SunGard Identifies Top Ten Trends Next Year in Managed Services and Outsourcing for FIs and Corporations

18 December 2012

SunGard has identified what it claims are the top ten trends in managed services and outsourcing for 2013 at financial institutions (FIs) and large major corporations.

Kalpesh Master, managing partner for the sector at SunGard’s global services unit, perhaps hopefully, believes that regulatory pressure to improve reporting and its take of firms’ budgets, will drive increased use of outsourcing in 2013. He also believes that, “areas that do not contribute directly to revenues but were previously considered too risky to outsource, such as tax processing, actuarial modelling and retirement plan recordkeeping” will all be targeted for cost savings next year.

The SunGard top ten trends in managed services and outsourcing for 2013 are:

1. As outsourcing matures, firms will look to their service providers as partners for a complete solution that bundles software with professional services, custom application development and managed services, as well as thought-leadership.

2. The Business Process-as-a-Service (BPaaS) model will gain momentum because firms can leverage a utility model that serves multiple companies, provides economies of scale and supports an efficient end-to-end business process.

3. Firms will continue to seek software solutions delivered on a Software-as-as-Service (SaaS) basis, so they can select software components in the cloud to create a single, customised solution.

4. Customers of Business Process Outsourcing (BPO) services will look beyond traditional application hosting and staff augmentation or replacement models to add domain-specific business services and thought leadership.

5. IT executives will outsource more IT infrastructure and application management services to help reduce total cost of ownership and free up internal resources.

6. Firms will look for outsourcing providers that can offer cloud computing to help more quickly prototype and develop applications.

7. Compliance with regulatory and operational risk requirements is leading firms to look more closely at the integrity of outsourcing service providers and to demand strong Service Level Agreements (SLAs).

8. Firms will move towards service contracts that are based on a variable cost model in 2013, which transfers risk to the service provider and helps firms save money and better manage the peaks and valleys of demand.

9. Adhering to best practices and global certifications and standards such as COPC, ITIL and Lean Six Sigma will help outsourcing providers to give customers more efficient and higher quality services.

10. Firms will look to managed services providers to operate and maintain new and complex initiatives such as ‘big data’ analytical farms and smart grids of customer and treasury / supply chain information.

Commenting on the list, Rodney Nelsestuen, a senior research director at the CEB TowerGroup consultancy, said: “The FI and corporate sector is expected to increase its spending on outsourcing of services and technology at a rate more than two times that of traditional onsite IT spending through to 2015.” According to him the drivers for this growth will be the need to update aging technology despite tight budgets and deferred investments, vendor innovations in both pricing and the [SaaS] delivery of more bundled IT and service options, plus increases in the business value that vendors offer through expanded domain expertise.

“Technology and operations will become more integrated,” he further claims, “and software will be embedded with infrastructure, bundled with managed services, and provided through both on-demand cloud services and more offerings of platform-based business process outsourcing.”

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