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Contributed by Manoj Rai, Global Delivery Head, Microsoft practice, Business Application Services (BAS), Wipro Ltd

Shared IT Service Delivery: A Phoenix Waiting to Rise?

The days during which IT companies around the world experienced drastic growth quarter-to-quarter may soon come to an end. IT providers today are going through a phase of their plateauing growth. The writing is on the wall - the stocks of these major IT companies indicate a slowdown in growth, mirroring the trend of enterprises seeking to lower the costs of IT labor. Organizations that tend to be leaner are instead turning to cultivating IT talent within, causing a major shift in the world of IT service delivery. This transformation may slowly bring about the end of IT service delivery as we know it, as enterprises adapt to a model that enables greater efficiency at a lower cost.

As it stands, the model of traditional service delivery is linear in the sense that it is contingent upon the personnel allocated to a specific project. Due to the contingent nature of IT service delivery, enterprises must take into consideration every detail, including hourly billing to onsite-offshore arbitrage. This model is true even for outcome-based projects, as these projects are also grounded in the resource equation. An IT service provider steps in with a timeline, deploys resources and maps out phases of the project including design, execution, testing and production.

In this new age of IT service delivery, IT solution providers will take on an increasingly laissez-faire approach, setting milestones and a delivery schedule, then leaving the rest up to the enterprise. The IT vendor's focus will remain on assigning resources and deploying infrastructure. However, the execution of the task will not be accessible to the client. There will be a greater focus on an outcome-based approach, drastically changing the current processes in place.

This departure from the traditional approach to contracts will pave the way for transformations in the relationships that vendors have with their clients. The Offshore Development Centre (ODC), which is a client-owned site present on the vendor's campus, will be eliminated in favor of a shared virtual command center. This command center will draw upon a repository of code previously used to service other clients, fulfilling current client needs at a faster rate and lower costs. This new process may pose challenges in legal compliance, in the absence of traditional ODCs. Obstacles may also arise in intellectual property (IP), as it is unclear what is the intellectual property of the customer versus the intellectual property of the IT solution provider, which would allow the vendor to offer a solution partially comprised of reusable components to clients who are seeking similar functionality.

Many enterprises may feel apprehensive at the complete evolution of IT service delivery as we know it. While this idea of shared IT service delivery is in its early stages, a growing number of enterprises are beginning to adopt this hybrid model and reap the benefits of solutions delivered at a lower cost and higher efficiency.

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About the Author

Manoj is a General Manager and business leader with over two decades of experience in consulting, technology implementation and senior management roles in a high growth IT services industry, serving global Fortune-500 customers and driving value in Microsoft ecosystem. He specializes in creating an environment for high growth, set up systems for the same, practice management, Global Delivery Models and business operations for IT services, Business Application services covering digital ecosystems, Cloud, ERP environments and Mobility.

In his current role, Manoj heads the Global Delivery function for the Microsoft practice where an ecosystem of Microsoft platforms and services are being built to drive high performance.  He and his team are responsible for helping Wipro's customers to build world class business solutions and succeed with innovative offerings that leverage the power of Digital, Cloud and Business Application platforms and services.