Is your small business expanding? Do you wish to cut down on your costs without compromising your services? Then outsourcing is likely the answer you are looking for.
Regardless if you’re a small firm or an established one, outsourcing can help you in many ways. A key survey revealed that 59% of companies invest in outsourcing to cut down their expenses.
Though this is encouraging to hear, it is not enough for you to simply outsource on the fly. You must also look at the latest outsourcing trends that will shape the industry this year.
So what are these trends to look out for? Continue reading below as we discuss seven trends that businesses must be aware of.
The Outsourcing Industry: A Brief Overview
Before we discuss the latest outsourcing trends, let us first get a glimpse of the outsourcing industry today. Apart from its cost-cutting benefits, outsourcing helps companies focus on their core business. This helped the industry nearly double its growth over the past two decades.
From $46 billion in 2000, spending on outsourcing grew to $85.6 billion in 2018. Furthermore, the United States outsources around 300,000 jobs annually.
Companies are also starting to embrace cloud services to improve their outsourcing. This is despite the concerns on data security surrounding cloud technology.
Furthermore, 70% of transportation and retail firms outsource portions of their services. The same thing goes for 71% of financial service executives in the country.
With 2020 already underway, there are outsourcing trends that will make an impact this year. Let’s take a look at seven of the most important ones:
1. More Flexible Contracts
If it is your first time to outsource, you will encounter a contract that comes with stipulations. But unlike before, companies can expect more custom outsourcing agreements this year.
You will see more contracts that come with room for flexibility. This is important considering the different limitations and cost pressures that businesses face in regard to their outsourcing needs.
This flexibility covers service, delivery, and pricing.
2. More VAs and Chatbots
You can also expect to see more virtual assistants (VA) and chatbots doing the job for companies. Businesses will incorporate these technologies to interact with their customers.
This new form of outsourcing is evident in the chat boxes that you see on various websites. These chat boxes address customer inquiries without sounding too robotic.
The good thing about chatbots and Vas is that they offer consistency. Though real people can show emotional knowledge, there is a tendency for them to lose their cool. Moreover, chatbots can handle different tasks that don’t require human emotions.
These tasks include arranging schedules, finalizing meetings, and qualifying clients, among others.
3. The Cloud Effect
As we mentioned earlier, more companies are opening up to cloud services. Cloud-based technology increases connectivity. In turn, this makes offshoring more efficient.
Furthermore, the media and information industries will continue to invest in telecommunications outsourcing. They will continue to incorporate cloud-based systems to expand their reach without physically going out in the field.
Also, the cloud computing industry will likely continue to grow. In 2020, the market grew to $180 billion. By the end of 2020, observers believe the industry will reach the $411 billion mark.
This is because tech leaders like Google, IBM, Intel, and Microsoft will pour in more money to create a quantum computer. Experts also believe that the quantum computing market will reach a value of $8 billion globally by 2027.
4. Telehealth Market to Make Waves
The healthcare and medical technology industries will continue to outsource reduce their costs while improving their processes. The telehealth market will offer more online video calls in lieu of physical hospital visits to the doctor. You can expect to see more hospitals attending to patients living in faraway places through online services.
Moreover, hospitals will outsource wearables to improve their diagnostics. Examples of these wearables include smart eyewear, wearable patches, trackers, and heart bands. Observers project the medical industry will spend over $27 billion over the next six years.
Additionally, more doctors will outsource virtual reality tools featuring artificial intelligence. They will use these gadgets to diagnose more complex diseases like Alzheimer’s.
5. Small Businesses to Outsource Heavily
More start-ups and small businesses will outsource this year. These companies will increase their spending on software development from 6% last year to 9% this year. Moreover, small companies will look to use new technologies and approaches to improve their services.
Instead of building in-house teams to cover non-key operations and other excess workloads, they will opt to outsource since it’s the more cost-effective way to go.
Outsourcing offers financial respite for smaller companies that are working on a tight budget. It also solves problems concerning a lack of manpower.
6. New Outsourcing Destinations
You can expect to see new players for software development outsourcing. Though China and India will continue to serve as havens for IT and business process outsourcing companies, Eastern Europe will rise as the emerging provider for small to medium-sized firms. For example, Ukraine is one of the top outsourcing providers in Central and Eastern Europe. IT services in Ukraine are growing rapidly, and the opening of R&D centers of tech giants is proof of that.
Also, medium-sized companies in the US and Western Europe will continue to experience a talent shortage. This will prompt them to outsource employees who are technologically-skilled.
7. The Emerging Experience Economy
Last but not least, there is the emerging experience economy that will play a bigger role this year. This pertains to the companies’ needs concerning experiences affecting the overall client experience.
This involves outsourcing services that focus on intangibles and immaterial attributes. These include aesthetics, values, culture, and design.
Examples are services that improve the health and wellness of employees. Companies will look to outsource wellness solutions to increase employee retention and satisfaction. More businesses will hire coaches, trainers, doctors, and therapists who can provide these services.
Outsourcing and Beyond
By following these outsourcing trends, you can make better decisions about your outsourcing needs. You can invest in the right services that will improve your company’s overall efficiency.
But outsourcing is only one of the many tools worth considering. Check out our other articles to learn more about other solutions. We discuss topics that will help grow your business.
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