How are XaaS models changing the future of outsourcing?

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Everything-as-a-service (XaaS) has revolutionized business models to provide vital services that help them scale. Digital transformation requires companies to be flexible to adapt to today’s rapidly changing market dynamics. Companies are now embracing service-based IT, or XaaS, to achieve the flexibility and resilience needed to gain a competitive advantage in their industry.

In today’s business environment, organizations need agile IT systems that deliver clear value, with the rise of intelligent devices and the Internet of Things increasing the need for organizations to connect with consumers in even more ways. According to recent reports, the global XaaS market size was estimated to be USD 436.82 billion in 2021. Fortune Business Insights research also predicts that the total services market size will reach from $545.35 billion to $2,378.07 billion during the forecast period 2022-2029 at a CAGR of 23.4%.

IT Outsourcing Complexity 

XaaS companies must control every detail of their IT and cannot provide the kind of white-glove maintenance that customers and employees expect. They may need more time, professional resources, or sometimes the budget. Outsourcing engineering and IT services to a competent partner can help them overcome the challenges.

XaaS is more than just bringing all the different “service models” under one umbrella. This includes the wide range of products, services, and tools that modern technology platforms offer consumers. According to Gartner, IT spending will top $1.3T in 2022 and rise to $1.8T by 2025, with investments in cloud technologies and solutions accounting for much of that.

However, many modern businesses still need to be built on outdated IT infrastructure that cannot support these new technologies. Manual systems, obsolete user experience, and slow service face the increasing expectations of both consumers and employees.

For example, many third-party logistics organizations rely on outdated manual systems for their daily quotes and pricing. With these manual approaches, agents rely on phone calls and emails, which increases work time and affects the organization’s ability to focus on strategic business opportunities.

These organizations can benefit from leveraging the XaaS business model and partnering with an experienced service provider. In doing so, they can rely on the latest technologies for system automation, core integration with other existing systems, application testing, and scheduled maintenance with a chosen partner. This can be done with less expense and effort than building your team. In addition, the organization can add or subtract different services as needed.

Efficiency and cost reduction

XaaS is rising as a desirable option for today’s organizations – primarily due to its ability to simplify complex IT infrastructure deployments and ultimately reduce costs and maintenance costs.

Overall, XaaS ensures that businesses get a manageable and predictable program that puts the power back in their hands. The XaaS service model allows the organization to expand or discontinue various services. The model thus ensures better efficiency of the invested money.

The XaaS service model saves an organization from hiring/firing talent when a new need arises. It also ensures that services continue uninterrupted even without associated staff. For example, after a layoff/sick leave/vacation in a company where IT management is handled in-house, there is often an interruption in service until the employee returns or is replaced. However, companies gain continuity by using a service partner without worrying about recruiting or upgrading.

Preparing for an Agile and Flexibility

Organizations that want to deploy but need more skills or infrastructure to make the changes can significantly benefit from seeking the help of a managed service provider.

For example, organizations are familiar with the cloud concept but may need more know-how to deploy and manage multiple cloud environments. Lacking the skills and infrastructure, they need the right service provider to help them adopt and scale cloud technology with consumption-based pricing models. Since automation is on everyone’s mind, hiring a service provider with custom automation can help eliminate unnecessary tasks.

Its recently helped a leading natural health products company implement an enterprise-wide digital transformation and increase its daily order capacity by 150%. The organization partnered with leverage its technical expertise and domain expertise. As the project progressed incrementally, we amoebic business framework enabled the organization to scale and reduce several critical functions.

Organizational Challenges with XaaS

While the full-as-a-service model is thriving, it is not without its challenges. Data security and compliance are some of the companies’ considerations when considering the XaaS model.

When organizations adopt XaaS as part of their business, vendors collect, store, and process data from different channels. Data is also collected from multiple sources, and stakeholders have their policies for data management. The challenge is ensuring the collected data’s security and fulfilling all data compliance measures. This can be provided through a structured process and collaboration with an established service partner.

Another big challenge is evaluating potential service partners and finding the best ones for your needs. Organizations must ask various questions to determine whether a service provider can meet the organization’s needs and goals. Use case studies and references to analyze how they work with their customers, their delivery processes, costs, time to market, etc., which can help build an overview. Also, dig deep into how their experiences, technologies, and other strategic visions align against the various metrics your organization needs.

Conclusion

The XaaS model enables companies to operate at high speed and reduce operating costs. Remember the flexibility they offer to move workloads and resources as needed. Business leaders recognize their role in solving the performance and productivity puzzle. Improve Performance. We provide XaaS services across industries, including transportation and logistics, insurance technology, and healthcare.