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10 outsourcing trends to watch in 2016

Stephanie Overby | Jan. 4, 2016
Experts expect a number of shifts in the IT outsourcing industry in 2016. Some of these shifts include a focus on hyper-speed deal making, new multi-sourcing headaches, more man-machine collaboration and more.

8. Vendors get soft(er)

“After 20 years, vendors who have been accustomed to bending customers to their one-sided terms by offering low prices will come to realize that further market penetration—particularly penetration into core functions or large companies--will require a more accommodative approach to meeting the needs of those companies,” says Peterson.

9. Automation will redefine relationships

“Having exhausted the opportunities to move work to lower-cost people, ITO and BPO companies are now focused on moving it to machines,” says Roy. “Buyers with contracts designed to purchase people will need to reconcile their contracts to this new world.” Both customers and providers will have to rethink their deals as they integrate more robotic process automation (RPA) into IT service delivery.

“Clients will rethink their sourcing strategies and how to build their RPA capabilities and providers will continue to build automation into their solutions,” says Craig Nelson, managing director with Alsbridge. “Both parties will have to redefine roles and skills requirements for human jobs, as well as manage the touch points between automation functions and jobs performed by humans. This will present a significant challenge for outsourcing relationships as agreements will need to be flexible to accommodate these highly dynamic environments.”

10. Agile sourcing emerges

With technology itself seeming to advance on a dime, outsourcing decision making will have to speed up. “Companies who decide on a digital strategy will execute quickly in 2016 to avoid seeing a technology shift or a competitor jumping ahead,” predicts Peterson of Mayer Brown. “We see increasing numbers of clients deploying substantial negotiating teams working on an agile basis to close smart deals fast.”

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