Blue Wolf State of Outsourcing 2013

2012-2013
contents 03 06
Message from the CEO
Outsourcing IT: an idea comes of age
Outsourcing Strategies
Cost, impact, and control
12
Outsourcing by IT Function
Application Services Application Development Web/Mobile Development Application Maintenance Application Hosting Infrastructure Services Data Center Operations Database Administration Network Operations Disaster Recovery Help Desk IT Security
04
The dynamic community of highly skilled, independent experts and external service providers that ebb and flow with the resource needs of rapid enterprise initiatives. They thrive on challenge, understand business technology and are ready to work.
About the Survey

Where we get our numbers
08 10
IT Outsourcing Trends
How IT delivers value as a service
05
Key Findings
Takeaways and highlights
State of IT Outsourcing Budgets

Current and future spending through 2013
23
Bluewolf Services
your workforce has changed...
how do you configure your team?
outsourcing it an idea comes of age

message from the ceo
IT outsourcing is evolving into a strategic tool that reflects todays rapidly changing business and technology landscape. Once a tourniquet to cut costs, it has matured and become a business imperative.
Michael Kirven, Co-F ounder, Bluewolf
Technology is changing the game again in many industries, and the companies that adapt and manage their technology and talent best will have the competitive edge. CIOs dealing with cloud, big data, social enterprise, and mobile face big challengesthey cant find top talent fast enough. Whether they are leading the pack or fighting to keep up with the leaders, companies who dont modernize both their technology and how they access talent face the possibility of extinction. With a national talent shortage, a competitive tech job market, and rapidly changing business models and cycles, IT decisionmakers are turning toward outsourcing for new reasons. Its use
will continue to grow as CIOs increase emphasis on customer service, employee engagement, and the overall role people play, alongside technology, in driving innovation. By engaging an Elastic Workforceinstead of taking on new overheadCIOs are empowered with access to the right resources at the right time, and can dedicate the proper skills to the task at hand. As an IT leader, the 2012-2013 State of IT outsourcing report will help you look at what is happening in the market, how team structures are evolving and how you can leverage your IT outsourcing budgets to access talent and get the most business impact.
The State of IT Outsourcing
The Elastic Workforce
about the survey
Talent comes from everywhere: inside your walls, outside contractors and external partners. As organizations continue to adopt technologies that can be scaled to demand and iterated upon to meet real-time business challenges, Bluewolfs State of IT Outsourcing Report reveals a greater reliance on outsourced elastic talent with specialized skills that can readily flex in response to ever-changing market demands.
survey the key findings

top drivers for it outsourcing in 2012
Productivity & profitability Flexibility to turn resources on & off Access to experts & hard-to-find talent
In the next 12-18 months... 32% will

increase IT outsourcing investments.
The Survey
Bluewolf commissioned a survey to learn about the current state of IT outsourcing. The survey aims to address the following fundamental question: How are CIOs, Directors, and Managers shifting the way they leverage external providers to deliver capabilities to their business?
Respondents
Our survey includes the insight of over 200 IT decision-makers from companies at the SMB to Enterprise level. The report is enhanced by intelligence from thousands of contract IT placements Bluewolf has made, from May 2011 to May 2012, as well as over 4,000 cloud-based technology implementations.
Methodology
The survey focused on two key metrics: 1. The frequency of IT services being outsourced for application and infrastructure services. 2. The sourcing models utilized to outsource IT services, such as managed service providers, consulting firms, staff augmentation, offshore providers, etc.
of data center operations are managed in the cloud.
An average of $0.48 of every outsourcing dollar is spent on Application Services.

