Despite the slow economy, some opportunities can be found in the information and communication technologies (ICT) sectors, according to a recent report by Frost & Sullivan.  The report states that some IT projects will be put on hold during the unstable market, but there will be many new opportunities within the industry. 

Four areas of expected ICT growth were identified, which include the following:

• Sustainable IT
• Outsourcing services, managed and hosted services
• Information management tools
• Services that support mergers and acquisitions

“In particular, ICT solutions that shift costs from a capital to variable component, focus on productivity increases and cost reduction, and support organizational restructuring and acquisitions are likely to see growing demand,” says Andrew Milroy, ICT director at Frost & Sullivan. 

The report predicts that investments will be made in sustainable technology within existing infrastructure, such as virtualization, videoconferencing, thin clients and power consumption modeling, as these capabilities are able to reduce costs while increasing green initiatives.   A greater focus on variable costs is estimated to lead to an increase in popularity of software-as-a-service (SaaS) and hosted service models.

Business travel will most likely decline, which will create a greater need for conferencing tools.  These conferencing tools will also allow more employees to work remotely, which will reduce travel costs and emissions.  As a result, there will be new opportunities for providers of secure remote access solutions.

One of the major areas of expected growth among the ICT sectors involves IT outsourcing.   Many organizations are looking for ways to cut back on costs and IT outsourcing provides a way to accomplish this goal.  Plus, outsourcing to a global sourcing provider allows companies to better focus on core competencies and increase productivity.  Global sourcing providers are expected to reap the greatest benefits to this anticipated growth.  Frost & Sullivan cautions in the report that contract terms can be expected to fall significantly.  Companies can use the advice of experienced IT outsourcing consultants to ensure that the contract terms are in their favor.

The authors of the Frost & Sullivan report believe that there will be new opportunities in both traditional and non-traditional areas of managed services, including managed handsets, network services and leasing services.  According to the report, there should be an increase in mergers and acquisitions as the economy continues to weaken.

Based on this Frost & Sullivan report, it is safe to assume that a slow economy will benefit some areas within the IT industry, while negatively impacting others.  Global IT sourcing is a great way to lower costs during this economic slowdown.  A&E Consulting helps organizations weigh the benefits of outsourcing and also assists in choosing the right outsourcing partner.  The consulting firm will even oversee the first outsourced project to ensure a smooth transition.

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There are many aspects that go into creating a beneficial relationship between a buyer and a global sourcing provider.  One of the most important initial documents is the statement of work, also referred to as an SOW.

A statement of work is a document used to solicit proposals from global sourcing providers and is usually included as part of a Request for Proposals.  It describes the work that is needed and generally includes a timeframe as to when the project must be completed.  Vendors will respond to the statement of work with a proposal and cost estimate.  Buyers can then choose the most qualified vendor for the project.

Creating a statement of work is not an easy task and can be time consuming.  However, it is well worth the effort as it is fundamental to the success of the project.  A statement of work must be specific and clearly outline the work that is to be done.  If a statement of work is too ambiguous, it can lead to misinterpretation and future problems.  IT managers therefore, must take the necessary time to draft this essential document and ensure that it is detailed.

There are many items that should be included in a statement of work.  The scope of work required and the time in which it should be performed should be defined.  Hardware or software that is to be used should also be mentioned so that vendors know what is expected of them.  A statement of work generally discusses the location of where the work is to be completed and the allowable time for projects.  It should incorporate a schedule for specific deliverables.  If there are any special requirements, such as security clearance, necessary skills or travel requirements, it should be outlined in the document.

A statement of work might also include criteria for defining a project’s success or failure.  Defining success can be especially helpful in eliminating potential misunderstandings between the buyer and vendor.

When reviewing proposals from vendors, IT managers should evaluate the vendor’s plan for performing the required work, the skills of the vendor’s employees, performance history and price.  All of these factors are equally important and each one should be considered when choosing a vendor.

For more information regarding statements of work, contact A&E Consulting at 818-572-8399.  A&E Consulting assists companies looking to incorporate global IT sourcing into the overall business strategy and will help oversee the first outsourced project.

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In the world of IT development, data protection is a top priority.   Data faces many of the same risks when sent to a global sourcing provider as it does when kept in-house.  Intellectual property is one of the greatest assets an organization can possess and proper security measures should always be implemented to protect it.  Problems with security can be avoided when an outsourcing company takes precautionary steps before sending work to a global sourcing provider.

When searching for a vendor, there are certain criteria that are considered when choosing a company.  One of the main factors that should be included in the decision process is the vendor’s data security policies.  There should be clear, enforceable policies in place and the access controls should be identified.  Many of the larger vendors will have certifications showing that information security practices are upheld.   Some firms will have obtained the ISO 27001 certification, which means the company documents and follows information security practices and controls.

It is important to find out how the vendor enforces access controls and how these controls are updated when employees change jobs or leave the company.  Some vendors will offer to provide development on a dedicated data server, which will include audit control access. Once a vendor is chosen, IT managers must make sure the company follows the outsourcer’s industry best practices and compliance guidelines of the home country.

Whatever policies and access controls that are discussed should be outlined in detail in the contract.  A signed non-disclosure agreement, non-compete agreement and no solicitation agreement can provide additional protection for the outsourcing company.  If a vendor refuses to include data protection information in the contract, it would be wise to consider a different global sourcing provider.  Even after the initial terms are agreed upon and the contracts are signed, an outsourcing company should perform regular audits to ensure that data privacy policies are being followed and enforced.

Only the information that is crucial to the project should be shared with the global sourcing provider.  The outsourcing company will have to carefully evaluate the propriety data and technology that are needed to successfully develop the outsourced projects.  In-house employees should be aware of what information is acceptable to share when talking with the global sourcing provider.

By being aware of the potential challenges associated with data protection and taking preventative steps, an outsourcing company can reduce the associated risks.  A&E Consulting can help you evaluate data protection issues when global sourcing and will oversee the first outsourced project. 

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