Wednesday, May 23, 2007

Asset-Light Model Provides better Supplier/Buyer Alignment

Source :

HCL Technologies Ltd has announced that in its latest Report titled "Infrastructure Management Outsourcing - The Emergence, Adoption, and Growth of IMO" Everest Research Institute, research arm of Everest Group, a Global Sourcing Advisory firm, has predicted a robust growth for the IMO market and hailed its popularity as "likely to Invigorate the Infrastructure Outsourcing (IO) marketplace, as it strips the labor from assets in outsourcing deals."

Everest described "asset-light model" as providing "better alignment of supplier incentives with buyer interests. Buyers find it beneficial to own IT assets due to the inherent flexibility, control, and benefits of scale. New technologies also serve as a catalyst for the asset-light approach, due to the constant turnover of the asset base and the difficulty of predicting the technology road map. Finally, the emergence of Remote Infrastructure Management outsourcing (RIMO) played a key role in Instituting asset light as a sustainable model."

Built on the fundamental philosophy of "asset light contracts" resulting in flexibility, control and transparency to the customer. The Company introduced the co-sourcing model of engagement in the market 5 years back and since then has been winning customer confidence through this unique differentiation.

Co-sourcing addresses the enterprises need for flexibility and strategic control of their IT Infrastructure outsourcing engagements. This model is based on a collaborative approach to outsourcing by defining it as an activity of partnership between the client and the service provider where the client retains assets, strategic decision making like technology refresh, policy definition and architecture issues, IT strategy etc., while the service provider takes over the day to day running of IT operations and provides recommendations on strategic aspects.

Commenting on the report, Anant Gupta, COO, HCL ISD, said, "Being a pioneer of the global delivery model of Infrastructure Management, we at HCL, have introduced many disruptive frameworks and models in this space. Everest's recent reports not only underline the relevance of this model but also describes it as key to sustainable IT Transformation and opens alternate options fro buyers to consider than the "traditional model" of outsourcing practiced by Big 5 outsourcing firms."