It is a month since we wrapped 2022, but technology is endlessly accelerating and exceeding our expectations. This quick, evident change is racing with time, alerting us to pace with it to get ahead of the curve with zero counterclaims.
With emerging trends like short-term contracts, freelancing, remote work, resignations, and cost-cutting, the gap between supply and demand intensified. Startups could correlate with this state as they face a vast growth potential but labor to quickly and adeptly scale. It not only drove the urgency; but also created opportunities for the outsourcing industry to outsource skilled resources to fill the gaps. And this will see massive global spending on outsourcing hit $731 billion in 2023, with IT outsourcing at $519 billion in 2023.
So, it is understandable with these eye-opening stats that with the upsurge in technology, rising demands, and competition, businesses will manifest the benefits of outsourcing to check off the boxes of:
Cost savings: SMEs, especially startups, are often tight on budget. Apparently, hiring an expert in-house becomes prohibitively expensive. Therefore, in 2019, one-third of the small businesses outsourced at least one business process. Evidently, outsourcing helps to access a pool of talent and resources at lower costs with optimized efficiency. It also reduces overhead, infrastructure, and maintenance costs by outsourcing specific tasks. So, 52% of businesses plan to outsource at least one business process soon.
Scalability: Organizations must quickly scale up or down in the evolving landscape to stay aligned with customer needs and requirements. Outsourcing helps organizations adjust their operations, and labor to the dynamic market, and maximize their productivity and profitability at lower costs with specialized expertise and the latest technologies.
Faster turnaround times: What is your current turnaround time while shipping a product to your customer? Or the consumer loan approval? If you have long turnaround times, you are surely losing a bunch of dollars. Outsourcing non-core activities lead to faster turnaround times, improved efficiency and productivity, increased competitiveness, and lower operational costs.
Continuity: Businesses shift to outsourcing during transitions to sustain, add value, and manage risks. During mergers, downsizing, or changes in management, companies must prioritize their customers and ensure that their experience is consistent throughout their goods and services, and outsourcing helps to meet this requirement.
As it is evident that businesses will move from service-oriented to technology-intensive processes, they need to upgrade themselves with technology innovations, trending tech stacks, and the latest business models. So, just like 68% of the large consumer product companies in the US have leveraged outsourcing, businesses must rhyme with all the facets of this disruptive change. That is what will make your business sustainable and profitable. In other words, you must be data-driven.
Every business needs to be data-driven to address its problems, identify new growth opportunities, and drive profitability. Therefore, collecting, cleansing, and processing data is vital to structure, analyze, and derive insights for quick and better impact.
2023 will be more about organizations diving deep into making data and analytics a fundamental part of business strategies and culture and how to build a data-first culture for exceptional business outcomes.
There is greater scope for the outsourcing industry as multiple organizations outsource their data analytics to gain insights into detailed visualization and reporting. In fact, the global data analytics outsourcing market was $5900 million in 2020 and projected at $60,348 million by 2028 with a CAGR of 34% between 2021 to 2028.
But to pace with such technological advancements, organizations must shift to intelligent automation and machine learning for better insights, accuracy, productivity, and decision-making capabilities. Therefore, the future of outsourcing will heavily adopt Artificial intelligence to promote efficiency and automated workflows, as evidenced by these whopping figures and forecasts- The global AI market as a service offering was valued at $5.9 Billion in 2021 and is forecasted to reach USD 52.8 billion by 2028 at a CAGR of 44.1%.
So, whether you want to shorten supply chains, train autonomous systems, identify efficiencies, look for recommendations, reduce risks or deliver a personalized experience while maintaining consistency and quality, Artificial Intelligence has your back to uncover operational efficiencies, reduce costs, and generate new revenue opportunities.
But, in such unprecedented times, organizations can sustain themselves and generate revenue only if they can speed up time-to-market for their products and services. A study by McKinsey and Co validates the above statement. It proved that if a product gets delayed by 6 months, it earns 33% less profit over 5 years.
No code/low code platforms like Microsoft Power Apps make it easy to build and deploy feature-rich, intuitive business applications through simple drag-and-drop and launch products quickly, unlike the traditional app development process where you require technical expertise and a steep learning curve.
So, this year, outsourcing will witness no code/low code platform trend to increase agility across your organization, modernize processes, and solve tough business challenges.
In today’s dynamic market, businesses must increase agility to quickly adjust to development pace, flexibility, and collaboration with technological shifts. This year, organizations will focus on rocketing agility to survive and grow for better visibility and greater customer satisfaction. And outsourcing will contribute to business agility by giving access to a pool of talent and disruptive technologies, all at affordable costs.
Locating and retaining certified, seasoned experts will be backbreaking this year. The Great Resignation in the United States in 2021 and the recession in the US in the summer of 2022 added to the labor shortage, leading to additional problems related to recruitment, quality, and retention.
There is a global shift in the way people prefer to work. From the onset of the pandemic, employees are prioritizing their families, work-life balance, and mental health. Therefore, remote work has perfected the infrastructure to remain effective in such unprecedented times. So, 2023 is about the outsourcing industry’s capabilities to manage remote work and operations effectively and efficiently in rhythm with the market changes.
Concisely, 2023 will witness oodles of shifts and innovations apart from Data Analytics, AI, Automation, ML, agility, and Remote Staffing. Although our crystal ball cannot foresee those changes, we are always ready for whatever comes to us; we at WaferWire aim to continue to thrive on for excellence to help you reach your full potential.