Last year, IT outsourcing spending accounted for over 10 percent of the total IT budget, as this strategy continues to come more prevalent for companies that need staff augmentation or IT specialists. While organizations are continuing to utilize these types of services, the way they are outsourcing IT competencies is changing. Let’s dive into the top 5 emerging trends in the outsourced IT industry to see how these resources are continuing to evolve.
#1: From Cost Reduction to Results and Flexibility
In the past, outsourced IT focused on trimming project costs on a per-person or per-hour basis, lowering the overall cost of development from what it would cost in-house. While cost reduction is still a part of outsourced IT, now outsourcing focuses on the results of projects and not just the dollar amount. In this scenario, spending more per hour can result in a high-caliber project and a better return on investment. We always say it’s not about the cost per hour, it’s about the lifetime cost of development for a project and having solid quality of the finished project with minimal maintenance needs.
#2: IT Sourcing as an Enabler
More and more, firms are turning to outsourcing to deliver a solution when qualified local talent is difficult to find. In these scenarios, IT sourcing can be an enabler by providing the right person at the right time. Organizations benefit by getting “just in time” expertise from demonstrated professionals with proven track records. As organizations find it easier to attract top-tier talent at the point of need, they can also be more flexible and scale with market demands. Outsourcing can make organizations more competitive in the long run, by allowing for ready expansion and contraction to accommodate needs of the business and market shifts.
#3: IT Operations Decentralize
In recent years, IT outsourcing has been growing as a total segment of IT spending. Businesses may opt to outsource one or more common IT operations, such as application development, cloud storage, data center operations, help desk services, or security. As one or more of these operations are outsourced, the IT enterprise as a whole becomes decentralized. Once a business begins to outsource some functions, it tends to rethink core and non-core functions. They then look to outsource more previously in-house tasks as priorities change, monetary constraints demands, or outsourcing companies deliver better value. Things in this area will continue to shift as businesses at all levels invest more heavily in IT outsourcing.
#4: Client Service Offers Room for Improvement
Less than two-thirds of enterprise customers report satisfaction with American and Asian Pacific service providers. A little over 50 percent of enterprise customers report satisfaction with European and Middle Eastern service providers. As these numbers indicate, there is significant room for improvement in client services. Providers who can improve service response time, tailor service offerings to meet niche needs, and deliver service-oriented personnel improvements will rise in the rankings in 2015 as clients who outsource IT begin to demand vendor accountability. The good news is, there are outsourcing firms that have high levels of satisfaction.
#5: Managed Services
In today’s environment, more and more businesses are looking to delegate many of their IT operations to an external vendor, also known as a Managed Service provider. By utilizing a dedicated 3rd party, firms can rely on this external resource that specializes in various areas in the IT space. This ensures that company networks and other systems are up to date without having to have an in-house employee with these specialized areas of expertise.
While this strategy applies to all types of companies, both in and outside of the technology realm, it also gives small and medium-sized firms the ability to outsource their entire IT department. As a result, they can avoid the complexity of having to rely on building out a team in-house. By having a team of specialists readily available, it can mitigate many of the break-fix problems that arise. These problems typically result from companies scrambling to find a resource to fix a problem instead of being more proactive and preventing the downtime in the first place.
In this current competitive environment, there is little wonder that businesses turn to IT outsourcing to accomplish more with limited time and budgets and to focus on their core competencies and outsource non-essentials. Anticipating these key trends can help businesses make wide decisions while keeping operations up to date, remaining future-ready, and staying ahead of the competition.