12 Key Outsourcing Trends For 2023


A man and women looking at the 12 key outsourcing trends to watch out for in 2023

12 Key Outsourcing Trends For 2023

As a business leader, staying current on outsourcing trends will assist you in navigating the outsourcing ecosystem and adjusting to the post-pandemic “new normal.”

Outsourcing in 2023 will require that organisations seek out providers with high-quality services, strive for high levels of flexibility, and employ modern technology.

This article talks about the most important trends in outsourcing in 2022 that you should know about in 2023. 

Let’s get started

Prioritising quality

Companies now emphasise providing high-quality services to their customers. 

For this, they’ll need skilled employees and advanced technology, which can be expensive in most countries. 

As a result, companies are switching to processes such as software development outsourcing, HR outsourcing, business process outsourcing, legal process outsourcing, etc.

Moreover, outsourcing enables companies to offer their clients customised solutions. An outsourcing company is more likely to have the time, expertise, and resources needed to customise solutions than an in-house team. 

Ensuring business continuity

Companies preferred outsourcing with multiple vendors before the pandemic. But now, most want a strategic partnership with one (or fewer) vendors, as recently reported by the University of Cambridge.

Businesses now believe a strategic partnership with fewer outsourcing companies can ensure business continuity and cost saving. 


Frequently changing service providers can disrupt business continuity

And a company is more likely to build a strong relationship with its outsourcing company when it’s working with the same team for an extended period. A strong bond can increase commitment and trust, which makes reaching objectives easier. 

Additionally, businesses can ensure continuity with an outsourcing partner through a more extended outsourcing contract. 

More extended contracts can ensure you’re provided services even during uncertain times because you’ll work with a trustworthy outsourcing partner. 

Wanting business flexibility and adaptability

The Covid pandemic and the resulting lockdowns were chaotic and disruptive. Many countries had a hard time recovering from the short-term economic shock. 

According to Deloitte’s 2021 Global Outsourcing Survey, these conditions are prompting businesses and service providers to become flexible concerning work. 

And to match the growing agility demands of companies, an outsourcing provider will need to:

  • Accept if the company suspends or pauses a project abruptly.
  • Ensure work is completed before the deadline, even if there are sudden obstacles in the outsourcing destination.
  • Increase collaborative initiatives.

Hiring niche talent 

According to a 2022 ManpowerGroup survey, 75% of employers find it hard to find talent in the US. 

Most importantly, there is a shortage of talent specialized in new technology. This shortage is the most significant barrier to the adoption of 64% of modern technology used in fields, like network and security, according to a 2021 Gartner survey.

And since it’s time-consuming to upskill in-house teams, companies are outsourcing services to a vendor with expert talent in a desirable outsourcing destination. By outsourcing to a skilled vendor, a company can instantly access the expertise it lacks in-house. 

Using modern technology

Companies keeping abreast of emerging technology can use it to automate processes, increase efficiency, and simplify operations. 

But software development, automation, IoT (Internet of Things), and other modern technologies evolve regularly. It can be challenging to update technology frequently, so companies are outsourcing to service providers.

A service provider is an expert in their specific field. As a result, they’re more likely to update themselves about the advancements in technology than an in-house team. 

Artificial intelligence, machine learning, and automation

Business and outsourcing companies use Artificial Intelligence to automate repetitive tasks, calculations, or replying to messages. 

Additionally, Artificial Intelligence helps a provider improve customer service. Chatbots or cloud-based IVR (Interactive Voice Response) are examples of this revolutionary, emerging technology.

A 2022 Grand View Research survey reported that the global AI and Machine Learning outsourcing market size was $93.5 billion in 2021.

The AI and Machine Learning outsourcing market will expand at a compound annual growth rate (CAGR) of 38.1% from 2022 to 2030.

Cloud computing

Cloud outsourcing is essential to access other modern technologies like AI, RPA, and machine learning. It also empowers a company to collect and store resources on the cloud and access cloud services. 

Companies such as Amazon Web Services (AWS), Google, and Microsoft are investing more capital into their cloud platform and cloud services.

A 2022 Cloudwards survey revealed that the total value of cloud computing and the cloud platform market will amount to $832.1 billion by 2025. 

Demanding better cybersecurity

Digital transformation can open up several ways for intruders to access inside data. 

A Forbes article revealed that 82% of companies faced cyberattacks in 2022. But managing an in-house security team can be difficult.

That’s why companies are hiring a Managed Service Provider (MSP). An MSP is a third-party service provider that manages a specialized operation, like data security

Companies are handing over cybersecurity to MSPs as they’re more likely to have cybersecurity experts and advanced solutions. The demand for MSPs is so high that it was worth $152.02 billion in 2020 and will grow to $274 billion by 2026, as per Statista. 

Outsourcing surge amongst startups and small businesses

Outsourcing allows small businesses or startups to access the best talents and tools at economical prices.

These businesses outsource repetitive tasks to save time and money. Small companies are also less likely to have experienced employees due to their limited payroll budget, and outsourcing enables them to access the best talents.

According to a Clutch survey, 90% of small US businesses plan to outsource a business process in 2022, a 10% increase from 2021. 

This outsourcing trend will continue in 2023 and disrupt various industries.

Improving customer experience and satisfaction

Customer experience is the key brand differentiator in 2022 and will continue to give businesses a competitive edge in the coming year. 

To provide a better user experience, businesses may have to invest more in customer support and social media coverage. 

Focusing on the customer experience can help companies:

  • Ease customer acquisition.
  • Increase customer satisfaction.
  • Strengthen customer relationships and brand loyalty. 

But the unpredictability of customer call volumes can be difficult to manage. Companies may have to quickly scale up and down and manage the workforce for proper functioning. 

This opens up more avenues for outsourcing customer service.

According to the Global Call Centre Outsourcing Market’s 2022–2026 report, the call centre outsourcing sector will grow by $21.72 billion

The report also stated that the CAG rate will accelerate by 3.96% during 2022–2026.

Outsourcing services such as customer support improves the customer experience and lowers operational costs significantly.

Emphasizing cost reduction

Before the pandemic, companies were moving from cost reduction to prioritising quality and scalability, but that changed with the pandemic. 

Deloitte’s Global Survey 2021 stated that 88% of the surveyed companies said cost reduction was now their main outsourcing objective. 

Most surveyed outsourcing companies said that although clients wanted agility, scalability, and technology enablement, the reduction of operational costs brought by outsourcing services was the primary decision-making factor.

This trend could continue in 2023 while the world economy recovers from the pandemic and recessions.  

Practising transparency in workflow

In the past years, most companies had little idea about the decisions made regarding the outsourced project as the outsourcing provider handled it completely. This led to frequent misunderstandings.

However, there’s now a growing demand for transparent communication with outsourcing companies.

A study by the American Scientific Research Journal for Engineering, Technology, and Sciences said that expressive communication is crucial for transparency. 

Additionally, a Deloitte study reported that creating an outsourcing contract like an SLA can help increase transparency. An SLA can give your business a clearer idea about the quality of the outsourced work and help enterprises to hold the outsourcing provider accountable. 

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