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Top 5 Outsourcing Trends for 2016

Outsourcing is a primary concern for businesses that offer various services and depend on vendors to support their business goals in the long term. Outsourcing trends are evolving at a steady pace and changing the dynamics of business processes. With countries like India, Philippines, Brazil, etc. emerging as the preferred outsourcing destinations, there has been a gradual shift from the conventional outsourcing trends. The year 2016 is expected to witness changes in the outsourcing trends in the areas that concern customer expectation, cloud adaptation, data security, service providers, etc.

Let us take a look at the top 5 outsourcing trends for 2016 that are likely to impact the global outsourcing market.

1. Quality service at better price

Customers are likely to expect improved services while keeping a tab on the prices shelled out for the services. They are expected to adopt a quality specific approach where the onus will lie on the vendors to provide them with efficient services. It is assumed that customers will be less interested in working with vendors who try to win projects by offering perks and freebies.

Customers are working towards reducing their capital expenditure while seeking improvement of the service-quality they are sourcing. They also seek to reduce their product delivery cycles in order to improve their overall proficiency. Such trends will prompt customers to look out for providers who offer quality services at a better price.

2. Competitive edge for cloud service providers

Technology is expected to continue to be a key trend-setter in the outsourcing market. Service providers who adopt cloud technology are likely to increase the competitive measure of the outsourcing market. As service providers are expected to follow a customer centric approach, the migration of their delivery infrastructure to cloud will help them to improve their performance. Even if the competitive edge does not turn out to be of substantial quotient for some service providers, they will be able to improve and innovate their service model that will lead to increased efficiency and agility in their business processes.

3. Focus on data security

One of the bottlenecks in the customer adoption of cloud technologies is data security. Migration to cloud has been hindered by the concerns related to data security and privacy fears. Many businesses who are wary of adopting the cloud technologies have taken up the wait-and-watch policy. Cloud service providers have recognized this deterrent and are working towards improving the security and reliability issues. It is assumed that the focus on improvement of data security will increase the trend of businesses selecting cloud over traditional hardware-based systems.

4. Streamline the use of multiple suppliers

Management cost involved in managing multiple suppliers or vendors is a cause of great concern for businesses. As organisations seek to find out ways to reduce costs, the emphasis will be on analysing the employment of multiple vendors on single projects. One of the concern areas in such projects is that the whole project delivery may get delayed due to the non-delivery of a single vendor. It is assumed that suppliers will be prompted to provide more tailored services. It may also lead to the curtailment of suppliers from projects in order to improve the ratio of cost and service delivery. The trend of streamlining the use of multiple suppliers is expected to open opportunities for efficient suppliers.

5. Emphasis on centralized system

Multinational companies are focusing on having centralized systems. One of the main reasons for the increasing popularity of the centralized system is to reduce the dependency on multiple stakeholders. Many companies are planning to rebuild their IT operations system so that their entire IT activities can be carried out from a single service centre. The concentration will be on developing centralized service centres that will have the capacity to serve every internal department of a company. Service providers will be expected to be flexible enough to adapt to the changes and provide diverse services to various end users 24/7 with increased competence.

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