A large percentage of buyers have understood that the conventional outsourcing contracts neither deliver the expected savings nor are flexible to adjust to the highly unstable environment. On the flip side, cloud/as-a-service gives buyers the much needed freedom to tap into resources as and when they are required.

Brian J Manning, president & managing director, CSC India articulated, “The global market for cloud services is predicted to surge to $148.8B in 2014 from 68.3B in 2010.” Thus, there will be a  drastic amendment in the business model of any  organization.

Currently, we are in Generation Two of the cloud. This phenomena encompasses as many benefits as challenges. As the outsourcing world is drifting from utility low-cost business models to value-based model; cloud is a very attractive option on the platter. Cloud computing is considered as the next shift in IT architecture and has been tagged as the 'game changing force' in IT. However, given its disruptive nature it could also become a temporary inhibitor to outsourcing.

The Global Services Outlook 2012 Survey stated, “More than half of the respondents cited ‘Need to rethink issues in light of adopting cloud-based models’ as the top inhibitor. Amidst the hype about cloud and its implications on how IT and IT services get delivered, there is increasing uncertainty on how to adopt these models. 

Organizations do not want to make the wrong investments. They would rather wait for the dust to settle down so that both IT strategy and sourcing strategy work in sync in the longer term.”

The three top-ranking and therefore definite trends as per the  Global Services Outlook 2012 Survey  are:
1.Pricing pressure and price negotiations will be common throughout 2012.
2. Companies will adopt vendor management tools, benchmarking and performance management
tools to manage their outsourcing relationships.
3. Cloud-based infrastructure services will move mainstream.

Outlook 2012

2012 is expected to be the year in which cloud sourcing supplants traditional outsourcing. Keith Higgins, chief marketing officer Symphony Services, explained, “There is no question that cloud computing has transformed the way companies do business. Organizations are now sourcing complete business solutions through the public cloud using a combination of cloud applications, platforms  and infrastructure. We expect that outsourcing companies will become more specialized in 2012 and will include some cloud based tools in their offerings.”

Sitel is seeing a significant cost-savings opportunity for global call center BPO providers to achieve optimal operational efficiency by transitioning from on-premise legacy systems to cloud-based call center offerings that scale as a direct operating expense. This will also open the door for companies to replace large, captive operations with faster and cheaper outsourced operations, particularly in areas where customer experience can be enhanced by specialists.

2012 will witness a large percentage of call centers moving towards cloud. Vijay Narsapur, strategic business practice head, customer service, Infosys BPO, revealed in another interaction on automation.“Lot of contact centers will be moving to the cloud-both hardware and software. CRM software is already going to the cloud” he said.

The current landscape of the outsourcing industry will shift in 2012.  In the last five years, cloud-based technologies impacted the business community significantly. However, in the last two years cloud providers increased ten-fold.

Fred Côté, president, Kunnect predicts, “75 percent of companies will choose cloud subscriptions lasting more than one year. The adoption rate for cloud-based services is increasing dramatically. Consumer-based familiarization with the iPhone 4s’ iCloud will further support the cause for cloud-based solutions. Organizations are also witnessing ROI in the cloud, as evident in a CSC study showing that 82 percent of businesses adopting cloud services save money.”