How Outsourcing Practices Are Changing in 2020: an Industry Insight

Be sure to choose an outsourcing partner that has expertise (education, certification and/or other credentials), experience , and good security . Improving business performance, turning risk and compliance into opportunities, developing strategies and enhancing value are at the core of what we do for leading organizations. Next-generation outsourcing deals move beyond cost-cutting and enable true business transformation. Our multi-disciplinary approach and deep, practical industry knowledge, skills and capabilities help our clients meet challenges and respond to opportunities.

Although BPO originally applied solely to manufacturing entities, such as soft drink manufacturers that outsourced large segments of their supply chains, BPO now applies to the outsourcing of services, as well. Back in 2016 Deloitte outsourcing trends submitted 72% of respondents from the business sector to already outsource IT functions and over the quarter planning to increase the use. Notably, 70% of surveyed companies are going to outsource more in the upcoming years.

Another large shift that Gartner predicts in this market is that by 2023, 40% of finance organizations will consolidate to a single outsourcing service provider for all F&A operations, up from 24% in 2019. Every organization must seek to eliminate or reduce the environmental costs of doing business. Decarbonizing the supply chain is a sensible place to start, but forward-thinking businesses are looking beyond the supply chain to improve sustainability across all business operations. And of course, sustainability is linked to resilience, since resilience means being able to adapt and survive for the long term. Any business that ignores sustainability is unlikely to do well in this age of conscious consumption. ● This report will help stakeholders to understand the global industry status and trends of Outsourcing and provides them with information on key market drivers, restraints, challenges, and opportunities.

The future of outsourcing: Where is the industry heading?

Even when times seem relatively calm, organizational inertia, painstakingly built relationships, and an understandable desire for stability can lead procurement teams to stick to current suppliers. Moreover, digital sourcing doesn’t just represent a new provider but a new way to work with all providers. Given the radical changes most organizations now face on multiple fronts, some working teams may argue that they don’t have the bandwidth to support a digital procurement program as well. But the number of such deals almost doubled over the five-year period. That potential opportunity stands in sharp contrast to the overall outsourcing industry’s single-digit growth rates.

The technologies that are now erupting in the digital ecosystem will seep deep within and influence the majority of outsourcing operations. The outsourcing model so far is based on the services provided by people and supported by tools. A more digitally-inclined model is taking form where services are offered by digital tools and the ones supporting the efficient working of these tools are people. Companies are becoming more aware of the risks and instead of creating an output-based contract, they will now be forming outcome-based contracts. This kind of outsourcing will not just mitigate the risks for the outsourcing buyers, but also motivate the outsourcing service providers by sharing rewards.

what are future trends in outsourcing

This is since the new normal obliges businesses to keep up with digital transformations and the increasing competition within their industries. A lot of adjustments had to be done when companies were forced to work remotely during the pandemic. Outsourcing made it easier for them to implement remote work and adjust to a digital environment as a way to provide uninterrupted service to their customers.


This has caused businesses to go through their outsourcing contracts once again, set-up new pointers for WFH, etc. Moreover, with many countries under lockdown, organizations outsourcing their business operations to other countries are facing challenges in ensuring business continuity. This is shifting their attention to countries that are not so severely affected by the pandemic.

Small businesses have moved toward outsourcing a majority of their processes in order to cut costs, focus on core business, resolve capacity issues, get better quality, and much more. Value networks are connections you build to create value for your company or its processes. A large food and beverage company had a well-established shared-services function, with consolidated finance and HR to support global operations. But costs were still very high, and integrating new business in the existing setup was becoming tedious. The organization asked a global BPM leader to transform its existing setup to make it scalable and cost competitive. These were all agreed to in crafting the contract between the two sides, a process that built trust and helped align long-term interests.

  • Co-sourcing will become the new norm as businesses choose to support each other and share the risks.
  • Technology advances give businesses, governments, and social-sector institutions more possibilities to lift their productivity, invent and reinvent offerings, and contribute to humanity’s well-being.
  • In 2019, Clutch found that 37% of small businesses already outsourced at least one business function, and Statista reported the total market value of the global outsourcing market to be worth $92.5 billion.
  • As the majority of the countries are under complete lockdown, many companies are repatriating services for the short term to plug the gaps.
  • SEO, PPC, social media, and web design are some of the tasks you can delegate to digital outsourcing.
  • Consultants such as Outsource Accelerator are there to educate first-time clients interested to dip their toes in the industry.
  • The breakthroughs and trends mentioned above proved that now is a great time to outsource services.

