With the changes in how businesses operate at present, software outsourcing service providers are faced with a challenge of uncertainty. Nevertheless, service providers should be able to establish innovative ways and to find new strategies to bounce back.
Outsourcing has metamorphosed the way businesses operate these days, evolving with time to keep pace with industry developments. With the rush to deliver the most efficient and the most affordable services, outsourcing strategy is rapidly changing with the evolving business dynamics. This enabled organizations to affordably outsource technical support and other processes to reliable outsourcing partners.
A NEW YEAR WITH A NEW OUTLOOK
It is a new year with a new US president, a new European landscape as well as new paradigms taking shape in the outsourcing space. The winds of change are upon everyone. Companies, customers and providers would be wise to comprehend where they are going. From call centers to software development, 2016 was a year marked by considerable change and uncertainty across the business process outsourcing scale. Technological, political and human factors all have conspired to ensure that regardless what sector works in, there would be no more ‘business as usual’. In 2016, Amazon has released the APIs for its Alexa AI or Artificial Intelligence product, meaning that the research that the retail and cloud behemoth put into artificial intelligence and recognition is now available for third-party developers.
SOFTWARE OUTSOURCING FOR 2017
The outsourcing scenario for this year could be determined by the following.
1. Brexit and Trump would change course. The course of software outsourcing would be determined by the new Trump regime in the United States and the effects of Brexit in the United Kingdom. Already, companies have started re-assessing contacts in the light of the not-so-pro-outsourcing changes that are expected. Legal complications would be discussed more, renegotiations would occur as companies attempt to arrive at a common ground for adherence to policy as well as business viability. Despite this, more work transitioned to onshore delivery centers is expected.
2. Security would be a major concern. The past 2016 was an infamous year for security and data security breaches. With the change in outsourcing policies, delivery mechanisms and required infrastructure would change, making security challenges. On the other hand, increased awareness on security compel companies to go for advanced security measures, like threat intelligence, automation and analytics solutions. New vendors in the security environment would emerge, delivering niche services.
3. The Cloud would mature. The initial Cloud craze has worn off. Now, customers are ascending maturity levels. As customers get more knowledgeable, Cloud service providers would have to adapt or else perish. Home-grown cloud vendors are expected to emerge, having taken a cue from the initial outsourced parties on delivering a superlative cloud experience.
4. Dwindling growth for offshore providers. With changes in policy come a hit to offshore service providers, be it data analytics, cloud or SaaS. The persisting currency exchange problems are a dampener, which badly affects the margins and thus result in downsizing of staff. Thus, vendors would have to face reality and be ready to find alternative avenues to income generation. One way may be to find acquisitions by US and UK organizations.
5. AI-led automation. Machine learning would find a place in the commercial outsourcing process, with deep learning giving deeper insights to outsourcing mechanisms as well as driving costs down. Automation helps standardize, thus details of existing outsourcing deals could stand redundant and would see many renegotiation headed by intelligent automation.
6. Cognitive would witness concrete advancement. Although 2016 saw much talk and less concrete action in the cognitive intelligence environment, 2017 will seal it for cognitive-based solutions, especially platforms. Most of these may be more home-grown, instead of the present crop of outsourced ones. The new entrants would use the past references of certain case studies to establish themselves.
7. Defeat of the call center. The call center, an earlier prominent outsourcing function would lose its importance with the emergence of self-servicing tools as well as virtual assistants. Virtual agents would take over in the form of contract centers that cater to the queries and needs of customers.
8. Market consolidation. Most importantly, with all the policy changes that are shaking up the outsourcing ecosystem, one could expect a slew of mergers, spin-offs, acquisitions and renewed ways of working to take over. New policies ensure that some vendors will be driven out of business. Only those who comprehend and act on the changes would make it through.
THE NEED TO FIND INNOVATIVE WAYS
2017 is proposed to be the end of the outsourcing saga. The model that delivered a competitive edge to organizations and a cost advantage to customers, is set to cease. How organizations cope and bounce back is a matter of action and agility, at the right time and with the right business model. In the coming months, the smartest outsourcing service providers would find ways to commercialize and leverage these platforms.
