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Outsourcing is a business trend whereby a business is contracted to an independent organization from the prior. In return the contacted business is bought back as a service from the independent. This definition is also applied to offshoring, which is the transfer of part of a business to another country (Hira, 2008). Businesses that have adopted the trend of outsourcing need to keep in touch with the changing trends. There are several trends of outsourcing and offshoring. Contract deals are getting smaller. The past ten years saw the companies draw up contracts for long periods of time but this has significantly dropped. This is for the mega deals which have seen a decline in the past years.
For deals worth less than $100 million, they have been on a steady increase since 2009. There is a price change that the companies are undertaking not worrying that these price ranges areas are risks to their businesses. Due to the flooding of the outsourcing market, the companies have to come up with innovative and fresh thinking in order to ease the profits margin pressure on their companies. They have turned to formulating such actions as, joint ventures, having price bases on the business outcome, and have also adopted an income sharing policy that has seen confidence restored in their investors.
There has been a rise in the number of enterprises that offer multi-sourcing and this has seen the company that offer single specialized services being facedout. Businesses are opting to purchase these companies’ services as they can perform more than one service for them. However, this situation has seen the companies being overburdened by the demand for their services. The companies have struggled to keep afloat in the current environment as a result of the increase in demand. In as much as the idea for having multi-sourcing was a sound one, they have yet to come to terms with the right course of track to handle the inflow in the market. Despite the services they are receiving, many of the companies hire in house management team whom they will later train to perform the tasks they are outsourcing.
Any company that is worth their salt knows that security of the company data is a priority no matter how trivial the information may be. In recent times many companies have seen breaches in security of company data. When such a situation occurs, this information can be used by their competitors to bring them down by finding out the weak areas or even make duplicates of any new inventions and strategies that the company has.
Cloud sourcing has seen slow adoption despite the fact that it is a next generation model. It enables a company to pick an entire service form a single cloud without the involvement of management. Cloud sourcing will be a great boost for the outsourcing enterprises, but the slow reception to the model is an issue that will need to be tackled as this model is the latest trend in the information technology (IT) scene. Cloudsourcing is a process by which cloud service providers outsource services that may include repairs and upkeep to companies that require them. This is a trend that has been adopted by many businesses and it is definitely the future of IT.
The advantage of cloud sourcing is that with this model the company is able to acquire a complete structure using the cloud technology and this is without the need for managerial supervision. Cloud sourcing has an advantage since it is compatible with any platform and so it becomes cost effective to the company as no extra costs are incurred. Cloud-sourcing works in the same manner as outsourcing. The only difference is that the company looking for the service will arrange for a complete IT solution on to the service provider. It is a model that targets for a specific business need. Cloud sourcing offers a flexible solution as it can undertake a variety of tasks. It saves the costs for the company who sources for this service. It also allows for the multi operations of tasks that can be run simultaneously; it allows for a scalable nature in the company’s product and service platform. Cloud sourcing allows for its flexible nature to perform any task and provide for a comprehensive solution (Buyya, 2011).
Outsourcing security can bring about a controversy if not handled carefully. Due to the influx in outsourcing firms, it has become harder to keep them secure so as to protect the confidential data of the companies who have sought out their services. Many companies have taken to outsource the security of their company data since it may not be possible for the company to keep up with the growing data and the ability to keep it safe becomes a growing concern. The company may take on too much task and fail to adequately protect the company data from malware or hacks (Winkler, 2011).
This in effect allows for the company to concentrate on its objectives and the growth of the company as they seek out ways of improving their production and service delivery. It will also save the company a lot of money as they will not be tasked with the maintenance of a security infrastructure and hence outsourcing is cheaper in the long run. It also decreases operation costs to the company as they do not need to hire and train more staff who would deal with the running of the security concerns.
It is easier to outsource the task to a specialized service provider who already has a working staff and is well aware of the tasks that are involved. It also saves money for the company since they are saved from the purchase of equipment. Such an additional cost may lead to the stall of another project as funds are relocated. As the company sources for the third party they should take in consideration that it should cost them less if they had done it themselves but still give them the best service, outsourcing of an unsuitable service can be fatal to the company.
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