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Major Changes in the IT Outsourcing Industry

by: Sarah Joson

Wednesday, February 26, 2014 |

With the incessant and rapid advancement of technology over the past couple of years, business owners were found seeking new ways to uphold their edge in the world of commerce.

A blog entry posted at Harbinger-Systems.com explains that nowadays, IT outsourcing is no longer taboo and is considered as one of the most commoditized business solutions in the world. As it became the go-to tool in improving efficiency and competitiveness amongst business operations, IT outsourcing is now more recognized in strategies used across all the business units of a company.

IT outsourcing industry highlights

A lot has happened within the IT outsourcing industry since its inception. Here are some of the highlights:

Latest tech trends: cloud, big data, and mobility
Businesses are integrating new technologies to stay relevant in the cutthroat world of business, and the top three IT segments that CIOs are looking are cloud adoption, mobility, and big data. Strategies are being aligned with these trends to accommodate the growing demand. However, being able to maximize the benefits from the three trends has become quite a challenge for executives and IT outsourcing providers.

For executives, the decision-making process and initial investment talks are complex because they can only measure the results and make changes every so often. Providers, on the other hand, have to keep up with the demand by improving their assets and becoming more flexible and agile based on the requirements of their customers.

Pricing is based on results.
IT outsourcing is now expected to deliver more value to the business rather than play a supporting role in reducing cost. The goals have shifted and some of the common ones are market penetration, revenue generation, and resource optimization.

Smaller deals take center stage.
Smaller deals are rapidly gaining traction, but mega deals are still seen here and there. The volatile state of economies around the world and the fact that developed nations are having a hard time recovering are driving the growth of smaller deals.

Also, outsourcing buyers now prefer stacked operations where they can procure the services from several providers instead of just one provider. This enables outsourcing clients to customize their operations by utilizing only what they need, when they need it. In addition to that, long-term contracts are becoming a thing of the past as buyers are shifting to short-term ones.

Experts say this is not an indication that outsourcing is slowing down anytime soon; it’s just a way to accommodate new delivery models that reflect a healthy growth rate.

Small and start-up businesses strongly consider offshore outsourcing.
Offshore outsourcing has also become a way for small businesses in emerging segments such as healthcare IT, retail, and financial services to maximize operations and drive business value easily and swiftly. What this means for start-ups is a faster return on investment and reduced time spent on non-core processes.

Mid-sized companies are also considering outsourcing.
The introduction of software-as-a-service (SaaS) and cloud made way for new outsourcing demands among mid-sized companies. Some of the factors that contribute to the growth of outsourcing in this segment are the lack of skills and manpower that their processes need.

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