Looking to 2013, analysts have predicted that organisations will become more cautious about outsourcing their IT staff, savvier in evaluating contracts and more selective in the services they choose to outsource.\nDeloitte Consulting technology leader Robert Hillard said organisations will bring more IT back in-house, as they become more cautious about the consequences of outsourcing and offshoring too much of their IT talent.\n\u201cWe\u2019re actually seeing a reduction in the number of roles going offshore,\u201d he said. \u201cIf you want to be able to govern your IT then you need senior technology workers and you need to get them from somewhere. It is best if they have grown up in your organisation.\n"If you have outsourced too many of your IT workers then you don\u2019t have a pool of talent who are going to grow through to your next-generation of senior management\u2026 you lose access to that pool of innovation.\n\u201cI think around the world people are actually wanting to bring an amount of their IT back [in-house] and perhaps tamper some of that trend towards outsourcing, [which will] continue but not at quite the same pace\u2026 It\u2019s very hard to outsource innovation.\u201d\nIDC head of research Matthew Oostveen said there will be shorter contracts with IT service providers, with CIOs becoming savvier in evaluating outsourcing agreements and how they meet business needs.\n\u201cWhat we are going to see is a shrinking of the contract length," he said. "So instead of the long-term outsourcing agreements \u2013 seven years, eight years \u2013 we\u2019re going to see those contracts shrink down to three years, four years, five years,\u201d he said.\n\u201cCIOs in Australia are becoming much more savvy about the business impact that outsourcing is having on their organisations.\u201d\nGartner vice president and distinguished analyst Rolf Jester\u2019s predictions are different to Hillard\u2019s. He said traditional outsourcing will dominate in infrastructure service investments in the coming year. However, cloud computing and multisourcing will continue to play more of a role in this as they mature.\n\u201cTraditional outsourcing will still represent the majority of the infrastructure services expenditure in 2013, a total of $6.6 billion, compared to the much smaller IaaS [infrastructure as a service] spending of $385 million mentioned earlier. But the much faster growth rate of cloud services will see IaaS become 10 per cent of the total by 2016," he said.\n\u201cMany Australian organisations have built up mature sourcing practices, and some are using disciplined multisourcing to help achieve business outcomes. They are now looking to the next step in standardising and industrialising the operational aspect of IT.\u201d\nTelsyte senior analyst Rodney Gedda said we can expect to see more selective IT outsourcing in 2013 as there will be more providers offering \u201cniche services\u2026 including those that make liberal use of the \u2018cloud\u2019 marketing tag\u201d.\n\u201cThe main change will be around the ability of outsourcing providers to compete with the economics of on-premise IT and how effectively a service can be delivered by a third-party in a cloud fashion that does not require a \u2018hands-on\u2019 engagement,\u201d he said.\nFollow CIO Australia on Twitter and Like us on Facebook\u2026 Twitter: @CIO_Australia, Facebook: CIO Australia, or take part in the CIO conversation on LinkedIn: CIO Australia\n\nOther trends to watch out for in 2013:\n\nWhere is cloud computing heading in 2013?\nWhere are big data and BI heading in 2013?\nWhere are mobility and the consumerization of IT heading in 2013?\nWhere is green IT heading in 2013?