Outsourcing will see a paradigm shift as new trends are sweeping in.

Expect a number of sweeping changes in the IT outsourcing industry in 2016. Some of these include renewed focus on digital, newer ways of deal making, maturing cloud
computing,security threats, pressure on costs, gainful in-sourcing in select areas, political trends especially during election year in the USA, emergence of newer providers that offers more niche services in comparison to large firms that cannot connect at all levels.

Closing deals quicker : Gone are the days of multiple months spent in negotiating, now it has become very agile to put all-encompassing teams into a war room and thrash out proposals and sign deals and get benefit right away.

Technology influenced automation is playing a major role, with the advent of machine learning, big data analytics, BOTS etc. it is re-shaping the need and questioning the rationale for cheaper resources offshore. The increased focus on Run better, Run faster is putting pressure on the age-old outsourcing premise of shift high paying jobs to low wage countries while costs increases have begun eroding margins. This will be a game changer.

Newer models in vendor outsourcing have emerged and proven successful, the single vendor approach has been tossed out in many cases, multiple vendors is the norm, clients are not shy bringing in newer entrants without much established expertise, competition among multi vendors to bag more opportunities is helping clients get more out of their deals as well.

Focus on security and cloud computing have brought in newer challenges any of the most powerful cloud technologies will require integration efforts comparable to those required to install large ERP systems. These are long drawn projects needing niche consultants not run of mill resources. Most companies do not have employees capable of managing multiple emerging technology platforms, they’ll have to outsource service integration, incident management, and change management. Providers are notching up partnerships as well to offer more value add services.

Security is top of mind from the boardroom to the break room, and it will influence outsourcing strategy in 2016. It is poised to increase with emergence of  cloud computing, Changes to Safe Harbor and the Internet of Things (IoT) as they  become more prevalent. The ever-increasing threats will use increasingly creative ways to exploit weaknesses, often with devastating effect.  Service providers have often been the weakest link in a company’s security and will need to find better ways to address that concern.

Cloud is emerging stronger as we move forward, clients are not shy of moving more critical work into cloud. Having found success with non-critical systems,  we’ll see more production workloads move to the cloud—and not just AWS, use of multiple providers is becoming a norm, no one wants to put all bets on just one cloud provider. The future of data centers will embody many platforms. The as-a-service outsourcing model makes it possible to combine infrastructure, software, and business process to create a platform that is much more modular, scalable and intelligent. This platform can tackle higher-level processes, creating results that increase revenues, improve margins, enhance customer service, and move the business forward instead of running in place.

Stay tuned to learn how these trends are shaping the outsourcing industry.