Offshore outsourcing, where U.S. companies farm out tech work to low-cost countries like India, will wane as routine data center functions become automated and businesses start to employ IT for more strategic purposes–like building new sales channels–and seek service providers that can help them along that path, according to a senior industry exec.
"You can look at the early signs that the Indian IT model is over," said Krishnan Chatterjee, head of global strategy and marketing at HCL Technologies, during an interview last week. "The question that customers are now asking is, ‘Are you willing to blend multiple services into an integrated offering, so we can talk as business partners, rather than you giving me 10 bodies who will churn out x lines of code at the cheapest rate."
What’s driving the change is that new technologies like virtualization, cloud computing, and smart analytics are automating many routine IT tasks–such as network provisioning and monitoring–that have often been offshored. That means companies can use more of their technology budgets for strategic projects that can drive growth through new products and services. They need IT service providers who can keep up.
A deal that HCL announced last week illustrates the type of higher level engagements the company is seeking. U.S.-based healthcare payer United Health Group said it would use proprietary software tools developed by HCL to support its adoption of new disease classification codes, known as ICD-10, which go into effect in 2013.