The reason why the future of the outsourcing industry lies on driving business outcomes

The convergence of big data, social media, software, cloud and device has cause unprecedent3ed disruption across all industries. Corporate giants such as Borders, Blockbuster and Kodak often have been examples of this after crumbling the competition from Netflix, Amazon and Shutterfly respectively. In a world where there is a myriad of mobile devices, where social media could bring down mega companies and governments, the capabilities of software are no longer nice-to-have; they have become necessities and are essential for growth and survival.

The outsourcing market is believed to exponentially grow this year 2017 due to three megatrends, which are the following:

1. ISVs and technology organizations are racing to create their product mobile, cloud and social media ready
2. Traditional firms are transforming into digital organizations
3. The internet of things, new software-enabled businesses are disrupting value chains across different fields

Most companies, which include traditional information technology vendors lack the mindset and skills necessary to enable high velocity, complex, mission vital programs. That is why, they would look for partners who could help in delivering bespoke, highly complicated product development programs. These need a product-centered approach and a wider portfolio of skills, including user experience, global agile development, integration and the ability to design ultra scalable and secure architectures. Outsourcing specialist firms are positioned in a unique manner to deliver value in the changing paradigm toward more innovation and open models.

The outsourcing industry is changing constantly. Moreover, while the best practices from the past could certainly be a big advantage for vendors, companies should evolve to be more flexible in order to fit in the need of the market at present. Whether it is co-investing in a product line or growing an internal practice for better delivery of next-generation technologies, service providers should innovate to stay competitive. Based on a survey, up to one-third of the top firms in each industry would be challenged as existing or new entrants use social media, cloud, mobile and analytics to alter the processes or pricing of the industry. Enterprises that comprehend this and would act on it would grow, those that do not would have a difficult time staying afloat. Customers will increasingly look for specialized partners to drive innovation at the physical-digital convergence.

The process if very controversial and affects each and every facet of business, from manufacturing to designing, development of software, management of logistics, financial control, sales and customer support. Outsourcing has been praised as efficient, cost-effective, strategic and productive. Moreover, the process is also condemned as money-grabbing, evil, ruthless, destructive, exploiting the poor, destroying nations and communities. The incentives are great, and could lead to drops in the costs of the job from fifty to sixty percent. Up to half of the money spent each year by European organizations on administration and sales can be outsourced. Regardless of the publicity, sourcing is most often to organizations in the same country.

New sourcing decisions could generate weeks of widespread protests, unfriendly media coverage, as well as industrial action. The issue is very sensitive that decisions usually are taken behind closed doors at an organization's most senior levels. Moreover, they are announced only after a lot of careful research into how proposals are likely to be received. If handled incorrectly, BPO or business process outsourcing could damage the corporate image, unsettle customers, weaken a product or brand and could result in lower quality products as well as services. Nevertheless, when handled well, the results could be good enough to save a failing company, depending on the situation.

It is clear that the offshore option provides immediate cost savings. Firms are getting more adept, experienced and confident in remotely managing their processes, whether by a vendor or their own center. These days, more and more enterprises are obsessed with driving out cost and figuring out things such as transformation of processes at some point in time. The difference these days however, is that most of the perceived risks of moving to a different country has gone. Moreover, enterprises simply are doing it as part of their daily operations.

With the industry emerging from the aftermath of the recent worldwide recession, there are several trends that provide a glimpse of what is in store for the future of the field.

• consumers and buyers would seek more standardized solutions from their engagements, thus they would have to differentiate themselves via performance instead of pricing. Thus, pricing structures would be stabilized to some extent
• analysts predict that the industry would continue to fight short-term expense pressures, and there would be pressure on the service vendors for more flexible pricing contracts
• sharing critical business and information technology service has been proven to lower costs, minimize errors and boost productivity
• better quality control and minimized back-office expenses are being set up and this trend would continue
• consumption-based technologies delivered via the cloud would grow, since they are cost effective

India would continue to be the major destination because of the fact that it has been able to evolve with the changing requirements of customers all over the world. NASSCOM, the apex body of the country's premier IT service and software companies, reported that the country's share in the global market increased from fifty-one in 2009 to fifty-five in 2010. It still stands out for its customer efficiency and offering. Nowadays, clients are not after cost-effective solutions but also for enhanced productivity, skilled staff, business process excellence and service quality. India's large population and multiple-skilled people would continue to be preferred by service seekers on a global scale.

The financial rewards, economies of scale and the flexibility and increased productivity promised by the process would be a hot commodity for many years, as the skyrocketing rates of increased sourcing affect each and every segment of society. Focused initially on highly transactional back-office processes or non-vital services, it now covers strategic functionalities, with some firms off-loading whole segments of their value chain. As it exponentially spreads all over the world, issues that do not exist yet would arise inevitably. It would be wise to monitor trends and developments and build standardized solutions to help all stakeholders look for a way around or over the obstacles along the path.

Ritesh Mehta is the Sales Director at TatvaSoft Australia, a Software & mobile app development company. For Over 15 years, he has been professionally active in financial management, software development.