There’s no doubt that 2020 changed the global business landscape.As 2021 nears the last quarter, it is obvious that the world will not return to normal anytime soon. However, the customer demands continue to rise, with more focus on seamless shopping experiences online and quality customer service. In 2020, businesses that were backed by strong IT infrastructure or Managed Service Providers continued their operations with minimal hiccups. Outsourcing really stood out during these unprecedented times. Due to many organizational adjustments occurring to continue making deliverables available to customers, more and more businesses turned to outsourcing during the pandemic. As the world looks forward to the remaining few months of 2021 and beyond, how does the future of outsourcing after COVID-19 look like?
Outsourcing after COVID-19: The shift to the digital marketplace
With entire countries on lockdown for months on end, curfew and restrictions in place, prohibitions on gathering outside, and indefinite shutdowns of transit systems, even businesses that never operated on the digital platform were forced to come online. Businesses that survived the first wave were the ones who already had at least a basic skeleton in place. For others, there were slim pickings.
The COVID-19 pandemic has shown that it is imperative for businesses to manage their IT service providers better – especially those that facilitate their process services and digital capabilities to stay afloat during and after crises periods. With digital transformation, organizations have become more reliant on the success of tailored solutions that outsourcing offers at competitive costs and excellence.
Considering the wonders that such solutions offer, the rise of outsourced solutions is poised to grow at a CAGR OF 4.5% from 2021 to 2026. However, as with every other industry, the outsourcing industry is also undergoing significant transformations in the wake of the pandemic. From co-sourcing to multi-vendor outsourcing, there are several ideas that are breaking the ground. In this article, we try to explore what experts believe to be the most popular post-pandemic outsourcing trends.
Read on to discover!
Post-pandemic outsourcing trends: The future of outsourcing after COVID-19
Trend 1: Rise of value networks
In the outsourcing industry, forging connections to land business deals for a company and its services is known as value networking. Value networks are critical for the success of any business as they facilitate collaboration among partners and enhance the visibility of the supply chain. There are different kinds of value networks.
The ones slated to perform the best this year are:
• Single Enterprise Networks where outsourcing companies hire resources from other service providers to amp up their products and deliverables.
• Purchasing Networks where two or more businesses come together to generate more business, develop better solutions, and maximize the returns on outsourced services.
• Service Provider Networks where two outsourcing businesses join hands to solve complex issues that they encounter.
Trend 2: The multi-vendor approach
Most businesses that outsource their requirements seek out a reputed vendor and settle for a long-term association with them wherein one completed project turns to multiple completed projects, success stories, and referrals. However, this is a conventional approach that almost isolates businesses from trying out other vendors who may have competitive prices or better resources. With most of the world turning to outsource to India and other countries, business pundits areexpecting entrepreneurs to switch to the multi-vendor approach instead.
The multi-vendor approach advocates outsourcing different projects to different vendors and countries. There are two main benefits of this approach:
• In an effort to play it safe, companies often miss out on better resources, processes, and prices. Granted, it involves a sense of trust and credibility that has been built over time, but with due diligence, it’s possible to build more such trustworthy partnerships. With a multi-vendor approach, it becomes really easy to get the best of all the technology, processes, and resource experiences.
• Having multiple vendors cater to diverse requirements means not putting all eggs in one basket. This way, businesses can bypass suffering major losses in case of unforeseen circumstances like closure of the outsourcing partner company or crises like the COVID-19 pandemic.
Trend 3: The popularity of co-sourcing
While outsourcing is a business best practice, a majority of entrepreneurs also want to retain their in-house staff. This has given birth to the concept of co-sourcing.
When businesses leverage the expertise of an offshore team along with the geographical familiarity of their in-house staff, it’s called co-sourcing. Co-sourced relationships allow businesses to continue benefitting from their core business expertise while collaborating with affordable state-of-the-art technology partners to maintain their competitive edge.
As this partnership cements, both parties become more value-driven and result-oriented. In the long-run, it becomes feasible to co-create, develop, and innovate together, thereby bringing in more market capital and financial value to both the business and outsourcing vendor.
Trend 4: The digital outsourcing model
Presently, the conventional outsourcing model comprises of services and products offered by experts and powered by tools. But one of the most anticipated trends in outsourcing after COVID-19 is going to be the takeover of this model by automated processes.
Post-pandemic, businesses can expect more and more services being offered via digitally automated tools that are maintained by experts. Such models will be truly digital and sustainable in nature. Some of the booming processes in this field include machine learning, robotic automations, and artificial intelligence.
In a nutshell
The global outsourcing marketplace was valued at US $318.5 billion in 2020. It is expected to reach US $425.19 billion by 2026. This means that businesses that are yet to leverage the benefits of outsourcing, should partake in this wonderful value-adding practice. There are so many affordable places to begin with. For instance, when businesses outsource to India, they save as much as 70% of their operational, infrastructural, and recruitment expenses. The rising cloud migrations, cloud services, and automated processes have made outsourcing more than just a cost-reducing approach. Businesses now prefer outsourcing also because of the innovation, customer experience, and quality that it brings.
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