IT outsourcing and offshore locations, an evolving and complex trend

[#1]

According to a recent report by IDC, robust growth continues in the IT services market, and the utilization of offshore locations still plays an important role.  But with that growth, some fundamental changes are occurring, such as the shifting of the traditional IT outsourcing model to one that is an outcome-based model (one based on performance and not just number of people deployed).

 

One thing that remains constant though is the necessity of an effective global delivery model for successful outsourcing agreements as shown in last week’s announcement  of Wärtsilä Corporation of Finland signing a new outsourcing agreement with HP (also see my previous post on “How solid is your global sourcing foundation? “).  But even an effective global delivery model is only one of many components that companies employ to transform their complex operating models through outsourcing, as evidenced by a recent post by Kevin Lee of the Everest Group titled, “The Evolution of Next Generation Operating Models in the Energy Industry” published on the Sherpas in Blue Shirts blog.

Last year, more organizations, in more countries, turned to offshore locations to control operating costs and improve margins.  This is a complex trend that is here to stay, and one that I strive to stay informed about on a daily basis.

If you have any offshore questions, please feel free to leave me a comment on this blog post. And if there’s an offshore topic, you’d like me to cover in future posts, let me know. In the meantime, check out HP’s Best Shore information to learn more.

[#2]

I do agree with you regarding increasing complexity in IT outsourcing and offshore outsourcing among countries.  As technology developed, it changes all the old methods and compel all the software industries to adapt advent technologies for better and easy service. Thanks for sharing such an informative post.

[#3]

This is quiet informative article.Every IT industry whether large scale or small scale, is now receiving increased returns due to the outsourcing process undertaken by them. The growing demand for IT services is also evident. The recent outsourcing trends are found to have sync with the present dynamics of the market. It is expected that the trends would change in subsequent years. Moreover, many BPO companies have emerged as a result of the IT outsourcing. Therefore, these will face a good competition globally. IT department is currently taking measures to meet the demand and supply and funds are allocated in order to promote the growth of them.

[#4]

Stu -

Good links.  In the past, I've seen deals where outsourcing providers attempt to 'pad' the number of resources on a project, without providing a way of specifically holding those resources accountable for work output.

From my perspective, I see work monitoring software and enterprise dashboards playing a big role in the future of outsourced / offshored work relationships.  Have you seen any adoption of this at all yet on the enterprise level?  I'd be interested to hear your comments about this.  Please feel free to send an email as well.

[#5]

Danny - I agree that work monitoring software and enterprise dashboards will play an ever increasing role in outsourcing going forward.  I also believe other activities such as applications security testing will expand in terms of importance.  Please see a recent post by one of my colleagues on this last topic, "Why applications security testing is vital to your enterprise".