Even during unrest, they can easily go through their contract and ensure that the work is not hampered. Their interests will be focused on the outcome of the collaboration and not in either completing the task for the client or just delegating a task for completion. Outsourcing, especially IT outsourcing, has been completely shaken up. For enterprises to ride the wave of change and emerge on the other side, shifting gears today with the latest outsourcing practices is imperative.

Future trends of outsourcing reveal the ever-increasing focus on cybersecurity and compliance.

It reached approximately $133.78 billion in 2021, growing at a CAGR of slightly above 85.2% between 2016 and 2021. According to a report by Greenlight Insights, which is also predicting that global VR revenues will total close to $75 billion by 2021. Ukrainian professionals combine moderate rates with mature workflows and high-quality results. Due to safe money transferring, cultural proximity and solid R&D base, Ukrainian IT companies are often chosen as reliable long-standing partners for various IT development projects. With the extensive raise in technologies, IT companies get pressure to remain competitive. From cybersecurity and AI to blockchain and cryptocurrencies, the insurgency of new technologies is overwhelming.

what are future trends in outsourcing

Outsourcing dates back to the 1970s when manufacturing companies looking for process efficiency began hiring third-party vendors to manage their less-than-essential processes. This approach made its way to IT operations and entire back-office operations, including human resources, payroll, and accounting. Entities have distinguished themselves by offering specialized technologies and tools and the relevant professionals to help implement and manage the required technology.

HR Outsourcing Trends

Worldwide, companies spend an estimated $230 billion on managing business processes. These range from customer-service functions, such as call centers, to back-office processing in applications such as claims, payments, finance, and procurement. To date, outsourcing deals that explicitly call for next-generation technologies account for only a small share of the total spend. We live in a time where pretty much anything can be achieved by outsourcing.

what are future trends in outsourcing

● The report provides assessments of Business Process Outsourcing market share at both country and regional levels. With unprecedented bottle-neck in business due to the pandemic and lockdown policies. Many organizations have created multiple strategies to ensure business continuity in even the most extreme circumstances.

And it’s a good job, because the need to work together to solve key business challenges (not to mention humanity’s biggest challenges) is great. Indeed, in the future, it will become increasingly difficult to succeed without really close partnerships with other organizations. In practice, this means greater supply chain integration, more data integration and sharing of data between organizations, and even cooperation between competitors. ● This report will help the readers to understand the competition within the industries and strategies for the competitive environment to enhance the potential profit. Etc. of the main players, which helps the readers to identify the main competitors and deeply understand the competition pattern of the market. The readers in the section will understand how the Outsourcing market scenario changed across the globe during the pandemic, post-pandemic and Russia-Ukraine War.

The future of outsourcing in the next years

The report by Gartner reveals that IT spending is expected to climb to $3.8 trillion in 2019, a 3.2 percent increase from the projected spending in 2018. The lack of in-house engineering talent will become one of the core reasons to outsource. One survey illustrates that over 70% of technology employers in the UK expect to face a talent shortage over the next 12 months.

Updates on our eight finance trend predictions

More than 75% of respondents are actively considering or pursuing RPA in their sourcing arrangements. Our interviewees are now focused on solving the tactical challenges of RPA adoption, such as developing and maintaining a positive business case, defining provider responsibilities, and assigning data ownership. Outsourcing has been empowering companies to get more tasks completed at a lower cost since the 1980s.

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Crunch time series for CFOs: Finance 2025 revisited

Clients receive 24/7 access to proven management and technology research, expert advice, benchmarks, diagnostics and more. Gartner analysts discussed today how finance leaders can ensure sustained value from their outsourcing partnerships during the Gartner CFO & Finance Executive Conference, taking place virtually, May 25-26. Today’s consumers are seeking a more meaningful connection with brands.

There are certain trends that are expected to take a complete turn after the lockdown, and digital transformation or business automation will be a popularly-adopted strategy. Additionally, businesses often don’t dedicate the time required to recruit a new employee to leverage potential growth opportunities. This is where globaloutsourcing providerscan have your outsourced team set up in as little as six to eight weeks. Obviously, this promises significant growth prospects both for vendors and clients. In the future, big companies will partner with multiple narrowly specialized vendors.