Trends in outsourcing. Forecast for 2020

If you have already used outsourcing in the past, or are planning to start soon and worry about whether this form of cooperation will pass the test of time, then now you can be calm. Outsourcing just will not disappear anywhere.

In this article, you will learn how to overcome the crisis of outsourcing and what is its future.

A brief excursion into the history of outsourcing

Outsourcing, of course, led to a revolutionary change in the approach to business. Initially, only those tasks that did not carry significant risks, such as payroll or data entry, were outsourced. Then there was a massive outsourcing of contact management and customer service processes.
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Cost savings through outsourcing has become apparent, and more and more companies are paying attention to this. Transnational companies, which sought to save, began to transfer high-level tasks to reliable partners, including IT services, business processes in the health sector and research projects. But today, outsourcing has become something more than just a way to attract cheaper labor. It has become the basis of business strategies for both small and large companies, which consider it necessary to concentrate 100% on their key business operations and transfer the rest to specialized service providers. Outsourcing has become one of the main factors for the rapid development of business in countries such as India, China, the Philippines, and Mexico.

Outsourcing: to be or not to be?

Most companies in various vertical industries confirm the advantages of outsourcing, however, discussions about the sustainability of such a business model in the long term do not abate. Supporters of outsourcing argue that the negative consequences of this process include the lack of quality control and project management, as well as narrowing the scope for innovation. Opponents of outsourcing point out that wage growth makes outsourcing less attractive and in the long run such cooperation can be unprofitable.

Despite these negative trends, the outsourcing market continues to grow. Currently, it is used by companies of any size and activity. Startups and large enterprises resort to outsourcing to gain a competitive advantage in their business scenario. Businesses are starting to use a variety of platforms, including cloud technologies, social networks, mobile solutions, etc., and stakeholders are becoming increasingly geographically distributed. In such a fragmented environment, outsourcing was still able to adapt to rapidly changing business environments.

The crisis in the business sphere only contributed to the further development of outsourcing. The recent global economic crisis has shown that companies need not only to learn to survive in times of recession, but also to look for new ways to overcome problems and achieve success in such a situation. Given the current situation, the motto for many will be “outsource and survive”, in addition, you need to ensure effective management of your projects in the field of outsourcing and do everything you can to stay ahead of the competition.

The future of outsourcing

• Relationships in the format of outsourcing have become more standardized, and now the parties are more focused on people and processes than on prices. This allows outsourcing providers to look to the future with confidence.
• The need to reduce costs will lead to the emergence of outsourcing contracts, under which flexible service level agreements (SLAs) and the volume of services provided will be concluded.
• Small businesses, start-ups and companies of the SOHO format (from the English Small office / home office - “small office / home office”) will be more active than others to take advantage of outsourcing, increasing operational efficiency and reducing time to market.
• Rising prices for oil and other raw materials, as well as transportation services will force companies to explore opportunities for outsourcing, since they will be forced to reduce operating costs.
• More and more critical high-level business functions will be outsourced in the next decade, and the low-level outsourcing market will stabilize.
• Latin America and Europe can compete with India as the main provider of outsourcing services.
• As cloud computing outsourcing services become increasingly widespread, support and development services will be increasingly in demand.
• In order to reduce costs, manufacturing and pharmaceutical companies will prefer areas that allow them to take advantage of low labor costs and operating costs. In addition, huge outsourcing potential will also be actively used for outsourcing research and development in these industries.

Will outsourcing disappear in the coming years? Definitely not. Outsourcing service providers can look to the future with confidence, as they provide their clients with access to specialized skills and not only save their time and resources, but also allow them to focus on solving key business problems.