Azim Premji once said, “The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.”
He is absolutely right! Outsourcing is inevitable. It is a new buzzword. Outsourcing is witnessing a massive boom over a past few years. The year 2022 is going to be no different.
The global business process outsourcing market size was valued at USD 232.32 billion in 2020 and is expected to witness a CAGR of 8.5 % from 2021 to 2028. The numbers clearly reflect a constant growth in the outsourcing market. There are many key trends that have emerged in the recent past and seem promising for the industry to flourish in the near future.
REMOTE WORK: A NEW NORMAL MODEL
Remote work is becoming the new normal, thus opening the door for Global Outsourcing. Many team leaders and business executives are realizing that a team working from home can also do wonders. Remote work is quickly becoming the new normal. Here are some statistics to substantiate the statement:
- Only 17% of US employees worked remotely before the Covid-19 pandemic but during the outbreak, 44% of employees started working from home.
- In May 2021, a Mercer study found that 70% of companies said they were planning to adopt the hybrid model.
- 67% of organizations plan to increase their spending on video & web conferencing applications like Zoom to make the remote work transition better.
- Remote work has witnessed 159% growth over the last 12 years before the pandemic started.
- A Gartner, Inc. survey of 317 CFOs and Finance leaders on March 30, 2020, revealed that 74% of companies plan to shift at least 5% of their previously on-site employees to remote positions permanently post Covid 19.
THE RISE OF MACHINES: ROBOTIC PROCESS AUTOMATION
Robotics Process Automation is a relatively new technology that is set to revolutionize the BPO industry. The use of RPA in the outsourcing segment ensures faster results, improved customer experience, data security & privacy, flexibility & scalability, accuracy, and new revenue stream creation potential.
- In 2020, over 75% of companies actively considered or pursued RPA in their outsourcing arrangements.
- 48% of companies worldwide plan to invest in RPA technology.
- 83% reported using RPA to increase agility and resilience in their supply chain.
- 75% are choosing RPA to support their remote workers.
AN INCREASE IN SPENDING ON OUTSOURCING SOFTWARE DEVELOPMENT SERVICES
It is now becoming common for companies to outsource software development because of different reasons like reduction in business costs, business environment management, enhancement in services quality, capacity issue solving, intellectual capital access, and many others.
- The global IT outsourcing industry, including RPA solutions and software development, has increased to a total contract value of more than $30 billion.
- 70% of companies expect automation and RPA solutions to increase as a service delivery model in the future.
- The total spending on AI and RPA in business operations is projected to increase to more than $30 billion in the future.
A SURGE IN CLOUD SERVICES ADOPTION
Covid-19 pushed companies towards adopting a remote work model, which led to the faster and quicker adoption of cloud services. The cloud is gradually becoming an essential tool for unlocking organizational growth.
- According to Statista, In 2020, 82% of companies reported deploying a hybrid cloud, that merges private and public clouds, for their organizations.
- In 2020, more than 50% of organizations moved their workloads to cloud.
- According to The Flexera 2021 State of the Cloud Report, 36% of enterprises spend $12 million every year on public cloud services on a global level and 90% of enterprises expect cloud usage to exceed prior plans due to Covid-19.
INCREASED SPENDING IN OUTSOURCING BY SMALL BUSINESSES
One of the key motivations for small businesses to outsource their tasks is cost-cutting. They also opt for outsourcing to acquire services of highly talented and skilled professionals.
- According to Clutch (8 in 10 small businesses), 80% plan to outsource their business tasks to save time, grow their company, and gain other advantages.
- Almost 37% of small businesses outsource at least one of their business tasks.
- 33% of small businesses outsource to access flexible resources.
- 27% of small businesses are motivated to outsource in hopes of saving time and improving their efficiency.
- 19% of small businesses want to grow their business through outsourcing.
GROWING IMPORTANCE OF TECHNICAL SUPPORT OUTSOURCING
Businesses have now developed a mindset that investing in tech support means investing in the longevity and growth of your business.
- According to Technavio, The market for technical support outsourcing is expected to have a Compound Annual Growth Rate (CAGR) of 6.46% during 2020-2024.
- Over 60% of consumers prefer an automated website or mobile app self-service for simple customer service tasks.
- 63% of customers like being served by a chatbot but want to escalate the conversation to a human, technical support agent.
- 85% of customer service interactions are projected to become more automated.
With advanced technological development, the outsourcing industry is expected to grow in the coming years as well. The industry is only going to get bigger in the near future.