2011 Outsourcing Industry Predictions

As companies continue to rebuild and re-invest following the global economic recession, the overall outlook for the outsourcing industry is strong. Fuelled by technological expertise, regional advantages and business alignment capabilities, I believe that outsourcing will move from a more fragmented function towards a more integrated approach which will help companies to achieve their business goals in the year ahead.

High Demand for Global Delivery Capabilities

In 2011, the market will see an increased push for more comprehensive global IT strategies. In the year ahead, enterprises will look for outsourcing vendors with strong global delivery capabilities in an effort to optimise cost structure, increase scalability, tap into the global labour pool, and foster innovation.

Mobile Software Surpasses Other Traditional Application Development Platforms

With the rise of mobile device usage in the enterprise environment, companies are more than ever focused on software application development for devices such as the iPhone, Android and tablet PCs such as the iPad. As such, mobile software will surpass application development on all other traditional computing platforms in 2011. Furthering this trend will be companies that demand access to services and wireless internet connections in cars and airplanes and will push for the development of new solutions to meet this growing demand.

Larger Corporations Turn to Agile

In the past, Agile was seen as an effective development methodology for small to mid-sized organisations. Today, that trend has transitioned to larger enterprises that are looking to effectively manage processes and respond to change, as well as to have full visibility into possible outcomes for stellar software delivery. The same flexibility that Agile software development has provided to smaller enterprises will now allow large corporations to continually transform and thrive in a dynamic environment.

Transformational Outsourcing Becomes Mainstream

Today, more and more executives are recognising that outsourcing can deliver significant gains by way of efficiency, productivity, quality and cost-savings. In 2011, companies will look for an outsourcer with the capacity to take over the entire product or application development process, and in some cases, manage the entire business function. This will allow the client company to focus internal efforts on advancing the business, while the outsourcer focuses on cost structure, optimisation and other factors that contribute to business growth for that particular segment.

Cloud Computing Spans the Enterprise

Whether used in a storage capacity or to greatly decrease carbon footprints, the public cloud will experience growth, specifically in the area of Internet services in 2011. In addition, large corporations will embrace the benefits of the private cloud, as previous doubts will give way to clear cost-savings and infrastructure optimisation benefits. As a result, the outsourcing market will witness a steep increase in demand for the rework of existing applications and the innovation needed to develop new corporate solutions.

Industries to Drive Outsourcing in 2011

In response to growing pressures and regulations imposed on the banking community over the past several years, the outsourcing industry will see a drastic rise in participation from financial services companies. More specifically, U.S. and European-based business units operating in investment banking, commodity and equity trading, fixed income and risk management will find the value and quality that outsourcing provides to be an enticing business endeavor. Additionally, the automotive sector will experience a significant up-tick in outsourcing engagements in response to the increased demand for embedded development projects for infotainment and other in-vehicle options. Other industries, such as e-commerce, media and telecom, will turn to outsourcing as improved technologies will allow for new services and revenue models.

The outsourcing industry is in the midst of an exciting evolution as more and more large enterprises recognize the broad value that outsourcing providers can deliver for a company’s bottom line. While many are still cautious following the global economic recession, many other enterprises are looking for a cost-efficient way to accelerate key business activities in 2011.

As such, software development partners that can meet the growing demand for expertise in such progressive areas as mobile application development and cloud computing, while adhering to strategies that will yield the highest ROI for clients, will be at a significant advantage.

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Dmitry Loschinin has led Luxoft from its inception in April 2000. Dmitry started his professional career as a software engineer in the late 1980s. In a short period of time he achieved management roles within leading multinationals such as KED GmbH, MCP GmbH and IBM. In 1998 Dmitry joined the IBS Group where he successfully established SAP R/3 implementation practice before taking charge of the IBS initiative to offer offshore software services. This initiative eventually became Luxoft. A recognised expert on the issues of global outsourcing, Dmitry is a Certified Outsourcing Professional (COP) and is a member of the Outsourcing Hall of Fame, one of the most prestigious industry recognitions, presented by the International Association of Outsourcing Professionals (IAOP). Dmitry holds a Master of Science degree from the Moscow State University and completed an executive education program at Wharton School, University of Pennsylvania, US.