Reports that IBM is reducing its offshore workforce are the result of cloud computing, automation and artificial intelligence (AI) shaking up the IT outsourcing sector, and 2015 could see acceleration in the sector’s evolution.
IBM used to be described as the bellwether of the IT sector, yet, in today’s world of internet giants such as Google and Facebook, this no longer appears to be the case.
But although the company might not be as vocal as the fast-growing giants, which have their fingers in all sorts of pies, IBM is quietly getting on with its transformation. Recent huge IT services deals are evidence that IBM remains a constant fixture on the contract lists of large enterprises. In December 2014, IBM announced deals worth $3.6bn.
All suppliers must transform, as IBM has, if they are to prosper.
Traditional outsourcing models, which have seen third-party suppliers take over the running of IT or business processes for organisations, are changing. Customers want IT services contracts to add value and suppliers want to increase their profit margins.
This might appear an uncomfortable marriage, but both can achieve their goals by harnessing the latest technologies.
By using technology such as automation software, AI and cloud platforms, businesses can become more efficient without spending heavily with suppliers for human resources. At the same time, suppliers are increasing sales and margins, because they are not just adding costs in line with business volumes and are instead moving to non-linear business models.