Written by Steven Brough on December 20th, 2008

Outsourcing Trends In IT

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Information Technology led the way in an outsource services trend in the late 1990’s. The industry showed that companies in developing nations were capable of producing quality products for less money. The outsourcing trend in IT began with simple maintenance projects and has led to projects so complex that they are broken down into modules and placed with different vendors. This trend of awarding modules has led to the development of common global platforms.

Today, companies whose core business is outside the IT world are emulating the success of the IT industry. The outsource services trends are being employed by companies as diverse as pharmaceutical companies to Human Resource companies.

Pharmaceutical companies are using offshore companies to do research on new drugs, clinical trials and manufacturing. This outsourcing trend is driven by using a company in a developing nation due to the lower labor cost of that country. Labor costs are the major factor in any outsourcing trend.

Engineering services including mechanical and electrical engineering analysis and design are being outsourced due to the available workforce of qualified engineers. The skill sets of the engineers in the developing countries are equal to if not greater than the skill sets of engineers in developed countries. There is also an outsourcing trend appearing in Plant Design and Process engineering. Once again, lower labor cost is the driving factor in this trend and these are the benefits you will notice when you learn how to outsource.

An outsourcing trend that has developed very recently is for companies to completely outsource the operation and maintenance of their IT networks. Companies recognize that they need to return to or maintain their core business. Outsourcing the IT network allows them to concentrate on the core business and simply have their IT network operated for them.

Near shore outsourcing is an outsourcing trend that companies have recognized as an asset to their organization. High value clients are no longer routed to a center that is 12 hours away, but is within one or two time zones of where they are. This business process outsource utilizes technology to route high value clients to a near shore location and lesser value clients to a location further away.

Human Resources outsourcing trends allow companies to gain outside expertise, improve service quality and once again concentrate on core business. Some companies will use several HR companies in their outsourcing. Others place all of their HR requirements with one company. There are advantages and disadvantages to both.

The outsourcing trend began with the successful IT outsourcing in the late 1990’s and has grown across disciplines to almost any industry today. The availability of quality products at a reduced cost allows companies to stay price competitive in a rapidly changing world.