Introduction

The ownership of IT assets is one of the key factors in determining the dynamics of an outsourcing engagement. This white paper traces the evolution of approaches to IT asset ownership and transfer over the last three decades, explores the factors driving increased adoption of the asset-light model of outsourcing, and discusses the market impact of such evolution in asset strategy in terms of outsourcing revenues and contractual scope.   

Scope

Assets ownership transfer used to be closely associated with the benefits of Infrastructure Outsourcing (IO). Over time, the majority of the benefits of IO became achievable without transfer of ownership of the buyer's IT assets to the supplier. This trend is often referred to as an asset-light outsourcing.

• Sources of benefits in the infrastructure engagement and their dependence on the transfer of asset ownership between the buyer and supplier
• Analyses of key factors that promote asset-light outsourcing model (e.g., adoption of new technologies, emergence of Infrastructure Management Outsourcing)   

Contents

The research comprising this report is geared to analyze and better understand the asset-light outsourcing trend. Key Insights are divided into three categories: Sources of benefits in the IO engagement, Adoption of the asset-light model and Catalysts of adoption. Each category contains 4-6 key trends, which are discussed in detail (and illustrated with supporting data and analysis) to provide the reader information in easy-to-apply, bite-size pieces. For example, the key messages in the sources of benefits are as follows:

• One-time cash infusion can be achieved through third-party leaseback
• The benefit of increased Return on Assets (ROA), realized through transfer of the assets off the balance sheet, is likely to diminish because of the upcoming changes in accounting rules
• Cost savings from operational improvement can be achieved through remote efforts