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Main Outsourcing Trends for 2009
In this article we would like you to get acquainted with main outsourcing trends predicted for the next few years. Some of them start emerging nowadays. We tried to present here trends that can really affect the outsourcing industry.
1. Consolidation
2. Globalization
3. P2P Offshoring
4. Green IT
5. Virtual Worlds
6. Service-oriented architecture
7. Convergence of technology and business
1. Consolidation
The end of 2008 caused aggravation of the competition between outsourcing companies. There are lots of offshore vendors nowadays and new companies emerge every day. And in the situation that has formed at the present moment a lot of outsourcing organizations are unable to survive. That’s why experts predict some significant consolidations in the nearest future.
2. Globalization of the market
Globalization f the sector is caused by the outsourcing boom. By recent time main outsourcing countries have been considered to be India and China. They still remain, but a number of states have joined the ‘outsourcing movement’, e.g. countries of Eastern Europe (Russia, Ukraine). So the outsourcing sector gains the global scale. The large number of outsourcing companies leads to the more definite specialization of outsourcing.
3. Person to person offshoring
Normally offshoring is associated with medium-sized and large-scale businesses, but there is a new trend in outsourcing: Person-to –Person Offshoring (PPO). It consists of services that can be outsourced by entrepreneurs to individuals. They include:
- Online Tutoring Services
- Accounting, Finance and Tax Preparation Services
- Home Design and Related Services
- Editorial and Writing Services
- Graphic Design Services
- Transcription and other Administrative Support Services
- Software Coding and Other IT Services
- Website Creation and Maintenance Services
- Marketing and Sales Support Services
- Other Ancillary and Concierge Services
Main models of P2P Offshoring:
1) Direct Interaction:
Under this model a vendor directly interacts with a client. Parties conclude a contract. Since the cost of individual projects is fairly low, clients usually pay the vendors with credit cards which can help offset some of this risk.
2) Online Marketplace Model:
This model involves the mediation of the online marketplaces (freelance-sites).
4. Green IT
Global companies start taking concern of their impact on environment increasingly. This fact makes them change their demands to their suppliers. This is the reason why lots of outsourcing engagements now include the paragraph as to the environmental protection. Environmental concern is becoming one of the evaluation criteria for service providers. Environmentalism in terms of Green IT becomes a trend and gets shapes of the industry.
According to the Brown-Wilson Group’s (an outsourcing industry consulting firm) study, more than 21 percent of US and European countries that outsource have added green policies to their outsourcing agreements.
However, the real impact on the outsourcing industry will be seen after implementation of the ‘green’ legislation by governments of European countries.
5. Virtual Worlds
Recently the popularity of virtual worlds such as Second Life has grown significantly. These worlds allow people build virtual offices, attend virtual meetings and get real deals. Though the market of outsourced virtualworld services is rather young, but it gathers pace.
6. Service-oriented architecture
Service-oriented architecture (SOA) enables the customers to take one piece (or several pieces ) from the process they wish to outsource and render to a provider (just like in Lego where one cube can be taken away from the whole structure and replaced by another one). Service-oriented architecture helps to concentrate on one piece of a process, thus enabling to provide more detailed specialization for outsourcing vendors.
7. Convergence of technology and business
According to this model clients refrain from outsourcing their business processes in parts (in isolated pockets) to different companies. According to this, the higher demand will be for providers that can deliver all aspects of outsourced processes in one package.
Basing on materials by Evalueserve, www.silicom.com, Brown-Wilson Group, Outsourcing Journal
About the Author
Lego Architecture Series – Falling Water
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