplication Services

An average o $0.48 o every outsourcing dollaris spent on Application Services.

An average o $0.35 o every outsourcing dollaris spent on In rastructure Services.

nearly half of cio s said...

SMB: Under 300 employeesMidmarket: Under 5,000 employeesEnterprise: 5,000+ employees

50%

26%

28%

44%

51%

49%


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Sources:1. 2012-2013Bluewol ITOutsourcingBenchmarkSurvey,May 2012 2. 2011-2012Bluewol Technology Outlook 3. 2012Bluewol ITSalary Guide12 The State o IT Outsourcing

Outsourcing shares by IT function

17%DisasterRecovery

15%IT Security

application services it infrastructure services

23%Data CenterOperations

16%NetworkOperations

12%Help Desk

17%Database

Administration

Application development is the most requently outsourced IT unction both in scope and variety o sourcingstrategies used. Some projects are best e xecuted by a team o contractors while others require a specializedconsulting rm or managed service partner. As applications become more process-centric, the developmentcommunity needs to have skill-sets around speci c business processes as well as industry expertise.

Application Development 46%

elastic workforceSta Augmentation

Consulting Firms

Managed Service Providers


O shore Providers

Partial Outsourcing

40%

36%

16%

16%

26%

11%

Bluewol IT Resourcing Bluewol Beyond: Sales orce, Eloqua, Marketo

will outsourcemore in next12-18 months

bluewolf prediction growth

offshore

offshore

So tware Developer(All languages)

Sales orce Developer

QA Analyst

30%

top staffing placements

26%Application

Maintenance

46%ApplicationDevelopment

39%WebDevelopment

28%Application

Hosting

Share o ApplicationDevelopment


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web&mobile developmentThe explosion o web and mobile technologies remade entire industries. As organizations continue to integrateweb and mobile strategies into their marketing and eCommerce e orts, CEOs and CIOs are re-evaluating the bestways to manage demand. Some choose to keep web and mobile development within IT and leverage an elasticwork orce mix, others reorganize these unctions under marketing or sales because o revenue potential.

elastic workforce mixSta Augmentation

Consulting Firms



O shore Providers

Partial Outsourcing

Bluewol IT Resourcing Bluewol Consulting: Mobile development



offshore

offshore

Mobile Developer(Android, iPhone)

Front End Developer

UI/UX Designer

39%

4%

27% 16%18%

22%

16%

4%

4%

10%

Application hostingTraditionally, businesses have built and run the in rastructure to support on-premise applications. Much o thetotal cost or owning and operating this in rastructure is now shi ting to managed-service and cloud-basedproviders. We oresee that application-hosting outsourcing will only increase as more organizations lean oncloud-based providers and more service providers integrate cloud into their o erings.

28%


Consulting Firms



O shore Providers

Partial Outsourcing

Bluewol Beyond: Amazon Web Services



offshore

offshore

Sales orce Consultants

Eloqua Consultants

So tware Developers(All languages)

35% 7%7%

26%

26%

9%

4%

top staffing placements top staffing placements

Share o ApplicationDevelopment


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Database AdministrationBusinesses are beginning to see the critical value in big datautilizing real-time analytics to bring newstreams o revenue-creating insights to their business. With tons o data to si t through, both structured andunstructured, organizations have the opportunity to identi y and prioritize the strategic data sets that must bemanaged by highly skilled database experts (internal or external) and those that require less expertise.

17% Network OperationsPatience or slow connections is extremely thin these days, with productivity so closely tied to networkspeed and access, poor service can seriously hamper your e orts and possibly cost your organizationhundreds i not thousands o dollars. Over the past year weve seen an uptick in sta augmentation and partialoutsourcing o network operationsspeci cally or network maintenance and network administration.

16%


Consulting Firms



O shore Providers

Partial Outsourcing

Bluewol IT Resourcing Bluewol Beyond: System Administration



offshore

offshore

Network Administrator

Network Engineer

Network Security Engineer


Consulting Firms



O shore Providers

Partial Outsourcing

Bluewol Beyond: Remote DBA Bluewol IT Resourcing



offshore

offshore

Sr. Database Administrator

Data Architect

Data Modeler

11%

14%

11%

21% 7%6%

6%

9%

11%

4%

8%

6%

6%

9%

11%

4%



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Disaster RecoveryWhile many DBAs currently have DR and database mirroring experience, t hey are o ten ocused on moreessential ROI projects. Because o this, many companies are outsourcing DR to best-o -breed managedservice providers. In 2012, expect to se e more companies leveraging cloud computing as a way to o set theneed to put in place and c arry the cost o a disaster recovery in rastructure or critical applications.

