IT outsourcing is by no means a new concept. However, IT outsourcing trends are shifting. Over the next year, be prepared to see the industry get a facelift. As cloud computing becomes mainstream; the enterprise approach to cloud outsourcing will become more mature.
This means that you will see a focus on: increased governance, better security practices; and the utilization of specialized outsourcing firms. Thus, look for the following IT outsourcing trends to impact you in the near future.
1. Look for an Increase in Infrastructure Outsourcing
The traditional model of outsourcing software development, while relying on extensive onshore server farms, is about to take a 180. The economic downturn has taken a toll on job markets across the board, which means there are more software developers available stateside for less money. Incidentally, the energy market is still strong; and your data center drinks energy — and revenue — 24/7. To reduce costs, an increasing number of firms are switching to Infrastructure as a Service (IaaS) models. IaaS involves running your applications in the cloud on outsourced hardware.
2. Expect more Robust Security Models
Among all of the IT outsourcing trends, the most complex trend from an implementation standpoint is likely, security. The push for cloud technology and IaaS comes with inherent risks. Expect your executives to scrutinize your outsourcing security models.
For example, enterprises are becoming increasingly concerned with where their data is located. Most regulated industries, such as health care and finance, have strict rules around data being stored in the US vs. internationally. Moreover, IT auditors are looking closely at business access and authorization models. The bottom line is that you need to know where your data is and who has access to it.
3. Boutique Outsourcing Firms will Rise
The day of the big outsourcing vendor is on a decline because firms are expecting more from their outsourcing partner. Large firms are good at doing an okay job across the board, but fall short when it comes to specialization. Thus, the rise of the boutique outsourcing company is foreseeable. Boutiques generally are more agile and make up for what they lack in size with focus in a specific area. However, your firm likely has diversified needs; so expect to manage multiple specialized partners rather than one mega partner.
4. Count on Lower Cost and Smaller Deals
Finally, smaller outsourcing firms, in an effort to maintain a competitive edge, are playing with riskier pricing models. Among the IT outsourcing trends this is likely to be the most contentious. As small firms intentionally shrink their profit margin, expect lower cost for services but with the same high-touch boutique quality. However, you and your vendor will likely want to hedge your risk by signing smaller deals. Moreover, with the increase in the number of vendors you partner with, smaller deals will be less cumbersome to manage.
Above all, whether you are new to IT outsourcing, or you are a seasoned veteran; knowledge of the current IT outsourcing trends will enable you to make appropriate decisions in the changing marketplace.