How to stay ahead in the outsourcing game

outsourcing future trends


The basic definition of outsourcing is that it is the activity of a firm hiring an external party for performing services, or less frequently, producing goods. The outsourcing approach is commonly used by firms for lowering costs such as payroll, while simultaneously improving productivity by freeing up time to invest on a company’s core business functions.

What’s the outlook?

The outsourcing industry is largely comprised of two main subsets, Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO), and the outlook for both remains positive. The global ITO market, which comprises IT services such as software development and digital infrastructure, stood at a value of US$ 318 Billion in 2020. It is projected to grow at a compound annual growth rate (CAGR) of 4.5% to reach around US$ 425 Billion by 2026. The global BPO market, which can cover both front and back office operations, was valued at US$ 180 Billion in 2020. It is expected to reach a value of  around USD$ 240 Billion by 2027, growing at a CAGR of 4.2%.

In order to stay ahead of the game, businesses involved with outsourcing in any way need to be aware of the latest and potential future trends. Some main ones include an increasingly remote working culture, continued advancements in technology and cybersecurity, and the growing importance of strategic partnerships. 


Remote, remote, remote 

This is mainly for two reasons. Since the beginning of the Covid-19 pandemic, companies have by now had enough time to adapt to the new reality and find their unique ways to transition towards a ‘remote first’ policy. In a 2021 survey by Statista on 1,200 respondents from around the world, 45% were found to be working fully remotely with another 29% working in hybrid roles. In another survey conducted by Travelperk on its global customer base, 76% of the respondents confirmed that their companies have shifted to hybrid work, allowing at least partial remote work opportunities. 

Secondly, the demand from knowledge workers everywhere for some ability to work remotely is here to stay. Research indicates that 97.6% of remote workers would like to continue working remotely for the rest of their careers. Moreover, workers today have many more remote working options on the table (about 3x more compared to 2020), and outsourcing companies will find themselves competing for talent with firms around the world who are willing to provide remote work as an option to employees. 

What haven’t you automated yet?  

Automation and the use of cloud services are becoming increasingly important for all businesses, including those in the outsourcing industry. One key trend is Robotic Process Automation (RPA), which is basically building software ‘bots’ to automate repetitive and mundane actions, typically performed by humans while interacting with computer or other technological systems. This can help speed up digitisation, save costs, and improve the efficiency as well as accuracy of repetitive tasks, potentially transformational for the operations of BPOs in particular. 

Cloud adoption is another notable trend, helping companies cut costs as this removes the need for internal infrastructure or hardware, in addition to providing greater flexibility. A survey held in early 2022 indicated that more than 93% of respondent organizations are considering or have already implemented cloud services to aid their outsourcing activities. This is supported through research by the International Data Corporation (IDC), which forecasts global cloud spending to surpass US$ 1.3 Trillion in 2025. 

Secure your clients’ data 

The idea of outsourcing is to create higher business efficiency using technology. Ironically, this can open outsourcing companies themselves to the threat of security and data breaches. In 2021, Deloitte reported that 64% of businesses plan to invest in cyber security capabilities in order to mitigate online threats and ensure infrastructure reliability. Furthermore, in 2022 it was reported that 66% of SME businesses around the world experienced some form of a cyberattack in the previous year.

Since data is a company’s most important and valuable resource, ensuring its integrity is the most essential thing for any outsourcing business with respect to maintaining its relationships with clients. Multi-level security options are now common on the market, such as multi-factor authentication, while most companies also seek strict compliance with the GDPR standards to prevent security breaches. Unsurprisingly, 68% of outsourcing companies have data security as one of their top concerns, according to a recent study.


The outsourcing industry, in all its forms, will continue to grow robustly in the coming years as digital and online technologies evolve rapidly. For outsourcing companies to thrive in the future, we believe that they will need to be aware of these three key trends. Offering flexible working options to employees, adopting automation tools, and investing in cybersecurity will be essential. 

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