Recent research report indicated that IT Outsourcing is the "highest growth area" which shows tremendous spending rate for companies adapting this kind of business strategy.

According to the research report conducted by Garter showed that the user spending rate for companies would exceed £364 billion worldwide for this year. This figure shows an 8.7% increase from the same category last year. Two reasons were identified for this tremendous growth. The reasons identified includes the following:

-Focusing on improving internal processes
-Desire for innovation

If this would be the prediction for IT outsourcing, companies should also be informed of the downside with the sudden growth of IT outsourcing because there are still risks involved. Implementing preventive measures would ensure that possible risks would be minimal.

Many companies go astray when it comes to IT outsourcing simply because they do not know what direction to take. In this article written by Gemma Simpson, the author shares 3 basic steps in IT outsourcing which would be a big help for companies.

Here are the 3 basic steps:

1. Organizations should not opt for an outsourcing model without working out how it will affect and fit in with its IT landscape, according to a study.

2. Companies must consider how to manage IT and staff resources when outsourcing, according to the Three Pragmatic Steps to an Outsourcing Strategy report.

3. Companies should ensure the outsourcing model makes sound economic sense and any additional IT spending is taken into account.

There you go! A simple yet effective approach for IT Outsourcing.

In outsourcing, as in any business, profile is important and it could also be known as portfolio. Just like in any other jobs, your accomplishments and work could give you the opportunity that you are seeking for.

This is what Kenya needs to work on if they want to succeed as an outsourcing destination. According to this news piece entitled Kenya needs to raise outsourcing profile, there is not enough "bang" to make Kenya rise to the top of outsourcing lists.

Nicholas Nesbitt, CEO of KenCall explained this statement showing that "The prospects are good and the opportunity is tremendous in Kenya. But right now, there are not many people looking at Kenya. They are still looking at India and the Philippines because Kenya has not yet built a critical mass of players in the industry."

Marketing plays an integral part in landing outsourcing deals and this is something that Kenya should focus on more.

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First there were virtual assistants and now there are butlers which are being outsourced.

As you would notice in outsourcing, first there were only non-core business tasks which are outsourced like call centers and now, tasks that are outsourced are becoming more and more intricate because of the demands of customer and the knowledge that someone is wiling to that job.

Steve Lohr also mentioned this development in outsourcing, calling it the "second wave". Here is what they have to say in the butler-type outsourcing:

"The second wave, according to some entrepreneurs, venture capitalists and offshoring veterans, will be the globalization of consumer services. People like Yamaki and Tham, they predict, are the early customers in a market that will one day include millions of households in the United States and other nations. They foresee a host of potential services beyond tutoring and personal assistance: like health and nutrition coaching; personal tax and legal advice; help with hobbies and cooking; learning new languages and skills; and more. Such services, they say, will be offered for affordable monthly fees or piecework rates."

Are you ready for that kind of outsourcing?

As I've mentioned before and even on my previous posts, strategy in outsourcing is important because it keeps you above your game. In manufacturing, this kind of thinking is also applicable thus the need to have a guide when having these manufacturing deals.

In this article entitled How to Get The Best Deal in Contract Manufacturing, it outlined the different expectations which you could see when entering a client engagement. Here are the expectations which were mentioned:

-The contract manufacturing vendor focuses on protecting its downside by reserving the right to increase customer prices, e.g., component materials, labor costs, and overhead costs, during the term of the agreement.

-The contract manufacturing vendor provides some form of a cost-plus pricing structure to the customer, where the vendor has no incentive to reduce costs or increase efficiency, innovation, or effectiveness in addressing the customer's needs.

-The customer gains comfort from the belief that it will not overpay as it relies on the notion that all contract manufacturing vendors will be subject to similar cost structures.

-The customer is willing to accept the inherent potential price increases because it retains the perceived flexibility to move its manufacturing to an alternative provider.