The global IT consulting services market has reached maturity, but the trend of outsourcing to low-cost countries continues.
Every time you research online to see how much the market for IT consulting services will grow, you’ll see a common pattern, which is “the market is growing, but slowly.” Now you wonder why this market is witnessing slow growth despite the rising adoption of IT services. Well, fret not, we at SpendEdge don’t believe in giving ambiguous answers. Our procurement market intelligence reports offer businesses and stakeholders the scope to understand the supply market and the key factors affecting the sourcing and procurement of IT consulting services. According to our experts, the demand for IT consulting services has matured, and the market is fragmented due to the presence of independent consultants and small firms who provide niche services such as data analytics and IT advisory. (Source: Global IT Consulting Services Category – Procurement Market Intelligence Report)
In addition, the recent rise in M&As across industries, such as chemical and oil and gas, will boost the demand for IT consulting services to handle activities pertaining to accounting, resource planning, budgeting, and data warehousing. With the preference for IoT rising ever so steadily among end-users, the spend momentum will increase and buyers will not be looking at conventional large service providers to avail effective IT consulting services. The Americas and Europe are expected to be the front-runners in terms of demand but regions like APAC are also anticipated to witness an increase in the demand for such services due to the extensive outsourcing of such services. Now that we’ve established a base for you to understand the growth potential of the IT consulting services market, let’s look at some of the procurement best practices that will help you save costs in your sourcing and procurement activities.
Top three procurement best practices for IT consulting services
Strategy 1: Streamlining execution
Due to the critical nature of their operations, buyers of such services have to focus on streamlining execution and monitoring services in a structured manner. One of the procurement best practices for the buyers is to establish a strategic plan in collaboration with service providers. This would help both parties to create a blueprint of the solution and allow category managers to identify cost-saving opportunities.
Strategy 2: Performance monitoring and benchmarking
To increase supplier accountability and identify potential performance bottlenecks, the buyers of IT consulting services should design strong KPIs for the constant monitoring and evaluation of service providers’ performance. Since the data gathered from establishing effective KPIs would help buyers to gain a better bargaining power during the contract renegotiation phase, it is one of the key procurement best practices to be followed if you are looking to procure IT consulting services at effective rates.
Strategy 3: Emphasize on strategic contract management activities
One of the best procurement best practices to source IT consulting services at effective rates is to define phases and processes that service providers should follow and clarify responsibilities that need to be fulfilled to gain maximum value from their engagements. The critical nature of the category makes it essential for the procurement department to participate in planning actively.
SpendEdge’s procurement report offers strategic insights on the supply market for IT consulting services and helps procurement professionals to gain information on the sustainability and procurement best practices, pricing models, supply market, and key sourcing and procurement trends affecting the global IT consulting services market.
Overview of the global IT services industry
The global IT services market holds substantial opportunities for industry players due to increasing IT spending in the retail, healthcare, and transportation sectors. The increasing global demand for systems, services, software, and rising IT spending by governments are likely to boost the IT services market. The industry is highly associated with economic cycles as IT services are project-based and often represent discretionary spending. Apart from the conventional factors, the growing need to push companies to outsource their IT requirements is also predicted to spur the growth prospects of the IT services sector.
However, our analysis of the global ICT industry shows that IT services providers are expected to face challenges in terms of:
- Rising consumer demands: Today’s consumers are technologically driven and are not confined to less updated technologies. Therefore, prominent IT services providers must ensure that the requirements of the customers are met through customization and other relevant product offerings.
- Cyber threats: Today, organizations are inundated with data – with the rising volume of data, players in the IT service space have become the victims of various security breaches. Therefore, it becomes mandatory for the companies to streamline their efficiency and improve security in their operations.
To overcome these challenges, bridge demand-supply concerns, and meet the rising needs of the customers, organizations are facing the need for robust supplier profiling solutions. Supplier profiling solution helps firms engage with suppliers and deliver high-quality service while enhancing their economic opportunities.
The Business Challenge and Journey
Client background: An IT services major with over 15 business units spread across the globe wanted to better understand the latest ICT industry trends and identify the key suppliers.
Client issue: The company had a robust internal team that was experienced in make-versus-buy analysis but lacked an important ingredient – the capability to combine human intelligence and technology to effectively identify contract manufacturers globally at the onset of any assessment.
To help the client select the right contract manufacturing partner, SpendEdge’s supplier profiling experts followed a scrupulous research methodology and carried out discussions with prominent stakeholders in the ICT industry space. The experts also compiled information from a wide array of exclusive sources such as paid industry catalogs, company exhibits, and industry forums.
Client journey: With the help of SpendEdge’s supplier profiling engagement, the IT services provider identified the existing supplier base of contract manufacturers globally and conducted an in-depth analysis of the top contract manufacturers. The client also ensured that all proposed collaborations would seamlessly fit with their existing strategy. Furthermore, they identified areas of improvement in terms of process, output, and automation.
Key questions answered in this supplier profiling engagement
The IT services industry client conducted multiple make-versus-buy analysis for different categories and geographies simultaneously. This helped them improve time-to-market delivery of their offerings.
