Nowadays, in a dynamic and competitive business environment, many companies (from small start-ups to more established businesses) choose to outsource certain activities.
This trend will continue in 2023, as the companies that have adopted this strategy are reaping the profits. The term Outsourcing comes from the merging of the English words “outside” and “resourcing”, and this is exactly the core of its meaning. Outsourcing consists of turning to an external company to which a specific task is entrusted. These tasks usually include the provision of a service or the creation of goods.
If carried out efficiently, outsourcing can help the business grow without compromising product quality. Outsourcing was first recognized as a business strategy in 1989. Subsequently, in the 1990s, it became a fundamental management model for companies. Initially used by manufacturing companies, it was then adopted by almost all companies.
Why is it worth outsourcing business activities?
Outsourcing business activities is advantageous, as it makes it possible to reach commercial objectives, generate value, access a resource base and reduce risks. Companies can outsource any service, from recruitment and accounting to IT services (e-outsourcing). There are many reasons why outsourcing is a growing trend in the business world. Some of its advantages include:
1 – Reduced costs
With outsourcing it is possible to reduce costs and at the same time improve efficiency. Here are some ways in which the company reduces costs when it applies outsourcing services: first of all, the company is not required to train staff when it has no experience in a certain sector. In addition, there is no need to invest in technology and space to support office activities. These matters will in fact be handled by the contracting company, so the business can save time and money on hiring, providing benefits and other administrative expenses. The overall cost of the work activity is simply lower.
2 – Flexibility in hiring
Through outsourcing it is possible to hire a team for a project and then release them from their obligations once it is finished. When demand is high, it can be more convenient for some companies to hire temporary external contractors rather than risk hiring more employees and then being unable to pay them.
3 – Logistical ease
Sometimes it is more useful from a logistical point of view to outsource services such as shipping and customer service. When local, full-time staff are not available, companies can provide essential services outside normal working hours thanks to the availability of these intermediaries.
4 – Focus on core business activities
When processes are entrusted to another company, much of the workload is eliminated and there is time to focus on the essential activities of the business. Therefore, the company will experience an increase in efficiency and productivity, while reducing resource consumption.
5 – Finding experts easily
While most employers value skilled employees in various fields, there are cases in which hiring a specialist makes more sense than investing in employee training. A contractor might be able to complete a certain job quickly and without interfering with ongoing business operations thanks to the knowledge and experience that staff members lack.
Thanks to outsourcing, it is possible to broaden the search, select among different companies and work with the best experts in the world. Finding the ideal group of professionals who can meet all needs and produce the best results becomes feasible. The more professionals work on a project, the faster all the tasks will be completed.
6 – Less (working hours) is better
When you subcontract specialists, the entire operation is carried out more quickly. This way you can save the time spent managing the team and the time spent on activities such as meetings, training and teamwork.
7 – New and modern business solutions
Considering that during subcontracting you hand over responsibility to another company, the company might become more receptive to innovative ideas. Thanks to their subject-matter knowledge, the company will present much more creative and efficient solutions.
8 – Sharing and managing risk
You share the obligations while part of the work is delegated to another organization. It also helps with risk assessment and analysis, which is another significant advantage. An external group will anticipate future dangers and help reduce them. Main outsourcing trends in 2023. After the epidemic, outsourcing has seen several progressive trends.
The changes that the pandemic brought to the outsourcing market in recent years are reflected in the outsourcing trends for 2023. By the end of 2022, companies expected to spend over 700 billion dollars a year on outsourcing. IT (information technology), healthcare, accounting and other sectors all fall within this expanding outsourcing economy.
To create a strategic plan for successful outsourcing in the coming years, it might be useful to review the main outsourcing trends in 2023:
1 – Quality before anything else
Nowadays, companies particularly care about offering high-quality services to their customers. They require sophisticated technology and experienced employees, and both can be expensive in most countries. Therefore, companies are converting to outsourced procedures such as software development, human resources, business operations, legal processes, etc.
2 – Long-term agreements and business continuity
Companies now think that forming strategic alliances with some outsourcing provider can guarantee cost savings and business continuity. But how?
