5 Leading Global Outsourcing Trends to Watch for in 2023
Today’s outsourcing market has been forced to change faster than ever. It is one of the fastest-growing sectors, in spite of all the global challenges in the past few years. Outsourcing has adapted well to business disruptions such as health pandemics, tight labor markets, supply issues, climate change, and global power shifts.
Today, outsourcing is a proven solution to navigate the labor market, reduce risk, maintain productivity, and meet various challenges.
The latest outsourcing trends are focused on enabling businesses to adapt faster, manage resources more efficiently, and maximize their productivity. Here are some outsourcing trends that you should be aware of in 2023.
1. A growing market for cloud computing
There is an increase in demand for cloud computing as data storage requirements increase. Businesses of all sizes are flocking to the cloud due to its processing power, flexibility, and scalability. As of 2022, 60% of all corporate data will be stored in the cloud, according to Statista.
The use of cloud services simplifies the outsourcing process for businesses. Among the main outsourcing instruments are cloud-based technologies, which are flexible and expandable. The cloud allows for the sharing of information, as it is always online and available.
The cloud computing market is experiencing explosive growth due to pandemic-related disruptions and emerging technologies. According to MarketsAndMarkets, Fortune, Business Insights, and Grand View Research, its size is somewhere between $250.04 billion and $445.3 billion and will grow at a CAGR of 15.7% to 17.9% by 2026-8 to reach $792 billion to $947.3 billion. According to other studies, it will surpass $1 trillion by 2030. This trend will continue in 2023, as this technology will continue to benefit the sector.
Automation of internal and external processes, as well as control over robots, is possible through Robotic Process Automation (RPA). In RPA, artificial intelligence (AI) performs routine, time-consuming tasks, freeing humans to work on more complex tasks. The advantages of RPA include increased speed and efficiency, cost savings, improved accuracy, and scalability.
By automating processes, optimizing workloads and elevating services, robotic process automation (RPA) is driving innovation in business process outsourcing (BPO).
As companies realized they could save money by automating repetitive tasks and allowing only critical tasks to be handled by humans, the demand for RPA increased. It is expected that outsourcing companies will continue to implement RPA and automation that will bring great benefits in the near future.
AI and Chatbots
Some customer support tasks are automated and sped up using AI and chatbots by BPO providers. Clients can use chatbots as personal assistants whenever they need help with various tasks.
2. Partnerships for strategic growth
Partnerships have become increasingly important in the outsourcing industry in recent years. Consequently, skills are valued more than cost-cutting by companies. To ensure seamless collaboration, outsourcing companies tend to build global teams, and this trend is expected to increase in 2022. In the near future and in the future, the agile, highly responsive way of cooperating is likely to be of greater value. Outsourcing companies that work with outsourced staff increasingly seek long-term collaboration and strategic partnerships as long as one vendor meets their needs.
3. A growing market for BPO
In addition to enhancing flexibility and adaptability, business processing outsourcing reduces operating costs and allows companies to focus on core competencies, among other advantages. More organizations are outsourcing some of their business functions because of these benefits.
According to a report by Grand View Research in April 2022, the global BPO market reached $245.9 billion in 2021 and will grow by 9.1% from 2022 to 2030. Increasing efficiency and business agility, decreasing operating costs, and emphasizing core competencies are the main market drivers.
The most outsourced tasks
The following services were the most outsourced in 2022:
- Information Technology
- Administrative Service
- Accounting and Finance
- Sales and Marketing
- Human Resources
- Legal Services
- Customer Support
- Tax Preparation
- Computer Programming
- Shipping and Logistics
- Web Design
- Healthcare Services
4. Secure and robust cyber infrastructure
Digitization makes BPO more vulnerable to cyberattacks, so cybersecurity plays an increasingly important role. Data security is one of the top priorities of outsourcing when it comes to security threats. Since companies trust their data to a third party, outsourcing poses some risks, making cybersecurity one of their top concerns.
The security of data has become a trend and a necessity because it has become the most valuable resource. To ensure data and outsourcing process security, it is important to choose a reputable company.
Deloitte reported that 64% of businesses plan to invest in security capabilities to combat security threats and ensure the reliability of their infrastructure. Strengthening cyber security will help you earn the trust of customers and feel more confident in the market during times of cyber attacks.
To protect themselves and their clients, outsourcing providers are stepping up their cybersecurity efforts. The majority of outsourcing companies follow multiple levels of security, such as multi-factor authentication and GDPR compliance, to prevent security breaches.
5. Increase in flexibility, agility and adaptability
As a result of the pandemic, the workplace has changed dramatically. More and more companies are replacing traditional office-based jobs with flexible, remote ones. In order to move to remote mode, businesses had to restructure and rapidly adapt, and only afterward realized all the benefits and opportunities that were available. A remote work environment allows businesses to hire the best talent from around the globe; technology and cloud infrastructure make it possible to execute workflows at any time and from anywhere. Globally, remote work remains a trend in 2023 despite the pandemic slowdown.
A digital era has brought with it developed technologies, software, and applications, outsourcing with its flexibility and lack of geographical borders, access to a wide range of specialists and narrow specialists, short-term collaboration within one project or even just one task, as well as long-term collaboration. Outsourcing continues to develop and grow as it adapts to the challenges of the present.
In almost every industry, outsourcing is used to complete important projects. To meet high demand, BPO providers were forced to become agile, flexible and adaptable. Navigating the volatile landscape with lockdowns, highly frustrated customers, labor shortages and travel restrictions placed great stress on BPO companies. Those who failed to adapt failed altogether.
Businesses must follow the latest outsourcing trends to adapt fast, manage resources efficiently, and optimize productivity. In 2023, they will focus on remote services, flexible contracts, access to the latest technologies and speeding up time to market.
6. Ensuring business continuity
Traditionally, Business Continuity Plans (BCPs) are required for investment firms, but few have experienced a crisis or dislocation that completely disrupted operations. There is no doubt that the pandemic highlighted the benefits of outsourcing in terms of business continuity.
Outsourcing supports business continuity planning and can help firms fulfill their fiduciary responsibilities to clients. Here are a few key benefits of outsourcing for business continuity:
- Preventing a disaster from compromising a firm’s technology infrastructure, data, and operations
- Connecting remote workers to core systems securely from anywhere
- Increasing personnel depth and expertise to minimize disruptions caused by turnover and key person risk
- Implementing a business continuity plan that complies with regulatory requirements
The practice of outsourcing is changing as clients seek shorter contracts with fewer or one provider instead of dealing with multiple providers in the past. This ensures stable BPO services and avoids fluctuations or disruptions caused by switching providers.
Outsourcing is used by almost all industries to complete important projects. The digital age has brought about the development of technologies, software, and apps, outsourcing with its flexibility and no geographical boundaries, access to a large pool of specialists as well as narrow specialists, short-term collaboration within one project and even one task, and long-term collaboration that is appealing to a growing number of people. Adapting to the challenges of the present, the outsourcing industry continues to grow and develop.
There is a fast-paced change in the outsourcing market today, as it adapts to global challenges. The latest outsourcing trends help companies adapt faster, manage resources more effectively, and optimize their productivity.
In order to remain competitive, businesses must keep up with the fast-paced outsourcing industry. Your business will be affected by these trends both now and in the future.
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