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The future of IT outsourcing in the aftermath of COVID-19


By Akash Bhat

In the recent past, outsourcing has drawn in a lot of business opportunities for regions like India, China, The Philippines, and Mexico to name a few. India is perhaps the biggest beneficiary of the outsourcing boom, and over the years, has established a niche for itself in IT and ITES outsourcing. In fact, according to reports, the global IT outsourcing market was valued at USD 333.7 billion in 2019, and it is expected to reach USD 397.6 billion by 2025, registering a CAGR of 4.5%, during the forecast period (2020 – 2025).

As the pandemic has accelerated the digital journey of organizations across the board – be it with how we work, educate, or consume. We are moving beyond a “new normal” – work and life in general looks very different from what it once was. Organizations in India are becoming more and more dependent on the success of creative applications and extensions that IT could provide.

Adapting to the Digital Role

As the digital transformation reshapes consumer behavior and interests, businesses around the world are grappling with an unprecedented volume of new disruptions and obstacles to growth. Added to this are the mounting globalization of markets, cybersecurity issues, and fierce competition, and it is easy to understand why organizations are increasingly looking to outsource some of their operations. The economic crisis sparked by COVID-19 in India could spur reforms that return the economy to a high-growth track and create jobs for 90 million workers by 2030. Letting go of this opportunity could risk a decade of economic sluggishness. A new report from the McKinsey Global Institute identifies a reform agenda that could be implemented in the next 12 to 18 months. It aims to raise productivity and incomes for workers, small and midsize firms, and large businesses, keeping India in the ranks of the world’s outperforming/emerging economies.

New forms of jobs, new skills, and new ways of working are already cropping up. For example, within retail, consumer services have had to adapt to not only providing in-person support but also to help customers shop more effectively online. This could include helping consumers with online purchases, explaining how it works, and even dealing with minor technical glitches along the way. Certainly, sales and customer service roles will be more incorporated going forward. This is where additional customer support will come into its own – by providing solutions to businesses, back-up to potentially overwhelmed customers and employees alike, and providing the necessary bridge across the skills gap. Let us explore the emerging trends that will take us all to the next level.

Transforming the partnership model

Like every strategic partnership, IT outsourcing requires a proper planning phase, which includes defining clear goals and setting up the most effective cooperation model. Today IT outsourcing companies need to provide highly adaptable and flexible partnership options to meet the needs of the businesses in a rapidly changing world. Still, these options are usually based on traditional engagement models: Dedicated team or Staffing, Time & Material and Fixed Price. Choosing the right option can boost effectiveness and help to establish a mutually beneficial partnership with your partner of choice. Whether you’re working with individuals or outsourcing on a larger scale to technology solutions providers, it is important to start with and maintain a partnership by making sure the technology solutions provider understands your business goals and can help you reach them.

Boosting cybersecurity

The growing number and sophistication of threats that organizations face daily put a bigger demand on cybersecurity. With roaming users accessing the network and data from everywhere, the challenges of protecting assets are even greater and require an increasing number of resources. To help solve some of these challenges, organizations are turning to managed security services providers (MSSPs) and other vendors for outsourcing a variety of security functions. The boom in online retail, whether that is for the small shop owner or the national retailer, means that we have moved adoption forward by 4-6 years. Consider that for a moment. What would have taken half a decade, has now taken place in three months. That means that our consumption needs to be made more secure, our transfer of funds, data and end products need to be protected.

Education from the top down

Working with outsourced teams can ensure your business matches the changing environment, and it’s important to remember that the demand for digital skills will only increase. Existing and future roles will need to adapt; the world has no option but to become more digitally literate. More contactless, automated, and paperless solutions are already being developed and adopted. Education is an area that is growing for technology solutions providers. For employees right now, it’s about making the most of the tools we have and educate from the top down on how to maintain a secure environment whilst working remotely.

These top future trends of IT outsourcing promises a bright future not only for top-notch brands but also for startups and SMEs. The COIVD-19 outbreak is making it more difficult than ever for businesses to operate and manage IT in-house. Undoubtedly, this is a golden time for businesses to avail themselves of the benefits of IT outsourcing. The need for innovation has kept businesses as well as IT outsourcing companies on their toes for a decade. After reading the top future trends of the IT outsourcing industry, I am sure you would be imagining ways to explore the opportunities for your business.

(The author is Chief Executive Officer Allied Worldwide and the views expressed in this article are his own)


  1. It’s great insight into what future holds for outsourcing. cyber security as you’ve mentioned will play very high role as tapping into home networks would be much simpler than corporate networks and if not strengthen can take away the benefits of remote working in long run.

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