A Quick Analysis of the Top Three Outsourcing Trends in 2011

One of the best things about outsourcing is that you pay for the services you demand only when you utilize them. There is no need for you to acquire new equipments or invest in additional personnel or training. Indeed, outsourcing provides efficiency and economical advantage. You can access high-performance business solutions within your budget while your in-house staff focuses more on the critical parts of your operations.

The year 2011 was expected to introduce or at least, follow up on some emerging outsourcing trends from the previous year. As we approach the middle of the year, let us see how some of these trends have fared so far.

Industry experts expected the trend of progressive outsourcing. They agree that 2011 will be marked by the end of big outsourcing contracts. In its place, smaller service deals will be inked, mostly by first-time buyers who were biding their time in 2010. So, what do we have so far? Well, there was a reported increase in the number of global outsourcing and offshoring transactions during the first quarter of this year (up by 14% from the numbers that the first quarter of 2010 registered). These are smaller firms brought in on a long-term basis to perform jobs that were usually outsourced to larger companies. Many companies have also started to rely on “local firms” – providers that are somewhere within 300 miles. For small outsourcing companies, this means that they can now directly compete with larger companies. That is, if they are fully-equipped with the knowledge, skills and infrastructure that certain projects require.

At the onset of 2011, insiders saw that IT businesses ink outsourcing deals in order to cut costs. Actually, this scenario is pretty much the same in the past years. However, at least one expert believes otherwise. According to Chris Niccolls, “… outsourcing isn’t driven by cost savings. Savings are just a result of properly executed outsourcing.” He also added that outsourcing is driven by other things such as “advances in technology, changes in the business environment, shifts in regulations, and individual preference.” Apparently, according to Niccols, businesses are going into outsourcing in order to take advantage of technology and industry developments – not just for the sake of their budgets.

Speaking of advances in technology and industry developments, one of the most significant trends that insiders expect is the emergence of cloudsourcing. The union of cloud computing and outsourcing services seems to be eminent as businesses are always on the lookout for better, faster and most of all, cheaper contract. At this point though, no drastic changes have manifested yet (changes don’t happen overnight, obviously). However, this trend is slowly picking up speed and by 2012, experts believe that 20 percent of businesses will own virtually no IT assets. Since the cloud can successfully eliminate the need for expensive and clunky IT infrastructure, outsourcers are expected to invest in cloud-based, multi-client data centers – if they want to minimize their expenses and make their service provision even faster. Otherwise, they would be relegated to the sidelines.

Evidently, technology is the major game changer in outsourcing. Any advances in information technology are expected to greatly affect productivity, performance and cost management. Now more than ever, as the second half of 2011 looms, outsourcers should take advantage of the new opportunities and partnerships introduced by technological developments to stay competitive and responsive to the demands of the market.

  • http://www.facebook.com/people/Gnanesh-PS/515577089 Gnanesh PS

    Great to read about the trend of continued increase in the IT Outsourcing in 2011. Just read an excellent article titled Do Your Homework Before You Select an IT Outsourcing Provider, http://bit.ly/oWigKp

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