From the dawn of traditional outsourcing to the age of cloud computing, the application of technology has enabled firms to save huge amounts of capital since the turn of the century. This trend is unlikely to change, and according to a survey conducted by Vanson Bourne, a significant 93% of businesses believe that cloud computing will continue to drive their venture forward in 2012.
With this in mind, is there still a place for traditional outsourcing organizations in the contemporary business world? Given the continued advancement of cloud computing as a business tool, and the evolving nature of its applicable software, it is difficult to imagine many companies returning to old school IT outsourcing providers at any point in the ear or distant future.
The Cloud vs. Traditional Outsourcing: Why is it Such a One Sided Battle?
The reasons for the dominance of cloud computing over traditional outsourcing methods are similar to those which allowed the latter to become prominent in the first instance, and centre around the growing need of businesses to drive their operational costs down. Just as traditional outsourcing afforded businesses the chance to outsource a growing number of tasks and employ a more flexible, cost effective and project based work force, crowd technology has evolved this principle while making companies even more pronounced financial savings.
More specifically, cloud computing and open source software has exposed the true and often extortionate profit margins that were made by large outsourcing firms. The costs of allocating skilled work to large overseas corporations or independent contractors are far greater than those associated with employing shared services to process work and non strategic tasks, which has in turn provided an ever more efficient and affordable way for firms to operate. With cloud computing software in place, companies can share their resources with collaborators and minimize their outgoings in the process.
Streamlining the Process of Outsourcing: Eliminating the Service Cost
With the traditional outsourcing model, organizations would pay for far more than the simple service that was provided. On top of this was the use of time and resources to fulfill a contractual obligation, which contributed towards a disproportionate and ultimately over sized cost. Cloud computing eliminates this by streamlining the process of outsourcing, with shared resources and flexible infrastructure key to making savings of both time and money. The process gives businesses the tools to become more profitable, which can make a significant difference in the current economic climate.
As anyone who has ever hired a member of staff through an employment agency will testify, the difference between the bare cost of labour and the total fee is sizeable, and often too much for a small or independent business to bear in a depressed economy. This is why the stock of e-recruitment continues to rise, as the ubiquitous nature of online connectivity, social media and cloud computing principles continue to reshape business practice across many different industries. All of these money saving process have a foundation in cloud computing, and the sharing of platforms and informational resources to complete tasks.
So although some may say that traditional outsourcing is now outdated and moribund as a business concept, it is perhaps fairer to suggest that it has simply played its part in a continual and never ending evolution. Cloud computing is simply the next stage of this evolution, and one which makes firms further financial savings while impacting on a significant range of business, IT and sales tasks. So while firms such as UKHost4u can provide relevant web hosting solutions, so too cloud based CRM packages and software can streamline a companies sales operation.