Will Cloud Computing make Outsourcing Outdated?


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Value-added outsourcing now has an important new role to play as cloud computing continues to increase the complexity of business services.

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Will Cloud Computing make Outsourcing Outdated?

  1. 1. Will Cloud Computing make Outsourcing Outdated? The last few decades have proved outsourcing to be an ideal option for many industries, allowing them to manage their non-core tasks in an efficient and affordable manner. Advanced technology and manpower expertise have allowed outsourcing companies to offer unparalleled proficiency in the services they handle. Today, everybody is talking about cloud computing – the new business model that has changed the way organizations operate and how the provide services. In fact, value-added outsourcing now has an important new role to play as cloud computing continues to increase the complexity of business services. The Cloud Platform Businesses of any size can have access to advanced technology with cloud computing. Thanks to cloud computing, businesses can use an IT resource on a cloud platform – they do not need to have the capital to own that resource. For instance, the services that IT major Accenture offers on its cloud platform are Big Data Analytics, Data Decommissioning, Infrastructure as a Service Provisioning and Management and Testing-as-a-Service (TaaS). IBM SmartCloud and Apple’s iCloud, are other examples of what cloud computing services can offer. So the cloud computing model offers easy, on-demand network access to a shared pool of configurable computing resources including networks, servers, storage, applications, and services that can be rapidly supplied and released with minimal management effort or minimal interaction with the service provider interaction. In
  2. 2. most cases, a company simply needs to provide a credit card number to these providers to access their cloud platform in a matter of minutes. There are different types of cloud computing services available to suit different needs. While some like social networking platforms cater to individual users who want to store photos, documents, and videos, others are meant for businesses that need extensive platforms to develop IT applications. Why Enterprises rely on Cloud Computing  With cloud computing the hardware and software requirements at user side decreased to a great volume. The only thing that is required to run cloud computing is an interface software, which can be something like a web browser.  A survey conducted by HfS Research and the London School of Economics Outsourcing Unit across 628 enterprises, confirms the value of cloud computing in various aspects of the enterprise. The major highlights of the survey report are:o o o o Cloud can cut down the over all cost of running business applications Quicker implementations of business applications Facilitating a virtual/distributed organization Enables to increase business focus on core activities  Cloud computing allows documents to be accessed from any device and from any parts of the world, for increased mobility. Furthermore, there will be increased productivity and fast exchange of information.  Adaptability to changing work environments is another advantage. Many of today’s professionals work on the road, requiring mobile connectivity. Many companies are now in to BYOD (bring your own device) revolution for better productivity.  Provides increased storage, so there is no need to worry about limited memory space  It is possible to implement cloud computing in matter of minutes. Setting a password and selecting devices to connect the network is only required, to start up the application.  The most striking advantage of cloud computing is cost effectiveness. As the software is made available online, there is no need to install it again. Free services as well as paid services are available. Those selecting paid services should make their payment on monthly or yearly basis. There are plans without any contract period that allow making payments, when the service is required.
  3. 3. Outsourcing and Cloud Computing However, cloud computing services involve challenges such as security, data integrity, service availability, and many more. Hence the role of traditional outsourcing is not just going to disappear overnight, though it will mean certain changes. The role of BPO companies will have to evolve into providing their clients with advice on the proper design of their business model and helping them take advantage of their interactions with cloud service providers. Today, businesses want to adopt the newer technologies and methods of doing things as they feel that not doing so would make them obsolete. Transformation to cloud computing will take a long time as in the even in technology marketplace, many companies have invested heavily in IT and outsourcing. Also, most IT and business process outsourcing providers are well aware of the implications of cloudbased services. Though cloud computing promises simplification of services, it sometimes makes things complicated as IT executives have to manage multiple external cloud providers as well as an internal IT environment. Experts say that the cloud will give rise to multiple classes of business process outsourcing services and providers such as utility providers, business function providers, and integrators and valueadded business designers.  Utility Providers - Suppliers of IT power or basic business process functionality with focus primarily on efficiency and cost  Business function providers - Niche providers with in-depth expertise in specific functions such as sales, HR and customer support  Integrators and value-added business designers – companies that help their clients transform into “cloud enterprises” The Future - A Cloud-based Outsourcing Environment Companies should plan for a future environment where they can mange their IT and business operations well. They need to carefully assess the risks involved with deploying new technologies. The role of outsourcing is changing. While a specialized BPO company may continue to cater to their unique market, larger companies would most likely reinvent their service models to look more ‘cloud-like’. In short, the success of outsourcing will depend on a skillful integration of the cloud services into their business models.