Future of Outsourcing by 2025

Date 14-04-2021

Today’s businesses around the globe are doing their best to cement a strong foot in the outsourcing landscape. Added to this, 2020 has certainly been a volatile year where we witnessed that things can change drastically at any given moment. Thankfully, the past year has also taught us to be prepared for the global pandemic, and become more adaptable, resilient, and responsive towards customer experience management given the condition.

According to the research by Fortunly, 'Two years ago the global outsourced customer experience market was worth approx. $75.1 billion. The worth of the market is expected to heighten to $81.5 billion by 2023, soaring at a CAGR of 3.5%.'

However, despite numbers, businesses have always been reluctant to dip their toes in offshore outsourcing. Lack of professional expertise, the threat of data breach, cultural barriers, are some of the reasons for this reluctance.
Read on to get an insight into the journey and discover the hurdles in the path of incorporating outsourcing in one's business.

High Cost and higher expectations

Occasionally businesses tend to have exorbitant expectations from an IT service provider. Handing over sole responsibilities, with the notion that everything will go over smoothly, can cause the failure of the project and can even lead to economic casualties.

To combat this issue, it is advisable to discuss best practices beforehand to decide on the role of the customer service provider, to estimate the probable results from the outsourcing venture. Also, it is important to inform the project management team of firms pursuing outsourcing services about the reasonable risks, and potential expenses linked with outsourcing.

Also, businesses should put in the time and effort to pursue the profiles of appropriate service providers, to cleanly sort out the one, adept at fulfilling project requirements.

The Solution

One of the best ways to smooth over this issue is by strategic approach wherein the businesses will get a perfect time estimate of when a project will wrap up. This will certainly take out false expectations from the equation.

Organizational and Cultural Differences

Great talent has never been an issue. What technically becomes dreadful is the cultural gap. Corporate as well as regional differences have always been a part and parcel of outsourcing.

Locations, work culture, and company policies are some of the major factors that lead to organizational and cultural differences. Technically these have the potential to influence the workings of the business. Interpretation, interaction, commitment, and even productivity can be severely impacted.

The Solution

The businesses hiring service providers should seek to organize an elaborate induction and training to give an insight into the organizational and cultural norms. The vice-versa, wherein a similar program, giving an in-depth understanding of the corporate and regional culture of the clients can be carried out by an outsourcing provider for its team.

Risk of data security and intellectual property

Outsourcing has always been a double-edged sword. If not handled with care, then one might even lose rights to the developed and efficient application. Added to this, there's always been a lurking threat of breach of confidential customer data, along with the hazard of forfeiting intellectual properties like trade secrets, business plans, etc.

Be it an enterprise, MSME, or a humble startup, tight security of data and IP is of utmost importance. With service providers working remotely, a good chunk of confidential information is to be sent across the web, to get acquainted with business information, operational data, and other assets. Resources and tools along with data might also be needed to be shared while working.

Shying away from laying strict groundwork while laying out contract details might cause serious irreversible damage. Hence, fundamental measures for protecting IP and other resources shall be a priority.

The Solution

To crush this challenge, legally binding documents such as NDA shall be prepared for signing with the outsourcing vendor. This way, the threat of breach of data and hazard to resources could be mitigated, even while the service provider attends to stringent protocols.

Poor Project Control and Decision Making

Misunderstandings and power management have always been infamous for causing a tiff between business and outsourcing companies. This unwanted contention has the power to hamper the execution of the project in the long run.

Since businesses technically reach out to the outsourcing providers, this is why sometimes, they might carry around a preconceived notion of being the 'boss'. This in the long-run has the potential to damage the professional relationship of service providers with businesses.

The Solution

To avoid this confusion, the best way forward is to mention the threshold of exerting control on an offshore business process outsourcing contract, while working on a project together. The terms of the contract considering service should hence be made crystal clear to the team of employees, of both the business as well as the service provider.

Switching to the lane of digital outsourcing

Unlike business process outsourcing and traditional IT, the services are solely rendered by machines and not humans. Mind-boggling right? Well, in this new wave of digital outsourcing- humans have learned to formulate execution strategies, configure digital systems, tackle exceptions, incorporate data. However, they have not learned to accomplish services on their own.

Contrary to a traditional cloud service provider, a digital outsourcing provider takes on the sole responsibility of customer-specific business function, instead of rendering a one-to-many service.

The major wins in the digital sourcing lane come from RPA i.e Robotic Process Automation. While operating at a presentation level, to give the appeal of a human user to the software application, RPA software can be easily programmed to do the tasks based on rules, performed by humans in traditional outsourcing.

Yet another major addition is Artificial Intelligence. AI is majorly used to replace spoken human interaction, using 'chatbots'. This is done to reinstate drivers using autonomous vehicles to further derive human-like insights from the contours and patterns in data. With its humongous potential, AI might be able to render services beyond human capabilities in the future.

Probably down the road, we might eventually discover digital outsourcing providers, rendering and subsequently keeping blockchains, along with many other shared digital ledgers, in line to store information. These technologies will ensure the creation of savings with a single system of record for many firms instead of having companies keep up their records.

Despite the emergence of digital outsourcing, there still is a great chunk of work that is innately too unstructured and human to be automated. So fret not. Automation is not here to steal jobs. Rather expect to see traditional as well as digital outsourcing thriving together, in years to come, like the providers who have delivered both offshore business process outsourcing as well as onshore outsourcing services in the past years.


Mechanization and robotics have been revolutionizing the working patterns in recent years. Computerization has supplanted the customer service industry, at a commendable pace, that has filled the hole between advanced physical partitions. This will eventually help in influencing the lives of humans as well as the enterprise. For cost streamlining and effectiveness, developed corporations are mechanizing their back-office operations.

To maximize value and avoid pitfalls in the new lane, major alterations are needed in the contract terms of both existing as well as new contracts, to adapt to third-party contracts to digital outsourcing. Investing in digital outsourcing will cut down labor costs, and the firm can then maximize value, and avoid costly pitfalls in digital outsourcing.

By 2025, the new lane on the outsourcing highway will certainly specify which party is responsible for obtaining consumer consents, and which party is responsible for maintaining compliance with changing privacy laws, that can impact the personal data collected through connected products.

Also, the savior that goes by the name of technology, will present ways to enhance efficiency and effectiveness, in the dynamic world of call center outsourcing. Whether one decides on keeping operations in-house or decides to render outsourcing to a promising client, everything can be achieved, if the recommendations and guidelines are implemented directly.