The Consultants

Since my 2008 predictions were so utterly wrong, I decided to take a pass on the opportunity to embarrass myself again for 2009.  Instead, I’ll let other’s embarrass themselves.

The IAOP has five predictions:

• Outsourcing will stay closer to home (they suggest that China will be challenged by “closer-to-home” locations)
  
• Global uncertainties will create outsourcing volatility
  
• Professional expertise will be valued
  
• Strategic companies will prosper
  
• Social responsibility and green will be outsourcing themes
  

• Organizations will shift strategy, taking a longer-term view of sourcing options instead of a one-time decision on which functions to outsource or move to a client-owned offshore center.
  
• Security concerns will grow. The range of offshore locations to consider for outsourcing will expand due to security concerns in India.
  
• Currency changes will be positive for the buyer. The cost of outsourcing will continue to be attractive and become slightly cheaper due to currency and GDP shifts in low-cost locations.
  
• Inflation of outsourcing costs in India will effectively stop. Employee wages in India will stabilize and remain steady, keeping the cost of delivering services from rising.
  
• Work will be streamlined. Systems designed to structure work and reduce facilities’ costs by utilizing remote workers will improve and evolve further, allowing low-cost U.S. locations to be tapped for work that needs to stay inside the U.S.
  
• The complexity of the outsourcing decision will grow, driven by the twin concerns of economics and security.
  
• Time will become a new factor in sourcing decisions. Budget concerns will drive a need for faster sourcing processes, using streamlined steps confirmed by quantitative pricing data. In some cases, this may be a sole-source process.
  
• Systems and process standardization will continue to commoditize work and allow many more vendors to be considered for niche outsourcing needs. The process of managing a larger group of vendors will be key.
  
• Provider selection is changing. It will take greater effort to cut the field to four finalists who receive the request for proposal (RFP).
  
• Mergers and acquisitions will continue. EDS was the big name in play last year. Who will it be this year?
  
• Human resources outsourcing will struggle as vendors sort through the complexity of client needs and their own requirement to standardize.
  
• The offshore mix in infrastructure will grow as vendors improve their capability to remotely manage centralized computer centers.
  
• Chief Information Officers will search for the right mix of value, cost and service quality. This will drive reevaluation of the mix of what is outsourced.