In response to this, many organisations are showing renewed interest in industry specialisation, hiring experts in the various fields of IT and commerce. With the influx of remote work, the expectations of HR are shifting. As more workers begin transitioning from in-office positions to remote work, companies will change to gig models to distribute projects to gig workers.
As a worst-case scenario, other countries that provide these services could be affected as well. To retain the services of the highest quality IT outsourcing providers, companies must pay top dollar. Businesses will benefit from this investment by getting it outsourcing trends the services and solutions they need to grow and advance. Applications are a huge part of this movement in the form of software as a service . This part of the industry has seen an explosion in development, and new SaaS options appear seemingly every day.
Intelligent automation drives down costs
The Covid pandemic and the resulting lockdowns were chaotic and disruptive. Many countries had a hard time recovering from the short term economic shock. Companies now emphasize providing high-quality services to their customers.
Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing. The Outsource Accelerator website has over 4,000 articles, 250+ podcast episodes, and a comprehensive directory with 2,300+ BPOs…
Renewed interest in industry specialisation
Companies benefit from these services in many ways, including cost control, expertise, speed, focus, and security. The advantages and disadvantages of each option must be weighed by each company. Regardless of the decision, every business should at least consider how this valuable service can benefit them. Then we’ll check out tech trends we expect to be important in IT outsourcing.
According to Logic Monitor, 87% of global IT decision-makers anticipate accelerating their migration to the cloud in the wake of COVID-19. By 2025, “95% of all workloads will be in the cloud.” Separately, a recent CNET article reported that the number of reported breaches in 2021 reached the highest level ever. You might have to put off urgent projects if you rely only on your own ability to hire and train IT professionals. When you outsource those tasks to an IT team, you can begin immediately. Further, as mentioned above, these teams are highly experienced in a variety of deployments, ensuring that your project gets off to a great start.
How Outsourcing Practices Are Changing in 2020: an Industry Insight
The 2016 global outsourcing survey by Deloitte revealed that clients now expect enhanced and specialized services from outsourced consultants. More and more business catering to different fields are now opting for outsourcing to offer improved and far better value-added services to clients. For example, despite the convenience of technology-based communications, distance-related challenges can arise. These can include cultural and communications barriers when you’re using globally remote service providers. Indeed, most business operations can now be outsourced to some degree.
Since 2009, the number of remote workers has risen by 159% according to Global Workplace Analytics. Given how BPO has become one of the fastest-growing sectors, with more companies choosing to outsource tasks and services, businesses must learn to adapt and keep up to stay in the game. The business process outsourcing industry is ever-evolving, adapting to the challenges that confront the times. Global shifts caused by several factors such as climate change and political and economic power continue to pose challenges that organisations worldwide must deal with. You can trust our skilled teams with your business operations while you focus on your core areas and save on costs at the same time. Many companies that turned to their service providers for support are expanding their relationships with them.
- This is my analysis of how the outsourcing industry has changed in 2020 and what might happen in the future.
- Companies indeed save a fortune by employing skilled foreign workers.
- Companies these days consider more than simply price when selecting a software outsourcing partner, as talent in many places is on the rise.
- However, the actual effects of the US job growth are yet to be seen, given that outsourcing decreases the unemployment rate.
- This will allow businesses to operate more efficiently and effectively, while also reducing costs.
- Most companies will persist with a similar mix over the next 24 months, our data shows.
Correspondingly, an almost equal proportion of companies anticipate greater dependence on IT service providers in the same period. That’s particularly true of companies accelerating or rethinking transformation agendas. While many companies rely on a global footprint of service providers to prevent service breakdowns, that model doesn’t factor in the possibility of a pandemic washing over the world. Service providers, particularly in outsourcing hubs such as India and the Philippines, were hit hard, although they did their best to cope. For example, a service provider in India rented an entire hotel to ensure that its employees could work in a bubble.
Businesses expect to spend over $700 billion annually on outsourcing by the end of 2022. This growing outsourcing industry includes IT , healthcare, accounting, and other sectors. Another Eastern European country that gains popularity in the outsourcing industry is Poland.
