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Technology Optimization, Business Process Excellence to Impel IT Outsourcing

Nick Sharma
Monday, February 8, 2010
Nick Sharma
The recent economic recession has reiterated the need for IT companies, especially mid-sized IT companies, to revisit their drawing board, re-strategize and come up with path breaking, yet cost effective ideas for maximizing business productivity and performance. Companies have steadily started outsourcing and spending again, but before doing so, they are making sure that they first get a proper sense of what kind of returns to expect from their IT investment.

However, the global recession seems to have turned out to be a blessing in disguise for mid-sized IT companies who offer global outsourcing services / solutions - as not just big US companies, even mid-sized US IT companies have started to acknowledge the benefits of outsourcing non-core technology work to “specialists”. Gone are the days when having a captive centre was considered to be the most viable business model. Companies have started to realize that business process optimization is the new mantra for steady organizational growth and transformation. Having realized that they need to possess a certain level of maturity when it comes to processes, governance and vendor management, organizations have started to reassess their approach towards selective sourcing and multi-sourcing.

Mid-sized IT companies rapidly moving up the IT value chain

Industry analysts strongly believe that the market for outsourcing will considerably rebound in 2010. Research reports indicate that the focus for the IT outsourcing market will slowly but surely be replaced by an outcome based model - this essentially means that traditional deals will continue to decrease during the next several years even as new utility and cloud computing services start becoming the preferred model of outsourcing. This will instigate a paradigm change as companies try to figure out ways and means to successfully cope with this model. Those that develop a sustainable, commercial offering will continue to be in vogue and are sure to witness an upward trajectory with respect to business growth.

Research indicates that an important breed of ‘emerging market suppliers,’ delivering outsourced services from promising global sourcing locations are gaining traction with organizations seeking to mitigate risks through expanded global sourcing networks. Some of these companies have achieved meaningful operating scale; further, aided by significant investments in delivery capabilities and by adopting certain best practices in the industry, these companies are successfully serving world’s leading corporations. A key USP of these companies is that they offer the best of both worlds to clients - onshore/near shore value and cultural nativity with offshore labor arbitrage - thus providing commercially viable, blended solutions on a platter.

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