Offshore outsourcing service providers will be replaced by blockchain

Rage Comment : The information and intelligent era has begun to dilute the marginal profits of enterprises. Enterprises that rely on the labor arbitrage model have also lost their vitality and the possibility of survival; they can only go into an infinite vicious circle of vested interests. This extensive development model has long lost its vitality and only needs a catalyst to be replaced. Blockchain technology is currently the most disruptive technology and will also bring a fatal blow to this industry.

Translation: Annie_Xu

The Trump effect and the promise of lower corporate tax rates could increase employment in the United States, but there will also be some non-human factors involved.

Outsourcing excess capacity

Why outsource anything that exploits labor arbitrage now? Many IT and BPO contracts are up for renewal, so the question is what is the success rate, 50%, 25% or 10%?

HP's acquisition of CSC and CSC's acquisition of Xchanging are evidence of overcapacity in outsourcing and a lack of strategic management that can only be managed through industrial restructuring.

Blockchain is a wise choice

Ginni Rometty of IBM is the only person in the company who is driving the transformation of technology-based enterprises, investing heavily in emerging technologies such as blockchain to build a smart planet and smart cities. This is a wise move and shareholders will benefit in the end.

Ginni Rometty

Blockchain technology is disruptive and can accelerate the decline of offshore outsourcing service providers by eliminating the non-value-added administrative activities of middlemen. Blockchain can use the automation capabilities of smart contracts to shake up the foundations of this industry, eliminate the core of the industry, create new levels of efficiency and save costs.

In a world where blockchain is used, mainly in the crypto economy and light industry market, there is no need for outsourcing, because enterprises under this model are inherently efficient, secure and fair.

Indian IT services sector still in the spotlight

India's IT services sector remains in the spotlight as new technologies such as robotic automation have begun to dilute marginal profits and replace cheap labor. Software that never needs to rest can replace a full-time employee at a cost of just $2,000. This figure is eye-catching.

The outsourcing business model belongs to the era of large, rigid organizational structures; performance can be measured against service level agreements, and factories with cheap labor can achieve scale. The only problem is that cheap processes can only produce inefficient business processes, and there is no possibility of improvement, because the side effect of improvement is the shrinking of supplier margins.

Critical Strike

Today, consumers determine corporate performance and outcomes; however, consumer behavior is informal, transparent, unpredictable, disloyal, and has high expectations for flexibility and choice.

HMRC abandoned Aspire and chose a smaller professional service provider, only because of their efficient and simple design and construction solution adjustment, using cloud computing to get rid of the traditional system. So will blockchain give the IT and business process outsourcing industry the final blow?

Blockchain can eliminate non-value-added management processes and 90% of back-end functions. The shortcomings of IT service providers are obvious.