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A new era in IT services

June 19th, 2006

A recent study by IDC shows that spending on IT consulting is expected to increase at a rate of 5.4% over the next four years. While the anticipated growth is promising, the industry’s re-emergence from what IDC describes as: ´a somewhat prolonged period of stagnation´, does not mean consultants can relax and enjoy the steadily increasing growth rates predicted until 2010. Consulting companies have to evolve their services to meet the changing requirements of organisations.

IT organisations want flexibiity

Reducing operational and capital expenditure, mitigating risks and installing IT infrastructures that enhance core business have become increasingly important to organisations as budgets are forced to provide optimum return on investment. The growing popularity of smaller, specialist independent consultancies is evident as companies are attracted to the more flexible contracts and greater guarantees of returns often delivered by such providers.

Larger service providers have been criticised for not being wholly independent – would a large consultancy with an outsourcing division recommend a client does not outsource? Or would they even advise only a small project was required? Inefficient and inflexible consulting contracts will not meet the needs of today’s IT organisation, and as such, smaller players have forged a niche in the market, providing flexible and bespoke solutions to companies’ project goals.

Aligning IT with business

Aligning IT with business is vital for organisations to succeed in today’s business climate. Investments must be justified in terms of enhanced business performance. Organisations have to maintain control of IT systems to ensure they are getting real value for money. In addition, it is often necessary to make specific systems or processes deliver ROI very quickly. For example, an organisation may need to increase the security of its application delivery, launch new products or services, provide partner and customer access, enable workforce mobility, consolidate servers and applications, utilise offshore processes or create a shared service platform in a relatively short period of time. For IT services, pay-as-you-go consultancy provides a solution that allows companies to deliver business services faster while maintaining maximum control over their IT infrastructure.

IT consultants have to deliver services that allow companies to respond to external change and enable them to shape their IT organisations to accommodate business direction. Organisations need IT systems with the flexibility to adjust to global and economic market shifts, incorporate the latest technology and deliver personalised services – but on a manageable scale. Alliances, mergers and partnerships have to be accommodated more quickly to keep up with the speed of business growth. With this in mind, organisations will also require a more flexible way of engaging with external consulting.

Subscription based IT consulting services

Packaged services with the ability to deliver rapid return on technology investments will shape the future of IT consultancy. Consultancy services that are delivered project-at-a-time are more successful and more measurable than large contracts and can even become self funding. Furthermore, adopting a pay-as-you-go subscription model for IT services consulting will allow companies to develop their IT infrastructure in line with budgets and internal plans while providing a guaranteed return on investment. Organisations can utilise specific areas of IT consultancy, such as service delivery, application processes or business engagement as and when they are needed, responding to real-time business problems rapidly instead being restricted by long and inflexible contractual obligations. These services could be scaled even further so companies not only pay for a specific area of consultancy, but to how many employees they wish to have access to these services at the time.

Financial services provider Scottish Widows recently used this type of subscription-based consultancy model to provide remote office service to a third party organisation. Within six weeks of commencing the programme a pilot was launched and the service is now live. Using SAFE, a pay-as-you-go consultancy service from Centrix, the financial services provider was able to utilise a number of key best practices to install an off-site office as well as saving money in the process. Scottish Widows has recently partnered with Virgin to provide insurance services under the Virgin brand and also used the service to support the deployment of key applications and infrastructure assets to Virgin in rapid time.

Speed is the new wealth indicator

As the business world evolves, size and scale have made way for speed as the new wealth indicator. Success is measured by how quickly you can adapt to the ever-changing environment rather than the size or stature of your company. IT is playing a key role in this evolution and it is vital for service providers to tailor their products to this changing market. Lengthy consulting agreements where ROI is difficult to calculate and development is hard to manage will need to be replaced with more compliant systems. Offering CIO’s the chance to utilise the specific type and amount of IT service consultancy they need is vital.

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