Global Outsourcing Surveys 2016 by Deloitte polled scores of executives from leading organizations in order to get the pulse of global outsourcing based on their experiences, observations and expectations. The surveys discovered that “the market for outsourced services will likely continue its rapid adaption to meet—and in many cases to anticipate—the demands of the customer.” Outsourcing has become a major conduit for businesses to promote innovation and productivity.
We are already midway into 2017 and there are lots of influential outsourcing trends under way that are going to shape the remainder of the year and beyond. Let’s check out what this year will bring in terms of offshore outsourcing as viewed by industry insiders:
Innovative services that put more emphasis on value-addition than cost-cutting
Nearly all companies are already on a path to broaden their approach to outsourcing in that they now are beginning to view it as something over and above a mere cost-cutting exercise. They see outsourcing as a reliable tool to response suitably to globalization. They have begun to consider outsourcing service providers as partners in business innovation and knowledge expansion who can take their business to the next level. Clients expect to find in offshore services the ability to respond to the ever-changing business needs and stay relevant in the market, and this goes beyond cost factors. Innovative services include centralized and standardized IT solutions that help gain operational and competitive advantage.
Ø Maturation of cloud with further adoption and hybridization
Industry experts predict that by 2018, nothing less than 50% of IT service providers will be utilizing cloud-based technology. In fact, more and more companies are abandoning on-premises web hosting services in favor of the cloud. Another cloud computing trend involves the hybrid cloud wherein both private and public cloud solutions are integrated and made to work together to meet enterprises’ needs. Further mushrooming of cloud offerings like PaaS, SaaS and IaaS is foreseen as we move ahead in 2017. Such a rapidly maturing cloud technology speeds up the rate at which services are outsourced and lowers the cost of service delivery.
Ø Reconsideration and rearranging of outsourcing contracts
Nowadays organizations in all sorts of industries operate in a highly complex and competitive business environment. This requires them to revisit the entire way in which contracts for outsourcing deals were finalized in the past. Now the trend is tilting towards signing outsourcing agreements that seek to maximize business value, reduce risks and improve one’s positioning in the marketplace in a number of breakthrough ways. These remodeled contracts are more client-centric in order to cater to the exact requirements and expectations of clients. The present day contracts are more flexible, scalable, strategic, and entered into with multiple vendors. Such a contract serves as a catalyst for organizations that want to pursue different models of outsourcing.
Ø Growing recognition of the advantages of remote working
Offshore branch offices and virtual work are now becoming a norm instead of being an exception. A growing number of enterprises will recognize this work model mainly because it entails real-time monitoring, regular meetings and feedback. This makes virtual employees as good as the resources sitting and working next to you. Physical proximity of a worker is no longer going to be a precondition for the completion of a project. Such a seamless and agile work arrangement is improving the internal processes of countless organizations, some of which even have a global presence.
Ø Security concerns persist but so do the measures to counter them
The question of data security, especially when sensitive information is to be moved to a foreign country, is still at the forefront of service buyers’ minds. Companies remain vulnerable to all kinds of threats on a daily basis. But the response of service providers to this challenge is worth noticing. Since security pertains to the overall safety of all stakeholders in an undertaking as well as one’s business reputation, service providers at present and in the future will not be taking things lying down. We’ll be witnessing more robust security apparatuses, policies and measures than what is already in place at the moment to manage any ensuing risks in offshore outsourcing.
So, what we just went through above is a clear picture of organizations redefining the manner in which they enter into and manage outsourcing relationships. The thrust will be on maximizing the real value of such a relationship while mitigating all possible risks. It is believed that such a trend is inclined toward making businesses more resilient.