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The Top Outsourcing Trends of 2016

The fast evolving technology and customer expectations changes are rapidly changing the way that organizations use outsourcing to offer services. The new outsourcing strategies are creating new opportunities for businesses globally.

The rapidly evolving technology, as well as the customer expectations, are quickly changing the way companies use outsourcing to offer services that they find it difficult to deliver via in-house resources alone. The outsourcing advantages, in turn, are creating other new opportunities and challenges for businesses all over the world.

Where organizations previously farmed out specific services mainly for money savings, at present, they are embracing outsourcing for several other reasons as well. They are also working with a larger variety of service partners since the digital business demands are getting more complex than ever. IT and business always have been in a constant state of enhancements, with current Information Technology trends undergoing dramatic changes through the years in a successful attempt of improving services and exceed customer expectations. With the IT outsourcing field starting to be more of a common business strategy worldwide, people would continue to expect the growth of several trends that would most likely cause considerable shifts in outsourcing companies operations.

The following are some of the top outsourcing trends of 2016 and how organizations use outsourcing to boost services and operations.

1. Rising Complexity. Nowadays, businesses are finding that outsourced services could help them do much more than just reducing work costs or ramping up new employee teams faster. The complicated digital transformation programs lead companies to create more strategic and collaborative relationships with outsourcing partners. The trend is building a convergence in the technology of the outsourcing field as digital requirements permeate engagements with management agencies, consultants, system integrators as well as product development services companies. All of the prospective outsourcing partners scramble to either train, hire or acquire the skill sets that they lack for the digital transformation projects to meet customer needs.

For outsourcing service providers, this could mean growing pressure to diversify and broaden the services that they offer. The most successful outsourcing organizations could provide end-to-end services to the clientele from business strategy and ideation through an implementation of technology and management.

2. New Political Pressures. Political events worldwide also drive changes in the service sector. For instance, the recent decision of UK to leave EU, known also as Brexit would lead to changing markets for outsourced services. In a survey data, it indicated that British organizations are likely to suspend plans of hiring new employees, which increases the chance that they would opt for contingent labor services. The journey of stable employment depends on the hart of disenfranchisement, a lot of people feel. Organizations should rethink the social contract since too many people are left behind by the fast changes in technology and globalization. It is imperative to help individuals acquire skills to play an active role in a changing work scenario or face bigger uncertainty and more situations like the Brexit.

3. Enabling Innovation. As the capabilities of outsourcing providers’ grow, customers are finding new and more strategic benefits of utilizing their services. Value, instead of cost, is the new watchword today. Furthermore, it will likely be measured by how outsourcing providers help empower the growth of business via innovation. Businesses gain new competitive advantages from working with outsourcing organizations with wide service capabilities. As service providers seen as key business enablers, service providers become purveyors of innovation, enabling transformation instead of simply providing a source of price arbitrage. Additionally, innovation is a major component of the value that is derived from an outsourcing relationship.

4. Digital Transformation. While a lot of retailers tapping into technology and becoming more tech-savvy could be considered as a good thing, for the most part, it’s considered the main disadvantage to firms that offer IT outsourcing services. If more enterprises continue being familiar with scalable, automated and affordable solutions, there is less need to outsource a workload. That is why outsourced service providers should rethink their brand image and how to build value to their name to still be considered a viable option.

5. Security Issues, Development Opportunities. As more business services are provided via outsourced partners through cloud services, IT security would remain a major concern. This means that businesses relying on outsourced services must be certain to include security requirements in their contracts. Customer systems and data are only as secure as the weakest link in the ecosystem of a vendor. The customers’ risks are twofold: Not only the customer increase risk of data breach, it could also increase the risk that it would be in breach of its contractual or regulatory obligations if vendors are unable to comply with these obligations. As the capabilities of service providers become more advanced, businesses would increasingly turn to them for even vital services such as the development of minimum viable products for instance, new and innovative offerings focused on early adopters. There will be new and innovated ways of combatting security breaches and protect sensitive and confidential information.

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More Stories By Hiren Y

Hiren is an IT business consultant and blogger. His expertise includes diverse technology platforms, like Microsoft, Java, PHP, SharePoint, Open Source, Big Data, BI, and Mobile.