Inspite of the pandemic, technology has helped industries stand strong in the face of unprecedented global change. In the case of IT and software outsourcing, the pandemic accelerated many of its plans for digital transformation. According to this report, the BPO market, which was valued at $232.32 billion in 2020, is expected to witness a CAGR of 8.5% from 2021 to 2028.
IT outsourcing is also one of the fastest growing industries in the world. According to figures cited by ISG, BPO contracts worth $18.5 billion are up for renewal in 2022, which means that this already expanding market will explode and give global business a much-needed boost. Gartner reports many top strategic technology trends to watch out for in 2022, including generative AI, cloud-native platforms, and decision intelligence.
Keeping these trends and buzzwords in mind, here are the key trends in outsourcing that are expected to create news in 2022.
1. RPA and Hyper Automation
Also known as smart process automation, RPA or Robotic Process Automation refers to taking software bots and adding intelligence to their functions. This will not only automate repetitive functions and processes, but also make the workflow more intuitive. This report predicts that the RPA market will grow to over $13 billion by 2030.
RPA is high on the list of important trends in outsourcing for 2022. RPA can boost outsourcing operations significantly by automating repetitive tasks, enabling employees to focus more on exciting and challenging tasks, not to mention the more complex ones. Long story short, businesses will want to outsource from providers that implement RPA. In fact, the pandemic has proved that processes that are automated and not fully human-driven are more resilient to change. Businesses will demand services from outsourcing companies that can provide automation, safeguarding them against lockdowns and restrictions. RPA can automate internal tasks, improve accuracy and efficiency, and allow the companies to focus on their core areas of expertise and critical projects.
As businesses expand and grow, there is a need to shift from simple automation to hyper-automation that scales. With hyper-automation, automatic software systems can learn from their environments, modify their own algorithms, and adapt to changing physical or software updates, thereby speeding up business processes and decision-making. Automation will not only involve software but also extend to physical systems like robots and drones, helping outsourcing providers handle workloads efficiently and intelligently.
2. Demand for cloud-based technologies and CNPs
With collaboration being a critical component in outsourcing, cloud-based technologies enable collaboration on multiple levels, seamlessly, remotely, and securely on a cloud-based platform. More and more companies are shifting their infrastructure to the cloud, which means that outsourcing companies are increasingly offering cloud-based services.
The growth of cloud technologies has significantly helped businesses everywhere. Companies need secure online data centers and data protection. There is also a huge need to store more and more data, which means that companies want to use cloud technologies to speed up their business processes and increase the efficiency of their data operations.
With the cloud computing market set to grow and reach $791.48 billion globally by 2028 with a CAGR of 17.9%, the growth of cloud-based platforms is an important trend to watch out for in 2022.
Read More: A Complete Guide to IT Outsourcing
There is a rise in demand for omni-cloud systems and cloud-native platforms (CNPs) because companies are looking beyond just ‘lift and shift’ migrations. This is where cloud-native platforms come in to offer cloud-based IT capabilities as a service. Cloud-native applications are designed and developed native to the cloud, deployed rapidly by small teams to ensure the cloud’s agility, adaptability, and speed. CNPs are trending because they can take the core competency of a cloud service and make it more scalable and cost effective, leading to faster time to deploy. Gartner reports that CNPs will lead to more than 95% of new digital innovations by 2025, up from less than 40% in 2021. In fact, the report suggests that cloud-native technologies will not be popular but extremely essential, with more than 85% of companies set to switch to a cloud-based setup by 2025. This shift to a cloud native development model is not possible without cloud-native architectures and technologies, which will help companies execute their cloud-based capabilities to the fullest.
With CNPs, companies will be able to build and deploy software on the cloud, pushing down costs significantly and increasing productivity. The shift to cloud-based platforms will also lead to tools like databases, object storage, and container registries that can support cloud native development. Interestingly, this migration of data centers to the cloud can present opportunities to small and medium-sized companies to take advantage of the shift.
3. Growing importance of Artificial Intelligence
Artificial Intelligence (AI) is a hot topic when it comes to the IT outsourcing trends that will dominate 2022. With so much focus on customer service and experience, AI can simplify business processes significantly by handling huge volumes of data and mining them to provide better user experiences. They can also decrease the average handling time of customer complaints and queries, leading to customer service executives focusing on more complex and difficult problems and personalized services.
AI also allows companies to have better control of their data and processes, integrating all areas of business intelligently.
With a huge rise in demand for AI, companies are looking to outsource AI-driven projects or want outsourcing services providers to bring strands of AI into their existing processes. Not all businesses can develop and implement Machine Learning and Artificial Intelligence on their own into their software, which means that they will outsource these functions to providers who have the knowledge of the subject area to implement these functions.
AI can be used to interpret and decipher unstructured data, which means that outsourcing services providers can integrate it into their business processes to decipher information and boost efficiency.
According to David Groomsbridge, Research Vice President at Gartner, companies that integrate AI engineering practices into their processes will generate three times more value from their business process than those who do not integrate or implement AI functionalities.
