Outsourcing Focus To Shift To On-demand Computing

Bangalore: | Updated: Nov 4 2003, 05:30am hrs
While the outsourced IT services industry could look at a fairly strong continuation in the traditional outsourcing model, the long-term trend would see the model moving to a more on-demand computing structure, according to IDC US infrastructure management research programme manager David Trapper.

Speaking at the IT.Com 2003 Global Outsourcing Summit, Mr Trapper said the on-demand model would see outsources paying less for consultants, streamlining their outsourcing model, getting better QoS at lower costs and paying as per their requirement. On the part of the service provider, such a model would add the much required flexibility to their service offerings.

As for the current model for outsourcing, the focus should be on vertically integrated service offering, operating costs, pricing model and building global capability and scaling capacity, he added.

Interestingly, the Indian IT service players are already building in such flexibility concepts into their business model. According to those present at the seminar, Indian companies were now looking at offering an on-demand service option at least in a small way especially in segments like infrastructure management which was assisting them to map and stay with their clients for a longer term.

The IDC forecasts on the outsourcing market are looking upwards as well. According to the estimates, about 20 per cent of large global players are expected to outsource their IT services. BPO itself is expected to grow 10 per cent from a $250 billion market to $350 billion by 2006. Between 30-50 per cent of all application programming is expected to move offshore while close to 30 per cent of large companies worldwide will outsource payroll administration and 12 per cent will outsource their system integration.