Offshore outsourcing has existed since the 90s. While this has been a decade-long practice in the business, it hasn’t garnered attention until political issues put it under the microscope. Since then, outsourcing horror stories have been grabbing headlines. There are many conceptions about offshore outsourcing, but the industry has significantly changed over the years.

Offshore outsourcing is not limited to call centres. Other business models beyond offshore staffing are gaining ground, such as shared services and global delivery. New technologies in IT outsourcing also provide solutions beyond traditional outsourcing.

Businesses are learning from recession outsourcing. Many are becoming more mature. While cost reduction is still one of the main drivers, businesses are now looking at how they can incorporate outsourcing in their longer term strategies. They also face pressure for ethical sourcing and corporate social responsibility.

According to analyst firm Ovum, IT contract value will decrease in 2014, but it’s because businesses are opting for shorter flexible contracts instead of mega deals.

Service providers are evolving to meet new business needs. New technologies such as the Cloud are changing the way businesses outsource processes. Software automation provides healthy competition. Emerging markets, such as the Philippines, are planning steps to move the country’s information technology and business process management (ICT-BPM) services up the value chain.

Small yet Nimble Global Clients
Offshore outsourcing is not the domain of corporations any more. Small businesses are able to access new capabilities, talent, and infrastructure by outsourcing business processes. This enables them to lower costs, focus on core business, and fill in knowledge gaps.

A Healthy Mix
Businesses are utilising onshore, nearshore, and offshore services. Smart outsourcing clients opt for global delivery or maintain a healthy ratio between in-house and outsourced processes. It’s not just about lifting and shifting a business process to somewhere else affordable, but using offshore staff as an extension to augment in-house efforts.

Offshore outsourcing is making headway to become more of a strategic tool rather than a cost-cutting mechanism.