With rising competitiveness in the business world, businesses are looking for new opportunities in the international market place to stand out among competitors. Finding the right way to conduct your business is an important part of making your operations work, and one way to provide a solution or meet a deadline is to have the work outsourced to another company. Advanced technology and globalization have changed the way businesses operate and business process outsourcing solutions have been found to be immensely beneficial.
In 2020, with advanced technology, outsourcing capabilities have improved considerably and companies are looking for ways to minimize the vulnerability that comes with the dynamic global economy. Businesses have to maintain high levels of agility, business flexibility and organizational ability to be innovative and explorative. In the coming years, outsourcing is expected to grow and following are some of the trends in outsourcing in 2020.
- On-demand relationships will emerge: Some companies will go for relationship models with deeper interdependence and teamwork whereas some may prefer crowdsourcing or hybrid models that can overcome their own limitations. These on-demand relationship models will allow companies to use services from an extensive labor pool when required, by offering a pay-for-use approach that enables anefficient process for getting activities completed on demand. Hybrid model of outsourcing comes in different forms for different areas. With crowd outsourcing and real-time access to the required resources, companies are able to acquire the services at a lower cost and with a higher level of flexibility. However, as the service acquisition is often fast, it is difficult to assure a great standard of quality. Therefore, businesses may rely on the expertise of established service providers on larger, medium to long-term projects and use crowdsourcing to cover present needs. It is expected that in the future, businesses will depend on multiple outside service providers. The emphasis will be on value-based business outcomes and partnership models.
- More emphasis on network management: For the best results, companies will establish meaningful contractual relationships with a number of key business partners to become a growing competitive presence in the future. In the coming years different types of relationship networks will emerge.
- Purchasing networks that represent business consortiums of two or more independent organizations may come together formally, informally or through an independent third party with the purpose of meeting their individual requirements for purchasing services to increase more value-added pricing, service and technology from their external service providers if each organization purchased the services alone. This means that purchasing networks will purchase services from a single provider.
- Service provider networks are formal or informal business associations that give members the agility to benefit from a community of industry professionals and experts when they need to address technical or business challenges in building their business, or to meet increasingly complex demands of client organizations. Member organizations can easily tap into the network of peers and gain access to valuable insights, skills and resources. In service provider networks, single client firms purchase services from a network of providers.
- Network to network (N2N) interactions will also increasingly occur when two consortiums, as described above engage in the purchase and provision of services.
- Co-sourcing will start growing: Businesses will seek relationships with increased strategic alignment, shared risks, shared value and greater value exchange to minimize business vulnerability. The relationships will be maintained by combining both internal and external partners where both have a mutually vested interest in the collaboration’s outcome. This will help some organizations to realize growth in a slackened global economy with extremely competitive markets. Co-sourcing associations will help give up control over some business areas so that focus can be given to improving their competitive advantage. Moreover, businesses using this model can collaborate with appropriate partners to create new value together. In such relationships the service providers will be motivated to create value for the client business because they are considered as partners. Co-sourcing partnerships are expected to give both parties greater value and minimize risk.
To benefit from these relationships, businesses must know to open up their organizational boundaries. Many are working towards building long-term trust and benefit-based relationships with key partners already. Companies should be aware that these relationship networks can increase the risk of a sapping dependency, locking businesses into a rigid structure, which may not be suitable for a fluid and changing contextual or transactional environment.
Outsourcing is an effective strategy that helps businesses provide quality solutions and also stand out among other competitors. Today outsourcing has become a globally accepted practice that ensures smooth transaction of business and minimizes risk. Investing in a professional business process outsourcing company could help business organizations improve productivity and efficiency.