Gartner’s report mentions generative AI as a significant AI feature to watch out for in the coming years. AI technology can use Machine Learning to train itself to perform tasks. With generative AI, AI-enabled machines can identify patterns in content and input to actually produce brand-new, original content. Outsourcing service providers are increasingly integrating AI components into their applications and processes in order to make them smarter.
4. Developing progressive web apps (PWAs)
PWAs are web-based applications; but they provide users with experiences that are similar to using apps when the users are actually using a web browser. Users do not have to install any app on their system. PWAs combine the best features of the web and native applications, making the UI/UX design more intuitive and responsive.
With customers spending considerable time on mobile phones, developing yet another app to clog their systems can lead to them not wanting to download many apps. PWAs give companies a competitive advantage because they reach users without the hassle of downloading too many apps. They also provide excellent user experiences. Developing PWAs is easier compared to building new apps. This can lead to companies driving down their costs because they do not have to develop individual apps for different operating systems.
How does this fit into the IT outsourcing trends of 2022? Companies will increasingly look towards software development services companies that can build this technology for them. Outsourcing service providers who can train developers to work on PWAs will see huge payoffs.
5. Expansion of remote working
Remote working has been common with outsourcing service providers; but after COVID-19 hit us, remote working has permeated many industries, specializations, and tasks. It has become the new normal.
With cost reduction top on the priority list of those outsourcing their software development services to BPOs, the expansion of remote working capabilities and systems will be a trend to watch out for in 2022.
In fact, according to a 2021 SuperStaff survey, while only 27% of employees worked remotely before COVID-19, now 44% are working remotely.
The rise in hybrid working patterns means that organizations have employees distributed over different geographical locations, leading to a shift in business model. Gartner calls this the distributed enterprise, with a significant reconfiguration in key business delivery models and predicts that by 2023, 75% of companies that makes use of this distributed enterprise model will see a 25% faster revenue growth than its competitors.
With remote working becoming the new normal, companies are looking to outsource for a wider range of projects, and use remote working collaborations to hire talent and reduce costs significantly. There has been a behavioral and mental shift in the way we work, which means that companies that were previously opposed to hiring teams abroad now have their own team members who are working remotely. This means that they will be more open to outsource functions to third parties at a lower cost. For offshore companies, this means there are many new opportunities for growth and expansion.
6. Demand for experts and multiple specialties
With technologies advancing every day, there is a need for more specialized expertise when it comes to software developers. We mentioned PWAs and the need to employ qualified software developers who can work on PWAs. With huge changes in technology adoption, multiple specialties and focused areas of expertise will become important trends to look for in 2022. There will be a huge demand for outsourcing service providers who have high-quality experts in specific fields that demand a high level of specialization.
Outsourcing service providers will have to expand their repertoire and skill-sets significantly. In fact, companies today want to centralize their processes with a single outsourcing service provider. They want to partner with outsourcing providers that offer most of what they need. This will lead to an increased demand for outsourcing service providers who offer different specialized services under one roof. Outsourcing companies that can provide experts in diverse fields will be much sought after because specialization means high-quality service and expertise that will translate to better business processes.
7. Security and cybersecurity specialists
With technology growing and diversifying at an exponential rate and with employees remotely accessing networks, enterprises are exposed to cyber-attacks and new forms of threats. The digitization of business management has led to an urgent need to guard company networks, data, and infrastructure.
This report states that cybercrime has increased by 600% since the COVID outbreak. In fact, a malware attack can cost a company an average cost of $2.4 million. This means that cybersecurity will be a huge priority among BPOs because the pandemic has truly exposed the fault lines in enterprise security systems.
Outsourcing service providers need to work out a multi-level security approach to rule out risks and safeguard the company’s data. With businesses outsourcing their important tasks to outsourcing partners, it is critical for outsourcing partners to have extensive security services to keep their data and systems safe from external threats. Outsourcing partners need to have security experts who can fortify their infrastructure, data, and software, both on and off the cloud. The Gartner report on top technology trends for 2022 mentions the need for organizations to adopt a cybersecurity mesh architecture or CSMA. With more users scattered across the globe, traditional security perimeters cannot hold the fort anymore.
This means having a sense of urgency when it comes to security and being equipped with resources to address the expanding needs in cybersecurity. Outsourcing partners will also use Blockchain technology in 2022 in order to secure their products and services. Outsourcing companies will also need to draft new security policies to monitor and regulate employee access to networks and infrastructure.
With lockdowns and restrictions, many companies opted for outsourcing in order to meet business demands. According to this report, IT departments in large corporations increased their outsourcing budget from 12.7% in 2019 to 13.6% in 2020.
It is important to understand these new outsourcing trends, and how they can catapult a company’s business success to the next level. Companies need to consider these important developments and changes when planning and implementing their strategies for businesses and software development for the next few years. The pandemic has reshaped customer and market behavior, with IT playing a critical role in steering these changes forward.