Offshore IT Outsourcing and Digital Transformation

March 8, 2017 6:00 pm | Updated 4 years ago.

Offshore IT Outsourcing has created a sense of apprehension in the minds of many in America who fear that they might lose their livelihood to companies from some Asian country. President Trump in his Presidential campaign mentioned that policies regarding offshore outsourcing would change so as to benefit US based companies. This would lead to an increase in employment levels in America. However, amidst all these turmoil in the political arena IT organizations are also undergoing some changes with a rise in mobile based analytics, robotics, Internet of things and cloud based analytics. As more and more companies are adopting the digitization process, IT organizations are looking for solutions that can be easily customized according to the need of the customer, less expensive and adopting an automated outsourcing service.

The Challenges

  1. Traditional IT Offshore Outsourcing to give place to new digital age services: According to the rules of traditional IT Offshore outsourcing each service provider offers its own products quite different from the products of its competitors. So, it becomes very difficult to compare the products that are prevalent in the market with the one offered by the service providers. Moreover, traditional IT Offshore outsourcing organizations also envisage on keeping the cost low to earn extra profits. The IT Offshore Outsourcing pertaining to the digital age is often not cost effective as it provides automated services like real –time data and analysis and even connectivity to mobile customers. The way outsourcing contracts are drafted will also witness a change.
  2. Cyber Security: With digitalization, cyber security and protecting one’s confidential data will be a concern which will be faced by one and many. It can be both strength and a cause of concern for IT Offshore outsourcing service providers in today’s digital world. Without a proper tool for data protection and management violations of privacy laws are always on the high. This may lead to numerous hassles which any customer and service provider will like to avoid.

D2e believes – The way out

IT Offshore outsourcing organizations should have a proper strategy in place for the separate units in an organization. The finance department should work in proper synchronization with the legal, procurement and IT department to meet the requirements of the business. Companies do not simply outsource nowadays to leverage cost arbitrage alone. The quality of service and industrialization adds value to an offshore outsourcing deal.

Technological development also means that companies will eventually compete with each other and the target will be to reap the benefits of a better business model of doing business. Deployment of effective innovative technology to enhance customer’s experience is imperative for the success of a business. A set of proper IT staff who can manage the deals efficiently and effectively is the only way out. In such circumstances, the absence of skilled staff is actually a hindrance and organizations are lead with no option other than outsourcing the work.

If organizations involved in IT Offshore outsourcing can offload their basic IT related work to a service provider, than the key resources can focus on development of core strategic initiatives that will give them an added edge over their customers.
The strength of US companies lies in their ability to innovate and adapt new technologies in an open environment. This motivates businesses to be more productive and competitive. So, the present approach of imposing tax penalties will be an impediment to the basic environment that helps US to grow.