The Future of Outsourcing: 2021 Trend Report

More extended contracts can ensure you’re provided services even during uncertain times because you’ll work with a trustworthy outsourcing partner. Businesses now believe a strategic partnership with fewer outsourcing companies can ensure business continuity and cost saving. Moreover, outsourcing enables companies to offer their clients customized solutions. An outsourcing company is more likely to have the time, expertise, and resources needed to customize solutions than an in-house team. In this article, we’ll discuss the 13 most crucial outsourcing trends of 2022 that you should watch out for in 2023.

trends in outsourcing

In this article, HBS professor Willy C. Shih outlines some of the policy approaches and offers a framework for responding to them. Companies in targeted sectors—such as automakers, energy companies, and semiconductor manufacturers—may experience dramatic changes in their operating environments. Despite the uncertainty of 2020 pushing it further, the digital model of outsourcing is all set to emerge.

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And this was especially true for small to medium-sized businesses (SMBs), which tend to lack the resources to keep various business processes in-house. Verizon’s report showed that over half of the victims (58%) from the data breaches experience personal data leakage. This indicated that the outsourced company’s information gets leakage, and outsourced firm’s customers will also be affected. For example, Adobe in 2013 got a data breach that impacted at least 38 million of their customers.

Yet, even if offshored workers become dedicated to company products and stay for the long-term, outsourced teams are still more suitable for temporary projects and may expose your IP rights and internal expertise to risk. Thus, smart business leaders reconsider outsourcing as an efficient part of the BC plan. With the usage increase of cloud computing services and IoT, companies face the anxiety of data theft and security.

Ten Latest Outsourcing Trends

BPO companies working with sensitive data are expected to have strong data security. This holds especially in the current situation where the pandemic has brought an upsurge in cybercrime by up to 600%. Because of this, strong cybersecurity has become necessary to protect business data and applications from fraud such as identity theft and phishing scams. Remote work has become the new normal, and even once the pandemic is over, it is safe to assume that the majority of businesses will remain in favor of this employment type. In addition to it, outsourcing and its finance-related perks will mark the business practices and strategies in 2021. The world economy will feel the consequences of COVID-19 in the year to come, which will cause organizations to question the safest and most cost-effective ways to grow, scale, and progress.

IT leaders want all levels of their organization’s security to improve—employee training, cloud, business continuity, and disaster recovery—not just the business level. When all statistics are taken into consideration, we can say that outsourcing will continue to grow in the future. In fact, around 80% of logistic leaders plan to increase their outsourcing budget by 5%. As a result, the global LPO market size is expected to reach $40 billion by 2024, and it was only $6 billion in 2016.The worldwide hospital outsourcing market is expected to increase with a CAGR of 10.4% by 2027. These are just some statistics that can help us have a clear insight into the outsourcing rates. Business process outsourcing is closely related to information technology outsourcing because many business processes are technology-based.

Pivot to an outcome-based business model

What we had expected to see by the end of 2020, we’ll be seeing the progress this year. Most readers think about environment-friendly outsourcing practices when hearing the term sustainable outsourcing. Instead, we are talking about sustainability in general—practices that satisfy present needs without compromising with future needs. Many businesses came to a standstill while others saw their operations, sales, and business relations decreasing. Walmart is one of the top five US companies that outsource jobs overseas.

trends in outsourcing

Robotic process automation, software bots, automation, machine learning, and other disruptive technologies are becoming ubiquitous and taking over the world. As countries closed their borders during the height of the pandemic, companies faced challenges that required them to become agile. As a result, businesses worldwide had to outsource to accommodate all of their customers and sustain their operations. The tech advancements and automation will ease all processes and better the communication between in-house staff and their third-party allies. New digital tools and AI solutions will contribute to more rapid development, better services, and heightened productivity.

Hacks When Outsourcing Marketing For Small Businesses

However, due to the advantages that computers and robots created, the outsourcing industry will fall back to the seller’s market. Cognitive Engagement mainly simulates human interaction with customers, this type of robot’s cognitive function is enhanced in creating a solution for the users and simulating human language [59]. The benefit of this kind of robot is freeing customer service time from answering a large number of repeated, basic questions. Cognitive Engagement is the robot use intelligent agents, machine learning technology, and natural language processing chatbots to interact with a human. With all the advantages that outsourcing brings along, there are some risks of outsourcing that require the manager to notice before and after making the outsourcing decision. Our team is growing all the time, so we’re always on the lookout for smart people who want to help us reshape the world of scientific publishing.

It usually is the risk of the communication and/or transmission systems between the supplier, and the outsourced firm is different. This risk exists at the beginning of the new outsourcing relationship for both cloud computing and service automation. The more the outsourced firm changed the supplier, the operational risks increase. If the firm changes its supplier every three years, the operational risk will higher than the firm changes its supplier every five years. Choosing a qualified supplier can help the outsourced firm reduce the risk of information leakage in both the cloud computing and service automation areas. The qualified supplier should be the supplier who is qualified both morally and in capability.


But after all, these risks all relate to the nature of outsourcing and the firm’s decision of cost-saving. Intrinsic risks of location referred to the risk of outsourcing the firm to a remote location. The location risks can be but are not limited to geopolitical risks, sovereign risks, and exchange rate risks.

  • You should understand exactly what services you are purchasing, the nature and rules of your subscription or contract, and also the pricing structure.
  • Given how BPO has become one of the fastest-growing sectors, with more companies choosing to outsource tasks and services, businesses must learn to adapt and keep up to stay in the game.
  • In 2021, the outsourcing industry will stretch to a new length and gain even more attention and popularity worldwide.
  • Take our assessment to find out if outsourced HR is the right option for your business.
  • Outsourcing is one way a growing brand can avoid the mistake of expanding its team too quickly.

Thus, these countries will emerge even stronger in the post-pandemic normal. The IT sector is erupting with new advanced digital products created by two organizations coming together from different parts of the globe. They can delegate the development of their most important IT projects, enterprise architecture, or other core competencies to the external team while keeping the management at their end.

The Future of Outsourcing: 2021 Trend Report

Outsourcing commonly identified as both supplier and the firm both located in the same country. However, offshore outsourcing defined as the supplier is located in a country different than the firm. On top of that, offshore is classified as the firm constructed a branch in a different country. With such a complex nature of outsourcing, Alexandre Dolgui and Jean-Marie Proth [32] provided some additional information to help clarify Outsourcing. Dolgui and Proth found that the frequent confusions for outsourcing are to separate outsourcing, offshore outsourcing, offshoring, and subcontracting. As discussed above, outsourcing as a practical strategic tool has appeared for a long time; however, the official definition did not exist until 1997 [30].

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