To borrow from a famous quote by US author Mark Twain, rumors of the death of the outsourcing market have been greatly exaggerated.
On October 1st Finnish IT services provider for the Telecom industry,Tieto,announced plans to cut as many as 950 jobs–up to 350 in its home market and 600 in China and central Europe–to offset a fall in outsourcing, aiming to save more than 50 million euros a year. Many reports attributed the cuts to the decision by Nokia, one of Tieto’s key clients, to insource more of its business.
Yet the need for telcos to outsource key network and IT services is as strong as ever. Indeed, the signs are that the outsourcing market is set to grow as carriers increase their focus on customer experience, driving necessary IT and Digital Transformation projects.
According to analyst firm Infonetics Research, the market for carriers outsourcing network services to vendors alone grew 3.8% in 2013 to reach $68.1 billion worldwide. “Overall, demand for managed services with a strong focus on user experience remains unabated,” said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics, in the report “Full-scale outsourcing by telecom carriers pushes managed services market to new heights”.
To improve the customer experience telcos are already looking to increase their focus on the next wave of IT platforms based around Social Media, Mobility, Analytics and Cloud Computing (SMAC). And to do so they will rely increasingly on organizations that can provide a mix of business and technology skills, using partnerships to combine best-in-class products, consultancy and systems integration.
Capgemini’s approach to Digital Transformation focuses fully on the end-user experience, tailoring each telco’s specific business and IT requirements around SMAC. Our partnerships with industry leaders such as Oracle, Salesforce.com, Amazon Web Services and Google mean we can outsource and deliver the precise SMAC elements you need to give you an advantage over your competitors—whether you need end-to-end transformation or a more modular approach. And we have a strong track record, counting some of Europe’s most notable carriers among our clients.
Despite the news from Tieto, the outsourcing market is very much alive and kicking.