Outsourcing in 2014: SoftServe`s Perspective

As this year draws to a close, Halyna Semenova, SoftServe`s Engagement Director, shares important insights into IT outsourcing changes likely to reshape the business landscape in 2014, including technology trends and their impact, blending offshore and onshore, compliance and security and focus on more efficient delivery at a comparable price.

As 2013 draws to a close, let’s have a look at what the next future may bring to the IT outsourcing industry. The key trends we`ve witnessed this year in SoftServe`s engagements offer interesting insights into potential changes likely to take place in 2014.

Technology Trends and Their Impact

Software Development Outsourcing (SDO) will undoubtedly continue to be driven by the latest technology trends. According to Gartner`s recent report, key influencer trends for 2014 will include the Internet of Everything; Hybrid Cloud and IT as Service Broker; Mobile Device Diversity, etc. At SoftServe, we expect that these technology trends will completely reshape the business landscape as we know it.

As a result of their influence, organizations will have to look for individuals who understand business drivers and constraints in addition to superior cross-technology expertise. As Forrester rightly noted, today’s leading IT organizations are moving from aligned IT to empowered business technology practices. A diverse technology profile, combined with a deep vertical knowledge, will create a perfect ground for outsourcing providers to develop true partnerships with companies to make a measurable business impact.

Blending Offshore and On-Shore Teams

Complexity and strategic importance of the projects that involve IT outsourcing are pushing organizations to demand a greater percentage of onshore support. This will naturally lead to blending offshore and on-shore teams and increase the importance of proven tools, practices and frameworks, like our own Abiliton to ensure both transparent and effective communication.

Compliance and Security

Compliance and security will continue to be important drivers requiring outsourcing providers to be aware of certain industry regulations as well as demonstrate a company-wide adoption and compliance.

Outsourcing for Quality Delivery at a Comparable Price

Changes described above will continue to shift the benefits of outsourcing from cost savings and scalability to increasing innovation, security, time to market and hard to find skills. Outsourcing will no longer be about low cost and quality compromises but rather the opposite: more efficient delivery that comes at a comparable price. As a result, in 2014 outsourcing providers will continue to re-evaluate traditional pricing to suggest more flexible, collaborative, risk sharing and pay for performance engagement models. We are finally realizing the expected promise of more partner-oriented rather than vendor-based relationships.

Investing into Project Planning and Preparation on the Rise

In 2013, SoftServe`s customers demonstrated an important outsourcing trend of investing into a thorough project planning and preparation stage, balanced with Agile development approaches.

Business stakeholders are starting to realize the full potential of an up-front investment that in the long term results in both higher quality and decreased expenditures. Conducted in partnership with a future vendor or an independent third party, such an up-front analysis and preparation helps align expectations, define success criteria and unveil issues related to adopting new technology, processes, and changes they bring to an organization.

A recent failure of Healthcare.gov site has shown that not all organizations have reached this level of maturity, but we expect this vivid example will push more and more companies into recognizing the value of meticulous planning followed by agile implementation.

We believe, these key trends will become even stronger in 2014 and will largely determine the way outsourcing industry develops within the next year or two.