Outsourcing 2030
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Outsourcing 2030

Outsourcing goes Standard

We are moving towards the world where the millennials will look at outsourcing, nearshoring, offshoring, onshoring as merely “work” and not as trends, tendencies or innovative value propositions.

Outsourcing started with the initial need of shifting work to Offshore economies that could provide low-cost labor such as India, Pakistan, South America, or China.

Over the last 5 to 10 years we have been living in the so-called Outsourcing 2.0 era, where the focus has shifted from merely the quest for low cost to a dual value proposition where somehow higher costs bear higher Quality Standards and Process Based Service. Therefore, the Outsourcing GPS now targets Offshoring geographies like Eastern Europe or the Philippines as well as Nearshoring (like Canada) or even On-Shoring.

If one looks at the IT industry, remote cheap locations like India or Pakistan, despite having expert resources, they do not follow lean/ agile methodologies while developing code which means they can be easily beaten (effectiveness wise) by competitor geographies that have a structured work approach (that includes methodologies like DevOps) such as the Ukraine or other former Europe’s Easter Block countries.

Outsourcing is not a trend, it is a growing source of labor within the marketplace and given the natural market supply and demand dynamics, Freelancing will be the main occupation of the Millennials that reach a higher degree of expertise in their fields of competence.

Even “as we speak”, some areas of expertise have such a high demand with low available capacity that experts tend to leave their companies to provide services as freelancers. This applies not only to new areas of knowledge like Artificial Intelligence or Cyber Security but also to “traditional” occupations like Industrial Maintenance. Some skills in metal work machining are so scarce that it highly compensates for such experts (despite being 50 or even 60-year-old persons) to “go solo” and support several Industries as freelancers/ independent contractors instead of having a slim payroll while being dedicated to one company.

Gartner estimates that as soon as 2020 some 50% of the US IT workforce will be made of freelancers.

 

Ruralshoring, on-shoring

 

Ever heard the buzzword “Rural-shoring”, it might as well be a political approach in promoting on-shoring, meaning having locally based freelancer expertise sourced by US companies instead of having those resorting to Offshoring. It is a fact that the market has a deficit in some high expertise IT areas and that everyone around the world is racing to have future generations filling the gap for Universities in some countries are focusing their master degrees as well as educational content in such areas. In the other hand, it is well known (and unlikely to change) that life in the countryside is way cheaper than in the “Big City” (it can be from 3 to 5 times more expensive to maintain a life standard in the City than in a Rural Area). So, if policies are in place that further enhances the advantages of living in rural areas while freelancing, that will account for making local expertise available for a lower price tag in the marketplace.

The growing Freelancing offering is empowered by the following factors:

1 - Collaborative tools –  We can now find in the market an endless offering of collaborative software tools that allow (even for free) to establish workflows and work frames comprehending features such as Video, Chat, Document Sharing, Project Management, Time Management, Payroll, and so many other features. Most being Cloud-based and therefore SaaS that can be accessed from anywhere at any time.​

2 - Software development tools – Software development is (and will be in the near future) one main and major activity within the marketplace and YTD a developer is able to resort to supporting development tools under a DevOps framework that allows him/ her to work within a team from anywhere around the world at any given time. Also, other support tools take resort to Artificial Intelligence support such as Intelligent Coding Pattern ID tools can now be accessed from anywhere in support of a developer’s portfolio.

3 - “Unlimited” bandwidth – The Internet bandwidth has been exponentially growing for the last 20 years (including mobile bandwidth) while costs are plunging and support rendering software, as well as file compression techniques, are making data packages flow slimmer by the day.​

4 - Focus on client – Freelancing is becoming customer focused, the marketplace’s high competitive tone is forcing freelancers to become “client aware” under the risk of no longer having clients. Client’s referrals and testimonials create a professional ranking that further fosters the need for customer care focus to remain in the game.

 

So, Freelancing is here to stay and will be a major full-time occupation in the near future, most likely engulfing a significant portion of the Y generation.

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