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 How to Hire an ICO Developer 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. Robotic process automation (RPA) is driving innovation in BPO, enabling providers to automate and optimize processes, manage their workloads more effectively and elevate their services.
Several trends are shaping the way providers manage their services and what customers can expect going forward. The global BPO market reached $245.9 billion in 2021 and will expand at a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030, according to an April 2022 report by market research and consulting Grand View Research. The main market drivers are a greater focus on improving efficiency and business agility, decreasing operating costs and emphasizing core competencies.
To avoid fluctuations and disruptions caused by switching providers and ensure stable BPO services. Lone Wolf Technologies is the North American leader in residential real estate software, serving over 1.5 million real estate professionals across Canada, the U.S., and Latin America. Getting started in outsourcing is easy – just a phone call or email away from service providers worldwide. Consultants such as Outsource Accelerator are there to educate first-time clients interested to dip their toes in the industry.
Next-generation outsourcing deals move beyond cost-cutting and enable true business transformation. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done. KPMG’s multi-disciplinary approach and deep, practical industry knowledge help clients meet challenges and respond to opportunities.
Reasons Why Workers Quit Their Jobs During the Pandemic
Outsourcing is a new normal across industries but is most prevalent in the IT sector, where more than 94% of businesses adopt some form of outsourcing. In the US alone, approximately 30% of organizations outsource at least one part of their businesses. This blog will explore some of the major IT outsourcing trends gaining widespread attention in 2023. This is the second installment of our series on Remote Outsourcing where we explore many ways in which work-from-home outsourcing is shaping the business landscape, providing innumerable opportunities for long-term growth.
The global augmented reality (AR) market has experienced remarkable growth in recent years and was valued at around $38.5 billion in 2022, according to Grand View Research. It is expected to grow at a compound annual growth rate (CAGR) of 39.8% from 2023 to 2030. The global virtual reality market size was valued at USD 28.41 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 13.8% from 2023 to 2030, according to the Grand View Research. Lately, AR/VR technologies have been one of the most popular future trends of outsourcing, especially for the mobile market. With the boom of Pokemon Go and Apple’s ARKit, mobile AR has been placed in the same category as headset-based AR devices such as Google Glasses. As a result, companies are increasingly turning to outsourcing to meet the growing demand for AR/VR future trends of outsourcing development.
Trend 4: The Growing Significance of IT Outsourcing and Cloud Computing
Today, a lot of successful businesses outsource parts of their workload – to achieve their goals. With more and more businesses signing up for outsourcing, it is gradually becoming a norm for business practitioners. But the trend is changing since companies are not just outsourcing non-core activities but tasks that demand quality. One popular managed service that businesses large and small are favoring is 24/7 virtual receptionists, business texting services and call answering services.
By automating routine operations, businesses can reduce the amount of time spent on paperwork and other administrative tasks, as well as the amount of time needed to analyze data and make decisions. This will allow businesses to focus on more important tasks, such as product development, customer service, and marketing. This has led to organizations outsourcing to India and other countries more willing to move to a standardized way of working for non strategic processes.
Outsourcing and cloud sourcing will merge and grow exponentially
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. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.
Research states that the outsourcing market will increase by US$40.16 billion up to 2025. Some of the leading outsourced services, including accounting, IT, and human resources will continue to be in demand for the following years. Outsourcing can have both benefits and drawbacks, depending on a variety of factors. The primary benefits include improved productivity, cost savings, time savings and better use of resources. Outsourcing non-core business functions can also allow companies to tap into vast wells of expertise outside of their industry. Additionally, outsourcing reduces the number of positions needed to fill in-house, helping to ease the hiring burden.
Global Outsourcing: The Rise, Business Impact, and Future Trends
Additionally, the COVID-19 pandemic has forced many businesses to operate remotely, leading to an increase in cyber-attacks and data breaches. Companies must continue to adapt to the new working environment and implement strong data security measures to protect against cyber threats. A significant concern for 2023 is the impact of emerging technologies such as blockchain and artificial intelligence on privacy and data security. While these technologies offer new opportunities for businesses, they also present new risks and challenges that require careful consideration. Businesses will need to prioritize the adoption of these technologies while ensuring they have robust data security measures in place. As the world becomes more interconnected and the global economy continues to grow, it is crucial to stay up to date on the latest trends and predictions for the future of global outsourcing.
- Outsourcing providers are stepping up their cybersecurity efforts to protect themselves and their clients.
- In a post-pandemic world afflicted by lockdowns and travel restrictions, more companies are choosing nearshore over offshore outsourcing.
- It means modern AI applications like chatbots, personal assistants, etc., can automate more processes and reduce human intervention than ever before.
- BPO is another subset of outsourcing that involves hiring third-party vendors to handle business-related operations.
- Put simply, an outsourcing model enables a smaller company to operate efficiently, compliantly, and confidently by relying on experts, with the ability to scale at a moment’s notice.
Thus, the General Data Protection Regulation (GDPR), implemented in 2018, obliges all companies, regardless of their location, to protect the gained data. Therefore, innovative IT companies are implementing a multi-level security approach with the help of outsourced cybersecurity services to eliminate risks, guard business data, meet compliance standards, and scale operations. According to the research conducted by Computer Economics, during the last year, the amount of security work outsourced increased. In summary, the future trends of outsourcing include a strong emphasis on data security. By partnering with outsourced cybersecurity services, companies have an opportunity to proactively address risks, meet compliance requirements, and ensure the scalability of their operations.
#3 Increasing Robotic Process Automation
As the most in-demand jobs increased, more non-core work eventually became irrelevant, triggering an increasing gap between the demand and supply for workers. Remote working is not a new thing – companies like WordPress have been working remotely to their advantage. An increasing number of businesses have even intended to support remote work and balance it with in-house working in 2019. Cost-saving is one of the main reasons businesses decided to outsource during the pandemic.
Of course, this increased adoption will have compliance and technology implications that will impact SLAs. 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. They provide a limited amount of high-quality advice that can help guide a smaller company through its growth stages. Hiring a full-time employee is expensive, with estimates putting the cost per hire at three to four times the salary of each position. After you make a hire, you need to provide quality compensation (especially in a tight labor market where talent is at a premium).
Similarly, according to Outsource Accelerator’s CEO, Derek Gallimore, the outsourcing industry in the Philippines is expected to experience a significant surge, generating 40 million jobs and $600 billion in revenue. Gallimore also stated that the sector is countercyclical, indicating that the cost-cutting measures and potential recession in the West would create more opportunities for outsourcing in the Philippines and other locations. One report by Grand View Research found that the global BPO (business process outsourcing) market reached a value of $261.9 billion in 2022. BPO is an aggregate term that refers to outsourcing a large variety of business functions, operations, and responsibilities to external service providers.