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Results of the 2012 Outsourcing Predictions

by: Sarah Joson

Wednesday, December 26, 2012 | Outsourcing News |

Did the 2012 Outsourcinf Predictions live up to its name?

Cloud computing, offshore application development, and a different sales and marketing approach were all included in the 2012 outsourcing forecast created by CIO.com and outsourcing experts last year.

In an article posted at CIO.com, Stephanie Overby dissected the real score of those predictions as 2013 is fast approaching.

Exactly as predicted

Last year, it was prophesied that "2012 will be a mixed bag of M&A activity," which is how it turned out.  There were minimal acquisitions and providers focused more on better deals with buyers. Smaller companies acquired by larger firms are poised to function internally and also through the services division.  

Another is the prediction that outsourcing clients are more concerned with the output than just savings. Buyers turned to an outcomes-based business model because providers underperform and oversell.

Lastly, buyers are considering other regions that are feasible to outsource to, although it is still the leader globally due to the fact that it has a large workforce equipped with various skills and its world-class infrastructure.
Not quite exactly right

Experts believed that the cloud hype will eventually die down in 2012. Unfortunately, that wasn’t the case. Businesses were highly intrigued by the benefits of using the cloud for operations which in turn increased its hype. Although interest on the process is high, adoption and procurement remained low due to security issues.  Moreover, infrastructure outsourcing, which was predicted to proliferate offshore, remained aground.

Talent gap was also predicted to fuel multiple cases of sales managers being let go. The problem seen was not all account executives and salespeople understood the products and services being sold.

Domestic app development growth is also listed down as a possibility last year, but the lack of infrastructure and expensive labor rates locally made it impossible to be done.

Things that are yet to come

Several predictions can be found somewhere in the middle of the outsourcing conundrum. Buyers are still unsure if they should purchase now, which process should they avail and from where. 

Smaller deals were also found in this specific group of predictions. Furthermore, multisourcing will be highly deliberated as providers that landed smaller deals are looking to renew next year and attain much larger deals.
Businesses were seen in between inshore and offshore operations. There is no concrete way of identifying which delivery model they will further adopt. In addition to that, providers became flexible in deals and terms, but not all were open to those types of drastic changes.

Lastly, issues on IT security were anticipated to be the main concern in outsourcing. Although there were a lot of security-related challenges and issues that rocked the IT segment, only a small number was related to outsourcing.

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