The Future of IT Outsourcing

The current situation around the world has put light on the weaknesses in the ongoing IT outsourcing model. As the world walks towards the ‘new normal’, major learnings from the pandemic are going to change the organization's approach towards outsourcing arrangements in the future. Entire global economy has been affected and businesses that have outsourced their operational activities and core business have been particularly affected. Aspects of the long-practiced outsourcing model have been failed, and now organizations have an opportunity to make a more reliable and efficient IT outsourcing model. The following aspects need consideration for future outsourcing arrangements:

  • Business continuity and disaster recovery:

History states, business continuity planning (BCP) has been always underestimated by the need to have multiple physical backup workspaces that are capable of being quickly accessed in the event of an incident. This approach assumes that the system and workers can be easily shifted to another location to ensure continuity of the work. This is mainly focused on the BPO arrangements which are severely reliant on remote workforces. Having multiple sites is a very important part of BCP and disaster recovery.

  • Remote working as the ‘new normal’:

It looks likely that some form of remote working arrangements will be in the market for a very long time. This majorly strengthens the importance of organizations implementing appropriate information and data security requirements into IT infrastructure management. Businesses will also require proper arrangements to handle the performance of the service provider’s workforce when physical supervision cannot be done. This might require service providers to virtually keep an eye quantity of output of workers. It is expected that organizations will need to give a detailed plan stating how remote working will be implemented, and how performance will be managed when physical supervision is not possible.

  • Broad review of outsourcing strategy:

One of the major benefits of outsourcing is the potential to get into a skilled workforce in a country with a lower-cost model. This main risk behind this approach is that it removes the ability to control the remote workforce. Cost benefits of outsourcing will always be the main point of the attraction. It is expected of organizations to pay attention to the function which may have been outsourced and can be brought in the organization.

  • Re-thinking governance and control structure:

Strong governing processes and mechanisms are often a solution to the successful implementation and working of outsourced arrangements. The process heavily relies on having a shared worksite, meetings in person, or in case of remote workers, the need for the presence of organization representatives is required. It would be very good for the organizations to have properly structured governance and controls that can be easily stretched up or down according to the circumstances. Although there has been a severe impact on IT outsourcing arrangements in the short run, it is expected to see reliable and sustainable demand for outsourced services in the long run.