The Impact of Covid-19 Pandemic on IT Outsourcing

Abstract

IT outsourcing has been a growing approach widely accepted as a strategic move of businesses for them to have more focus on their core competencies.  While there has been an upward trend observed in IT outsourcing, the world has been under the COVID-19 Pandemic that poses threats to this growing business approach and even to the stability and survival of businesses. The objectives of this study were to take a deep dive into the reasons that drove companies to take the path of outsourcing, more specifically on IT outsourcing, to identify the IT risks involved and the ways on how these can be mitigated, and to recognize the impact of COVID-19 Pandemic in the world of IT outsourcing. The sought objectives of the study were attained by reviewing the existing literature and with references to other research. The researcher referred to secondary data and existing literature, which were then analyzed and synthesized. The findings from these resources gave an understanding of the forces and benefits that drive businesses to outsource their IT process. These include cost reduction, increased focus and flexibility, ease of access to innovation and technology shift, problems in hiring, and better competitive advantage. These are associated with risks like dependence on vendors, loss of knowledge, higher costs, confidentiality risks, vendor selection, and exit barriers, which could be mitigated through careful planning, adequate control, and observance of risk management processes. The paper also found that IT outsourcing was able to maintain its momentum and growth despite the challenges of the COVID-19 Pandemic because of the realization of businesses that technology and the responsiveness to change are an integral part of the game. The paper presented and even laid down the need for companies to do a constant review of their processes, to be more proactive and strategic, and to be more responsive to the demands of time and of change to lessen, if not totally avoid, the impact of threats just like the COVID-19 Pandemic.