The turn of the 21st century saw outsourcing gaining momentum among the developed countries of the world. With IT-enabled and e-commerce services being integrated with businesses across a wide spectrum of industries, there was a need to be cost-conscious and provide round-the-clock support. For many, the solution was as simple as to outsource.

The initial years of outsourcing started with small non-core work. And over time, people realized the benefits and confidence was built. Strong talent, cost advantage, together with professionalism and customer-facing abilities, paved the way for high-end, critical non-core work to be outsourced. Soon, players in highly specialized spaces like product development mushroomed and gained popularity with their strong engineering team and product-management capabilities.

DocuSign’s Experience
From my experience, outsourcing has been a boon to our company, DocuSign. During our growth, we were faced with a requirement for a reliable team to maintain our existing product and add new features that the customers want in order to be at the competitive edge in the e-signature market space. With growing product demands, scaling an engineering team on-demand is a challenge. Additionally, keeping costs manageable is paramount. The constant technology shift in the current product and next-gen version also remained a challenge for DocuSign.

Global Services PREDICTIONS

Large IT service providers will acquire niche service providers to gain expertise in specific verticals or horizontals

Customers will consider niche providers not because they are inexpensive but because they bring in specialty skills.

We looked for a provider that could develop a thorough and beneficial solution. And that we finally found in Aditi Technologies, an R&D partner to software businesses, providing technology consulting and outsourced product-development services.

Keeping all our needs on the radar, the provider offered a defined solution by setting up a fixed capacity onsite-offshore model to take care of feature enhancements and maintenance. This highly reliable and scalable solution allowed detailed audit trail and tracking capability, an extremely fault-tolerant system and smooth business-integration workflow for the end-user. Outsourcing cut costs by about 50 percent, and has given DocuSign the flexibility in the size of the engineering staff working on its projects.

Since our outsourcing relationship started, I see the opportunities for DocuSign have been growing, and we are able to introduce more services to the market within a short time period. Not only that, we also take advantage of the time difference between Seattle and Bangalore, and get teams at both locations to work on the same project, to cut time to market.

More such players like Aditi are emerging and proving their mettle with niche services. Primed skill-sets such as the ability to understand an amorphous multicultural audience, user-behavior assumptions, competence in high-quality design and code, better IT delivery and strong customer-facing attributes are some of the reasons why such providers flourish. With such high-end advantages, it is but natural that the outsourcing trend inclines toward specialized providers. 

To leverage the complete benefits that outsourcing provides, the execution should be strategic and the customer-provider relationship should be envisioned as a long-term one. Of course, outsourcing has many highs and lows. Although cost and high-quality talent advantages draw most outsourcing seeking clients, there are concerns over the control of intellectual property and, to some extent, product knowledge. These concerns can be arrested with clear and transparent customer-provider partnership.

In 2010
Large deals that are already outsourced and are being renewed will go to large players as the expertise is already built. However, if the same customer outsources a newer portion of their business, it will be competed very heavily by the medium-scale IT players on the basis of specialized skills. And such deals with niche providers can be long-term releases with the deal-size falling anywhere between $0.5 million and $25 million a year.

Another trend that is fast catching on is outsourcing to emerging niche players in locations other than the obvious. Besides India, Eastern Europe, China and Latin America are all getting onto the bandwagon, each unique with their offerings and technical expertise. We believe that India has an edge as it has a more mature management model. As long as the Indian industry continues to evolve and diversify, and increases its capability both in volumes and in value, Indian players should be able to stay ahead in the game.

The not-too-distant future holds immense opportunities for outsourcing providers offering specialized services. As the outsourcing trend continues to grow, more and more companies will establish themselves across a range of specialized spaces, for example, providing end-to-end services like complete product development from vision to release and even offering stand-alone services like R&D competence. Our experience with outsourcing has led me to realize that competent outsourcing providers are rapidly maturing into important stakeholders across industries.    

Bringing over 15 years of experience to DocuSign, Lambert is responsible for marketing, brand development, and lead-generation strategies and programs.