Latest News  

Outsourcing becomes a critical part of a successful business strategy

In the 1990s, the industry used different buzzwords than it does today, and this language shift reflects the changing priorities for outsourcing pros. Today, enterprises are shifting away from thinking about outsourcing as a purely financial decision and increasingly considering it to be part of a business strategy critical to their success.

2015-12-02 11:34:44

In the 1990s, the industry used different buzzwords than it does today, and this language shift reflects the changing priorities for outsourcing pros. Today, enterprises are shifting away from thinking about outsourcing as a purely financial decision and increasingly considering it to be part of a business strategy critical to their success.

Just five years ago, the outsourcing industry had its sights set on one thing: cost savings. And the industry buzzwords reflected this focus. Enterprises were first and foremost concerned with the benefits they could gain from labor arbitrage and from reducing theirtotal cost of ownership, according to nearshoreamericas.com.

Back then, organizations primarily sought to optimize their information technology (IT) and reduce operational expenditures. They engaged most frequently with information technology outsourcing (ITO) providers that could help them save money and modernize their legacy applications.

Many organizations also used capitalization rules to extend the useful life of applications and continued to add functionality that could be capitalized (often well beyond the practical useful life of the application). These practices may have led to some short-term savings, but they resulted in significant technical debt in applications that could no longer be reasonably extended.

Today, enterprises are shifting away from thinking about outsourcing as a purely financial decision and increasingly considering it to be part of a business strategy critical to their success. Their new goals are to find and maximize value in a broader sense – not only running the business more efficiently, but finding new ways of connecting with customers and growing the business. Enterprises are embracing a wider ecosystem that includes traditional service providers, emerging new players in multiple geographies, and a vibrant startup and venture capital community known for bringing new ideas to market quickly.

A company may, for example, move its entire organization to a third-generation, cloud-based platform to take advantage of new capabilities and products based on sensor data, analytics, and data services. These new platforms (think of the Apple platform with tables, laptops, and mobile devices) integrate micro-services and APIs to transform traditional IT organizations.

Emerging and mature startups such as Mashery (a TIBCO company) or Apigee provide the foundation for managing platforms in an API-driven world and deliver new micro-services. Cloud-broker technologies such as Gravitant (an IBM company) and cloud-portfolio manager RightScale provide the platform to assess the cloud readiness of an application and allow the seamless transition from on-premises to a cloud-based deployment model.

These emerging technologies and associated companies are no longer fads. The largest providers in the market, the names we all know, are investing heavily in this market to manage the transition to new operating models that embrace software-as-a-service (SaaS), micro-services, data APIs, and the public cloud.

For the past several years, we have been predicting that, by 2020, 30%-40% of all enterprise workloads will be deployed in a public cloud. Based on the rapid growth in SaaS solutions, Amazon Web Services, Microsoft Azure, Google, IBM Softlayer, and other public cloud offerings, that projection may be overly conservative. Many of the G500 companies are on a path to transition from 70% to 80% of their workloads to the public cloud by 2018. In fact, studies show that 60% of all companies will use SaaS within the next 12 months and 84% of all new software hitting the market will be hosted in a cloud.

The last 24 months have been a true tipping-point period. Even as we were all busy becoming buzzword-compliant, trying hard to figure out what it all meant, the market was accelerating towards broad adoption of technologies that increased enterprise agility. As we enter 2016, our vocabulary has finally caught up, and we are using the words and phrases that reflect the rapidly changing role of IT.

The current lexicon has dropped its preoccupation with reducing costs and has taken up the cause for agility and speed to market. Instead of simply outsourcing to save money, organizations need their IT outsourcing service providers to help them maintain supply and demand, build applications and move workloads to the cloud.


0 COMMENTS ^ Go back to Top
WRITE A COMMENT ^ Go back to Top
 
Your email address will not be published.
Nickname
Email
Comment
Validation Code
   
 
 
NEWS
RPA solutions developer UiPath gets 30 million dollars financing from Accel Partners

Romanian start-up UiPath specializing in in robotic process automation announced it secured a 30 million dollars' worth financing from US venture capital firm Accel Partners.

