Of the many trends in outsourcing, the most dominant are those that are directly aligned to the strengthening and streamlining organizations' supply chains, pace and depth of innovation, and adding greater agility to their value chains. Inherent in the trends most impacting organizations are a myriad of career opportunities and potential for personal development. The intent of this analysis is to define those most dominant trends affecting outsourcing today and provide insights into three strategies for each trend which will allow students to fully capitalize on outsourcing in their careers. The pace and depth of innovation is quickening, and for many organizations their ability to sustain this level of activity and development is being challenged by the many distractions of running their less profitable operations. At the center of this challenge is the need to offload the least-valuable administrative work and activity so the most valuable strategies and tactics contributing to innovation and new product development can be undertaken (McIvor, et. al.). Outsourcing the most mundane, easily transferred activities including record keeping, accounting and payroll can lead to higher levels of profitability and long-term performance as products are developed more efficiently and completely (Jiang, Frazier, Prater, pp. 1281, 1282). This offloading of the more mundane and easily-taught tasks can free up both dollars and time to pursue the next major distribution for any company. Of all nations participating in outsourcing today, Indian outsourcers have a commanding lead in this area (Hansen, pp. 210 – 29). Their leadership in this area is attributable to the gains their leading outsourcing providers including HCL, Infosys, Tata and others have made in streamlining these operations of many of the world's largest and leading corporations. Their legacy of expertise in Sarbanes-Oxley Act (SOX) work from the last decade has also helped companies in the Indian outsourcing market to excel at accounting and financial outsourcing support. The implications for students of this first dominant outsourcing trend of companies offloading the more mundane tasks so they can concentrate on more strategic projects are many. The top three ways students can benefit from this trend in their careers is to first focus on project management skills, as many of these outsourcing partnerships require very tight time and resource management. Project management skills will also open up entirely new opportunities to manage the entire financial management systems of companies who choose to outsource this part of their company so they can focus dollars and time on new product development. A second approach students can take to capitalize on this trend is to minor in accounting and finance to understand the core functional areas so well that they can jump directly into engagements and excel in their role as an outsourcing project manager. A third approach students can take in terms of capitalizing on this trend of outsourcing mundane and routine work is to study Business Process Management (BPM) and Business Process Reengineering (BPR). Studying this area will give the students the ability to see problems their clients have from a more systemic, broader perspective instead of just focusing on the immediate tasks overall. This system-level thinking is a critical success factor for any student going into outsourcing management as a career; studying BPM and BPR techniques will have multiplicative effects throughout many other areas of their career.
Outsourcing
Trends in Outsourcing
Of the many trends in outsourcing, the most dominant are those that are directly aligned to the strengthening and streamlining organizations' supply chains, pace and depth of innovation, and adding greater agility to their value chains. Inherent in the trends most impacting organizations are a myriad of career opportunities and potential for personal development. The intent of this analysis is to define those most dominant trends affecting outsourcing today and provide insights into three strategies for each trend which will allow students to fully capitalize on outsourcing in their careers. Based on the thorough literature review completed for this paper, it is apparent that there is a definite maturity curve occurring in the outsourcing industry. Figure 1, Hype Cycle for Outsourcing, 2011 (Cardella, 2011). This hype cycle indicates the position of the three trends discussed in this paper.
Gartner Hype Cycle for Outsourcing, 2011
The pace and depth of innovation is quickening, and for many organizations their ability to sustain this level of activity and development is being challenged by the many distractions of running their less profitable operations. At the center of this challenge is the need to offload the least-valuable administrative work and activity so the most valuable strategies and tactics contributing to innovation and new product development can be undertaken (McIvor, et. al.). Outsourcing the most mundane, easily transferred activities including record keeping, accounting and payroll can lead to higher levels of profitability and long-term performance as products are developed more efficiently and completely (Jiang, Frazier, Prater, pp. 1281, 1282). This offloading of the more mundane and easily-taught tasks can free up both dollars and time to pursue the next major distribution for any company. Of all nations participating in outsourcing today, Indian outsourcers have a commanding lead in this area (Hansen, pp. 210 -- 29). Their leadership in this area is attributable to the gains their leading outsourcing providers including HCL, Infosys, Tata and others have made in streamlining these operations of many of the world's largest and leading corporations. Their legacy of expertise in Sarbanes-Oxley Act (SOX) work from the last decade has also helped companies in the Indian outsourcing market to excel at accounting and financial outsourcing support.
The implications for students of this first dominant outsourcing trend of companies offloading the more mundane tasks so they can concentrate on more strategic projects are many. The top three ways students can benefit from this trend in their careers is to first focus on project management skills, as many of these outsourcing partnerships require very tight time and resource management. Project management skills will also open up entirely new opportunities to manage the entire financial management systems of companies who choose to outsource this part of their company so they can focus dollars and time on new product development. A second approach students can take to capitalize on this trend is to minor in accounting and finance to understand the core functional areas so well that they can jump directly into engagements and excel in their role as an outsourcing project manager. A third approach students can take in terms of capitalizing on this trend of outsourcing mundane and routine work is to study Business Process Management (BPM) and Business Process Reengineering (BPR). Studying this area will give the students the ability to see problems their clients have from a more systemic, broader perspective instead of just focusing on the immediate tasks overall. This system-level thinking is a critical success factor for any student going into outsourcing management as a career; studying BPM and BPR techniques will have multiplicative effects throughout many other areas of their career.
A second major trend that is occurring in outsourcing today is the selection fo outsourcing partners to gain the needed expertise in information systems development and information technologies (it). This has been one of the most potent accelerators of Indian and Chinese outsourcing company's growth as the universities in these nations are now building programs specifically for managing outsourced projects. The outsourcing of it projects to gain greater expertise is how HCL, Infosys and others have been able to continually grow their practices over time (Hsu, Wu, et.al.). This outsourcing trend also capitalizes on the need for companies to keep pace with their markets and competitors. The focus of this area has shifted to Web application development including the development of complex, highly integrated enterprise system platforms beyond the scope of client it departments. This shift has actually accelerated the financial performance of Indian outsourcers to such a great extend that their goals are now to catch IBM in revenues and eventually surpass them in terms of consulting revenue. The outsourcing of complex it projects however must be exceptionally well managed and orchestrated to ensure the goals of the client are still achieved as the development takes place (Hsu, Wu, et.al.). Due to the high value of programming and development talent in Indian and Chinese outsourcers, this area is the fastest growing of their core businesses. In this area, there are many opportunities for students to advance their careers.
The three most important strategies students can take to capitalize on this trend is to first concentrate on their information technologies (it) and system knowedlge to the enterprise software level (Hsu, Wu, et.al.). This is critically important as the student, progressing into the role of system architect, will need to guide the intricacies of the integration project and guide overall development. A second critical skill is the ability to create an effective series of strategies for managing risk of the system integration and if necessary, the system replacement strategies across client and development platforms. This is a critical skill learned through experience, yet can also be part of any it training and development. The third approach students can take to capitalize on this trend is to concentrate on learning how best to manage Service Level Agreements (SLA) and the contracts necessary for managing system integration projects. This skill set is invaluable as a career progresses through outsourcing from an it standpoint.
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