MANAGED SERVICES is the #1 outsourcing strategy for Disaster Recovery, IT Security and Web/eCommerce services.
48% will
hire more contractors, rather than full-time staff.
cloud technologies
Salesforce Eloqua Amazon Web Services
The Elastic Workforce 5
Sources: 1. 2012-2013 Bluewolf IT Outsourcing Benchmark Survey, May 2012
2. 2011-2012 Bluewolf Technology Outlook
outSourcing strategies impact, cost, & control

When making decisions about sourcing talent for projects, initiatives, and growth, IT leaders must not only think about what to outsource, but HOW to outsource. Consider the overall cost to the organization, the measurable impact the sourcing model will bring the business and the ability to control/customize the solution provided. If you just need a few experts to execute within your ecosystemuse staff augmentation. Need a whole team with a proven methodology? Consider a best of breed consulting or managed service partner. Consulting Firms Cloud-Based Providers Managed Services
Staff Augmentation
Gain access to a full range of highly skilled local experts on demand.
Using this sourcing model, companies can add contractors to increase their output in pace with demand. This is the least expensive and most flexible approach to outsourcing that allows you to add expertise to your team without increasing overall headcount. With this set-up, organizations maintain control of all resources.
Cloud-Based Providers
An emerging delivery model for outsourcing may lie in the clouds.
Cloud as a delivery modelwhich can be implemented in weeks, modified on the fly, and abandoned just as quicklyis gaining momentum. Businesses are leveraging the cloud to outsource applications (Salesforce, Google Apps, Eloqua), data storage, and even the management of entire data centers to third-party providers.
Consulting Firms
Need to transform, how do you get started?
Sometimes the best solution for companies is to outsource entire projects to consulting firms with proven methodologies. In this set-up the consulting firm becomes a partner to the company and has all the necessary competencies to complete the project. Not all consulting firms are created equal: make sure your partner has domain experience and deep business process and technology expertise.
Offshore Providers
Access a highly skilled low-cost global workforce.
Decades ago, companies began relocating IT infrastructures from the US to India, China and Eastern Europe. The business model seemed simple. Take advantage of the best and the brightest in developing nations for a fraction of the cost. As the offshore outsourcing market matured, mixed results have CIOs re-evaluating the IT services and functions they choose to outsource this way.
cost
Offshore Providers Partial Outsourcing
Managed Service Providers

Staff Augmentation
Partial outSourcing
Turn over a specific IT operation, rather than the entire IT function.
Instead of outsourcing an entire IT function, organizations that prefer to retain a certain level of expertise in-house can identify skill gaps that can be easily separated into smaller processes. These parts of projects are outsourced, and the chosen partner has direct responsibilities and obligations to the company.
Free up internal resources or outsource ongoing innovationall at a predictable monthly cost.

In this outsourcing model companies engage with partners on a clearly defined set of IT services. Most managed service providers bill an upfront set-up fee and an ongoing flat or near-fixed monthly fee, which benefits their clients by providing them with predictable IT costs and a fair amount of control.
ability to control/customize resources

business impact
6 The State of IT Outsourcing
High
Medium-High
Medium
Low
application services
IT outsourcing trends
how it delivers value as a service
Applications enable companies and their workforces to be efficient, responsive, and to deliver consistent value to their customers. As the needs of your business change, your applications must scale and be customized. 73% of our surveys respondents currently outsource application services at least partially, and 30% are planning to outsource more in the next 12-18 months. Within our own practice, 40% of our technology staffing placements fall into application services. Implementations of hosted applications such as Salesforce, Eloqua, Google Apps, as well as Amazon Web Services (AWS) for web hosting has grown rapidly year-on-year.
infrastructure services
infrastructure services
There is no question that without a sound, secure, and responsive infrastructure, a companys ability to operate would be significantly hindered. Infrastructure requires 24/7/365 connectivity and close to zero margin for error. IT Infrastructure Services are outsourced by 62% of our surveys respondents, with 37% indicating they will increase outsourcing or sustain investment in the next 12-18 months. Additionally, 33% of Bluewolfs technology staffing placements fall into Infrastructure Services.
Outsource Application Services

Outsource Infrastructure Services

state of IT outSourcing budgets

Current and Future Spending through 2013
application Services
Budgets for application and infrastructure outsourcing are on the rise. Curious to know how your peers are spending their IT outsourcing dollars? At a glance, the rate at which organizations outsource application services is somewhat similar across business size. However, for infrastructure services, SMBs outsource more frequently in order to take advantage of the economies of scale that outsourcing provides. How does your outsourcing strategy measure up?
How much of your annual IT budget is allocated for outsourcing?
How much of your IT outsourcing budget is allocated towards Application and Infrastructure Services?
nearly half of cios said...

