Outsourcing Trends 2007: What's New and What's Not?

The slight decrease in the IT dynamics at the beginningbehind, while overwhelming reduction of the
of 2000s being over, the new drivers has fueledcontract’s scope becoming a nowadays reality.
further development of the IT branch throughout 2006"Gartner’s Key Predictions for 2007" include the
– 2007.forecast that through 2009, market share for the top
One of the tendencies of the global impact has to deal10 IT outsourcers will decline to 40.0 percent (from 43.5
with growing business value of the Internet as well aspercent now), equalling a revenue shift of $5.4 billion.
associated boom in e-commerce. The IT-richThe above mentioned trend consequently leads to the
enterprises have won substantial market advantagegrowing number of SMEs on the IT arena and
over the competitors that have not placed IT as thetherefore the increase of the impact on the
key element of their business strategy. According tooutsourcing landscape.
Gartner, the investments in the new informationPrecise attention should also be devoted to the Top
technologies would double within 2006 – 2010Trends 2007, outlined by CIO Insight: particularly,
period.Management section of the forecast features
The burning IT issues of the two previous years havepredictions that outsourcing will change IT management
included digital convergence, mobility andand that offshoring will shift from India. Concerning the
Service-oriented architecture. Other point of focallater tendency, notwithstanding pure neashoring, it is
interest turns out to be the alignment of IT andworth to note that Indian outsourcing providers are
business processes within the enterprise in general andincreasingly seeking possibilities for mergers with
in sourcing models in particular.Eastern European software developers. Inevitably,
The analysts from Experton Group have come upoutsourcing "moves closer to home", with Indian and
with the statement that in the next few yearsChinese outsourcing proposals becoming less
outsourcing "would be the driving force behind ITappealing to European vendors.
market dynamics". Despite the global slow down inOver the years, data privacy as well as data security
outsourcing dynamics – for the most part inhas become fundamental prerequisites for successful
America, the number and quality of outsourcingoutsourcing cooperation. Therefore, intellectual property
contracts concluded in Europe has risen during the firstissues together with effective practices on risk
quarter of 2007 (Morrison & Foerster's Global Sourcingmitigation will stay top of the agenda for the years to
Group). The year 2007, alike the previous one, hascome. Also, outsourcing service providers are
demonstrated the increase in the IT staff, despite theexpected to be capable of driving innovation and
forecasts for decrease due to the outsourcing of ITdelivering industry specific know how. Another trend of
activities. Hence, it proves out that outsourcinginterest, highlighted by Morrison & Foerster’s Global
strengthens the market position of outsourcing buyers,Sourcing Group, introduces transformational application
expanding their technological scope and consequentlyoutsourcing, which foresees restructuring of the code
creates new workplaces.in a more modern architecture, therefore making it
During the past few years we have seen the shiftdeployable in SOA.
occurring in decisive factors for outsourcing: in additionTo sum up with, the coming years will see tighter
to traditional reduction of development costs,alignment between outsourcing providers and
outsourcing buyers become more and more interestedsoftware development vendors, resulting in more
in access to the pool of talents (due to the internaleffective business cooperation models. Also, increasing
shortages of highly-qualified IT graduates) andcompetition will fuel more innovative approach to
industry-specific know-how. Another visible trend ofoutsourcing, with process orientation becoming the
2007 is multisourcing, accompanied by growingcore of it.
process-orientation. The time of "mega-deals" is left