What do you think about the New Year? Is the future looking bright for you? If you are in outsourcing we believe it is. After concluding our 2010 outsourcing predictions proved to be quite ok, we already promised you to share our opinion for 2011. Based on the changes we’ve noticed over the past months we will try to predict what will happen in the upcoming months. Although, it’s based on real facts it still feels like looking into a crystal ball. Nobody can really predict the future. But, this time the crystal ball is clear: a major shift in IT outsourcing is ahead of us.
1. Cost saving remains important
Last year we predicted cost saving would no longer be one of the main reasons for outsourcing. As we concluded during our 2010 outsourcing review we were wrong. Basically, due to the economic crisis cost saving became even more important. The economic recovery is still unsure and that’s why cost saving remains one of the major reasons for outsourcing.
2. Outsourcing to focus on the core-business
The fact is that most businesses would be a lot better off not trying to operate their own IT. Costs can blow out, a lack of system integration causes real trouble while meanwhile the business is depending more and more on IT. Entrepreneurs are becoming more confident about IT outsourcing. SME’s increasingly consider fully outsourcing their IT department, not only to save money, but especially to gain better experienced and skilled specialists to produce high quality solutions. In such cases the IT providers has to be a reliable partner who is really interested in his client’s business. By taking care of the IT development and maintenance they enable the entrepreneur to focus on his core-business, which is realizing his idea by taking care of content, marketing and sales. A knowledgeable partner enables the entrepreneur to be more flexible to follow the newest trends and technologies.
3. Standardized solutions in favor of customization
No longer CxOs are willing to set up their own brick-and-mortar data centers, at least not all of them. They also dislike costly dedicated software solutions. Capital dollars may be better invested to acquire new customers and to think out new business concepts. Organizations are willing to move to a standardized way of working for non strategic processes. The world is moving away from costly custom solutions and a high level of customization, to standardization.
4. Outsourcing smaller projects among more suppliers
2011 will mean the end of big outsourcing contracts. Of course there will still be big projects outsourced by big corporates to huge providers. But even these big corporates are looking for flexible and specialized smaller providers who can quickly support them in realizing new business concepts. And this is even more applicable to entrepreneurs. They will look for best of bread solutions.
5. Eastern Europe as a top outsourcing destination
Recent research shows there is a dramatic shift towards nearshore outsourcing (nearshoring). Especially Eastern Europe profits from this trend. The Tholons top 100 ranked 3 Polish cities as a good outsourcing destination and a few more as emerging cities. Poland is also ranked high by Gartner. We believe Eastern Europe in general and especially Poland will attract many new outsourcing deals in the year to come. Eastern Europe can provide you with highly skilled IT specialists who prefer to stay a specialist. Nearshoring will become more popular especially among SME’s than ever before.
6. Cloudsourcing will grow exponentially
The Cloud is providing more solutions every day. Increasingly we will move towards the cloud for hosting purposes. Also software as a service will continue to grow. The weird thing is that in general the business is pushing towards cloud solutions for different reasons like flexibility, scalability and of course cost saving. IT departments will have to be ready to answer these requests, meanwhile migrating existing infrastructure and services to make them cloud enabled.
We firmly believe the outsourcing market will increase in the upcoming year. For many companies it’s just a good way to focus on their core tasks. Besides, it becoming impossible for them to be up to date with all the latest developments and trends. What do you think about outsourcing in 2011? Do you think your company will give it a try or even outsource more than before? And in case you are a provider do you think your business will grow? Please share your opinion with us below or through Twitter: @Goyello and @PetersOpinion.
Great thanks to @rodunia for brainstorming with me about the trends.
Picture credits: iStockphoto