Application Services
infrastructure Services
44% 51% 49% 50% 26% 28%
How is this expected to change over the next 12-18 months?
How is the use of IT contractors expected to change over the next 12-18 months?
An average of $0.48 of every outsourcing dollar is spent on Application Services.

An average of $0.35 of every outsourcing dollar is spent on Infrastructure Services.
SMB: Under 300 employees Midmarket: Under 5,000 employees Enterprise: 5,000+ employees
Infrastructure Services
32 9 52 7
INCREASE
DECREASE
NO CHANGE
NOT SURE
48 13 37 2
INCREASE
DECREASE
NO CHANGE
NOT SURE
The Elastic Workforce
11
Outsourcing shares by IT function

26%
Application Maintenance
Application Development
bluewolf prediction growth
46%
it infrastructure services
15%
IT Security
Application development is the most frequently outsourced IT function both in scope and variety of sourcing strategies used. Some projects are best executed by a team of contractors while others require a specialized consulting firm or managed service partner. As applications become more process-centric, the development community needs to have skill-sets around specific business processes as well as industry expertise.
23%
Data Center Operations
elastic workforce mix

Staff Augmentation Consulting Firms 40% 36% 16% 16% 26% 11%
12%
Help Desk
30%
offshore
will outsource more in next 12-18 months
top staffing placements

Software Developer (All languages)
Managed Service Providers Cloud-Based Providers Offshore Providers Partial Outsourcing
46% 28%
Application Hosting Application Development
17% 17%
Database Administration Disaster Recovery
39%
Web Development
Share of Application Development
offshore
Salesforce Developer QA Analyst
16%
Network Operations
2. 2011-2012 Bluewolf Technology Outlook 3. 2012 Bluewolf IT Salary Guide
Bluewolf IT Resourcing Bluewolf Beyond: Salesforce, Eloqua, Marketo

12
web & mobile development 39

Share of Application Development
The explosion of web and mobile technologies remade entire industries. As organizations continue to integrate web and mobile strategies into their marketing and eCommerce efforts, CEOs and CIOs are re-evaluating the best ways to manage demand. Some choose to keep web and mobile development within IT and leverage an elastic workforce mix, others reorganize these functions under marketing or sales because of revenue potential.
Application hosting
28%
Traditionally, businesses have built and run the infrastructure to support on-premise applications. Much of the total cost for owning and operating this infrastructure is now shifting to managed-service and cloud-based providers. We foresee that application-hosting outsourcing will only increase as more organizations lean on cloud-based providers and more service providers integrate cloud into their offerings.

27%
offshore
35%
offshore

Mobile Developer (Android, iPhone) Front End Developer UI/UX Designer

Salesforce Consultants Eloqua Consultants Software Developers (All languages)
4%
offshore
10%
offshore
Bluewolf IT Resourcing Bluewolf Consulting: Mobile development
Bluewolf Beyond: Amazon Web Services

Application maintenance
26%
Application maintenanceespecially with native, industry-specific and legacy applicationscan take up a significant chunk of your IT budget. With the ubiquity of cloud applications and the total cost of ownership for software decreasing, we expect application maintenance outsourcing to decrease over time. With this, IT leaders will be freed up to focus on ongoing innovation with their existing applications and new development projects.
Data Center Operations

23%
Demand for storing and analyzing data combined with the increased amount of unstructured data captured by the enterprise is causing data center operations to grow in size, complexity, and scope. Outsourced solutions such as co-location and virtualized environments and rural area sourcing can be a cost-effective and scalable approach to larger data center growth, while increasing resiliency and recoverability.


