Major IT Outsourcing trends to watch out for in 2017
10th Jan 2017
IT outsourcing industry has grown rapidly in the past decade. Though this industry began with small IT call centres in the South Asian nations like India and Bangladesh presently it is a multi-trillion dollar company. Back in 1990’s the Business process outsourcing model emerged but it was fighting for mass acceptance. Due to the shortage of skilled workforce in U.S. for converting the code to the new date structure enterprises could not accomplish the work by January 2000. Hence, they were forced to look around and primarily concentrated on India to get the work done. This event finally sanctioned the adoption of Business Process Outsourcing model in a huge way and since then this industry has grown in leaps and bounds. The major IT outsourcing trends to watch out for in 2017 includes:
US president Donald Trump’s policies to protect the US economy will adversely affect the outsourcing industry. Trump has clearly declared that all the policies on trade, taxes, immigration, foreign affairs will be targeted to benefit American workers and families. The promises made by Trump in the election campaign, which shook the world are as follows:
• Penalizing the companies that will move their work offshore by heavily taxing them
• A cultural environment favorable for excluding the companies keeping their work offshore will be developed
• Major changes in immigration laws will challenge the prevalent labor outsourcing model which presently utilizes H-1B and L-1 visas for landed, in-country outsourced resources.
If the above-mentioned policies are strictly imposed then the outsourcing model will become much more expensive, hence unattractive.
Hybrid Cloud is another major IT outsourcing trend. It basically refers to integrated cloud service, which utilizes both public and private clouds to deliver specific functions for one organization. This ultimately gives quick access to users via the public cloud and more secure access to the private cloud. Gradually more companies will concentrate on striking a balance between private and public cloud solution and look into concerns like data and system integration, IT governance, data security and system portability.
Quality Centered Approach
The major outsourcing companies primarily American companies are choosing their vendors wisely due to the policies adopted by Trump. Many enterprises are moving from the fixed-price contractual model to local specialists and outcome-based contracts. They are looking for skilled teams who can work in an agile framework.
Intelligent and Robotic Process automation will disrupt existing outsourcing markets and drive down the market cost. Automation will lead to greater revenue, supplier margin expansion, the need for enterprises to rework on the existing outsourcing deals and the great divide between ‘haves’ and ‘have-nots’ in the global marketplace.
Security is the primary concern
Data security will continue to be the most important concern of 2017. Traction for security automation, intelligence threat, and security solutions will continue to grow strong as enterprises concentrate on a holistic approach for fighting against security issues and reduce business risks. Vendors will play a major role in preventing the rise of security threats with their offerings.