Continuous changes of service providers can affect business continuity. When a company works for a long time with the same team, it is more likely to develop a solid relationship with its outsourcing company. Reaching objectives is easier when there is a solid bond between the parties involved. Since you will be working with a reliable outsourcing partner, the longer the contracts, the more they guarantee security, even in uncertain times.
3 – Use of modern technology
Companies that keep up with new technologies can use them to automate procedures, increase productivity and improve operational efficiency. However, it must be taken into account that modern technology, including the IoT (Internet of Things), automation and software development, is constantly evolving, and frequent technological updates can be difficult, which is why it is useful for companies to outsource to external service providers.
A service provider is a specialist in its own area of expertise. It is therefore more inclined, compared to an in-house team, to keep up with technological changes.
4 – Small businesses love outsourcing too
Outsourcing is very convenient for small businesses and start-ups, thanks to which they can make use of the best staff and equipment at reasonable prices. To save time and money, some organizations outsource repetitive activities. Due to reduced budgets, small businesses are unlikely to have expert staff. Outsourcing allows them to access a larger, more qualified staff pool. By 2023, many sectors will be affected by the outsourcing trend.
5 – Nearshore vs offshore outsourcing: who wins?
First of all, let’s clarify the terms. What is the difference between nearshore and offshore outsourcing? Hiring a third party from a nearby country to carry out a business activity is known as nearshore outsourcing. Offshore outsourcing, on the other hand, involves outsourcing to a distant country that is generally in a different time zone.
Companies resort to nearshore more often today than in the pre-pandemic period.
6 – Smart working is the new normal
The Covid epidemic made remote working a new custom. According to several surveys worldwide, most people prefer remote and hybrid work to working in the office. This model is expected to last until 2023 and beyond. Customer satisfaction will continue to offer companies a competitive advantage in the coming year and will be the main brand differentiator in 2023.
Companies might have to invest more in customer service and social media to offer a better user experience.
However, the unpredictable management of customer call volumes can be challenging. For proper functioning, companies might need to scale up and down quickly and manage the workforce. This makes it possible to outsource customer support in different ways.
The customer experience improves and operating costs are considerably reduced when a service such as customer support is outsourced. Research on the global call center outsourcing market predicts that the call center outsourcing sector will expand by 21.72 billion dollars between 2022 and 2026.
7 – More transparency and collaboration
In past years, most companies had little knowledge of the choices made regarding outsourcing projects because the outsourcing provider handled everything. This caused many communication problems.
For this reason, more transparent communication with outsourcing companies is required today.
The 12 most important activities to outsource
When it comes to the most outsourced activities in 2023, the trend does not change much compared to that of 2022.
Below we list the 12 most outsourced activities in 2022:
1 – Ticket management
Best practices for everything, from optimizing usage to compliance and reporting, are guaranteed by hiring an external specialist in charge of ticket management. To be considered as an investment that will allow you to exceed industry standards and increase the return on ticket investment. The decision to outsource ticket management brings many advantages:
– Great customer satisfaction: customers will immediately receive the assistance they need.
– Increased productivity: it simplifies and automates support operations.
– Reduced operating costs: lower burdens in recruiting and training staff.
2 – Help Desk
The outsourced Help Desk is a service that companies offer to assist their customers in solving problems or finding answers to already-identified issues. With the help of these services, the company can offer 24/7 assistance to its customers. The best IT help desk outsourcing services will offer numerous advantages, including greater productivity and performance, rapid implementation of more effective operations and processes, constant accessibility, fast response times, lower costs and greater efficiency.
The number of tickets will be reduced and, consequently, the operation simplified. Meanwhile, the company will be able to focus more on innovation and the growth of its business.
Transparency Market Research, an expert in market research, predicts that the help-desk solution market will grow to 11 billion dollars by 2023.
3 – Outbound marketing
By outsourcing, the company and its team will be able to benefit from new potential customers by hiring a dedicated team and collaborating with sector experts.
