IT Governance

6 Outsourcing Trends to Change IT in 2018

When in doubt, outsource. Global outsourcing is nearly at $89 billion, so it is clearly working for someone. In an article for TechRepublic, Alison DeNisco Rayome discusses six trends of outsourcing that will affect IT this year:

  1. Traditional captive centers will decrease.
  2. Partnerships will become more critical.
  3. The growth of emerging tech will increase.
  4. Companies will focus more on value and less on cost.
  5. The IT skill shortage will intensify.
  6. The demand for soft skills will rise.

Outsource, Out-compete

About the first trend, Rayome writes this:

Businesses can expect captive centers to decline in number, as the difference in labor costs begins to vanish, and global companies cannot provide career growth and salary increases to these workers, [Srini Vemula, global product management leader at SenecaGlobal] said, leading to high turnover and low productivity.

Instead, companies should turn to an outsourcing partnership, which could take the form of a joint venture with an existing IT offshore company, or a partnership with more control on delivery options, Vemula said. In this case, the offshore partner would be able to manage career growth and salary expectations, while the business itself has more control on delivery and security.

The health of outsourcing means that there is an abundance of outsourcing partners to consider. You need to find the ones that display the clearest understanding of your business needs, work to accommodate your skill gaps, and act transparently. Great partners will also be forward-thinking, hiring to study and exploit emerging technologies like blockchain, so that they are ready to provide such services when you need them. These are important things, since there is not great evidence that the IT skills shortage will diminish in severity this year.

And as seen in IT itself, the emphasis moving forward will be more on the value that outsourcing partners can provide, rather than just finding who can offer a cheap rate. Low costs are not as important as big business outcomes.

For additional thoughts, you can view the original article here:

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