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Smaller companies are expected to use outsourcing more, reducing operating inefficiencies, reducing costs, and improving their core business strategies. From the rise of outsourced CFOs and fractional CMOs to the explosive growth of the BPO market, there’s no doubt that delegating business activities to third parties will remain in the spotlight in 2023. As both the quantity and quality of outsourced responsibilities grow, it will be interesting to see how they set the stage for an increasingly smaller, intertwined global economy to interact in the future. Fractional CMOs are an ideal middle ground for startups and SMBs (small and medium-sized businesses) that don’t have the resources to hire a full-time CMO yet.
It also includes the process of delegating digital marketing services to a third-party vendor. Where things are poised to change in 2023 is through the rise of outsourced financial leadership. A growing number of outsourcing companies are taking on the challenge of 10,000-foot financial decision-making for others. Small companies are also less likely to have experienced employees due to their limited payroll budget, and outsourcing enables them to access the best talents. The AI and Machine Learning outsourcing market will expand at a compound annual growth rate of 38.1% from 2022 to 2030. And since it’s time-consuming to upskill in-house teams, companies are outsourcing services to a vendor with expert talent in a desirable outsourcing destination.
Outsourcing trend 2023 #4: Cloud computing
This is mainly because of the economic uncertainty caused by the COVID-19 pandemic. However, with time, factors like quality, talent shortage, IT infrastructure, speed, etc., became the driving forces for outsourcing. In a 2018 Deloitte survey, cost was no longer the key objective to outsource. It was overtaken by faster time to market, flexibility to scale, competitive edge, and better user experience. The fallout from Russia’s brutal invasion of Ukraine, one of the world’s top technology hubs, will continue in 2023. It is likely that the disruption taking place there will continue to negatively impact those services and, as a result, the ability of companies across the globe to access those services.
QCon International Software Development Conference
Walmart is one of the top five US companies that outsource jobs overseas. It puts effort into giving some of its manufacturing jobs back to the US employees. However, Walmart still collaborates with around ten thousand manufacturing plants in China. Outsourcing statistics suggest that outsourcing cybersecurity is becoming an attractive solution for IT leaders. Both big and small business stats indicate that the value and quality of outsourced goods and services were the top priorities in 2020. Nearly 90% of survey respondents believe both providers and buyers will be focused on value and outcomes.
Improve Your Business by Embracing the Outsourcing Trends of 2021!
Affiliate partnerships may affect where a particular product is listed within a review, but they don’t affect the review’s content in any way. The value of the market is projected to increase to $81.5 billion by 2023, rising at a CAGR of 3.51%. 58.6% of the total U.S. workforce are remote workers due to the COVID-19 pandemic. Here are some outsourcing developments this 2022 that you should know. When expanded it provides a list of search options that will switch the search inputs to match the current selection.
At the same time, companies said that they are looking to service providers to shoulder more risk, particularly when it comes to maintaining the continuity of business operations. But software development, automation, IoT , and other modern technology evolve regularly. It can be challenging to update technology frequently, so companies are outsourcing to service providers.
Many companies that turned to their service providers for support are expanding their relationships with them.
Further cost reductions become possible when businesses largely eliminate the physical overhead of maintaining staff, office space and equipment. Companies are beginning to invest heavily in this technology to handle and mine massive amounts of data in order to improve user experience. Rather than developing their own AI tools and strategies, which might require a significant amount of time, many businesses outsource this function to outside vendors specializing in this area. Hospital outsourcing trends predict that the global hospital outsourcing market will expand at a CAGR of 10.78% by 2026. Based on recent research, the global recruitment process outsourcing market will most likely grow at an 18.5% rate by 2027.
A year-on-year comparison of outsourcing statistics shows a strange and increasing rift between larger and smaller companies that outsource jobs. Outsourcing companies that use cloud-based applications are at an advantage. As an authorised user, you can easily access files and data without waiting too long.