IT Trends For The Future. Per Andersen IDC
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1 IT Trends For The Future Per Andersen IDC
2 Per Andersen Managing Director IDC Nordic IT Trends For The Future November 29,
3 Agenda The move to Dynamic IT Project services trends Outsourcing trends Offshore trends
4 Mega-trend: Duality IT Investments Infrastructure - reducing costs - bandwidth - security - reliability - predictability Line of business - improved processes - improved business - return on investment - LOB decision - predictability
5 Two Focus Areas for Dynamic IT Business Analytics Responsiveness to Market Business Process Automation Business Applications Information and Data Integration Collaboration & Communication Access & Interface IT Operations Automation Service Level Management Metering, Measurement & Charge-back Security Infrastructure Virtualization Operational Efficiency Infrastructure Provisioning Platform Management/Monitoring
6 Business Execs Validate These Requirements Q: Most important IT improvements to better support business? Flexible Applications 36.2% Better Information Access 35.2% Better Communication/Collaboration 31.6% Lower Application Costs 26.1% Improve Security 23.4% Lower Infrastructure Costs 23.3% Implement Applications Faster 20.1% Improve Infrastructure Performance 16.3% 0% 5% 10% 15% 20% 25% 30% 35% 40% Source: IDC s LOB Executive Survey, 2004
7 Transformation Required in Business Process Automation from to Standalone, Time Lagged Monolithic, Vendor-defined Fragmented, Unreachable Static Standalone, Single Mode Hardwired, Inflexible Critical Dynamic IT Capabilities Business Analytics Business Applications Information and Data Integration Collaboration & Communication Access & Interface Embedded, Real- time Closed- Loop Modular, Flexible, Customer- Defined Integrated/ Federated Realtime/Dynamic Integrated, Multimode Adaptive, Modular
8 Applications & Information Solutions Enterprise Solutions Platforms to reshape application business No longer about the killer app, but killer platforms Who is going to win the game? Emergence of embedded business intelligence Pure play BI, BPA vendors will be in play Emergence of Information Infrastructure Platform Consolidation across data/information definition, access, management, distribution, assembly and presentation Business Monitoring & Analytics Business Process & Application Automation Information and Data Services Integration, Event & Deployment Services Collaboration & Communication Services Access & Interface Services
9 Transformation Required in IT Operations from Unautomated, post facto audit Fragmented, IT assets-oriented Fragmented, infrastructurefocused Apps, data hardwired to infrastructure Slow, inconsistent, labor-intensive Fragmented, IT-oriented Critical Dynamic IT Capabilities Service Level Management Metering, Measurement & Charge-back Security Infrastructure Virtualization Infrastructure Provisioning Platform Management/Monitoring to Automated, triggered by business operational metrics Business process-, services-oriented Integrated, pervasive Apps, data access virtual resource pools Rapid, consistent, automated Integrated, process-oriented
10 Infrastructure Software System vendors and ISVs striving for complete infrastructure offerings Consolidation and M&A Systems vendors & ISVs face strategic choices Quest for business value will drive more infrastructure players to partner with solution providers Open source and Linux will growth and become commercialized Service Level Management & Automation Metering, Measurement & Charge-back Security Infrastructure Virtualization Infrastructure Provisioning Platform Management & Monitoring
11 The CIO Agenda Automating business processes Integration Adaptive SOA Providing access to corporate information Reliable infrastructure Management
12 CAGR Nordic Software Markets Relative Size & Growth (CAGR) 16% 14% Security 12% 10% 8% 6% 4% 2% Storage software System & Network Management Content management/ publishing 0% Spending 2009, Euro Million
13 Service Oriented Architectures: The Time is Now Sample: Large international companies, May 2005
14 Service Oriented Architecture Use of Technologies (Share of Companies) XML Object code Reusable components Distributed system SOAP Java Dynamic access WSDL.Net (Procent) Source:.Net Versus J2EE in the Nordic Region, 2004
15 Agenda The move to Dynamic IT Project services trends Outsourcing trends Offshore trends
16 IT Services Growth Rates 20% 15% 10% 5% Project Services Outsourcing Customer Support Services 0% % Source: IDC, 2005
17 Use of Consultants Type of Use All models for use of consultants exist (sometimes in same company) Resources (mostly) Competencies (second) Project management 10% to 100% of project resources from external Customers emphasize Transfer of knowledge Sparring, innovation Business consulting Long term relationships
18 Future Use of Consultants When increasing Part of external sourcing strategy No growth in own IT organization Outsourcing entire projects More business consulting More project management Need for special competencies When declining More internal resources through mergers Consolidation leads to centralization Project cycle comes to an end
19 Agenda The move to Dynamic IT Project services trends Outsourcing trends Offshore trends
20 Current Status of Outsourcing Not planning outsourcing at all (40.2%) Already using IT outsourcing (51.3%) Planning on starting using outsourcing (8.5%) Source: IDC Enterprise Survey 2005, n=642
21 Outsourcing by Outsourcing Area Server or data center Desktop or LAN Networks Security Telephony Application management Web hosting 0% 10% 20% 30% 40% 50% 60% Source: IDC Enterprise Survey 2005, n=642
22 Reasons for Outsourcing To focus on core business Operational stability - higher uptime Cost saving Lack of skilled resources Obtain higher flexibility Modernization of infrastructure Source: IDC Enterprise Survey 2005, n=642
23 Agenda The move to Dynamic IT Project services trends Outsourcing trends Offshore trends
24 You asked for globalization You got it!
25 Size of European Direct Off-shore 2004 India 85% Western Europe imported 1.8b USD in 2004 CEE 10% Other 5% 1.2% of IT services, 2.5% of project services
26 Plans For Offshore IT Services It's not interesting We might use it as the market become more mature We already use offshore outsourcing services We are planning to or currently evaluation the possibilities Source: IDC Enterprise Survey 2005, n=642
27 We are planning to or currently evaluation the possibilities Offshore Plans by Vertical Industry Manufacturing Transport and Utilities Telecommunication Retail/Wholesale Finance, Insurance etc. Business Services Government/Public administration Education It's not interesting We might use it as the market become more mature We already use offshore outsourcing services
28 Reasons for Not Using Offshore Our tasks too small Language Culture Distance and timezones Don't believe in cost saving Lack of flexibility in process Don't know Low quality of result Other Source: IDC Enterprise Survey 2005, n=642
29 Off Shore Services Types Outsourcing 15% Support 8% Outsourcing 23% Support 6% Project Services 77% Project Services 71%
30 Strategic Options The end-user etablishes an off-shore arm Ex: General Electric The end-user buys directly from off-shore company Ex: Danfoss buys from TCS The end-user buys from global/local company with resources off-shore The end-user buys from global/local company that uses off-shore resources as part of the solution (transparent)
31 What Does This Mean to Local Project Services (System Development) Need for competencies: Fronting sourcing projects Offshore advise and implementation Project management Business consulting Proactive and innovative consulting Technical competencies in new technologies and architectures Declining needs: Basic programming skills Basic project management
32 Thank you! Per Andersen Direct: Managing Director IDC Nordic Omøgade 8 Postbox Copenhagen Ø Denmark Phone: Telefax:
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA P.508.872.8200 F.508.935.4015 www.idc.com
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