Outsourcing 3.0

Outsourcing 3.0 will lead the way for organizations to build and manage technology efficiently.  Traditional outsourcing (Outsourcing 1.0) was initially very successful as outsourcers learned to deliver IT solutions with the appropriate Service Level Agreements (SLAs) using attractive pricing models.  Outsourcing 1.0 was all about negotiating intricate, multi-party agreements which were very time consuming. Following the ignominious collapse of several major outsourcing deals, IT services providers and customers alike have had to revise their approach to the entire outsourcing business.

As organizations desired more niche and project oriented outsourcing, Outsourcing 2.0 came about as a natural step (analogous to Web 2.0).  Outsourcing 2.0 is not about SLAs or multi-party agreements, but collaborative rich mutually benefiting business arrangements, one that often requires taking the initiative (at higher degree), delivering very successful but non-repeatable results.  Smaller engagements were often outsourced through marketplaces such as eLance and Guru.  More sophisticated engagements required skillful brokers who engineered these engagements. The key drawback of Outsourcing 2.0 was the lack of repeatability and metrics.  An evidence of this drawback is the reluctance of Small to Mid-Sized Businesses (SMBs) to outsource their IT functions. 

Outsourcing 3.0 (analogous to Web 3.0) relies on semantic searches to identify niche outsourcers who best fit the objectives of organizations desiring to outsource projects.  It retains the metrics and structured processes of Outsourcing 1.0 combined with the identification of specific outsourcers who can collaborate and provide true value to the outsourcing organization.  The three ingredients required for Outsourcing 3.0 to succeed are: 1) a semantic search engine to link project needs to the appropriate outsourcer; 2) a highly collaborative workflow to ensure that the engagement process provides best value to the parties involved; and; 3) a knowledgeable network of brokers who understand information technology and outsourcing.

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5 Responses to Outsourcing 3.0

  1. Outsourcing is the way forward.
    Health Care outsourcing however has some way to go.

  2. Claire Moore says:

    I have read many articles on outsourcing and their development over a period of time, but the way Dr Subbu has classified them is really appreciable.

    I feel the with Outsourcing 3.0(as he quotes it)change is not only in terms of business but the attitude. The concept of partnering with the small businesses for mutual benefits has affected the way small businesses are functioning. Outsourcing slowed down due to recession in business all around but the truth is that it will still play a major part in future.

  3. Lataifeh says:

    Hi Claire

    Thank you for this piece of information; have a question though, As a service provider yourself for the SMB How do you see this fit with their perspective to IT solutions and how would it encourage more involvement?

    Cheers ..Salam

    Mohammed Lataifeh

  4. […] more refer to the blogs on USourceIT website (the world’s premier outsourcing […]

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