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Is IT Outsourcing in a Phase of Fundamental Transition?



Is IT Outsourcing in a Phase of Fundamental Transition?

When talking about the outsourcing industry, let’s know the fact that it was just a business strategy until 1989. However, after the industrial revolution, most organizations accepted that they were not solely sufficient to compete with the increasing market needs and started searching for approaches to augment their markets and profits.

In the 1990s, companies started moving towards approaches to augment sales with cost-saving measures. This is where outsourcing came into limelight and gained eminence.  Companies now wanted to outsource their secondary functions, which were not related to the core business. These functions included outsourcing accounting service, data processing, human resources, etc. Since outsourcing frees the in-house expertise to focus on other development functions and takes care of the secondary purposes like handling customer support very seriously, it is thus an obligatory need of every business.

The evolution of outsourcing companies has seen a paradigm shift in strategy making to service performance. Today IT outsourcing has evolved to face a fundamental transition with the advancement in technology and new tools adding on to service excellence.

The first choice to outsource the business IT service was of Eastman Kodak and it was a revolutionary decision back in 1989. Although several companies were not convinced of the same, however many understood the importance of getting a technologically proficient partner at work. For small businesses, it was hard to hire and train employees, thus outsourcing gained momentum as it made expertise available in low budget with proficient services.

Why Outsourcing?

Several companies have this query as to why outsourcing and not in-house? Here is why:

  • Cost-effectiveness.
  • Improves business focus on core competencies and strategy making for overall development.
  • Frees in-houses staff and simplifies tasks by sharing loads.
  • It provides access to top-notch capabilities.
  • Share risks.
  • 24X7 availability.

The paradigm shift in IT outsourcing:

Technological revolution and the development of IT and software have made the IT industry one of the most significant industries of the 21st century. Since IT development demands huge investment, it is the reason most companies want to outsource their IT needs to a reliable partner.

Many companies also favour outsourcing some of their IT projects offshore, as they feel a reliable and recommended partner can bring business excellence. This signifies the importance of brand image and how crucial it is to manage the business value before the customers.

IT outsourcing companies are respected; however, some myths have always tarnished its value leading to questions asking its worth. Some issues at times diminish trust in IT outsourcing services. Like lack of transparency and differentiated quality standards between client and outsourcer. However, with the booming technological revolution and services becoming swifter and easy to handle with the introduction of Artificial Intelligence (AI), Robotic Process Automation (RPA), Virtual Reality (VR), Augmented Reality (AR), etc. people now rely on outsourced IT services.

With the technological revolution, the transparency issue is no more a challenge and differentiated quality standards have been sorted too. Technological updates lead to expeditious query resolution and hassle-free business management, which is why IT outsourcing companies have gained momentum as they utilize the latest tech-tools to earn fame and profits from the market.

The IT outsourcing industry is not the same as before where businesses questioned their credibility. It is today a result-driven service provider, which assures business excellence.

It is important to note here:

This transition of IT outsourcing companies from a less reliable to a fully dependent industry highlights the noteworthy revolution with time, which is an epitome of learning.

Moving forward, you must be curious to know the future predictions for businesses taking IT outsourcing services. Here we have the trends that will reshape the services:

  • Refurbishment
  • Top-notch skills
  • The acceleration of referral strength

Wrap Up:

The path forward for the IT outsourcing industry will take advantage of the trends and will alter depending on innovations that come with time. Reaching tech goals is becoming harder and more competitive day by day, thus taking an insight into the trends and inheriting advancements in technology confidently is crucial. Moreover, the time to come will witness an outcome-based outsourcing model and is said to take over by 2020. This model carries services like input-focused facility, output-focused facility, and output-focused models. The emergence of these calculated outsourcing contracts prompts the shift towards a modern result-driven working state, which has no space for companies sticking to the age-old strategies.

Thanks for reading!

Sanchita Mittal is a dynamic technophile, writing on all aspects of the technological world. With wide and deep experience of covering all matters related to Technology, App Development Services, Life Style, Cloud and Digital Marketing. She wants to be at the forefront of technology, whether it is already applied in real life or still in the R & D lab.