IT industry analysts are busy forecasting the industry’s customer engagement. Some of these analysts are very confident that offshoring will be decreasing in a big way for US markets. Some analyst projections also indicate that insourcing will increase rapidly and outsourcing will go down across geographies. All of these predictions are based on robust mathematics of conceptual solutions that are powered by Cognitive Computing, Automation and Machine Learning, which are demonstrated in the market with strong orchestration capabilities.

Many of these digital technologies have been adopted by leading organizations from Retail, Healthcare, and Manufacturing industries, and are being followed by other business verticals. However, these technology implementations were done focusing more on the end resolution, and this was only adopted for a small part of the overall IT footprint.  Therefore the outcome was not as good as was predicted, and these customers were therefore slowed down in their approach. This also triggered the solution providers to rethink their approach. In spite of this slowdown, both the clients and providers believe that Cognitive Computing, Automation and Machine Learning are the way forward.

If we look back what went wrong? There are some issues at both sides. Organizations that adopted this new concept were focused on automated resolution and only implemented in pocket areas, resulting in minimal outcome.  While automated resolution was important, the fast and exact detection of any incident happening in the IT environment contributes more to efficiency and uptime of the environment. Detecting an issue involves different layers of the IT environment and takes more time, and average resolution time is always one third of the average time of detection. If we implement these kind of solutions just in pockets, they will always deliver minimal results as connecting the dots and enabling 360 degree visibility for these solutions are a must have. Vendors who are selling these tools have learned that without connecting to detection layer tools and service management tools, the results will be minimal. They are also focusing highly on supporting the ‘Transformation’ part of the business apart from adding more features for the ‘Run’ area of the business.

As we meet with clients and enterprises daily to discuss these topics, we hear their challenges and the typical ‘asks’ they are getting from their businesses. From what we are hearing we can definitely conclude that automation will change the game, but any business organization implementing this needs to take bigger steps covering a larger footprint and multiple layers – baby steps will not cover enough distance. Secondly, automation providers need to ensure their tools are well connected to other layers of the environment, preserving customer investment. Such tools will provide a better solution if it is part of a connected and combined platform.

And lastly let us go back to where we started … there is little logic to the thought of ‘insourcing’ or ‘going down on offshoring’, as the concepts we just talked about need a product vendor and one or more strong system integration services providers. Business organizations across all verticals have never exceled in any IT technology adoption in the past without some organization helping them to implement the new technology solution. There are very few exceptions to this such as GE, who traditionally invested in innovations. While this wave of change was led by the same services organization who largely supported customers in the areas of the US, EU, APAC and South Africa, the future engagements expected will continue to be similar in approach and the ‘cost’ along with the skill base will continue to be a major factor in this process.

It does appear that offshoring or outsourcing will continue to be utilized, however some decisions may be driven by the present social, economic and political scenario of the respective territory. What may change in the service provider engagement is the shift from “traditional offshoring”/Outsourcing to becoming a business enabler that is a smarter IT operation executor.


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Posted by Ankit Ghosh

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