Important Outsourcing Trends and Statistics You Need to Know in 2020 (And Beyond)

Outsource
December 30, 2019
15
min to read
The Invisible Team

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It’s no surprise that most SMB teams are focused on bringing more efficiency to their daily workflow while also scaling productivity this coming year. If this sounds like your list of objectives for 2020, then your business should consider the ultimate solution to both of these goals: outsourcing. From sales to recruiting to operations, outsourcing provides an unlimited amount of opportunities to help your business work smarter. 

But before you can get started, you first need to understand some key trends and frequently asked questions like, “what’s the difference between RPA and BPO”? Even if you’ve never heard of these terms before, this guide is here to walk you through the nitty gritty of it all. 

So without further ado, here’s everything you need to know about what outsourcing is, what are the current outsourcing trends and how your business can benefit from them, and what tools you’ll need for 2020 and beyond.

A Brief History of Outsourcing

outsourcing trends

It might seem like a buzzword today, but outsourcing has some interesting roots in manufacturing that translate over to our contemporary, digital industries as well. The first instance of outsourcing dates back to the Industrial Revolution in 1760. Before this time, craftsmen typically created their products or carried out their services entirely by themselves. Or, if the business had a big enough audience, they would employ other, full time workers to assist them. 

But once new manufacturing processes were introduced, business owners realized they could create the same products at better margins in record time compared to the tediousness of the “by hand” approach. At this point in time, outsourcing meant wheeling your textiles or tools down to the factory in your city and having their teams use shiny new machinery to scale production. 

Skipping forward a couple hundred years to the 1970’s, workers now had legal rights, personal computers are newly introduced, and technology used for business was more advanced than ever. And, thanks to the aviation (which was now both convenient and affordable for businesses), companies quickly discovered that outsourcing tasks like customer service and payroll was cheaper overseas. 

Nearly four decades later, businesses across all industries are seeing the fruits of both digitalization and globalization. With the right tools, companies now have the ability to hire and work with location independent freelancers. Companies also have access to more labor and advanced tools than ever before. 

The end result? We now see more than 68% of businesses who actively use outsourcing to propel their profitability and efficiency. Here’s why: 

  • 59% of businesses see outsourcing as an effective cost cutting tool. 57% see it as a way to focus on their highest ROI activities. And another 47% say it helps them solve their capacity issues. 
  • Outsourcing is quickly becoming normalized as an integral component of daily practices, regardless of whether or not the businesses who use them have physical office spaces. In fact, the global outsourcing market has doubled in size the past 8 years and is on track to continue this rapid growth in the coming years. 
  • And, in addition to all their practical benefits, 78% of modern companies around the world who use outsourcing report feeling happy about the results. 

In fact, outsourcing has become an industry of its own, offering services and products for both private and commercial markets. Here’s what you need to know about outsourcing as it relates to the business world.

 

The Business Outsourcing Industry

Looking towards the immediate future (between now and 2023), the global business process outsourcing (BPO) industry is expected to continue growing as much as 11%. With that in mind, here’s everything you need to know about what outsourcing looks like in our modern world and how it can affect your business. 

How is Outsourcing Used? 

Outsourcing is the process of finding, hiring, and working with a third party service provider. It’s most commonly used for activities that are time consuming and repetitive. 

Assigning these tasks to someone else helps keep your core team focused on higher ROI activities. Businesses also use outsourcing to find collaborators who have a special skill that their current employees do not. 

The Globalization of Outsourcing

The globalization of outsourced goods and services is extremely profitable thanks to a number of factors. Cheaper wages, better currency exchange rates, and large scale facilities mostly contribute to this. 

And while there are some serious issues worth considering, there are ways to keep your outsourcing socially conscious and fair. In fact, many big name brands like TOMS have found ways to take advantage of global outsourcing while still maintaining their company values.

 

Beyond Outsourcing: Everything Else You Need to Know to Understand it Better 

The rest of the terms outlined below serve as subsets of outsourcing. While they often target different business areas, they each share the benefits we’ve mentioned. And they can be applied to most industries, no matter how complex or layered their processes are. 

