Because of these benefits, more companies opt to outsource business processes, prompting outsourcing market growth. In order to stay competitive in the global marketplace, businesses in 2023 will need to prioritize cybersecurity measures to protect sensitive data and maintain customer trust. They will also need to invest in the latest technologies to improve efficiency, streamline operations, and stay ahead of the curve in terms of innovation. All through 2020, as the pandemic raged and governments around the world were forced to impose, and then reimpose, national lockdowns, the world’s economies were paralyzed. To understand the impact of the COVID-19 crisis on outsourcing, BCG conducted a survey of 200 global companies with large IT and business-process outsourcing footprints. (See “About the Survey.”) We found that 82% of the respondents saw revenues fall, 78% faced operational challenges, and 68% had to cope with service provider-related challenges.
While this reversal predominantly affected manufacturing, the IT sector suffered collateral damage. The workplace transformation forced by the pandemic is set to make telework a permanent arrangement for many organizations. As office-based work is turning into a home office, new opportunities for outsourcing emerge. CEO of Ideamotive, a marketplace matching tech talent with companies worldwide.
How to Choose a Reliable Custom Healthcare Software Development Provider
Odds are that what happened in the U.S. in 2021 will continue to reverberate around the world. Even if the effects of the pandemic begin to fade away (which is in doubt since the discovery and surge https://www.globalcloudteam.com/ of the Omicron variant), there are likely to be long-lasting impacts on the global labor market. At Nexa, our 24/7 answering service can create competitive advantages within your company.
- Virtual outsourcing solutions and global outsourcing can help you in cost savings by having day-to-day tasks completed in a lower-cost economy.
- Also, Eastern Europe has a high percentage of skilled people (including tech professionals), affordable talent, and strong data security.
- The ability to deliver measurable business value through strategic partnerships will be highly valued by businesses seeking outsourcing services.
- The current outsourcing model includes services offered by people and powered or supported by tools.
- Recently, robotic process automations (RPAs) have emerged as a prominent innovative driver of the outsourcing world, enabling service providers to optimize and automate processes.
- For this, they’ll need skilled employees and advanced technology — which can be expensive in most countries.
Naturally, companies providing the manpower will make necessary adjustments in the future. It’s true that business process outsourcing provides companies with access to top talent around the globe. However, these days, workers have discovered that they are spoiled for choice.
Understanding profit margins in the BPO industry
So vendors will need to be ready to restructure teams within the shortest time frame and be agile to deliver results faster. With innovations in technology and the lack of skilled developers, the workforce demands continue to increase. It might be too challenging for your in-house development team to keep up with the project demands. Your developers might currently be engaged in a project or just don’t have the right resources to train themselves. Asia has become a hotspot for outsourcing and is gaining attention in the outsourcing industry.
Another major trend in 2023 is the greater emphasis on strategic partnerships in the outsourcing industry. Instead of viewing outsourcing as a transactional relationship, businesses are now seeking outsourcing providers that can work with them to achieve shared goals through strategic collaboration. The ability to deliver measurable business value through strategic partnerships will be highly valued by businesses seeking outsourcing services. Out of an abundance of caution, many companies—62% of our sample—are very likely to renegotiate outsourcing contracts.
Companies want vendors to be more flexible
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.
Although gig working isn’t brand new, the current climate in outsourcing is a golden opportunity for gig work to mature in the coming year. A historically hot labor market, the growing prevalence and acceptance of remote work, and serious advancements in technology are the perfect storm for Enterprise outsourcers to embrace the benefits of gig work in 2022. The gig economy was growing before the pandemic, continued growing during the pandemic, and will continue to grow even further in 2022.
How to Choose a Reliable PHP Development Company: Tips & Tricks
Despite this fact, in the upcoming years, future trends of outsourcing will make it the only way for further growth of businesses, with no other channel giving the same economic efficiency. Thus, IT outsourcing providers will come out of the shadows and become strategic partners with strong, trusting relationships. Due to such changes, the outsourcing industry will become more collaborative and competitive. In particular, clients will look for IT outsourcing vendors who provide customer-centricity and progressive technologies. Cost reduction will remain a priority, but companies will also look for partners who provide a value-driven approach. As the GSA report states, software development providers will be contracted as service integrators, sharing risk and responsibility.
That way, you will be capable of building mutual trust, and maintaining excellent and transparent communication. Knowledge Process Outsourcing (KPO) is when you outsource activities such as using data to give insights into your business, and it has been shown to be very effective in recent years. A lot of people assume that the only reason people outsource is to save money, but there are other reasons. After some in-depth research of the latest studies, here is my analysis of how outsourcing practices are changing in 2021. Organizations increase their efficiencies while having the flexibility to scale and grow – allowing many to invest back into other areas of the business.
Next-generation outsourcing deals move beyond cost-cutting and enable true business transformation.
However, this old trend is improving, and today the center of attention has shifted onto the process and the employees. The term stands for a widespread business method that implies it outsourcing trends dedicating specific services or job functions to a qualified third-party team. This external team performs particular tasks, handles necessary operations, or provides services.
In the past, when you think of booming BPO industries, you might automatically think of Asian countries such as China, the Philippines, Taiwan and Vietnam. But, for the past couple of years, Latin America has been gaining ground and positioning itself as a great place to outsource. But the truth is, the bulk of outsourcing activity takes place further down the org chart—and in 2023, that trend is set to grow even further. Another area of the C-suite that is getting the outsourced treatment is the chief marketing officer. Outsourced CFOs like the team at Aquifer (who refer to themselves as “Financial Jedis” with “professional financial expertise”) are offering plug-in finance departments that are specifically tailored to startups.
Socially responsible outsourcing is the future
But it’s also something that most current workers want to keep, even when offices reopen in their area. Try it for free to see how this growing outsourcing trend can fit into your business model. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates.