According to Statista, the global outsourcing market earned $85.6 billion in 2018 and significantly more in 2019. These statistics predict a megatrend that will reshape the outsourcing market: the willingness of SMEs to invest in outsourcing.
Governments will get on the outsourcing bandwagon as well.
Phil Malem, CEO of Serco Middle East, an international leading provider of public services, revealed that in the post-COVID-19 era, service excellence in all sectors and putting end-users first to improve experiences will be front and center for the UAE.
And it’s why more and more governments will turn to outsourcing in 2021 in the wake of the pandemic.
Outsourcing certain vital sectors (like IT, HR, and others) will give more flexibility, increase cost savings and efficiency, enabling governments and entities to focus on their main areas of specialism and the tasks at hand towards servicing the client.
“This will be realized through frontline services, use of automation services (including robotics and AI), and behavioral insights which can enhance the customer experience,” said Malem.
“The outsourcer will bring with them an outsider’s view and therefore a fresh perspective, along with years of experience and best practice.”
Businesses have had to make sacrifices and let many employees go, making it clear that every budgeted item must be a calculated, strategic move.
Omer Saleem is the director and deputy CEO of Proven said outsourced benefits can be best described as tasks and requirements businesses need and cannot function without, and as items that might derail businesses from focusing on their core expertise, especially at a time when the primary focus must be on strategy, business innovation and reshaping both external and internal business structures.
Startups that survived the pandemic were able to keep costs down by outsourcing to create products, while essentials teams and sales personnel managed operations and focused on customer support.
A post-lockdown economy will inevitably provide unique challenges and opportunities in the overall work environment and delivery.
Plenty of up-and-coming entrepreneurs will be taking advantage of the trimmed-down competition to enter the market, introducing innovative solutions to address existing market challenges.
“This is where outsourcing creates value through a service that allows them to focus on strategy and niche offerings. Outsourcing deals with aspects of the business that often require entire teams to administer, while managers deal with the intricacies of core business delivery in which specialization creates real value,” Saleem said.
Business segments best suited for outsourcing
If you are doing business in the age of information, you will want your finance function to be outsourced.
The finance function has increasingly become a strategic area providing insights which, if utilized on time, can be the difference between success and failure.
Repetitive processes within finance are prime examples of areas that can be outsourced, including bookkeeping, invoicing, and accounting.
Today, instead of hiring departments-worth of employees for each of these operations, enterprises outsource entire financial operations. This allows them to allocate resources internally to higher functions such as analysis, forecasting, and reporting.
Another great example of business processes that can be outsourced is human resources (HR).
Successful HR departments are creating value through employee engagement, rapid analytics, and reporting which are essential to staying agile and for quick strategic changes.
The importance of HR came to the spotlight recently in Saudi Arabia, when an HR ministry was formed resulting from a merger between the Ministry of Civil Service and the Ministry of Labor and Social Development.
HR functions like financial reporting, dashboards, payroll, leave management, administration of benefits and recruiting are on an expanding list of business processes that can be outsourced.
When outsourcing becomes an automated practice, entities and partnerships can conduct more efficient business processes. It minimizes stress linked to repetitive or complicated operational elements that CEOs, business owners, and managers need to break away from to focus on business goals.
The majority of companies today outsource some of their business functions, with IT services leading the charge.
IT outsourcing, where talent is scarce anyway, solves many problems including cutting software development costs and having specialists on hand.
In 2019, an estimated 1.92 billion people purchased goods or services online, and e-retail sales surpassed $3.5 trillion globally. This number is expected to grow exponentially in the coming years, requiring more and more companies to adopt intelligent, round-the-clock digital support.
Cloud computing environments are expected to reach $761bn by 2027 as per the forecast by Fortune Business Insights. Therefore, the development of highly integrated and novel cloud-based ecosystems is the No.1 demand from the IT outsourcing market.
Offshore and remote health services will also see an increase and reach $19.5 billion by 2025, as per Transparent Market Research increasing the demand for remote and super-specialized telehealth services.
A recent study by Deloitte found that 3 billion global users are expected to have access to retail banking services through smartphones, desktops, tablets and smartwatches. Hence, the industry is incorporating top-notch cybersecurity measures to reinvent the way people used to manage finances.
AI and blockchain are key to optimizing secured financial operations, and outsourcing companies are focusing on these to create a strong foothold.
A GSA-UK report found 35% of businesses outsourced for cost-effectiveness and 23% outsourced to improve customer experience, whereas 17% outsourced to transition from legacy IT to as-a-service models.