Predictions for 2009

Friday, November 21, 2008 by Michael Kiffmeyer

Many organizations that are a part of IT outsourcing and business transformation outsourcing (BTO) are slightly concerned about the economy in 2009.  However, IT outsourcing was important before Bear Stearns, Lehman Brothers, Freddie and Fannie, AIG, and the big three automotive manufacturers. These events have underscored the importance of outsourcing because companies believe that transformational outsourcing can help them to service the economic downturn.

According to the International Outsourcing Forum (IOF), "the global outsourcing and off shoring market is expected to grow from approximately $10bn today, to between $50bn and $60bn by 2009". This dramatic market growth will create an additional three million jobs worldwide by 2009. While one million jobs are likely to remain ‘near shore’, the remaining two million will be relocated based on the price performance of location."

I believe here in the United States that when it comes to technology and the value it can bring, organizations realize that it is a vital lifeline for their very existence.  More and more organizations are also coming to the realization that they do not have to do everything internally but can partner with the right trusted technology consultant to handle many of their IT needs.  The economic downturn events of the past couple of months have made organizations come to terms with their vulnerability and question what they will need to survive in the coming years.

IT Outsourcing will remain a viable business in the year 2009.  As companies seek to reduce payroll while increasing productivity there is going to be a need for IT talent.  Where will organizations look for this talent?  The answer is quite simply where ever they have to.  More organizations are going to increase their working relationships with those trusted partners that can help manage their risks and provide IT talent on demand.

I predict that IT outsourcing and technology consulting will have a “busy year” next year for three reasons:

1. The slowdown in the world economy
2. The Presidential election is over and some level of stability will occur
3. Organizations realize that technology can make a huge difference in productivity and profitability and will seek out trusted advisors to assist them in making a difference

Those are my thoughts, what say you?

Comments for Predictions for 2009

Tuesday, December 9, 2008 by Kae Parrott:
Since India is one of the preferred outsourcing locations, I wonder if the recent violent attacks in India will cause American companies to rethink their outsouring plans? As security will need to be increased, it can be expected to increase costs as well. In addition, are we willing to put our own employees in harm's way by sending them to India? Do you think this will have much impact?
Tuesday, December 9, 2008 by Michael Kiffmeyer:
I believe your question is right on the money. Organizations every where need to be concerned about costs. I agree with you not only does India have to increase security and past on the cost to the countries that use them for outsourcing European countries will have to do the same. If these countries are exposed to attacks on a continual basis I can not see American firms putting their people in harms way - regardless of the price offered. Perhaps the new insourcing/outsourcing modle will become more prevelant. Companies are already starting to understand that everything cannot be outsourced and some intelligence needs to stay in-house. I believe American developers are already starting to understand that times have changed and need skill-sets have changed as well. American IT sourcing companies are going to have to get more creative to meet the needs of those organizations that are requesting their services.

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