Last year, the Outsourcing industry saw sea changes. Several trend shifts were noticed by experts, who feel that 2016 will continue to reflect many changes in outsourcing trends. Most of the new trends in outsourcing are a direct result of changes in the way business operates across the globe. The businesses are looking forward to leverage on new technologies in the market. Methodologies are introduced which saves time and money for the companies.

Though the ever-changing market and business scenario in the world will see a lot of trends come into existence, 2016, according to experts, will witness the emergence or rather dominance of the following 6 trends:

Offshore Captives:

In 2014, captive centers (the in-house IT and business process delivery arms) accounted for one quarter of the $150 billion global services market, according to outsourcing consultancy and research firm Everest Group. Much has been talked about the demise of this trend in the coming years. However, the model has been alive and kicking. Moreover, it is expected that it will continue to grow in the coming years too. When we see the sales of a captive center, it is generally due to an organizational change or choice and not an outcome due to the underperformance or failure of the model.

According to Everest Group, the new set-ups will outpace divestitures in coming years. The companies will continue to reduce costs by lowering down the provider’s margin. Flexibility will also be augmented as the contractual constraints will be reduced. Most companies have lots of experience in working with outsourced teams. This experience will be leveraged.

Mainstreaming the VMO (Vendor Management Office):

Most of the companies will focus on setting up of VMOs in 2016. Most of the service delivery models in existence have multiple vendors and there are many challenges that arise due to the same on a day-to-day basis. A VMO will give the company ease in managing everyday operational details while providing a high-level enterprise-wide view of the organization. Setting up of a VMO is more like establishing control points in the multi-vendor service delivery chain.

Bimodal IT:

A bimodal approach will be introduced by the companies as they recognize the need to revamp their business models. This approach helps in implementing contractual and commercial mechanisms which will describe the roles of various parties involved precisely. The roles and the tasks of various parties are broken down and are crystal clear. This will help optimize the contribution of each party.

Automation: The “In-thing”:

RPA (Robotic Process Automation), will see a rise in 2016. Most of the companies have already experimented with outsourcing and many of them gained from the same. After outsourcing the work to people for lost costs, the other option to reduce costs further is to automate the processes. Many companies will reconsider their deals and will start integrating RPA into the service delivery chain. Customers will use sourcing strategies in alignment with this trend and will also try to develop their RPA capabilities. The service providers will embrace innovation and will introduce automation into their solutions. Both the parties will have to evolve in this front and redefine the roles and the skills required.

Emergence of Agile Sourcing:

The year will see the emergence of agile sourcing. This will be aimed to speed up the services delivery. To gain a competitive edge in the ever-changing technological scenario in the world, the companies will switch to digital strategy. This gear-shift will be executed soon so that the companies will not lose out in the fast paced race. This will give them an edge to achieve faster time-to-market to gain a competitive edge. Customers will deploy their negotiation teams who will work on an agile basis to close deals sooner.

Increase in the Services Provided:

The service providers will start extending their expertise and will start delivering a vast array of services in the field of IT, BPO etc.

Many trends in business come and go. But the core focus of the business remains intact. Most established global captive centers in the market will focus on making the process more effective and efficient. The scope of the services offered are being expanded and the captives are moving in to deliver more complex work as they have already gained the confidence of the customer in delivering difficult tasks. A few giants in the market are also looking at delivering revenue impact to the enterprise.