ICT Outsourcing to Top Process Management Agenda in 2012

Businesses are facing an uncertain future across the eurozone with tighter budgets, while many decision-makers find themselves under greater pressure to demonstrate return on investment. In this context, the stakes are higher when it comes to process management decisions and failure to get it right could have substantial repercussions for business survival.

Outsourced process management

Outsourcing information communication technology (ICT) services, such as computing power, storage and business support, is forecast to become very popular over the coming years, to help reduce overheads and capital costs. These estimates outlined in the Centre for Economics and Business Research (Cebr) B2B Insights report are accompanied by the threat of internal redundancies, as the pursuit of greater efficiency and the prospect of a eurozone recession weigh on the private sector.

Perhaps with one eye on the eurozone, spending by firms on business services is expected to increase by 12 per cent to £92.5 billion by 2016, led by ICT outsourcing, which is forecast to achieve 13.6 per cent growth over this period. Consultancy services will also see activity increase, as businesses seek external advice on process management excellence. Consultancy services can expect to see a 19.1 per cent boost in spending, faster than the ICT sector.

However, Cebr report author and economist Rob Harbron believes a worsening of the eurozone crisis has the potential to derail business recovery in the UK, making it all the more important for firms to get their process management right. "A deep recession in the eurozone is not good for UK exporters nor the business service firms which are reliant on their success," he explained.

Virtualisation and data storage

Businesses have already started to adjust their data management processes, in part driven by a need to modernise but also by a recognition of the superiority of cloud computing and virtualisation for achieving security and data quality. The Software Quality Systems (SQS) managing director and chief markets officer for northern Europe, India and South Africa, Phil Codd, believes the increasing use of ICT technologies by businesses means the transition to cloud computing virtualisation is a very natural one.

"SQS sees an increase in the use of a number of technologies and trends [that] will impact significantly the need to work much harder on the software quality agenda," he explained. "Cloud computing can provide tremendous advantages to an organisation and there are additional considerations such as performance testing [and] security testing, as well as the need to ensure consistent functionality."

However, this transition brings with it the potential for new security and performance threats to present themselves. Mr Codd believes pressure on chief information officers to allow multiple access points into the corporate network - such as for personal devices - will create significant challenges. But, for many chief information officers, multiple access will be seen as a necessary component of process management improvement.

Risk averse ICT process management

Reducing business risk is fundamental to good process management and will prove key to the move towards ICT virtualisation, according to data backup and disaster recover specialist KeepItSafe. Managing director Eoin Blacklock believes businesses are starting to wake up to the risks associated with USB sticks, and their use will decline in 2012.

"On the other hand, virtualisation of servers and desktops will increase as companies need to adjust their storage systems, as the amount of data produced by businesses continues to grow exponentially," he explained. "It will become impossible for service providers to continue to manage storage requirements with traditional local storage."

As a result, businesses will need to confront new process management challenges, such as disaster recovery and data backup within the cloud. Failure to do so carries significant costs, both to reputation and to finances.

Mr Codd, of SQS, claims the impact of poor quality data and software management is not always as tangible as any monetary loss, but is no less substantial. "Reputational damage … can hit as hard as actual monetary cost, as in the case of automotive industry vehicle recalls," he explained. "Quality and software testing is not something to be left to the end of the project, it must be addressed at the very start and continued throughout the software development lifecycle."

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