Outsourcing industry trends: how outsourcing is evolving

There is no question that the outsourcing industry in the Philippines is big business with a compound annual growth rate of around 10% in the past decade (Oxford Business Group). In addition to this, the BPO sector has become the country’s largest source of private employment and the second-largest contributor of foreign exchange according to Asia Telecom Holdings.

The latest research from Deloitte shows that along with this growth the industry continues to evolve past the traditional ‘cost saving’ motivations to a more ‘benefits based’ motivations. In this blog we highlight some key trends that showcase how outsourcing is evolving.

Motivations are evolving

Traditionally cost saving has been the biggest motivation for engaging an outsource team, this is changing. What could be more motivating than cost saving? According to Deloitte’s research, while cost saving is still the top motivation at 59%, coming in a close second is the ability for businesses to focus on core business functions. Whilst it’s important to operate cost effectively to ensure sustainability and success, it is also very important for your business to be efficient.

Moving process driven tasks offshore allows your onshore team to focus on the core business functions that generate income and encourage growth.

Some other motivations that came up in the Deloitte’s study included:

• Cost cutting tool – 59%

• Enables focus on core business functions – 57%

• Solves capability issues – 47%

• Enhances service quality – 31%

• Critical to the business needs – 28%

• Access to intellectual capital – 28%

• Manages business environments – 17%

• Drives broader transformational change – 17%

Technology is evolving

There have been many technological advances that are transforming how businesses operate with an offshore team. Two notable advances include robotic process automation (RPA) and cloud computing.

RPA involves automating a business process with the help of a robot or a “bot”. It works the way Siri or Alexa do, only for your business, by mimicking human interaction. For example, RPA is being used in business to improve customer enquiry response times, whether it’s through live chat on a website or email, without requiring staff around the clock to address them.

Cloud computing is about efficiency as well as efficacy - the ability to produce a desired or intended result. Gone are the days where a business needed a local server or even a personal computer in order to store, manage and process data. Cloud computing allows for this using the internet; because of this, businesses can eliminate the need for expensive infrastructure.

Required outcomes are evolving

This follows on directly from how technology has evolved and what new horizons have opened up for different businesses.

Outcomes are more focused on providing what the customer requires in the form of a service. This could be software as a service (SaaS), where the vendors manage the technical part of the software and the client need not download and install anything, resulting in easy access from virtually anywhere with any device. Other examples are PaaS (Platform as a Service) as well as Infrastructure as a Service (IaaS), this is outsourcing the managing and maintenance of your servers, hard drives and so forth.

Data privacy and cybersecurity is evolving

There has been a drive to protect and preserve customer data globally. After a few notable scandals it’s understandable why. The result being a “increase in IT security outsourcing to ensure the robustness and integrity of customer’s [business] infrastructure” according to a Computer Economics recent study.

Outsourcing is an important industry that continues to grow as a response to ever-evolving technologies and demands. As business needs continue to evolve, outsourcing companies will continue to provide essential resources and services. The biggest trend is definitely the growing implementation of outsourcing across different business sectors and how it is changing the way business is conducted.