Trends in IT Outsourcing

Trends in IT Outsourcing

‘IT Outsourcing,’ is the hot topic for discussion in this decade. A lot has been debated on the benefits, cost-cutting, quality and value-adds. Despite controversies and criticisms, IT outsourcing has become an essential service. IT firms across the globe engage with IT outsourcing providers. Typically Outsourced IT services achieve cost savings through mass retrenchments and suffer from quality and process issues. The primary motivation for choosing IT outsourcing services was cost advantages. As outsourcing assumed significance and moved up in the value-chain, the services became popular. This led to the foray of several new IT outsourcing companies in the market.

Firms also prefer to work with a Global IT outsourcing company. Since they offer IT outsourcing services across the globe, the services tend to be scalable and cost-efficient. IT firms spend valuable time, efforts and money in choosing the right IT outsourcing services provider. Until recently, companies were keen on availing IT outsourcing services, due to the outsourcing hype and cost advantages. The quality of services provided by IT outsourcing companies was not of much importance. However, this led to severe quality crisis. Companies no longer relied on outsourcing only for cost-cutting. The lack of concern for quality in IT outsourcing services led to many problems. Poor turn-around of work led to delay in projects and defects. It even led to customer complaints, lost-accounts and lawsuits, in extreme cases. One reason was that there were no proper provisions to safeguard data-theft and handle sensitive information. Then it was time for the quality wave. As a result, there was lots of quality consciousness among IT outsourcing services providers. IT outsourcing services providers now offer lot of value-addition in their services, along with increased quality.

Companies may not be able to effectively derive the advantages of IT outsourcing, unless they choose the right engagement model. There are alternatives to traditional outsourcing models. One of the preferred services is co-sourcing. In a co-sourcing engagement, the supplier works with the client on a risk-reward model. The client gets the advantage of additional resources, during the peaks of demands. In a similar manner, the client can also send back some resources to the supplier, during downturns. The business control vests with the client as the client retains key personnel and processes. The resources of the vendor perform supporting activities. There is cost-efficiency and the vendor’s resources work during holidays, leaves and on other ad-hoc requirements, thereby ensuring business continuity all over the year.

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