26%
offshore
22%
offshore

Software Developer (All languages) Salesforce Admin Systems Analyst

Data Warehouse Architect Data Warehouse Developer Data Warehouse QA
15%
offshore
11%
offshore
Bluewolf IT Resourcing Bluewolf Beyond: Salesforce, Eloqua, Marketo
Bluewolf IT Resourcing Bluewolf Beyond: Remote DBA

Database Administration
17%
Businesses are beginning to see the critical value in big datautilizing real-time analytics to bring new streams of revenue-creating insights to their business. With tons of data to sift through, both structured and unstructured, organizations have the opportunity to identify and prioritize the strategic data sets that must be managed by highly skilled database experts (internal or external) and those that require less expertise.
Network Operations
16%
Patience for slow connections is extremely thin these days, with productivity so closely tied to network speed and access, poor service can seriously hamper your efforts and possibly cost your organization hundreds if not thousands of dollars. Over the past year weve seen an uptick in staff augmentation and partial outsourcing of network operationsspecifically for network maintenance and network administration.

14%
offshore
21%
offshore

Sr. Database Administrator Data Architect Data Modeler

Network Administrator Network Engineer Network Security Engineer
11%
offshore
11%
offshore
Bluewolf Beyond: Remote DBA Bluewolf IT Resourcing
Bluewolf IT Resourcing Bluewolf Beyond: System Administration

Disaster Recovery
16%
While many DBAs currently have DR and database mirroring experience, they are often focused on more essential ROI projects. Because of this, many companies are outsourcing DR to best-of-breed managed service providers. In 2012, expect to see more companies leveraging cloud computing as a way to offset the need to put in place and carry the cost of a disaster recovery infrastructure for critical applications.
Help Desk
bluewolf prediction
12%
growth
Application interfaces are being designed with a deeper commitment to user experience. Concurrently, end users have become more tech savvy and know how to troubleshoot problems. While the help desk function could be an easy target for outsourcingbecause the function is highly user- and client-facing and the cost is relatively lowit is not feeling the same market pressure as other IT functions.

17%
offshore
7%
offshore

Storage Admin SR Database Administrator Data Modeler

Help Desk (all levels) System Admin (all levels) Hardware Technician
9%
offshore
11%
offshore
Bluewolf IT Resourcing Bluewolf Beyond: Remote DBA

it security
15%
People + Technology = Game on!

bluewolf solutions
Technology works best in the hands of experts. While technology is the enabler, its the skilled talent that drives innovation and brings value to business. For over a decade, Bluewolf has helped companies scale their technology, workforce, skills, and resources to suit the specific needs of your project or business challenge.
IT Securityso critical to the businessis often one of the last functions to be considered for outsourcing. The combination of IT securitys complexity (firewalls, patches, and analytics involved) and the rise of outsourcing partners specializing in 24/7 data and network security has led some CIOs to consider outsourcing to augment their existing team.
15%
offshore
bluewolf IT ResourcingTech Staffing

Bluewolf provides staff augmentation to companies with immediate needs for deep expertise in specific technologies and software development processes. We cut placement times in half, delivering the resumes of the top three candidates within 24 hours. We can staff any project, for any technology positioncontract, contract-to-hire, or permanent placement.
Bluewolf BeyondManaged Services

Bluewolf Beyond is focused on post-implementation consulting, matching ongoing technology innovation to the pace of your business. With access to Beyonds in-house team of cloud application, marketing automation, adoption, and database management experts, you stay ahead of change and extract the maximum value from your technology.

Network Security Admin Security QA Security Analyst
7%
bluewolf public training

In todays competitive business environment, it is essential that a company remain agile and iterative. Bluewolf has built the strongest training and change management organization in the industry. User adoption is a key success metric for technology implementations, and Bluewolf can help prepare your employees by providing them with a foundation for professional development.
bluewolf Consulting
Bluewolf is your guide to Agile Business Transformation. We partner with clients to sync business and IT to achieve new levels of business performance with SaaS and cloud computing technologies. Our agile consulting solutions include: Business Process & Strategy, Cloud Implementation, Customer Lifecycle Consulting (Demand Gen, Sales, Service), Change Management, and Technology Adoption.
offshore

