IT Outsourcing in Terms of the Current Crisis – Collapse Or Remedy?

Since beginning of October the world started changing, everywhere – newspapers, radio, TV, Internet – you hear and see these words “Global Financial Crisis”. Some experts call it a financial collapse. The main problem for all companies is how to reduce expenses with minimum losses for their business. The aim of our article is to give an answer to the question: “Can outsourcing become a remedy to this disease?”

And the answer is definitely “no”, just as there is no panacea for all woes. But still we’ll try to understand if offshoring could solve some problems resulting from the current situation.

World companies are now trying to get rid of extra costs, including employee base. Expenses paid to the outsourcing company are far less than those connected with keeping your own employees completing the same task. Offshoring has always served this way. As a matter of fact, outsourcing industry has always been attractive due to its ability to improve TTM (Time to market). And now in terms of the present financial situation companies realize the necessity of outsourcing more than ever. That’s why all outsourcing companies have their fingers crossed hoping to attract as many clients as possible.

However, it doesn’t mean that all companies will have their business outsourced. Cost reduction means reduction of projects on the whole. Naturally, those projects which have high level of necessity for the company activity will be processed. Re-viewing of project importance for the business will be taken alongside with re-considering of project budgets. Crisis will not omit outsourcing industry. But this crisis will do more harm to vendors already providing services to clients rather than start-ups. Knocking down of project budgets may force outsourcing companies to lower their prices, so that margins will shrink or nearly disappear. Companies that are just developing could get some benefit from the current situation. After financial and industrial organizations complete their budgets for the first quarter of 2009, vendors will have to re-consider their rates and beginners are more flexible in this meaning.

Gartner, the world’s leading consulting agency, offered some solutions to outsourcing companies, how to behave and what strategy to choose in order to stay up in terms of the crisis: “all outsourced projects must deliver the promised improvements in business performance. From now on businesses will only be in need of IT that can deliver true value in terms of business performance”.

To sum up, outsourcing industry will probably be the most ‘surviving’ sphere these tough days due its high necessity for companies that want their business running smoothly.

Source: EzineArticles
 
 

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