 Read Full article »
Accace Romania − BPO digitization activities and 30 per cent increase in revenues in 2016

Accace, one of the leading outsourcing and consultancy services providers in Central and Eastern Europe, recorded a 30 per cent increase in turnover on the Romanian market in 2016.

 Read Full article »
Horatiu Cocheci and Nicoleta Dumitru join People's Advisory Services of EY Romania

Horatiu Cocheci and Nicoleta Dumitru, consultants with experience in human capital, join People's Advisory Services of EY Romania as Director and Senior Manager, a company release says.

 Read Full article »
Bittnet Systems plans merger with Gecad Net

IT&C solutions provider Bittnet Systems announced it plans to merge with Gecad Net with the goal to consolidate its position within multicloud area, according to representatives of Bittnet Systems.

 Read Full article »
Dedeman to implement Sap solutions for more efficient internal communication and employee management

Local retailer Dedeman will use SAP SucessFactors solution in order to get its recruiting, internal communication and training programs to a more efficient scale. The program will be used to manager over 9.000

 Read Full article »
EY: Global mining and metals sector faces digital disconnect

According to latest report of EY regarding the digital transformation in mining and metal sector globally, 15 percent of survey respondents say digital isn't on the agenda in their organization.

 Read Full article »
ABSL presents the 3rd edition of Iasi Business Mixer on 25th of April

The Association of Business Service Leaders in Romania (ABSL Romania), the organization that represents the local business services sector, will host the 3rd edition of the most important event dedicated to the

 Read Full article »
French energy operator Total opened support services center at Bucharest

Total, one of the largest major integrated oil and gas companies in the world, with activities in more than 130 countries and 98.000 employees opened a corporate support services center at Bucharest in March th

 Read Full article »
Accenture Report: Banks show confidence in cybersecurity but lack real-world testing

Many senior bank executives are confident about their cybersecurity strategy, yet a lack of comprehensive, practical testing is leaving gaps in their defense, according to a new report from Accenture.

 Read Full article »
Computaris reports positive 2016 results and outlook for 2017

Computaris International Ltd., specialized provider of software development and system integration services for software vendors and communication service providers, reports positive 2016 results and outlook

 Read Full article »
 
MOST RECENT VIDEO
 
 
MOST READ ARTICLES
» Yonder: The first Dutch company in Clu...
» RPA solutions developer UiPath gets 30...
» ABSL presents the 3rd edition of Iasi ...
» Accace Romania − BPO digitization ac...
» Fintech for the aging population: What...
» Grégoire Vigroux appointed the new Vi...
» JLL: Romania will finish this year pro...
» Stefanini plans 25 per cent growth of ...
» TELUS International Europe: Three cons...
» How Millennial call-center agents can ...
 
EDITOR CHOICE
Romanian Outsourcing Awards for Excellence designates the industry winners on May 11

Outsourcing Today, the integrated communication platform of the business services sector, presents the Third Edition of the annual Romanian

 Read Full article »
TELUS International Europe: More proactive, personalized customer experience, thanks to the Internet of Things (IoT)

Industry research is apt to say we're on the cusp of a future full of "smart" devices — that is, billions of everyday items embedded with wireless internet connectivity

 Read Full article »
Romanian Outsourcing Summit: Focus on the added-value of business shared services in Romania

This year's edition of Romanian Outsourcing Summit joined representatives of the government and top representatives of leading companies operating in the sector of business shared services and related industrie

 Read Full article »
Romanian Outsourcing Summit reaches its third edition

OUTSOURCING TODAY, the integrated communication platform of the business services sector, powered by The Diplomat Bucharest, presents the Third Edition of the ROMANIAN OUTSOURCING SUMMIT on March 23rd 2017, at

 Read Full article »
Latest News  
 
about us | newsletter | contact | members area
Copyright © 2015 by Diplomat Media Events Design by Diplomat Media Events