A Preview of Outsourcing Trends in 2014

The coming year should find businesses looking for more ways to retain control over their IT services and processes, as well as cut costs, according to Computerworld’s “10 IT Outsourcing Trends to Watch in 2014.”

2014General Motors cited that need when it brought innovation back in a massive three-year plan to move almost all of its IT services in-house.

IT services experts cite three ways in which that trend is expected to continue: an increase in insourcing, a hybrid model combining insourced and outsourced offshore services, and companies opting to take on service integration themselves.

“Clients are recognizing that a solid internal service integration capability provides better flexibility and knowledge of the business required to onboard new and specialty service providers,” said Lois Coatney, director with outsourcing consultancy Information Services Group (ISG).

Automation is expected to increase. IT service providers have been experimenting with machines – “robots” — that can “learn” to perform increasingly sophisticated operations without human intervention.

“My sense is that the outsourcers see this [automation] as a threat, but also an opportunity,” James Slaby, a research director at HfS Research in Boston, told Dice News. So far, he doesn’t see automation as a threat to IT jobs in the U.S., since it’s used for routine work that was outsourced long ago.

While cloud services have become more widespread, companies are expected to to find ways to manage them more effectively, especially through consistent metrics that help make apples-to-apples comparisons of their options. Meanwhile, Indian outsourcers are expected to move beyond application development and business process outsourcing to offer infrastructure services.

“It would have been unheard of 10 years ago for an India-based provider to beat out an IBM, EDS, or CSC in an IT infrastructure deal in the United States or Europe,” Shawn C. Helms, partner in the outsourcing and technology transactions practices at law firm K&L Gates, told Computerworld. “I predict that 2014 will be the year where Indian-heritage providers become the biggest competitive threat for traditional U.S.-based infrastructure powerhouse providers.”

Comments

  1. BY FrankQ says:

    The problem is that the STEM pool has been heavily depleted and the new generation does not show enough interest in reviving these careers; a situation similar to Japanese, where there is not enough “newborn” population to fill the gap. Maybe there is a hope there if using our older employees and gain some time until we build a new pool, but once again, Corp America is discouraging our reserves, as I see it.
    If some of these companies have not demonstrated enough stupidity in the recent past, I would’ve thought that they were traitors planning to destroy America on purpose. Shame on you, Corporation America, for having such a short vision.

    • BY bluemountain184 says:

      FRANKQ, you are right to some extent.
      For those young ones like me who want to work at high-tech corporations, they will simply pass me over for an Indian foreign student.
      This is why most high-tech corporations in Silicon Valley are losing U.S. citizens doing technical work, and it is probably what the shortsighted, greedy, and delusional Top 1% management wants.

  2. BY sai ram says:

    @Frank,
    iam not sure if the STEM weakening is the issue, its more of of cost-cutting or cost saving i guess, if they want more quality compared to the price. They will still stick with US vendors.

    when a pair of flipflops comes for $1 and stay cool for 3 months, even if they are manufactured outside USA. They would buy those $1, instead of $20 which would last for more than a year.

    things will come back to normal soon, as soon as Americans find a new business (they have been doing it since ages) & IT is no longer a big biz.. things will change again……………

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