1.1 Scope of the study
Outsourcing (or facilities management) refers to the use by companies of external service providers to manage their information systems. It therefore consists of entrusting an external service provider with the management, operation, security and maintenance of the IT equipment.
The IT activities sector covers three branches: software publishing, technology consulting and IT services.
The IT services sector itself covers three categories: consulting services (external expertise relating to the improvement of information systems), systems engineering and integration (design and development of information systems) and facilities management (information systems management).
Outsourcing covers a wide range of services, the nature and scope of which may vary depending on the service provider.
However, it is possible to identify the main types of outsourcing:
- Application Management
In addition, outsourcing is often likened to managed services even though, historically, outsourcing has a curative, reactive logic (in that cas, the service provider does not anticipate problems but manages those already present) while managed services operate according to a proactive approach (the managed service provider identifies anomalies before they create problems and supports its client in the development of its IT system).
In this study, we will choose to consider outsourcing in the broad sense, which includes two segments: managed services and as-a-service.
In 2019, in France, the annual contract value (ACV) increased by 15% compared to 2018. While the outsourcing market has experienced strong growth for several years which can therefore be described as structural, it is changing both nationally and globally. Indeed, managed services, even though they grew in 2019, are experiencing a negative dynamic in favour of as-a-service activities, whose growth is expected to be further strengthened as a result of the coronavirus crisis.
Indeed, the outbreak of new technologies, in particular remote servers (Cloud) has lead to a watershed of the outsourcing market. In addition to the choice of using a service provider for the management of information systems (managed services), there is now also the possibility of using a service provider who remotely manages the information systems and delivers them to the customer via an Internet connection (as-a-service).
Managed service providers can thus perform the tasks entrusted to them either on their own premises, if the customer's system is hosted there, or by means of a link enabling them to intervene remotely, or on the customer's premises.
Originally, the use of outsourcing was born out of a desire to reduce costs. Nowadays, the aim is also to improve their IT systems to optimise their performance, to access new resources and focus on their core business.
By 2020, more than 67% of companies had opted for outsourcing to simplify their network and IT management. [Infologo]
1.2 A growing global market
The global outsourcing market can be measured by the Annual Contract Value (***), which refers to the value of outsourcing contracts. In ****, the total value of outsourcing contracts worldwide was US$ **.* billion.
Indeed, the global outsourcing market is characterized by strong growth, especially since ****, as shown in the graph below. Similarly, at ...
1.3 A growing French market
The annual contrat value (***) in France increased by **% in **** to €*.* billion, according to the ISG Index barometer, which measures outsourcing contracts with an annual value of at least €* million.
Annual contract value (***) France, ****-****, in millions of euros ISG The ACV in France thus rose from *** million in **** to *.* billion ...
2.1 Trends and determining factors of demand
The first factor in the development of outsourcing demand is digitalization and digital transformation. For instance, the company IBM shows the effects of the digital transformation according to the IT decision-makers of a panel of *** companies. The digital transformation is leading to a growing need for high-performance IT systems, modernisation of ...
2.2 Customers' profile
For a long time, the customer base of the outsourcing market was mainly made up of large companies. However, the advantages of outsourcing are now considered to be valid for small and medium-sized companies, and even very small companies. Indeed, outsourcing is suitable for the smallest companies insofar as it now ...
2.3 Consequences of the Covid-19 epidemic
The coronavirus epidemic has accelerated an already existing trend, namely the development of the as-a-service model at the expense of managed services. Restrictive measures and containment in France have indeed reinforced the decline in managed services in favour of the as-a-service market, whose growth has particularly accelerated.
The epidemic has slowed ...
3.1 Organisation of the market
The definition of outsourcing has evolved as innovations and new technologies emerged. Indeed, multiple concepts have appeard and the vocabulary has become more complex. However, it is possible to identify two forms of outsourcing.
Facilities management, as the outsourcing of the management of information services, can be broken down into two ...
3.2 The sector's giants
The traditional IT services companies model
Digital service companies (***) are the main players in the outsourcing market in France and generally offer IT services that go beyond outsourcing alone.
According to Syntec Numérique, **% of these companies were expecting a growth in turnover in ****. Even if this figure should be put ...
3.3 The booming of the as-a-service sector
In ****, As-a-Service accounted for **% of combined market, up from **% in ****. [***]
The service-as-a-service model refers to the monetization model that corresponds to the architectural model that is Cloud computing.
Cloud computing is the on-demand delivery of computing power, database storage, applications and other computing resources through a cloud services platform over the ...
4.1 Types of outsourcing services
Global outsourcing consists of outsourcing the management of the entire information system.
Partial outsourcing consists of outsourcing the management of part of the information system. There are thus several categories of partial outsourcing.
Application management (***): concerns the development, maintenance, operation and scalability of the company's software assets. Operations ...
The prices of outsourcing services can vary according to several criteria, the main ones being: the scope of intervention (***).
However, it is possible to give indicative price orders.
An outsourcing company offers monthly, hourly or flat-rate prices. Monthly payments cost from ** € per workstation, and ** € per server for simple maintenance. Thus, if ...
4.3 Innovation : major stake of the offer
IT services companies rely on innovation to enhance and differentiate their offer. A Deloitte study highlights a significant increase in the use of innovation in the market to increase the value of a company.
Evolution of the strategy of services providers' customers concerning outsourcing France, ****-****, in % Deloitte
IT services ...
The outsourcing contract
The outsourcing contract is a service level agreement (***) between the outsourcing provider and the customer that defines the quality of service that the service provider must ensure. This contract includes basic and specific clauses.
It includes the classic clauses:
Identity of the provider and the customer Term conditions, ...
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