What’s the Next Big Thing in Outsourcing?

When the outsourcing phenomenon fist started taking the world by storm, software maintenance and development services were mainly outsourced. From the onset of outsourcing, India has been the main offshore vendor providing an entire range on IT and ITES services. After the first phase of outsourcing software services has passed, the next phase took on a whole new turn when companies started offshoring all their back-office work, such as accounting services, payroll processing services, procurement services and claims processing services amongst others. The second phase of outsourcing has been rightly called business process outsourcing.

With the rise in outsourcing, there have always been debates and arguments about whether outsourcing business processes to India, China and other countries is a good idea or not. Though there are cost advantages, companies wonder whether outsourcing is a good option. One major reason being, that some jobs require knowledge about the local culture, domain expertise in a particular industry or even a good understanding of business practices. These concerns have made companies cautious about outsourcing. Some organizations have even burnt their fingers at outsourcing and then taken their jobs back to their own country.

Although there are concerns about outsourcing, the overall growth of outsourcing has not stopped. The NASSCOM has predicted that outsourcing will continue to grow in the years to come.  Recent researches on this subject have shown that the BPO industry will grow and that India will be one of the key providers of BPO services. India already holds a large share of the global BPO market. Researches have also shown that although the price of outsourcing will be increasing in the coming years, but this will not stop companies from outsourcing. The Indian BPO market has been predicted to grow by more than 30 percent. So what’s the next big thing in outsourcing?  The next big thing in outsourcing is India moving on from providing IT services into providing more of business functions.

So what is making organizations step into the threshold of outsourcing? Outsourcing experts have said that the cost advantages that India offers has been pulling global organizations into the cost-competitive web of outsourcing. However there are other offshore experts who do not seem to think on the same lines. Experts who have been against outsourcing have said that although there are cost advantages, there are other hidden costs, such as the cost of managing an offshore center. While the debate goes on about whether outsourcing is a good option or not, a good analysis of the overall cost of outsourcing can help organizations decide whether to jump into the outsourcing bandwagon.

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