Outsourcing has been a common practice among businesses of all sizes, ranging from SMEs to giant corporations, for decades. However, with time it kept getting updated as per the changing priorities and lifestyles of people. Hence, for an entrepreneur, staying up-to-date with the ongoing outsourcing trends is a must to be able to adapt to the evolution and thrive in the competitive business environment. Outsourcing offers competitive advantages by reducing operating costs and turn-around time, facilitating flexibility, and saving time. Surveys say the global outsourcing market, which stood at USD 245.9 billion in 2021, is expected to increase at a compound annual growth rate(CAGR) of 9.1% from 2022 to 2030.
7 Outsourcing trends to be witnessed in 2023:
- Nearshore over Offshore Outsourcing
Both nearshore and offshore outsourcing are widely practiced by businesses due unique perks each type comes with. Nearshore outsourcing refers to contracting out business processes to an external firm/agency located nearby. Whereas, offshore outsourcing is contracting out processes to agencies based in a distant location or country where labor is comparatively cheaper. Though the latter helps businesses to reduce operating costs, it often leads to cultural clashes. Hence, many businesses, these days, are opting for nearshore outsourcing to avoid issues like extreme time zone differences, complex hiring compliance laws, and cultural differences, due to which the work culture and collaboration often get negatively impacted.
- Outsourcing to the specialists
To ensure quality output and gain competitive advantages in today’s dynamic business environment, businesses prefer to outsource processes to firms or agencies, or individuals that have expertise in a particular area. Also, the rapid technological advancement and emergence of new business tools, have created the need for skilled workers, who can properly use cutting-edge technology for the companies’ good. The most commonly outsourced processes of this era are software development, HR, customer service, etc. By utilizing the outsourcing firms’ expertise, and resources, businesses are getting access to the global talent pool.
- Maintaining business continuity
To ensure smooth workflow and optimum productivity, a business owner must build and maintain a strong relationship with his/her company’s suppliers, service providers, or outsourcing partners. There was a time when business owners were always in search of a better option. It was more about replacing the existing service provider with one who is ready to promise better services, than strengthening the old relationships. But today, entrepreneurs are understanding the benefits of maintaining relationships with existing vendors. Constantly switching the working arrangements of a business can affect the productivity level and also make it difficult for the owners to predict various success-measuring metrics. Juggling new partnerships usually disrupts business continuity. Therefore, today, business owners are looking to extend existing contracts, build a strong bond with their outsourcing partners, and increase commitment and trust.
- Inclining towards the cutting-edge technology
Considering the brisk amelioration of technology, the year 2023 is expected to witness a trend of outsourcing tech-driven services. Companies, today, need access to cutting-edge technology to automate processes, increase efficiency, and simplify operations. But, technology is evolving at a lightning speed, and hence, updating it frequently is quite an expensive affair. Therefore, outsourcing processes to a specialized service provider, that is equipped with advanced technologies, often turns out to be beneficial for a business. The most trending technologies used in the outsourcing industry are Robotic Process Automation(RPA) solutions, Artificial Intelligence(AI), machine learning and automation, and cloud computing. RPA enables companies to make robots carry out simple tasks. Using robots is cheaper than hiring and maintaining human employees for the same task. AI is used to automate repetitive tasks, calculations, or replying to messages. Chatbots are a prime example of this surging technology. Cloud computing allows entrepreneurs to store a plethora of crucial data and resources on the cloud, and access the same at any time from any location.
- Prioritizing business flexibility and adaptability
Businesses, in 2023, are expected to emphasize agile processes, adaptability, and consider alternate work models like work from home(WFH), 4-day workweek, etc., to keep employees motivated and ensure high productivity. The WFH culture got adopted by many giant multinational companies post the COVID-19 pandemic, which occurred in 2020. By outsourcing, companies are looking to improve their collaboration infrastructure and regular workflows. Surveillance software, that helps business owners track productivity and output, and also onboard new hires, are considered one of the primary initiators of flexible work culture. Using employee monitoring tools, one can now supervise employees or the outsourced team from distant locations.
- Demanding better cybersecurity
On one hand, digital transformation has helped businesses streamline their processes and ensure high productivity and low turn-around time, on the other, it has made accessing crucial data easier for intruders. Hence, many companies are partnering with third-party service providers that manage specialized operations, like data security.
- Enhancing customer experience
In the year 2022, the customer experience was considered the key brand differentiator and in 2023 also, it is expected to continue offering businesses a competitive edge. Businesses are looking to enhance their customer support service, increase customer satisfaction, and strengthen customer relationships to ensure a better user experience. But, understanding the changing requirements of the customer, being available for them 24×7, and promptly solving their queries is not an easy task. A company needs to have deep pockets to be able to hire and manage a workforce, large enough to efficiently manage unpredictable customer call volumes. When the customer support is outsourced to a BPO company, equipped with multiple teams of skilled customer support executives, working on different shifts, no caller goes unattended. Therefore, more businesses are expected to opt for customer support outsourcing in 2023.