Get to know Bluewolf
bluewolf is a global consultancy

Consulting + Technology Staffing + Managed Services + Training
We make enterprises agile and unite IT and business under one missionInnovation. As a global agile consultancy, Bluewolf provides consulting services across the customer life cycle, technology staffing, managed services, and training. Trusted by businesses across diverse industries, Bluewolf is translating todays unique business environment into opportunity for growth. Using Bluewolf, businesses are able to do more faster and deliver results that benefit the customer, the workforce, and the bottom line.
who chooses us
NBC Universal Avon Products GlaxoSmithKline Comcast Zynga Compuware NYSE Euronext Giorgio Armani Scholastic Corporation Olgilvy & Mather NYU Medical Center Gates Corporation Stanley Black & Decker Citizens Bank TE Connectivity National Financial Partners
engage with us
locations
New York San Francisco Washington, D.C. Philadelphia Long Island Boston Chicago United Kingdom
For Cloud Apps, Marketing Automation, Adoption, Database Management
Any position, new contracts 40 hours or more
Check out our courses: bluewolf.com/training
CONTACT US
bluewolf.com staffing@bluewolf.com 866.455.WOLF

Blue Wolf State of Outsourcing 2013

Încărcat de

Informații document

Descriere originală:

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Blue Wolf State of Outsourcing 2013

Încărcat de

Drepturi de autor:

Formate disponibile

2012-2013

About the Survey

State of IT Outsourcing Budgets

your workforce has changed...

how do you configure your team?

outsourcing it an idea comes of age

The State of IT Outsourcing

The Elastic Workforce

about the survey

survey the key findings

In the next 12-18 months... 32% will

of data center operations are managed in the cloud.

An average of $0.48 of every outsourcing dollar is spent on Application Services.

hire more contractors, rather than full-time staff.

The State of IT Outsourcing

Sources: 1. 2012-2013 Bluewolf IT Outsourcing Benchmark Survey, May 2012

2. 2011-2012 Bluewolf Technology Outlook

outSourcing strategies impact, cost, & control

Offshore Providers Partial Outsourcing

Managed Service Providers

Free up internal resources or outsource ongoing innovationall at a predictable monthly cost.

ability to control/customize resources

Outsource Application Services

Outsource Infrastructure Services

Sources: 1. 2012-2013 Bluewolf IT Outsourcing Benchmark Survey, May 2012

state of IT outSourcing budgets

How much of your annual IT budget is allocated for outsourcing?

nearly half of cios said...

44% 51% 49% 50% 26% 28%

How is this expected to change over the next 12-18 months?

An average of $0.48 of every outsourcing dollar is spent on Application Services.

An average of $0.35 of every outsourcing dollar is spent on Infrastructure Services.

The Elastic Workforce

Outsourcing shares by IT function

elastic workforce mix

will outsource more in next 12-18 months

top staffing placements

Managed Service Providers Cloud-Based Providers Offshore Providers Partial Outsourcing

Salesforce Developer QA Analyst

Bluewolf IT Resourcing Bluewolf Beyond: Salesforce, Eloqua, Marketo

The State of IT Outsourcing

Sources: 1. 2012-2013 Bluewolf IT Outsourcing Benchmark Survey, May 2012

web & mobile development 39

Share of Application Development

elastic workforce mix

will outsource more in next 12-18 months

will outsource more in next 12-18 months

top staffing placements

Managed Service Providers Cloud-Based Providers Offshore Providers Partial Outsourcing

top staffing placements

Managed Service Providers Cloud-Based Providers Offshore Providers Partial Outsourcing

Bluewolf IT Resourcing Bluewolf Consulting: Mobile development

Bluewolf Beyond: Amazon Web Services

Data Center Operations

elastic workforce mix

elastic workforce mix

will outsource more in next 12-18 months

will outsource more in next 12-18 months

top staffing placements

Managed Service Providers Cloud-Based Providers Offshore Providers Partial Outsourcing

top staffing placements

Managed Service Providers Cloud-Based Providers Offshore Providers Partial Outsourcing

Bluewolf IT Resourcing Bluewolf Beyond: Salesforce, Eloqua, Marketo