Role of Cloud Computing in IT outsourcing

IT outsourcing is big business. There is the very obvious cost savings. Apart from that, there are a host of advantages like faster drawing board–to-market time, better management of resources, deployment of skilled manpower and so on. But, the outsourcing industry has its very own challenges –the need to constantly improve quality of the end-product; the need to deliver more value to customer at shorter time spans, to name just two.

Most vendors struggle to deliver better to customers simply because they need to handle it all – from application development to storage issues to software licensing. This gives vendors very little leeway to focus on the deliverables, as they are already burdened with way too many responsibilities. That’s where cloud computing helps make outsourcing a lot simpler. Cloud computing refers to any pay-per-use service that, in real time over the Internet, extends IT’s existing capabilities. Cloud computing and SaaS (software as a service) providers offer applications, storage services, spam filtering and software services over the internet.

Increasingly, IT outsourcing firms are opting to use cloud and SaaS because they offer a host of advantages to both the vendor and the customer.

1.Faster lead time: Outsourcing firms do not have to waste time on services that can be easily hired from cloud or SaaS providers. This means, they have more time to work on their customer’s project, which equals faster drawing board-to-market time.

2. Lesser overheads: Buying licensed software for each and every project module is not very cost-effective. And developing applications for standard services or creating storage space for heavy data is a tremendous strain on resources. Cloud and SaaS allow users to pay for these services and thereby reduce costs to a great extent.

3. Better management of resources: Using cloud and SaaS enables vendors to focus their manpower and other resources on core activities, which in turn translates to more value and better quality services to the customer.

4. Lesser bugs. Better quality: Cloud applications and SaaS are developed and maintained by experts in that particular field. So, they are most likely to be really good products with lesser bugs and failsafe procedures. So, the quality of the end-product which is delivered to the customer is definitely better.

This way, cloud and SaaS works well with the core concept of outsourcing – delivering more while costing a lot less. But all good things, there are a few minor issues that must be handled with care – both by the vendor and the customer, if cloud or SaaS is to be successfully incorporated into an IT partnership.

1.Managing more: Management of the outsourcing team extends one more level to include the cloud or the SaaS component. So, it is an added responsibility for both the customer and the vendor. Continuous monitoring from both sides is required to see if the cloud or the SaaS component is utilized to its fullest potential.

2. Communication issues: Customers need to communicate to the Cloud or SaaS team through the vendor. This can give rise to communication issues. It is important for all parties to be in the loop in order to minimize miscommunication.

3. Lack of industry-specific specializations: Most SaaS are built on an all-encompassing theme – one for all industries and all purposes. So, some aspects of cloud or SaaS may be irrelevant or even damaging to your area of business. Watch out for these warning signals and do your background check before choosing your SaaS or cloud.

4. Security issues: Security is a big issue because cloud and SaaS are internet-based services. Although all these service providers offer top-class security, monitor closely to manage privacy and security better.

5. Quality control measures: Your Company’s quality control measures must encompass not just your vendor but also the vendor’s usage of cloud or SaaS involved, as well; in order to maintain quality across all levels.