Service providers more reliant on IT vendors

Enterprise Innovation editors
04 Mar 2014

Three out of four service providers have increased the number of their IT services vendors over the past five years despite the ambition among service providers to simplify and streamline their IT operational environments, according to Amdocs.

A survey conducted by Coleman Parkes for Amdocs covered 50 CIOs and 50 SVPs responsible for IT operations or IT services procurement at large service providers across 23 countries in Europe, Asia-Pacific and the Americas.

The research found that 74% of respondents had, over the past five years, increased the number of services vendors they used, with 26% having doubled their number of vendor agreements during this period.

Also, those surveyed are using more services to realign their operations in support of technological developments. Emerging IT domains (77%), new organizational buying centers (74%), and growing skills gaps (72%) were key factors driving the rise in services engagements.

A majority of respondents also agree that core IT domains saw the largest increase in services vendor engagements. IT infrastructure (77%), BSS (64%) and OSS (54%) were the three IT domains seeing the highest increase in the number of external services vendors.

Moreover, a significant majority of service providers are looking for sourcing engagement models that can help them simplify IT operational structures. Minimizing business risk (79%) and deal complexity (72%) were defined as the top criteria for selecting sourcing engagement models.

“There is a growing need for prime service integrators that service providers can rely on to take full accountability over the entire, multi-vendor structure in order to reduce risk and allow service providers to focus on their business, rather than deal with the increasing complexities of the IT environment,” said Rebecca Prudhomme, VP of product and solutions marketing at Amdocs.

“Service providers are looking for a trusted advisor who can help them identify the technology and IT services required to best deliver on their business objectives, as well as introduce added value and efficiencies through service innovation,” said Prudhomme.

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