The allure of business process outsourcing contracts is quickly fading because Smart IT initiatives are starting to pay greater dividends than have previously been available.
Research from Information Service Group shows that while the number of business process outsourcing deals signed in 2015 was an all-time record, their value and length have fallen by eight and 15 per cent respectively.
This tallies with our recent article which states that Digital Transformation will eclipse offshore outsourcing for saving the business money.
So if outsourcing is in decline, what is taking up the slack? There are many reasons stated to justify business process outsourcing, such as flexibility, scalability and access to talent. While these may be genuine drivers, there is one force which defines the value of outsourcing: money. If outsourcing didn’t save money, very few businesses would engage with it. Managing the relationships need to make outsourcing work and creating a cohesive service which reflects the corporate objective are notoriously difficult with outsourcing, and so the effort involved wouldn’t be justified without a significant bottom-line impact figure to strive for.
Smart IT addresses efficiency. Smart IT also delivers flexibility. And it does so without involving a third party and the complexity that this creates. It is able to achieve these aims because it moves beyond IT by considering strategic goals ahead of what is technically easy to achieve. Smart IT is the future of business technology because it isn’t based on a prescribed formula for delivering IT, it is inherently bespoke and takes into consideration the human element that is so often overlooked.
We’ll be offering more guidance on Smart IT in the coming months but as a starter, take a look at our guide to Business Relationship Management.