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How IT Outsourcing has Changed Over the Years?

Last updated: 27 Feb, 2023 By | 6 Minutes Read

It was not so long ago that the moot question was whether it would be beneficial to avail of IT outsourcing services or not. Not anymore. There is not an iota of doubt that IT outsourcing is here to stay and has taken on indispensable proportions for businesses around the world. The turnaround is because IT is critical to enhance efficiency and performance of any organization, much more than what it was about a decade or so ago.

Drawing comparisons between then and now about IT fuelled services is no longer considered a risky proposition. In fact it is quite the contrary. It is rightly perceived to lend a competitive touch for any industry and business sector as well as add to competence levels on all parameters.

It helps all-round development and growth and hence nearly all departments of commercial establishments are actively involved today in promoting and recommending larger and larger participation in the IT outsourcing scenario.

From Chief Executives, Chief Financial Officers, purchase departments, supplier chains and even IT end-users wield their sway and insist on going for IT outsourcing services. This has also led to a reduction in the in-house IT departments of companies the world over.

Given this scenario how has the IT outsourcing evolved over time –

    • Shift to smaller deals and increased specialization – The exponential growth of the outsourcing industry has seen greater emphasis on specialization by service providers. This has led to a deviation from the traditional bulk outsourcing of total IT business to spinning off reduced volumes to agencies experts in specific type of work.
      Hence instead of depending on one service provider, the trend is now on multi-sourcing contracts. This is also the reason for contracts of smaller durations than what it was before because IT sector is one where updates in technology and greater levels of innovations are a regular feature. Going for short term deals ensure that the benefits reach the companies that outsource as fresh contracts will only be given to those who keep up with the times.


    • Advent of new technological trends – With every quantum leap of technological innovations and with IT outsourcing services keeping pace with the changes, it pays for businesses to derive benefits from this field with greater levels of outsourcing of IT services.
      The emergence of Cloud, Mobility and Big Data has sharpened and brought a cutting edge effect to business strategies. Industries are now opting for increased outsourcing to take advantage of these systems without having to invest heavily to implement in-house this high tech triad.


  • Startups contributing to growth of IT outsourcing – Startups today contribute heavily to the growth of such sectors as IT, Healthcare, Financial services and Insurance by offering specific solutions in different fields of specialization.
    They are now very reliant on technology outsourcing services for quick development and to become a profit generating entity in no time. It reduces the need for capital investment in infrastructure thereby increasing their ROI in other crucial parameters.

Also Read: Does it Make Sense for the Startups to Opt for IT Outsourcing?

IT outsourcing has therefore evolved over time from a dormant role in trade and commerce to one of the most valued parameters in business operations.

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