To outsource or cloud-source? That is not the question we’ve asked a decade back. But with the rise of cloud computing comes automated tools that offer the same solutions – minus the complexity and higher cost that IT outsourcing offers. The perfect mix of simplified applications and processes, coupled with working on a tight budget, may put a dent on IT outsourcing’s universe as we know it. When businesses are signing more deals with vendors for less than what the contract is valued for, you start to wonder if outsourcing can survive amidst all these dynamic changes and disruption brought about by the cloud.
Fear the Rise of the Machines
I’ve been asked one time by this small business owner why he should outsource data mining tasks when he can use an intelligent web scraping tool that does the same job – for less. Besides, the pay-as-you go model costs way cheaper than the hourly rate of an outsourced data miner. Truth is, even those third party vendors are consumers of cloud services and it’s a no-brainer that you can also learn how to use these tools yourself. When the cost of labor rises each year, enterprises are forced to look for integrated solutions that offer convenience, flexibility and security. Some may argue that outsourcing may cost more in terms of investment and the headaches that come with it may not be well worth it. When more businesses are going global, it’s only smart to find the balance between the best talents and cost-effective technology around.
Winning in the World of Agile Outsourcing
If you’ve been in the outsourcing industry for quite some time, you know that challenges abound – from management, compliance to something as mediocre as time zone differences. Now, those running a BPO need not to panic as cloud adoption is not yet that ripe to affect the business model in a huge scale. Yes, the threat is there especially when cloud adoption is disrupting the sourcing marketplace. Sure, there will be negative and positive consequences to watch for. Those who are looking at the cloud for some leverage may be doing so because this is closer to the business – which means not having to oversee teams in multiple locations, not to mention having to deal with cultural and language barriers. Would you say that everyone wants instant gratification these days? There’s just this grey line between automation and outsourcing I can’t define, for argument’s sake.
Are You Ready for a Hybrid IT Outsourcing Model?
No doubt that we will see more companies looking for smaller, affordable deals that pack a punch. Last time, I told you that 2014 will be the year of the Hybrids. If IT service providers want to profit and compete, they have to look for ways to use automation to their end and bank on their customer satisfaction guarantee to ensure that clients will be loyal to their business. Besides, these customers are smarter; they’ve realized that outsourcing is full of empty promises and they might be better off doing the jobs themselves (or, with the help of these new tools). Outsourcing vendors need to step it up a notch and find new ways of differentiating themselves in a saturated marketplace.
It will all come down to value-added services that offer real solutions to business problems; not just a band aid fix. On a lighter note, people are good at adapting to radical change so they may just find new jobs managing these machines. Now, that’s ironic.