2015 KPMG study on outsourcing for technology-related services

Articles covering outsourcing topics by analysts such as Gartner and consulting firms like Accenture often stay at such high level that their practical application requires engaging these firms. Once in a while these articles could be very informative and helpful The latest KPMG study is worth taking look at. That study covering outsourcing for technology-related services shows some radical changes and interesting trends in the marketplace, to which both companies and service providers will need to adapt.

2015 study by KPMG covers over 2,100 contracts across 23 countries with an annual contract value of US$12 billion+. It provides insights into service provider performance as well as extensive insight on IT services market trends, and provides predictions on the future state of the IT services market and projected buying patterns.   The study highlights the following key findings:

  • A shift from cost reduction being the biggest challenge for IT functions to one in which IT services are increasingly viewed as an enabler for improved business service delivery and transformation.
  • Greater focus on enabling innovation via IT outsourcing, especially via enabling greater organizational agility and accelerating the pace of investment into technologies such as cloud
  • The above being said, cloud adoption remains sluggish, with the majority of clients spending less than 10 percent of their IT spend on cloud. Data location, security or privacy are the biggest barriers to cloud adoption.
  • Governance and management of IT services and outsourcing efforts remain a major problem with mixed satisfaction from service integration and management

To access the study materials click here to download the management summary. (The full report is only available to those organizations that have participated in the survey). You can also find an infographic summarizing the key findings from the report by clicking here.

“Outsource it!” is now in beta

A couple days ago my first full size book went into beta and is now available at the publisher website – http://pragprog.com/book/nkout/outsource-it. I feel very happy and relieved that the book is finally out, writing it was far more challenging than I’ve ever anticipated. At the same time I feel happy and proud, proud to be one of the authors of the pragmatic bookshelf, the group of technology writers that earned respect across very broad and demanding technical audience.

It will take a little while before the book hits the shelves of Amazon and other bookstores, but you don’t have to wait and get your e-copy of it today. While the book is in beta your comments and suggestions would be taken quite seriously and could result in changes and additions to the content, hopefully making the book even better. I am not sure how long the beta would take but hopefully much less than it took me to get here –

Roughly two and a half years ago I came up what seemed a great idea at the time – compile my blog material into an easy to read eBook. In a couple months I produced the first volume that was dedicated to making decisions on whether and how to outsource. In a short order I received substantial feedback that made it apparent that just recompiling the blog and doing surface level clean up won’t add too much value, and probably was not worth the effort. Continue reading

Trip to blogosphere

Outsourcing is a very broad topic with plenty of controversial topics, inevitably there plenty of people who have something to say about it. Chances are if you are interested in this subject you run across articles and posts by Outsourcing Institute or Horses for Sources. A couple years ago I put a few references in my blogroll and started a blogosphere directory. Thanks to the law of reciprocity that generated a few back-links and traffic to my blog. Over time the blogroll become stale pointing the blogs that become dormant or completely disappeared. I did not notice it till just recently, as I was doing some cleanup of the blog.

Similar to my freelancing directory the blog roll needed to be refreshed. In addition to cleaning it up I decided to create an outsourcing blog “directory” as well. And with no hesitation I went on blog hunting with a help of my fearless VA Yesha, looking for blogs that cover outsourcing. Very soon we had a list with more than 100 entries, unfortunately, many of them covered topics that I am not too familiar with and/or not too interested in such as Law Process Outsourcing or blogs solely focused on BPO. So we went back pruning the list getting it to less than 50 entries. Some of the blogs that got the ax were fairly active in outsourcing blogosphere, and I may include rejected entries in the list later on after I get a chance to check a few posts and see whether they are worth considering. Of course what’s one man trash is another man’s treasure, so “worth considering” is a very subjective term. Plus in any blog the posts are typically hit-or-miss, and even loosely related sources can put some interesting article once in a while. Well, I cannot create full directory, even with help of a couple dozen of Vas, that’s why we have omnipotent Google.

Anyway, please see the list sorted by URL of the blog on this page. To make the list a bit more helpful I added PR and Alexa ratings in the same manner as in my freelancing marketplace directory and created two additional versions of the list, one sorted Alexa Global and another by Alexa US. As usual, feel free to comment and suggest new entries. I am planning to update the list in ~12 months from now.

Bidding Sites and Building Frustration

A couple weeks ago I put an RFP out for a very specific set of SEO activities on one of bidding sites. This SEO project was for my darling app – WWHOW!.  Since WWHOW! is based on user generated content it offers serious SEO challenges. Having spent a few months fighting those I knew fairly well what I was looking for and did not make a secret out of my expectations. To no surprise my straightforward SEO request generated a lot of responses primarily from India-based providers. I just finished going through all responses I received to date and it looks like I will have to go through bid-response process again, maybe I have to try a new bidding site, maybe change my request format, content, layout… Frankly, I doubt that changing much on my side will affect the dynamics of the campaign and quality of responses. I might need to change the target development community…

The fact that I received not a single proposal that I could remotely go with was quite irritating. One of the reasons I was annoyed by it is its effect on my “buyer’s reputation”. In some way majority of established bidding sites penalize buyers for not accepting proposals. Some of them will even cut buyers off if they do not meet some criteria, e.g. certain percentage of project acceptance. It appears that they will cut you off independently from the reasons you do not accept the proposals. It happened to me on www.eLance.com a little while ago and since despite multiple attempts I could not reach the customer service I ended up moving to another bidding site.

