IT outsourcing can come in a variety of forms—outsourced programming to save money, outsourced deployment to bring in specific expertise that doesn't exist in the organization, and now cloud computing, which offers a number of benefits (cost reduction, simplified maintenance, scalability) and drawbacks (security, lack of flexibility to change providers in some cases, unpredictable costs). These trends tend to wax and wane depending on IT budgets, resource constraints, and changes within each individual business. Below are some high-level trends seen in 2010 in IT outsourcing, and what it could hold for this coming year.
These key trends are based on a study by Morrison & Foerster and relate specifically to outsourcing in IT.
Market uncertainty. Global outsourcing was flat in 2010, and is expected to be in 2011. One cause of this is market uncertainty—many companies are likely waiting to see what the next year or two holds before entering into a lengthy outsourcing contract.
Innovation. Another trend is innovation, meaning that companies are expecting an outsourced agency or other provider to innovate, and not just cut cost. As an example, if you're outsourcing your Help desk, you may want to provide better expertise, faster turnaround, or some other benefit, and those concerns might be more important than cost reduction.
Cloud computing. Cloud computing continues to be the tech industry's darling, but do the benefits outweigh the costs in core infrastructure? When you get down to it, the cost savings might not be as compelling as you think, based on unforeseen costs. Check out Mark Minasi's series on cloud costs (Ringing Up the Costs of the Cloud and Predicting Cloud Costs) for more.
Particular verticals outsourcing. Financial, healthcare, and pharmaceutical industries are expected to increase outsourcing in 2011. Regulation is becoming increasingly complex in these industries, so it makes sense that many organizations are looking to bring in experts to help ensure compliance.
Green IT issues. When was the last time you heard power saving cited as a benefit of outsourcing? It's not something most organizations think about, but as energy costs rise and employees get equipped with more bandwidth-sucking mobile devices, more organizations will consider outsourcing to reduce energy consumption, both to save money and to be greener (i.e., public relations).
Regional trends. Certain regions in Europe are expected to grow in outsourcing, particularly in the Nordic regions. Outsourcing will be flat in and to US-based companies. Finally, outsourcing to Asia continues to grow, likely based on cost reduction.
There's a lot more in this study, but these were the few nuggets that I believed you might find interesting. You can read the full report here.