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What’s In Store for the IT Outsourcing Sector?

by: Sarah Joson

Friday, January 4, 2013 | Outsourcing News |

2012 has definitely been a roller coaster for the IT outsourcing industry. Various activities contributed to what the sector is now. These are: merger and acquisitions, rise of new markets, operations being more goal-oriented, and challenges with cloud adoption.

IT outsourcing trends for 2013

Well-renowned IT information site CIO.com shares top predictions from various groups in the IT services segment for the plausible trends in 2013. These are:

1) High-valued jobs will be brought home.
Businesses that subcontract work offshore are anticipated to bring work back home for these reasons: work is done better locally, vendors do not meet their standards, and offshoring rates are fluctuating. However, basic tasks will still be outsourced.

Low-level and routine tasks will remain with third parties while higher value positions like capacity planning, architecture, and configuration management will move back in.

2) Possibility of domination.

It is predicted that a Chinese company will acquire an Indian or US firm.

3) Integration will still be an issue.
During the early stages of transition, partnerships will face more integration challenges if these are not planned properly.

4) A new IT delivery model will take center stage.
The service integrator model, which was introduced this year, will be picked up and tested by several organizations. Buyers are particularly interested in its ability to reduce headcount. It is also a tool for them that will help bring innovation.

5) New suppliers post new risks.

IT buyers will still contemplate if they will renew contracts or if they should push through with a different service provider. However, the latter entails more risks and threats to the operation, which is why many are expected to renew deals.

6) More flexible pricing models.
As customers faced more budget constraints this year, they are likely to seize every opportunity that empowers them when it comes to costs. Same goes for the providers that are looking to earn more. This is where flexible pricing models will come in handy, which is anticipated to help pave the way for transaction-based processes.

7) Buyers will try it on their own.
Now that outsourcing is more commoditized, the number of business owners who have tried outsourcing will decide to do it on their own, on their terms.

8) More local delivery hubs.
Providers will try to put up hubs locally which will act as the brain of all their delivery centers. This will enable them to provide services at affordable rates while maintaining balance in the operation.

9) Management practices will improve.

Buyers will be stricter in selecting the cream of the crop amongst hundreds of service providers, because they will be more focused on value-driven schemes that go beyond costs. They will also include cloud solutions that are straight to the point and are highly secure.

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