16% Help DeskApplication inter aces are being designed with a deeper commitment to user experience. Concurrently, endusers have become more tech savvy and know how to troubleshoot problems. While the help desk unctioncould be an easy target or outsourcingbecause the unction is highly user- and client- acing and the cost isrelatively lowit is not eeling the same market pressure as other IT unctions.

12%


Consulting Firms



O shore Providers

Partial Outsourcing




offshore

offshore

Help Desk (all levels)

System Admin (all levels)

Hardware Technician


Consulting Firms



O shore Providers

Partial Outsourcing

Bluewol IT Resourcing Bluewol Beyond: Remote DBA



offshore

offshore

Storage Admin

SR Database Administrator

Data Modeler

9%

17%

11%

7% 7%2%

2%

6%

11%

2%

6%

4%

16%

11%

9%

4%



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top staffing placements

bluewolf IT ResourcingTech StaffingBluewol provides sta augmentation to companies with immediate needsor deep expertise in speci c technologies and so tware developmentprocesses. We cut placement times in hal , delivering the resumes o the

top three candidates within 24 hours. We can sta any project, or anytechnology positioncontract, contract-to-hire, or permanent placement.

bluewolf public trainingIn todays competitive business environment, it is essential that a companyremain agile and iterative. Bluewol has built the strongest training andchange management organization in the industry. User adoption is akey success metric or technology implementations, and Bluewol canhelp prepare your employees by providing them with a oundation orpro essional development.

Bluewolf BeyondManaged ServicesBluewol Beyond is ocused on post-implementation consulting, maongoing technology innovation to the pace o your business. With ato Beyonds in-house team o cloud application, marketing automat

adoption, and database management experts, you stay ahead o chanand extract the maximum value rom your technology.

bluewolf ConsultingBluewol is your guide to Agile Business Trans ormation. We partnewith clients to sync business and IT to achieve new levels o busineper ormance with SaaS and cloud computing technologies. Our agiconsulting solutions include: Business Process & Strategy, CloudImplementation, Customer Li ecycle Consulting (Demand Gen, SalService), Change Management, and Technology Adoption.

it securityIT Securityso critical to the businessis o ten one o the last unctions to be considered or outsourcing.The combination o IT securitys complexity ( rewalls, patches, and analytics involved) and the rise ooutsourcing partners specializing in 24/7 data and network security has led some CIOs to consideroutsourcing to augment their existing team.

15% People + Technology = Game obluewolf solutionsTechnology works best in the hands o experts. While technology is the enabler, its the skilled talent thatdrives innovation and brings value to business. For over a decade, Bluewol has he lped companies scale theirtechnology, work orce, skills, and resources to suit the speci c nee ds o your project or business challenge.


Consulting Firms



O shore Providers

Partial Outsourcing




offshore

offshore

Network Security Admin

Security QA

Security Analyst

7%

15% 7%11%

11%

7%

7%

7%


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Consulting + Technology Stafng + Managed Services + TrainingWe make enterprises agile and unite IT and business under one missionInnovation. As a global agile consultancy, Bluewol providesconsulting services across the customer li e cycle, technology stafng, managed services, and training. Trusted by businessesacross diverse industries, Bluewol is translating todays unique business environment into opportunity or growth. Using Bluewol ,businesses are able to do more aster and deliver results that bene t the customer, the work orce, and the bottom l ine.

locations

who chooses us

engage with us

bluewolf is a global consultancy

New York San Francisco Washington, D.C. Philadelphia Long Island Boston Chicago United Kingdom

NBC Universal Avon Products GlaxoSmithKline Comcast Zynga Compuware NYSE EuronextGiorgio Armani Scholastic Corporation Olgilvy & Mather NYU Medical Center Gates CorporationStanley Black & Decker Citizens Bank TE Connectivity National Financial Partners

Any position, new contracts40 hours or more

For Cloud Apps, MarketingAutomation, Adoption,Database Management

Check out our courses:bluewolf.com/training

Get to know Bluewolf


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Blue Wolf State of Outsourcing 2013

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