Austerity is a fact of life for IT managers everywhere. No longer is it just a matter of doing more with less; organizations are increasingly seeking growth through innovation, and cost cutting in isolation is a game of diminishing returns. In this environment, we’re seeing a move to Smartsourcing.

Cloud computing and the growth in flexible, rich services have transformed the concept of outsourcing, sparking an evolution in the way organisations think about flexible, cost effective, project based workforces.

Traditional outsourcing saw companies contracting out entire business functions or projects to external providers. This kind of outsourcing will continue to play a role but the advent of loud Computing has brought with it the kind of flexibility, dynamism, scalability and cost savings that traditional outsourcing simply cannot compete with.

With so much unpredictability in the current climate, why get bogged down in complex contractual arrangements or sign up for set, time-based projects when you don’t know what’s around the corner?

One of the greatest assets of Cloud Computing isn’t just its capacity for driving down costs, but the way in which it enables the kind of on-the-fly experimentation that traditional outsourcing simply cannot provide.

In the past few years, many organizations have become used to consuming IT as a service; the utility model that Cloud Computing supports could almost have been designed for organizations looking to cut costs without cutting back on their ability to innovate or scale.

Cloud Computing allows organizations to streamline  resources while retaining complete control over information resources. In this respect, the economic climate has been a catalyst for the growth in on-demand software, virtualization, mobile technologies and infrastructure services, exposing some of the more negative, restrictive aspects of traditional outsourcing arrangements.

The complex contractual arrangements often associated with traditional outsourcing are in stark contrast to the flexibility of on-demand IT. Need more resources? Turn it up. Need less? No problem, scale back knowing that, should things improve next week, you can crank things up a few notches again.

This utility model has driven austerity friendly pay as you go payment structures. Because users can scale on demand, there’s no concern that you’re over-investing in a project that might not work. Costs per user, per instance are visible upfront, with no surprises. Service Level Agreements combined with information technology that can be rolled-out on demand make it relatively easy for businesses to show their dissatisfaction with a provider by simply taking their business elsewhere with minimal disruption.

Contributed by :
Marc Kauffmann,
President, The Kauffmann Group