Outsourced marketing is fundamental for companies to increase revenue quickly and efficiently, at a time when the market is defined by scalability and speed. By outsourcing outbound marketing, the team will have the opportunity to collaborate with innovative teams and thus acquire new market knowledge. The new team can also recommend additional cybersecurity measures for companies, help increase cost-effectiveness and gain market share using predictive algorithms.
4 – Digital Customer Care
Digital customer care is a new approach to managing customer service that emphasizes emerging technology. Outsourcing is a fantastic option for companies that do not have the time or resources to effectively manage digital contact with customers.
Through outsourcing digital customer care you achieve: cost savings; revenue growth; customer loyalty and, of course, a positive customer experience.
Outsourcing customer care usually consists of contact services such as email, web, live chat, etc. This omnichannel customer service includes a wide choice of contact options that gives customers the choice of the medium they prefer.
Good customer service will create a loyal customer connection between the company and its customers, a fundamental aspect for the company’s success.
5 – Robotic Process Automation (RPA)
RPA is a type of software development that simplifies the creation, use and management of robots for performing simple tasks. Companies are realizing that using robots to complete repetitive jobs is more convenient, which is why the demand for robotic process automation is increasing.
Access to further innovative technologies such as artificial intelligence, RPA and machine learning requires cloud outsourcing. This gives the company the possibility to use cloud services and store resources.
6 – Logistics Management
It takes a lot of time and money to hire logistics talent, acquire capabilities, invest in physical resources and develop technology. For this reason, companies will decide to outsource various parts (or sometimes even all) of their supply chain functions to third-party logistics service providers (3PL). We could think of many reasons why a company should outsource logistics management, but some of the most important include:
– The possibility of reducing overall transport and logistics costs to focus on the company’s strengths rather than on supply-chain operations
– Greater adaptability and effectiveness (thanks to leaner operations)
– Lower risk due to reduced administrative responsibility
– Higher service standards (leading to greater customer satisfaction)
In general, larger companies tend to have more complex supply chains, thus increasing the likelihood of using outsourced logistics. According to a third-party study, companies of all sizes increasingly use 3PL services. However, even smaller shippers continue to assign, on average, 27% of all supply-chain work to external contractors.
7 – Quality Audit
The 21st century has seen a clear trend towards outsourcing a company’s auditing process. The main advantage of outsourcing the internal auditing function is linked to the fact that involving an external source gives the impression of having fresh, objective and impartial eyes. Other advantages of outsourcing the audit include professional and timely reports, more information, conclusions, observations, suggestions for improvement, cost savings, etc.
8 – Data Entry
Data entry can be a time-consuming procedure that uses valuable staff resources, preventing them from effectively carrying out their main tasks. You can relieve employees of this manual and repetitive work by outsourcing data entry to a qualified team, thereby also ensuring correct and consistent entry.
9 – Chat Bot
Chat bots are used by companies to increase both service and sales conversion. Outsourcing chatbots is increasingly less expensive than developing your own live-chat platforms. Scaling the business is simpler when customer service works on “autopilot”.
10 – Booking Office
To be successful, a hospitality business must always be present and never miss an opportunity to get in touch with potential customers. The Booking Office service makes it possible to handle quote requests in multiple languages quickly and accurately. We Are Fiber guarantees 24/7 assistance to meet every need!
11 – Outbound Marketing
Outsourced marketing is fundamental for companies to increase revenue quickly and efficiently, at a time when the market is defined by scalability and speed. By outsourcing outbound marketing, the team will have the opportunity to collaborate with innovative teams to acquire new market knowledge.
12 – Smart Assistance
The Smart Assistance service has become indispensable for many companies thanks to its ability to optimize time and improve productivity. We Are Fiber’s technology is able to collect all information, sort it, analyze it and process it so that the company makes the best decisions and chooses the most suitable strategies. In general, the virtual assistant reduces staff workloads and manages the data flow for all companies, large or small.
To conclude…
If you want to make your business successful in 2023, outsourcing is a strategy that will need to be present in your business model. If you would like more information on how our outsourcing services can improve your business, contact us here.
