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IT Managed Services: 2010's Bright Future

By Nick Sharma

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According to the Chinese Zodiac, 2009 was the year of the ox. Those born last year, the calendar says, are endowed with qualities of stability, endurance, perseverance and tenacity. This year, however, is the tiger’s year, a year of courage, fearlessness and fighting spirit. The tiger, the ancient Chinese say, wards off the most common household disasters. From the ox-like perseverance through last year’s global recession, new tigers are about to emerge.

As the fallout from the 2008 recession rippled through the business community in 2009, IT services companies that relied on large U.S. corporations such as General Motors, Lehman Brothers and AIG suffered. Unexpected consolidation occurred among industry leaders, creating much larger players. Dell’s merger with Perot Systems and Xerox’s acquisition of Affiliated Computer Services (ACS) are just two examples. However, this consolidation created a new struggle for small- to mid-size corporations as they began to compete against mega-conglomerates with mega-reputations and optimal pricing structures.

As 2010 dawns, the recession is slowly retracting. Companies learned valuable lessons, streamlined operations and are starting to hire and to refocus their energy on making this a profitable year. For example, in 2009, CFOs were highly involved with determining IT budgets. Several companies I know of restricted discretionary spending but also withheld resources to support core functions. This led to a closer relationship between the CFO and CIO offices, which was unheard of prior to 2009. One benefit of this in 2010 will be that such strategic partnerships will result in a leaner but more efficient budget, as companies continue to maximize return on investment and operational expenditure.

Better Days

As the lessons of 2009 continue to unfold, I am one who believes that 2010 will bring with it a promising future. In the IT industry, for example, mid-size IT services companies are well positioned to capitalize on new market opportunities due to their size, innovation and agility. Skill set acquisitions will also become increasingly common for such corporations and they will have increased opportunities to penetrate niche markets by acquiring specialized firms that allow them to tailor services to customer needs.

Moreover, in 2010 IT services firms will create advanced strategic partnerships with their clients, assisting them with transformational projects that impact the bottom line. They will also arrange revenue-sharing agreements, which will shift the relationship from one that is service-based to one that is outcome-based. IT companies will no longer provide one solution, but will assume a larger role in the overall business and go-to-market strategy of their clients.

Despite market fluctuations, the global delivery model will undeniably continue to play a pivotal role in IT services in 2010 and beyond. Expecting a boost to its economy, India will likely emerge from the recession more quickly than others. Eastern Europe and Southeast Asia will also continue to actively contribute to the global IT talent pool.

Executives in the technology industry need to begin 2010 one step ahead of the game. They can do this by reviewing what their competitors accomplished the previous year and learn not only from their mistakes but from those of their peers, as well.

Sreenidhi Sharma, better known as Nick Sharma, is the CEO of CSS, a global technology solutions provider to enterprises, consumers & technology companies. With over 25+ years of experience in various leadership roles, he is renowned in the industry for playing a key role in conceptualizing, and implementing successful exponential growth strategies for several global businesses. Prior to CSS, Nick was head of Infrastructure Management Services (IMS) Business and an executive member of their Leadership Council at Saytam and VP and managing Partner for Infrastructure Transformation Services at Unisys (USA).