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Improving the productivity and scalability of labor resources are two important factors why companies will Outsource IT services in future – wherever full automation by robots is no option. 

Lack of proper skilled IT resources and lack of economy of own infrastructure are among the major reasons why Outsourcing used to be a reliable way to save extra costs and time. But today saving costs is not the only motive behind IT outsourcing anymore. A different aspect which was gradually making the trends to change is Innovation. Building on external expertise can be one of the most successful steps that will drive an organization on the path of Innovation – especially for small or mid-sized players.

The latest trends in IT like AI, Automation, Machine Learning, Robotics etc are all the outcome of Innovations. This tendency to upgrade the running technologies is a non-stop phenomenon which one cannot ignore or bypass it. It has to be accepted.

 

Transition from Process Automation to Cognitive Automation

Automation is the most talked about subject these days in IT companies as well as in BPO providers. As employees at Associate and Senior Associate levels in IT Organizations fear that someday their jobs will be taken over by Robots they look at Automation as a monster, without looking at the benefits Automation brings in an organization. Automation is invented by humans and will replace all repetitive human tasks in every sector to ensure continuous delivery is maintained and give more time to employees to focus on Innovative concepts. Already many tasks in Customer service sector are being automated at present with the objective to improve productivity and reduce errors at same time. We are living in the world of innovation where everything is connected with each other. The more technology will improve the more Automation will evolve. In other words IT Automation will become more cognitive. Chatbots are important example for Customer Service Automation services. Deloitte explains how Cognitive Automation can benefit companies with the growing applications of Artificial Intelligence and combined with Machine Learning, RPA and Chatbots will be able to deliver better and resolve business cases efficiently, without error and in less time.

 

Role Automation can play in IT Outsourcing

As described in the earlier article “Value Analysis: Benefits of Global Sourcing of IT & Software Services in the Age of SaaS Tools” IT Outsourcing - also in SW development - can be clubbed with the aspects of Automation to drive major benefits in entire process from planning to implementation. Depending on the maturity of the present set-up at a customer level, major savings in cost and time can be achieved in the sourcing lifecycle.

Estimated limits of savings in Sourcing life cycle by pliXos

Pic 1: Estimated upper limits of savings in cost and time by proper Automation in the Sourcing Lifecycle of Software Development as estimated in 2010 by pliXos

 

As Automation makes more grip in the organizations it becomes more important to think what impact Automation can have on IT Outsourcing and the challenges it brings along with it.

Companies in the western countries like USA, Canada, and UK used to outsource IT functions to offshore countries to save costs that would not have been possible if they hired the skilled IT employees at on-site location at that time. This in turn allowed the companies to focus on their core business and they grew in leaps and bounce. We are here talking of that traditional IT Outsourcing model which has flourished from about a decade ago. But, technology is not static. It continuously evolves and even disrupts. Artificial Intelligence, Augmented Reality, Virtual Reality, Robotics, etc are few of them. Also, the factors on which IT Outsourcing was focused earlier has changed. Strategic Sourcing is more in demand than traditional IT Outsourcing. A graph by Horses for Sources depicts clearly what are the new focus areas in today’s Outsourcing model and why traditional models are not providing the promised benefits anymore.

Comparing modern IT Outsourcing Objective with Traditional model 450
Pic 2: Differences in Objectives between traditional model and Future IT outsourcing objectives source: Horses for sources

Software Development is the essential function for most businesses. This often involves SW service providers. Done right, those SW service providers should bring with them rich expertise in development, e.g. modern processes such as DevOps, modern technologies such as React or React native etc. But how does Automation play a role here in IT Outsourcing especially in Software Development?

DevOps is currently one of the most used and preferred environment for software development. Undoubtedly it gives the right mix of attributes which helps in continuous delivery in development and deployment. Building on the right set of tools, them being integrated makes a big difference and increases the productivity to a greater extent than using DevOps alone.

Likewise one can automate many tasks in IT Outsourcing today by use of Software-as-a-Service tools which automate parts of the sourcing strategy definition, provider selection or help in the governance of projects. The gap between the demand and supply of skilled IT professionals mainly Software developers in US alone is boiling. According to App Association more than 89% of Developers work outside the Silicon Valley. The rise of App Economy is a reason why location is no more a factor or hindrance in Outsourcing Software Development. Presently more than 2,00,000 job positions are still open for efficient software developers in US alone.

 

Bridging the Gap between Demand & Supply of skilled Software Teams by an online B2B Marketplace

We at pliXos have been making this possible through its Global B2B Marketplace which allows Customers to search for fitting Service Providers plus further services supporting provider selection. Numerous corporates and government organizations have already trusted this B2B Marketplace. The B2B Marketplace in simple terms:

Challenge: Software Development plays a key role in every Business but it is time consuming & expensive to hire the needed skilled resources
Challenges in Software Development 450

 

Solution: Using online tools such as pliXos B2B Marketplace can save time& costs plus ensure quality in partners
Benefits in Software Sourcing Governance using pliXos B2B Marketplace 450

Pic 3: Stages of Strategic Sourcing using pliXos B2B Marketplace as explained on YouTube

 

Conclusion

Automation is on the rise. Besides complex initiatives and the use of Artificial Intelligence etc. building on SaaS tools to automate subprocesses in Application Sourcing offer fast rewards concerning costs and quality. Building on the global pool of SW talents to obtain the best developers and be able to scale is already best practice. Also for this case, multiple steps can be automated by online tools.

 

Sources:

www2.deloitte.com
www.horsesforsources.com
www.arcgis.com

 


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