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Thriving in Outsourcing's New Frontier

I remember the happy days of the outsourcing market-when every organization was effortlessly growing like teenagers who needed new-sized shoes every 4 months. Unfortunately those days are a thing of the past, as the industry\'s growth rate has fallen below double digits. But why is this the case?

These days it is often said that \"Every business is a software business\"-and therein lies both the good news and the bad news, especially when it comes to outsourced product development. Technology is now embedded and ubiquitous in every industry and every business, and industry players now view it as a core platform for their success. This would normally be music to the ears of the technology consulting market, but things are different now. Businesses view technology as so important that they want to have the critical thinking and ownership of product development done internally rather than outsourcing it. Their IT departments have been elevated, and recruiting key technology talent has become core to their success.

So what can the technology consulting industry do to regain its status?

Looking at the outsourcing market, we see that it is clearly not a \'winner take all\" situation. The industry is not pulling every player in the same direction, which is amply evident from the divergent growth rates we see with big players as well as small yet promising players in the market. Customers are looking at value and at the expertise that each technology partner can bring. The strategies, deeds and actions of every player, irrespective of their size, determines their own future. This is especially true when you consider that digital technologies are core to the customer\'s business, meaning there is no differentiation that scale offers.

Expertise, depth of value, business benefit-these are what clients looks for in technology investments and from partners. Hence, I believe that we will have true multi-segment niche providers who are not just in business for scale, but for the \"expertise\" or the \"real client issues that they help solve.\" These players can flourish in the new era of outsourcing that is gripping us today.