Outsourcing: the future?
I found an article about outsourcing, which gives us a very clear overview of where we were and where we are going in outsourcing. I work on my international outsourcing vision every day and I often wonder ‘where will we be in 10 years?’. From below figure (to see the big size, click the image) I see a few key points for our future:
– Timeline. Outsourcing brought $12 billion to India in 2004. India has grown even bigger on this number since 2004 and many other countries have followed India’s example in the IT outsourcing field. These numbers will keep on growing for the decades to come.
– Timeline. In 2010 companies still choose price over quality (the below document is about the US, I believe in Europe this might be different) and companies are frustrated about the quality of work. In my opinion, there are 2 important things here. First, price is important at the moment because of the worldwide recession. In times of rapid economic growth, companies need people and outsourcing is a requirement for companies to grow as shortages in IT staff make it hard to find talent. Second, companies report frustration because global sourcing is still in its infancy. People need to gain experience in order to know how it works. As more companies outsource, more frustration is reported. As people gain more experience in the next years, outsourcing will become more normal, eventually making it normal practice in any company.
I found an article about outsourcing, which gives us a very clear overview of where we were and where we are going in outsourcing. I work on my international outsourcing vision every day and I often wonder ‘where will we be in 10 years?’. From below figure (to see the big size, click the image) I see a few key points for our future:
– Timeline. Outsourcing brought $12 billion to India in 2004. India has grown even bigger on this number since 2004 and many other countries have followed India’s example in the IT outsourcing field. These numbers will keep on growing for the decades to come.
– Timeline. In 2010 companies still choose price over quality (the below document is about the US, I believe in Europe this might be different) and companies are frustrated about the quality of work. In my opinion, there are 2 important things here. First, price is important at the moment because of the worldwide recession. In times of rapid economic growth, companies need people and outsourcing is a requirement for companies to grow as shortages in IT staff make it hard to find talent. Second, companies report frustration because global sourcing is still in its infancy. People need to gain experience in order to know how it works. As more companies outsource, more frustration is reported. As people gain more experience in the next years, outsourcing will become more normal, eventually making it normal practice in any company.
I found an article about outsourcing, which gives us a very clear overview of where we were and where we are going in outsourcing. I work on my international outsourcing vision every day and I often wonder ‘where will we be in 10 years?’. From below figure (to see the big size, click the image) I see a few key points for our future:
– Timeline. Outsourcing brought $12 billion to India in 2004. India has grown even bigger on this number since 2004 and many other countries have followed India’s example in the IT outsourcing field. These numbers will keep on growing for the decades to come.
– Timeline. In 2010 companies still choose price over quality (the below document is about the US, I believe in Europe this might be different) and companies are frustrated about the quality of work. In my opinion, there are 2 important things here. First, price is important at the moment because of the worldwide recession. In times of rapid economic growth, companies need people and outsourcing is a requirement for companies to grow as shortages in IT staff make it hard to find talent. Second, companies report frustration because global sourcing is still in its infancy. People need to gain experience in order to know how it works. As more companies outsource, more frustration is reported. As people gain more experience in the next years, outsourcing will become more normal, eventually making it normal practice in any company.
I found an article about outsourcing, which gives us a very clear overview of where we were and where we are going in outsourcing. I work on my international outsourcing vision every day and I often wonder ‘where will we be in 10 years?’. From below figure (to see the big size, click the image) I see a few key points for our future:
– Timeline. Outsourcing brought $12 billion to India in 2004. India has grown even bigger on this number since 2004 and many other countries have followed India’s example in the IT outsourcing field. These numbers will keep on growing for the decades to come.
– Timeline. In 2010 companies still choose price over quality (the below document is about the US, I believe in Europe this might be different) and companies are frustrated about the quality of work. In my opinion, there are 2 important things here. First, price is important at the moment because of the worldwide recession. In times of rapid economic growth, companies need people and outsourcing is a requirement for companies to grow as shortages in IT staff make it hard to find talent. Second, companies report frustration because global sourcing is still in its infancy. People need to gain experience in order to know how it works. As more companies outsource, more frustration is reported. As people gain more experience in the next years, outsourcing will become more normal, eventually making it normal practice in any company.
– Models. Traditionally, most companies outsource projects or tasks. Especially in IT, it is hard to define clear requirements for projects, resulting in gaps in expectations between client and supplier. With big distances both physically and culturally, such gaps grow. Hence, the future of outsourcing will be in more direct models, where outsourcers either set up their own captive center (either through BOT or as direct investment) or directly manage a team employed by a supplier. Below this is also mentioned as ‘making things work’. Outsourcing projects is more complex than managing offshore staff directly (provided that the right processes are in place!).
