by: Sarah Joson
Friday, August 31, 2012 | Comments (0)
Category: Outsourcing News
One of the latest trends in businesses is cloud computing technology. It is a tool that companies use not only for process and product innovation but also to gain competitive advantage as economies across the globe are still on the road to recovery.
In an article posted at CloudTweak.com, Seth Bernstein shared major events in the Information Technology or IT outsourcing sector, particularly the cloud computing segment.
A report from research firm Gartner Inc. indicates that the IT outsourcing sector is valued at $251.7 billion and cloud computing is apparently the fastest-growing segment which reached $5 billion this year from $3.4 billion in 2011.
Evidently, the figures are dwarfed by the entire sector’s value, but with the cloud segment’s rapid growth rate, it is now considered a significant player in the vast IT outsourcing arena. Some of the factors that contributed to its growth are:
The cloud will be managed for you.
Instead of hiring additional staff or re-assigning designations, service providers will manage the cloud operation. Software applications will we updated by the providers, upgraded according to the specifications and needs of the business.
The cloud is readily available.
The stocks are limitless when it comes to the cloud. Providers have readily available bundles and packages that suit a company’s infrastructure. They just need internet connection and sizeable data storage units.
Size will not be an issue.
The size of a cloud computing operation can be easily adjusted accordingly. For business owners, they need to list down the applications and software that they need and create a cloud environment that best fits the business operation.
Even if there are still several challenges in the sector such as data security and operation downtime, the cloud’s tenacity has already been proven with its recent developments and rapid growth rate. It won’t be too long before it becomes the most outsourced process in the ITO industry.
by: Sarah Joson
Thursday, August 16, 2012 | Comments (0)
Category: Outsourcing News
There are numerous business functions that are being outsourced today. Business executives have reported that they subcontract processes that range from basic back office to high-valued technical functions.
Apart from trying to stay competitive in a tough market, businesses are driven to outsource to cut overhead costs and align business goals. Below are some of the processes that are commonly outsourced by businesses based in post-recession-stricken regions.
1. Transcription services - Transcription is procured for several reasons, but the industry that needs it the most is the field of medicine. Med students and practitioners are the ones who need accurate documentation of a certain procedure or presentation, which is why audio/video data are meticulously transcribed into a file.
2. Call center functions - A lot of renowned corporations outsource customer support as it often requires a lot of workers. Segments under this process are customer service and technical support. It is outsourced offshore to countries that have a large supply of English-speaking workers.
3. Payroll and bookkeeping - Nowadays, a lot of back office functions are being outsourced offshore - payroll and bookkeeping are examples of these. A lot of regions offer payroll and bookkeeping services at much lower rates compared to local ones, which is why companies use this to their advantage.
4. Information Technology (IT) - Software development, application development, and web development are some of the disciplines under this category. IT services are highly sought after in more advanced countries, which is why in some cases, talent shortage and high labor costs become challenges for them which in turn fuel the need for information technology outsourcing.
5. Recruitment - This function is often outsourced by large, multinational companies that often face a shortage in resources, have overhead issues, or have a sudden increase in positions that need to be filled immediately.
There are other processes that can be outsourced. The great thing is that no matter what business function companies need to outsource offshore, there are several delivery models that they can choose from, making outsourcing a much easier process to deal with.
The article posted at Info.ISG-One.com highlights factors that can help foster a sound sourcing strategy for strategic services and functions, which can also enable companies to minimize unnecessary expenditures in the long run and align goals with the objectives of the business.
1. Prepare an outline of your current expenditures. Documenting your business’ current base cost will help simplify future plans as you already have a point of reference. This can be used to generate a realistic comparative cost analysis. For example, you can compare the cost of your current operation to your alternative plans, as well as point out the areas in which budget can be increased or decreased. It will also give you an insight on what is the current market rate for services and if you are complying with market standards.
2. List down elements that fuel the need for outsourcing. Not only will this help you come up with cost estimates - it will also help you create contingency plans for future challenges, as well as create a flexible operation that can adapt to developments in the industry.
3. Study the available service providers. Another thing to consider in sourcing strategies is the scope and scale of service providers. You can start by reviewing each provider’s past clients and activities. Also, keep in mind that service providers are working against several factors such as competitors, service demand, etc. which is why you’ll probably come across a diverse pool of service providers.
4. Create mock-ups. Testing the sourcing strategies by creating mock situations will help you gauge the success of your plans. Apart from making sure that resources are complete and optimized, it will leave less room for mistakes as you have everything that you would need even before the operation starts.
5. Consider all possibilities, even unfavourable ones. The best way to minimize problems in the future is to prevent them. Having a list of all the possible challenges will help you create executable contingency plans that can help minimize the effect on the entire operation.