For a software outsourcing service provider, it is important to learn to adjust and get used to the trends and factors that could affect outsourcing and use these trends and factors to meet client requirements.
Outsourcing has metamorphosed the way businesses operate these days, evolving with time to keep pace with industry developments. With the rush to deliver the most efficient and the most affordable services, outsourcing strategy is rapidly changing with the evolving business dynamics. This enabled organizations to affordably outsource technical support and other processes to reliable outsourcing partners.
A NEW YEAR WITH A NEW OUTLOOK
It is a new year with a new US president, a new European landscape as well as new paradigms taking shape in the outsourcing space. The winds of change are upon everyone. Companies, customers and providers would be wise to comprehend where they are going. From call centers to software development, 2016 was a year marked by considerable change and uncertainty across the business process outsourcing scale. Technological, political and human factors all have conspired to ensure that regardless what sector works in, there would be no more ‘business as usual’. In 2016, Amazon has released the APIs for its Alexa AI or Artificial Intelligence product, meaning that the research that the retail and cloud behemoth put into artificial intelligence and recognition is now available for third-party developers.
SOFTWARE OUTSOURCING FOR 2017
The outsourcing scenario for this year could be determined by the following.
1. Brexit and Trump would change course. The course of software outsourcing would be determined by the new Trump regime in the United States and the effects of Brexit in the United Kingdom. Already, companies have started re-assessing contacts in the light of the not-so-pro-outsourcing changes that are expected. Legal complications would be discussed more, renegotiations would occur as companies attempt to arrive at a common ground for adherence to policy as well as business viability. Despite this, more work transitioned to onshore delivery centers is expected.
2. Security would be a major concern. The past 2016 was an infamous year for security and data security breaches. With the change in outsourcing policies, delivery mechanisms and required infrastructure would change, making security challenges. On the other hand, increased awareness on security compel companies to go for advanced security measures, like threat intelligence, automation and analytics solutions. New vendors in the security environment would emerge, delivering niche services.
3. The Cloud would mature. The initial Cloud craze has worn off. Now, customers are ascending maturity levels. As customers get more knowledgeable, Cloud service providers would have to adapt or else perish. Home-grown cloud vendors are expected to emerge, having taken a cue from the initial outsourced parties on delivering a superlative cloud experience.
4. Dwindling growth for offshore providers. With changes in policy come a hit to offshore service providers, be it data analytics, cloud or SaaS. The persisting currency exchange problems are a dampener, which badly affects the margins and thus result in downsizing of staff. Thus, vendors would have to face reality and be ready to find alternative avenues to income generation. One way may be to find acquisitions by US and UK organizations.
5. AI-led automation. Machine learning would find a place in the commercial outsourcing process, with deep learning giving deeper insights to outsourcing mechanisms as well as driving costs down. Automation helps standardize, thus details of existing outsourcing deals could stand redundant and would see many renegotiation headed by intelligent automation.
6. Cognitive would witness concrete advancement. Although 2016 saw much talk and less concrete action in the cognitive intelligence environment, 2017 will seal it for cognitive-based solutions, especially platforms. Most of these may be more home-grown, instead of the present crop of outsourced ones. The new entrants would use the past references of certain case studies to establish themselves.
7. Defeat of the call center. The call center, an earlier prominent outsourcing function would lose its importance with the emergence of self-servicing tools as well as virtual assistants. Virtual agents would take over in the form of contract centers that cater to the queries and needs of customers.
8. Market consolidation. Most importantly, with all the policy changes that are shaking up the outsourcing ecosystem, one could expect a slew of mergers, spin-offs, acquisitions and renewed ways of working to take over. New policies ensure that some vendors will be driven out of business. Only those who comprehend and act on the changes would make it through.
THE NEED TO FIND INNOVATIVE WAYS
2017 is proposed to be the end of the outsourcing saga. The model that delivered a competitive edge to organizations and a cost advantage to customers, is set to cease. How organizations cope and bounce back is a matter of action and agility, at the right time and with the right business model. In the coming months, the smartest outsourcing service providers would find ways to commercialize and leverage these platforms.
For a software outsourcing service provider, it is important to learn to adjust and get used to the trends and factors that could affect outsourcing and use these trends and factors to meet client requirements.
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