December 02, 2011: One of the important factors that make cloud computing attractive to organizations is that it offers an effective platform to outsource Information Technology. Since IT is not a core function of many of the business firms, they often tend to outsource the IT function to a service provider rather than making huge investment in infrastructure and people to perform it in house. Organizations realize that relying on cloud computing services will yield better results.
Many companies have started to outsource their entire business process to service providers. With the diffusion of cloud computing it will be lot more easier to outsource an entire business process.
Leading outsourcing service provide, Infosys has introduced Infosys Edge, which is a cloud based platform that is designed for managing specific business processes. Even though it is too premature to determine the impact of cloud computing on the business and Information technology, it is evident that we have started to make out of what is possible with the cloud. The question that worries most of the business is whether to perform a function in house or to outsource. Considering the time to the market, it would be preferable to outsource the function rather than performing it in house.
A recent study conducted by Horses for Sources seems to reinforce the trend that Infosys has brought in with Infosys Edge. The study conducted by HFS covered 534 buyers, advisors, and providers, and it mainly dealt with their sourcing strategies. The report says that 80 per cent of the buyers responded that access to standardized business processes is an important driving force to outsource their business functions. 87 per cent of the buyers said that reduction in operating cost is the foremost driving force.
Most of the companies are aware of the cost and productivity benefits of standardizing their business processes. Some of them believe that their processes are special and so do not require standardization. In addition to this some of the employees do not support standardization efforts as they think that it will result in loosing their jobs.
The cloud based standardized processes should help in removing the difficulties associated with on premise software and licensing and reduce the impact of resistant employees. One of the challenges that the outsourcing service providers face is with building a long term strategic relationship with their clients rather than just focusing on cost reduction alone.