Continue reading

Spam Attack

A few weeks ago we went through upgrade of anti-spam software we use in-house. The Bayesian filter database got corrupted during the upgrade or possibly before it and for some reasons we could not restore it from backups. After much ado we decided to start anew. Software upgrade was quite impressive and new filters reduced the volume of spam dramatically, the majority of the users did not even noticed the little problem we had. It was not the case for me, all knowledge previous version of the software gained about my spam designation was lost and many of my service providers came back.

Today I receive a couple dozens of emails a day which come from valuable IT service providers that somehow got hold of my email address. Apparently they use smart email campaign software that bypasses very solid guards that on daily basis filter out a few hundreds of Canadian pharmacy offerings, lottery winning notifications and love letters from Russian girls. Continue reading

Launching Common Sense Management

I spent a bit of time cleaning up the Site Map and while doing that I noticed that some of the posts have only loose relevance to outsourcing. I put them in a new category – Common Sense Management (CSM). CSM is not a widely used or a popular term. I started using it awhile ago to describe management and leadership style I apply in my day job – running technology teams building software products and services.

CSM is built on top of traditional techniques as well as new methodologies that at some point were considered controversial and now are widely accepted. “Common Sense” in CSM term doesn’t mean “agreed by many” or “widespread knowledge”. CSM stands for application of simple straight-forward solutions to problems that managers face on a daily basis. The best illustration to the term of Common Sense I have ever heard of was a story about “space pen”. Supposedly many years ago NASA spent millions of dollars developing a pen that would write well in the space. Weightless ink presented a serious technical challenge which was successfully addressed by “space pen”… Russian cosmonauts used a Common Sense solution to the problem – pencils…

CSM is a huge topic – it covers multiple aspects of leading and managing people, teams, projects, engagements, and so on. So I decided to start a new blog Common Sense Management – Tips, Tricks and Traps of Technology Leadership. CSM applies to leading all kind of teams and engagements, not only technology, yet with my experience and knowledge limited to that domain I’ll do better staying focused on the technology field.

My first post in the new blog was to some degree a repetition – I wrote about 10 Golden Rules of Bargaining, the post is a bit different from Offshore Negotiations and Rules of Haggling – it is a using Presentation 2.0 style and if you are interested in the topic is probably worth checking out.

I am not sure how frequently I will update my new blog and how it will affect my postings in this blog. Since I only write while commuting the total volume is limited by my abilities and length of BART ride. Well, as they say in France – Vivra verra…

Is Blog Format a Misfit for PO?

I was chatting with a good friend of mine who happened to be one of my readers as well. Being a good friend he did not sugar coat his thoughts and opinions, as they say “friends stub you in front”. And, as it typically goes, when we were done fighting we only strengthen our positions and views. So, no adjustment or reviews are coming to the 100+ posts I wrote so far. Also as it goes in frank discussions between friends a few interesting topics came up, a few questions that needed mulling over. One of them was quite intriguing for me: “is blog format a misfit for what I am trying to accomplish in pragmatic outsourcing?”

For all intents and purposes PO is a collection of my thoughts, experiences, ideas, etc. directly or loosely related to IT outsourcing. I write the blog as if I am writing a book on IT outsourcing one random chapter at a time. When I look at the table of content it looks like I’ve got a plenty of material for a decent size book already. That approach has a few serious shortcomings though. The main is chronological nature of blog is counterintuitive for technical writing and even more so for reading. Those who elect to subscribe to my blog most likely find the info disorganized, sometimes repetitive, etc. Those who stumble upon my blog looking for offshore advice find info often incomplete. And so on.

Another blog format related challenge comes from expectations of constant updates. That as I move along closing more and more topic becomes more and more complex. Things, unless you consider current news approach are not terribly dynamic. For example, I wrote about India vs. China from IT outsourcing standpoint; that post is soon to be a year old. Some economy trends changed, political and industry events changed some of the elements and tweaked the balance. Of course things changed. Yet how much, is that worth placing an update to that post, revise views and positions, nope, I am afraid the changes no matter how significant did not affect foundations and views presented in that post, chances are it will be a long while before rewriting or updating the post is warranted.

I am not running out of topics yet, there is a lot to cover, and I am not planning to switch the format or type of content. I would appreciate your thoughts on that question though…

And one more thing worth mentioning: Kirill Abgarian, one of my readers and supporters, suggested that I should put my knowledge in a book about Pragmatic Outsourcing. I got quite excited about that idea; while time-wise and skill-wise I could not possibly do it, but considering an offshore ghost writer support and an ebook format that appeared to be very doable. I shopped around what it would take, swaged some purchase dynamics and came to a sad conclusion that I would need to have at least couple thousands subscribers before I could cover the expense of writing and publishing the book. That’s considerably more than I have at the moment, so no ebook for now… but maybe some time in a future…