Outsourcing IT functions continues to be a compelling value proposition for many companies.
And as more companies embrace a multi-source model, buying services from many suppliers, and a hybrid model where they host some functions in-house and push others to the cloud, the space will be exciting in 2016.
Here are the top five trends that you can expect to see next year:
1. The efficiency drive is expanding
For those looking to or already outsourcing some procurement functions – marketing, finance or IT for example – there is a “visible inclination” towards automating some aspects of these processes. We’ve already seen some evidence of this in 2015 – Accenture’s revised BPO arrangements with Deutsche Bank one of several of recent examples. But Sandler Research notes that focus will redouble in 2016, as customers seek more efficiency from their outsourced arrangements.
“In the current scenario, companies are opting for the automation of processes, simplification of IT environment, and development of an economical cost structure,” Sandler said. “
“Importance is being given to building reusable service delivery platforms and increasing scalability and automation by leveraging new software tools that quantify, manage, and control the implementation of a process within as well as between organisations.”
2. Low hanging fruit still hangs low
The low hanging fruit for outsourcing has been service support and helpdesk and applications, and British analyst firm Kable predicts that won’t change in 2016. Expect about 17 percent of companies that haven’t gone down that path yet to do it over the next two years, according to Kable. A slightly lesser percentage are also anticipated to make the leap to outsource IT infrastructure, potentially shifting into a hybrid cloud environment.
3. Flexible contracts
While outsourcing contracts continue to be awarded, they are getting much more flexible to suit the buyer’s changing needs. This includes the ability to scale up and down throughout the life of the contract, with favourable commercial and legal conditions for the buyer to do so. In short, it’s a buyer’s market, according to outsourcing consultancy Information Services Group (ISG). The firm reported that this era of “multi-sourcing” niche services from many providers could prove a headache for customers seeking ways to integrate all these different services cohesively.
4. Big data outsourcing
There’s been plenty of hype about big data in years’ past, but real evidence emerge in the past few months that a lot of the early concerns have been resolved, and as such it is open season for more elaborate projects. CenturyLink suggests that those without the budgets for their own big compute capacity could look to outsourced providers to power their big data push.
5. Cloud providers have an edge
In a recent blog post, BPM Watch predicted that service providers that had embraced cloud – such as Brennan IT – could have an edge in winning deals in the outsourcing market. “Even if the competitive edge does not turn out to be of substantial quotient for some service providers, they will be able to improve and innovate their service model that will lead to increased efficiency and agility in their business processes,” the analyst firm noted.