Trends impacting global delivery space and how it impacts India

Information Technology offshoring or outsourcing originally began in the 1980s, and gained steam in the 1990s as Indian IT service providers rose to global prominence. Outsourcing primarily involved onsite deployment of resources, with IT professionals moving to the location where delivery was needed, and later evolved into offshoring due to the significant cost difference between onsite and offshore resourcing.

Initially, offshoring was used for lower roles, while senior functions such as problem identification and decision making continued onsite. This work model eventually transformed into the global delivery network model of work moving to the locations where the right people are available rather than people moving to the location where work needs to be done, as software companies strove towards driving higher value while simultaneously reducing costs.

The IT services space was further revolutionized in 2004, when the global delivery model was introduced. The model involves IT service providers sourcing skills from their global locations to deliver value seamlessly for client organizations.

Today, GDM not only provides a seamless workflow to the organizations, but also boosts efficiency, helping to drive down costs and speeding up implementation of strategic initiatives, thus enabling them to lead in the global arena. It provides them with the necessary services, talent, quality and scale, facilitating adjustment of capability to match demand. GDM, which is inclusive of onsite, onshore, nearshore and offshore options, has now attained maturity. It is no longer a term perceived to glamorize IT offshoring but has been adopted by many organizations globally to ensure seamless business continuity during the pandemic.

New-Age technologies, such as artificial intelligence (AI), blockchain and Big Data have further strengthened the need for GDM, as organizations want to tap the best skills and professionals, and such niche skills may not be available in one place. These technologies have also enabled teams to collaborate better in a remote environment, helping organizations to become more efficient, regardless of where the various team members are located.

Impact of the global delivery model on India

During the pandemic, Indian IT services providers reported greater offshoring, a trend that is likely to persist as companies become more flexible about remote work and because of the positive impact GDM has had on their margins. Cities, such as Bengaluru, have become popular ITES/BPO hubs, helping India become a go-to offshoring destination for global clients.

Within the industry, the use of terms such as onsite and offshore have been ceased. Each location is a delivery location, with the capabilities and resources to provide seamless services to customers. This one-team approach ensures that team members based out of remote locations, such as India, have access to the same growth opportunities as those situated closer to customer locations.

When pursued effectively, offshoring can be a great strategy for organizations to strengthen their position in the global market. A well-executed outsourcing engagement that involves resources spread over more time zones, 24×7 resource availability, and faster responses to changing customer requirements, can build a robust foundation for a lasting relationship.

The past two years have underscored how critical it is for companies to effectively manage IT services, in order to survive a crisis, and to transform and lead in the aftermath. Research suggests that even though companies will invest in developing in-house capabilities, they will also continue to depend on outsourcing service providers. In such a scenario, it is imperative for IT services companies to facilitate seamless and cost-effective delivery of business solutions for customers, by clearly articulating the vision and defining business needs and creating a roadmap for success.



Views expressed above are the author’s own.


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