– Types of services. IT has been the launching business domain in global sourcing. Sometimes I wonder why this has grown this way, as IT is more complex than many other business processes. Currently, BPO and KPO are growing substantially and I expect other fields to dominate the global sourcing market in a decade. It will become normal to outsource any task or activity which can go through a wire to the best fitting country or company.
– Impact on the economy. The figure shows that the US insources more services than it outsources generating a trade surplus. Similar numbers hold true in Europe. Even though a lot of offshoring-opponents believe the impact on an economy to be negative, the future will prove that offshoring facilitates the growth of the economy, resulting in wealth on both ‘sides’ of the equation.
Source: Focus.com
– Models. Traditionally, most companies outsource projects or tasks. Especially in IT, it is hard to define clear requirements for projects, resulting in gaps in expectations between client and supplier. With big distances both physically and culturally, such gaps grow. Hence, the future of outsourcing will be in more direct models, where outsourcers either set up their own captive center (either through BOT or as direct investment) or directly manage a team employed by a supplier. Below this is also mentioned as ‘making things work’. Outsourcing projects is more complex than managing offshore staff directly (provided that the right processes are in place!).
– Types of services. IT has been the launching business domain in global sourcing. Sometimes I wonder why this has grown this way, as IT is more complex than many other business processes. Currently, BPO and KPO are growing substantially and I expect other fields to dominate the global sourcing market in a decade. It will become normal to outsource any task or activity which can go through a wire to the best fitting country or company.
– Impact on the economy. The figure shows that the US insources more services than it outsources generating a trade surplus. Similar numbers hold true in Europe. Even though a lot of offshoring-opponents believe the impact on an economy to be negative, the future will prove that offshoring facilitates the growth of the economy, resulting in wealth on both ‘sides’ of the equation.
Source: Focus.com
– Models. Traditionally, most companies outsource projects or tasks. Especially in IT, it is hard to define clear requirements for projects, resulting in gaps in expectations between client and supplier. With big distances both physically and culturally, such gaps grow. Hence, the future of outsourcing will be in more direct models, where outsourcers either set up their own captive center (either through BOT or as direct investment) or directly manage a team employed by a supplier. Below this is also mentioned as ‘making things work’. Outsourcing projects is more complex than managing offshore staff directly (provided that the right processes are in place!).
– Types of services. IT has been the launching business domain in global sourcing. Sometimes I wonder why this has grown this way, as IT is more complex than many other business processes. Currently, BPO and KPO are growing substantially and I expect other fields to dominate the global sourcing market in a decade. It will become normal to outsource any task or activity which can go through a wire to the best fitting country or company.
– Impact on the economy. The figure shows that the US insources more services than it outsources generating a trade surplus. Similar numbers hold true in Europe. Even though a lot of offshoring-opponents believe the impact on an economy to be negative, the future will prove that offshoring facilitates the growth of the economy, resulting in wealth on both ‘sides’ of the equation.
Source: Focus.com
– Models. Traditionally, most companies outsource projects or tasks. Especially in IT, it is hard to define clear requirements for projects, resulting in gaps in expectations between client and supplier. With big distances both physically and culturally, such gaps grow. Hence, the future of outsourcing will be in more direct models, where outsourcers either set up their own captive center (either through BOT or as direct investment) or directly manage a team employed by a supplier. Below this is also mentioned as ‘making things work’. Outsourcing projects is more complex than managing offshore staff directly (provided that the right processes are in place!).
– Types of services. IT has been the launching business domain in global sourcing. Sometimes I wonder why this has grown this way, as IT is more complex than many other business processes. Currently, BPO and KPO are growing substantially and I expect other fields to dominate the global sourcing market in a decade. It will become normal to outsource any task or activity which can go through a wire to the best fitting country or company.
– Impact on the economy. The figure shows that the US insources more services than it outsources generating a trade surplus. Similar numbers hold true in Europe. Even though a lot of offshoring-opponents believe the impact on an economy to be negative, the future will prove that offshoring facilitates the growth of the economy, resulting in wealth on both ‘sides’ of the equation.
Source: Focus.com
About Hugo Messer
Hugo Messer is a Dutch entrepreneur, distributed agile team specialist, and author. He is the founder and owner of Bridge Global, a software services provider, and ekipa.co., an agile coaching agency. He has been building and managing teams around the world for the past several years. His passion is to enable people that are spread across cultures, geography and time zones to cooperate. Whether it’s offshoring or nearshoring, he knows what it takes to make global cooperation work.
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Its great information, outsourcing is necessary to increase efficiency and productivity of the company. For the future every company should use outsourcing. thank you.