5 types of outsourcing providers — and how to get the most from them

From service integrators to transformers, CIOs are finding that they must tap an array of IT services providers to meet their needs.

5 types of outsourcing providers — and how to get the most from them
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As corporate technology leaders pursue their digital transformation strategies, many are looking to IT service providers as potential partners in those change efforts. However, a one-size-fits-all approach to outsourcing providers is not likely to serve CIOs well in meeting innovation goals. In fact, bigger doesn’t necessarily mean better in the digital change era.

“Traditionally, size was a good proxy for capability, especially when technology was viewed fundamentally as an enabler of efficiency,” says Jimit Arora, partner in Everest Group’s IT Services practice. “Companies had rules about not wanting to work with companies below a certain size or scale threshold citing governance or risk capabilities.” However, as rapidly advancing technology capabilities have emerged as key enablers of business differentiation and growth, CIOs are finding that they instead need different types of IT services providers to meet all of their needs.

When it comes to the most cutting-edge tools, smaller startups or niche providers may have more of the capabilities required. IT leaders may also need a partner to handle legacy application maintenance and production support in order to devote more of the in-house IT organization to transformation efforts, for example. Or they may want to look to third parties to manage their outsourced environment or to spearhead their transformation efforts.

Now is an opportune time for IT leaders to reassess their IT service provider mix. By looking at outsourcers not based simply on scale but on the specific role they will play, IT leaders can assemble the right mix of capabilities to best enable their organization’s technology and business strategies.

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