To know more about our supplier profiling solutions and how we help IT services providers
Overview of the Information Technology Services Industry
The global IT (information technology) services industry includes services related to the application of technical and business expertise that enables organizations to create, optimize, manage, and access information and business processes. The information technology services industry’s scope includes product support services such as software and hardware maintenance and professional services such as IT consulting and integration services. The increasing global demand for systems, software, and services, as well as IT spending by governments, and banking and financial sectors are likely to spur the growth of the information technology services industry.
However, a few factors are expected to influence the growth of the information technology services industry. These factors include:
- Planning and risk management: To stay efficient and effective across the information technology services industry, timely assessments are needed. These modifications are in response to changes in the market including global sourcing, new product launches, credit availability and the requirement to protect intellectual property. Moreover, these risks must be identified and quantified to control and mitigate.
- Supplier relationship management: It is essential to create, comprehend and follow mutually agreed upon standards to better understand the current performance and opportunities for improvement. Moreover, having two different methods for communicating and measuring performance results in a waste of time and effort.
Many such factors are compelling information technology services industry firms to leverage the use of supply chain management solutions.
The Business Challenge and Journey
The client, a leading information technology services provider with business units spread across the globe was facing challenges in the overall supply chain visibility and performance measurement. Additionally, they had complex relationships with shipping lines and freight forwarders. The client also had a lack of unified procedures across product groups.
To help the client achieve a stable operating platform, the supply chain management specialists at SpendEdge developed a robust market research approach. The analysis included primary and secondary research coupled with qualitative and quantitative data collection methodology.
During the course of this engagement, the information technology services provider was able to devise an innovative, international supply chain with a stable operating platform. This helped them streamline operations, eliminate original bill of ladings, and the letters of credits. Additionally, the client selected carriers with reliable services and implemented carrier performance measurements.
Key questions answered in this supply chain management engagement
With the help of this supply chain management engagement, the client was able to implement a more sophisticated reporting tool for their sourcing and procurement processes. Additionally, the client was able to select carriers for major trade lanes based on three criterias: fast transit time, reliable service and reasonable price.
To know more about our supply chain management solutions
The latest procurement market intelligence study by SpendEdge on supply market landscape of the IT support services for a leading bank offer access to new technology, safety, and security measures, and compliance related information in the market.
Improving the IT support structure
Building strong consumer relationships lead to brand loyalty and consumer retention. IT support services are vital in maintaining proper consumer relationships after sales. By optimizing IT-related operational activities of organizations via proactive monitoring, protection, maintenance, and provisioning of IT tools and applications, suppliers are building successful business operations. The understanding of consumer needs and structuring service delivery that is in line with the requirements and business structure will ensure maximum customer retention. Moreover, a proper functioning of IT support team will result in reduced re-works, increased efficiency, and higher ROIs. SpendEdge’s latest procurement intelligence study provides information on the important regulatory frameworks, demand-supply shifts, and growth drivers and challenges. The study helps companies to understand the supplier market landscape, elucidating the supplier operational and functional capability.
Strategic planning will help the organizations to perform a deep-dive assessment of the supplier cost breakup, positioning, and selection criteria in the specific domain. The organization will be able to identify technology gaps and risks associated with allocating IT resources and capabilities. Formulating strategic plans will help the companies to select, manage, modify, and track different IT projects at different levels of the service delivery chain. Proper monitoring and tracking will ensure consumer satisfaction and improve the brand image in the market.
Increasing focus on training resources
The backbone of a productive IT services framework are its resources; hence resource management is one most crucial operation in maintaining a functioning IT service structure. Various companies are investing in employee training modules that will increase the efficiency and productivity of the IT services staff. By implementing tools like IT service management (ITSM), organizations are monitoring and providing training sessions on a real-time basis. Trained resources help in implementing new and innovative service delivery models and increases the business profits and revenues.
Introducing innovative digital platforms
Offering out-of-the-box services and digital platforms will help services providers to remain competitive in the market. The introduction of innovative technologies such as cloud, IoT, AR, BYOD, and VR have revolutionized the service delivery market and helped companies expand to niche markets. These improved technologies will help improve user experiences and will generate revenues for the organizations. The implementation of new technologies will also result in preemptive, immediate response, and faster resolution.
What solutions SpendEdge offer to businesses
The team of procurement experts at SpendEdge provide a market intelligence study that offers an assessment of the sourcing and procurement services domain and meets the requirements specific to needs of the client. Some of the solutions are:
- Provide a detailed understanding of the category essentials such as service level agreement terms, category risk analysis, supplier evaluation criteria, and sourcing evolution
- Offer insights on the recent cost saving opportunities, market insights, demand-supply shifts, category spend analysis, and procurement best practices
- Assess the key competitors’ functional and operational capabilities in terms of monitoring, maintenance, protection, and provisioning of IT tools and applications
- Deliver comprehensive information on the long-term and short-term growth prospects and shifting trends in IT support services
Read our complete case study titled – Procurement Market Intelligence Solutions Helps a Leading Bank
Other case studies you might be interested in:
- SpendEdge’s Supplier Intelligence Assessment Helps a Global Credit Collection Service Provider Understand the Supplier Market Landscape
- Supplier Market Intelligence Engagement Helps a Global Furniture Manufacturer Understand Supplier Market Landscape
- Procurement Market Intelligence Engagement Helps a Global HR Recruitment Company Understand the Supplier Market Landscape
For any queries, reach us at – email@example.com