EP118: IT outsourcing and shared services trends

Technology outsourcing, business process outsourcing (BPO) and shared services are entering a new growth phase driven by factors beyond cost arbitrage. As technology adoption accelerates and skill requirements diversify, organizations increasingly rely on best-in-class vendors rather than building all capabilities in-house. While BPO suits large-scale operations, shared services help organizations eliminate duplicated support functions, a model already adopted by over 80% of Fortune 500 companies. Economic disruptions often trigger such transformations, with digital shifts in Western markets and cost pressures in the Middle East acting as catalysts. In the Middle East, IT outsourcing and shared services are expected to grow faster than BPO due to regulatory, language and scale constraints. Key drivers include rising technology adoption, talent shortages, tighter immigration rules, regional expansion, economic cooperation and labor cost differentials. Success begins with reassessing the current operating model, defining target benefits and designing a clear target state to guide partner selection and transition.