1. Organizations will shift strategy, taking a longer-term view of sourcing options instead of a one-time decision on which functions to outsource or move to a client-owned offshore center.
2. Security concerns will grow. The range of offshore locations to consider for outsourcing will expand due to security concerns in India. Alsbridge recently commissioned primary research by leading geopolitical intelligence providers Stratfor on the current "temperature"
3. Currency changes will be positive for the buyer. The cost of outsourcing will continue to be attractive and become slightly cheaper due to currency and GDP shifts in low-cost locations.
4. Inflation of outsourcing costs in India will effectively stop. Employee wages in India will stabilize and remain steady, keeping the cost of delivering services from rising.
5. Work will be streamlined. Systems designed to structure work and reduce facilities’ costs by utilizing remote workers will improve and evolve further, allowing low-cost U.S. locations to be tapped for work that needs to stay inside the U.S.
6. The complexity of the outsourcing decision will grow, driven by the twin concerns of economics and security.
7. Time will become a new factor in sourcing decisions. Budget concerns will drive a need for faster sourcing processes, using streamlined steps confirmed by quantitative pricing data. In some cases, this may be a sole-source process.
8. Systems and process standardization will continue to commoditize work and allow many more vendors to be considered for niche outsourcing needs. The process of managing a larger group of vendors will be key.
9. Provider selection is changing. It will take greater effort to cut the field to four finalists who receive the request for proposal (RFP).
10. Mergers and acquisitions will continue. EDS was the big name in play last year. Who will it be this year?
11. Human resources outsourcing will struggle as vendors sort through the complexity of client needs and their own requirement to standardize.
12. The offshore mix in infrastructure will grow as vendors improve their capability to remotely manage centralized computer centers.
13. Chief Information Officers will search for the right mix of value, cost and service quality. This will drive reevaluation of the mix of what is outsourced.
For more information on outsourcing advisory services, contact Alsbridge at 214-696-6410 or visit www.alsbridge.com.
