How Outsourcing Practices Are Changing in 2021: an Industry Insight

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. Burgeoning outsourcing destinations like Ireland and Egypt will be able to continue their growth in the new year, along with new players yet to establish themselves. Outsourcing companies in Bulgaria, Romania, Colombia, and Poland have a chance to capitalize on global talent migrations and overcome some of the labor challenges they’ve had in the past. In addition, the need for automation has grown alongside the shortage of outsourcing talent.

It’s going to be a huge factor in the war for talent that we mentioned earlier. But it’s also something that most current workers want to keep, even when offices reopen in their area. Since the onset of the pandemic, workers across many industries around the world have been reevaluating their relationship with work. The result has been a global shift in the way that people look at how work fits into their lives. RPA allows us to keep up with the increased cost-efficiency and productivity demands of our clients.

Outsourcing will be a Success Key for Firms:

For instance, accounting and IT services make up 37% of all outsourced jobs, whereas digital marketing makes up another 34%. Most of the small and mid-sized businesses don’t have big budgets for cybersecurity. About 14% of companies report outsourcing over 50% of their cybersecurity operations. U.S. outsourcing statistics from 2020 show only 19.4% of marketers observed a change in the outsourcing marketing activities during the pandemic. Despite the pandemic, some tech businesses even decided to increase their IT budgets, outsourcing statistics from 2020 show. Others collaborated with their offshore and nearshore IT outsourcing partners.

A strong bond can increase commitment and trust, which makes reaching objectives easier. You’ll need to know relevant https://www.globalcloudteam.com/ to develop a successful strategy. Sixty-one percent of the companies we surveyed said that they accelerated parts of their digital transformation over the course of the year, although 42% noted that they slowed down some projects.

Cost-Effective Ways to Promote Your Business

Not only have technologies evolved, but ways of working also transformed and borders expanded.

• For these reasons, outsourced partnerships should always be based on transparency and open communication, with clearly defined goals and expectations from both parties.
• These top outsourcing trends in 2021 hint of, hopefully, a continuous positive uptrend for the rest of the year, carrying on from an equally optimistic market outlook from 2020.
• An SLA can give your business a clearer idea about the quality of the outsourced work and help enterprises to hold the outsourcing provider accountable.
• It is often far easier to delegate cloud computing rather than try and implement it yourself.
• People have been doing it for a number of decades, but it has become easier than ever with access to new technology.
• Of all the IT services, most companies engage in RPA and software outsourcing.

Most readers think about environment-friendly outsourcing practices when hearing the term sustainable outsourcing. Instead, we are talking about sustainability in general—practices that satisfy present needs without compromising with future needs. Businesses have started looking for outsourcing contracts that have provisions for lockdowns or global uncertainties where the world comes to a standstill. They need to react, remodel, and return to business in the “new normal” which is touted to be financially risky.

Preferring remote work

This levels the playing field, allowing them to compete with much larger, more established companies. There was a time when outsourcing was seen as a very ‘transactional’ process. It can be a bit like working with a plumber when something goes wrong in your home. You call the plumbing company when you need them, but you don’t tend to have an ongoing or long-term relationship.

Artificial intelligence (AI) and process automation (PA) are rapidly transforming the outsourcing industry. Many businesses are already using AI-powered tools to automate repetitive tasks and improve efficiency. A recent report made by the market research firm Technavio identifies PA as one of the key drivers that will speed up the growth of the outsourcing market during the next few years. This trend is expected to continue in 2023, with outsourcing providers increasingly using AI and PA to deliver more efficient and cost-effective services. The need for data security, process automation, and AI solutions has caused the growth of the IT outsourcing industry. Moreover, the estimated market value will take place at a CAGR of 4.5% per year.

Outsourcing Trends In 2023

It makes perfect sense, as you can outsource some roles that may have once had to be manual– including data entry and order processing– and these can be greatly helped by technology. Only larger companies tend to have their own cybersecurity employees, so it is not uncommon to outsource to others. In this case, it is a chance to tap into other peoples’ expertise more than to save money. Services can range from consultancy on the best practices for your security to fully running your cybersecurity and protecting you from attacks.

While outsourcing is likely to continue growing, the functions that are outsourced and the companies that rely on outsourcing may change. Operations are generally moving in-house, while key sectors like software development and maintenance remain outsourced. The outsourcing industry has experienced significant growth in the IT sector in recent years, with IT tasks accounting for 37% of all outsourced tasks. This growth is driven by various factors, including cost savings, scalability, and flexibility. The average IT department budget allocated to outsourcing is 13.6%, indicating the importance of outsourcing in the IT industry.

24.5% of all organizations are going to increase outsourcing efforts or outsource for the first time in 2021.

Some of the crucial factors you should consider while choosing an IT outsourcing company include experience, domain knowledge, skills, cost-effectiveness, and customer satisfaction levels. However, to reap the maximum benefits of these IT it outsourcing trends, you need a trusted, expert, and experienced outsourcing IT partner. This security is attractive for companies seeking to outsource IT functions or cloud storage. And due to its decentralized nature, blockchain makes it easier to derive value from data in the form of business intelligence (BI). Therefore, considering the sudden rise in the acceptance of this technology, it is estimated that by the end of 2022, the value of global cloud computing will reach 180 billion U.S. dollars. Also, SaaS application development alone is estimated to earn 113.1 billion dollars.

Companies are handing over cybersecurity to MSPs as they’re more likely to have cybersecurity experts and advanced solutions. The demand for MSPs is so high that it was worth $152.02 billion in 2020 and will grow to $274 billion by 2026, as per Statista. This market will expand at a compound annual growth rate (CAGR) of 38.2% from 2022 to 2030. Companies keeping abreast of emerging technology can use it to automate processes, increase efficiency, and simplify operations. More extended contracts can ensure you’re provided services even during uncertain times because you’ll work with a trustworthy outsourcing partner. And a company is more likely to build a strong relationship with its outsourcing company when it’s working with the same team for an extended period.

Ensuring business continuity

As a result of these cyber threats, new and emerging privacy and data protection regulations are expected to impact the outsourcing industry. Many countries are introducing or strengthening their existing privacy and data protection laws, including the European Union’s General Data Protection Regulation (GDPR), which will have been in effect for five years. 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.