BPO (Business Process Outsourcing)

Business Process Outsourcing (bpo)

What is Business Process Outsourcing?

Business Process Outsourcing lives under the umbrella of general outsourcing. It generally refers to any and all business related tasks. For example, you may use BPO for recruiting new talent or harvesting qualified new leads. 

How does BPO work?

Business Process Outsourcing is generally divided into three major categories: Onshore (meaning local or in the same country), Nearshore (in countries that border your own), and Offshore (countries overseas).

What are the benefits of Business Process Outsourcing?

Besides the overall benefits listed above, there are other pros and cons to outsourcing BPO which can help companies scale production faster and more efficiently, reach a global audience, and boost technical support. 

What is a Business Process Outsourcing company?

They partner with businesses to bring individuals and teams the staff they need to achieve their goals. Top tier providers will often assign a single point of contact between your business and theirs to help streamline requests. All in all, they help make your process faster, better, and more cost effective.

What are some Business Process Outsourcing benefit examples?

Let’s say you work in the insurance industry. You can easily use BPO to manage compliance, implement omni channel communication, and send your print mail marketing campaigns. You’ll also be able to back up sensitive customer data and prepare your business for emergency power outages. 

So now that you have a good idea about what BPOs are, let’s take a look at a related term.

  

BPaaS (Business Process as a Service)

Business Process as a Service (BPaaS)

What is business process as a service?

Business as a service uses software (typically stored in the cloud) to cut down on labor for both vertical and horizontal business models. Major benefits include:

  • Getting the most out of your software and other tools with helpful integrations and more team members available to fully use each tool. 
  • There are no huge upfront costs. Most outsourcing partners offer a variety of flat rate, customizable packages on an ongoing monthly (or yearly) subscription basis. 
  • You’ll get all the advantages of an upgraded corporate infrastructure without the expensive bill. 

What are some business process as a service (BPaaS) examples?

You might even want to use these as inspiration for your own BPaaS strategy. 

  • Hire knowledge workers who specialize in social media management to boost your marketing performance. 
  • Recruit top sales talent and train them on company policy. 

There will be more great examples down below. But first, let’s discuss the next important outsourcing key term.

 

BPA (Business Process Automation)

Business Process Automation (BPA)

What is business process automation?

Business process automation is the use of advanced machine learning (ML) and artificial intelligence (AI) models that respond to changes in processes, as well as traditional robotic automation, to streamline your operations. For context, an organization would take their recurring, manual tasks and give them to someone outside of your organization, or use a software tool to complete it for you. 

Either way, this term can seem pretty similar to others you’ll hear associated with outsourcing, but it’s important to note that it primarily refers to day-to-day, unskilled, and/or time consuming list items. They need to get done but they don’t need to be completed by your highly skilled employees who definitely have something more urgent or time sensitive to take care of.

What is business process automation methodology?

It’s the process of organizing complicated workflows for a variety of staff members at every level. Of all the terms in this guide, it’s the most similar to project management. 

How can professionals establish a business process automation framework?

There’s no perfect way to develop a framework and each company’s needs will vary. However, you can always count on the following elements to play a role in your framework: 

  • Goal setting
  • Infrastructure analysis
  • Documented process testing
  • Technology integration
  • Revision, process retesting, and extra support 

BOS (Back Office Support)

Back Office Support (BOS)

What is back office support?

Any administrative or behind-the-scenes operations that aren’t customer-facing can be improved by a little automation. Things like record keeping, IT requests, and basic accounting all fall under this category. 

What are the best practices for outsourcing back office support functions? 

Although it may feel counterintuitive, plenty of businesses choose offshore solutions to back office outsourcing. The trick is to monitor quality for consistency, create a reliable system for information security, and work to overcome common outsourcing considerations like language, cultural, and time differences. 

RPA (Robotic Process Automation)

Robotic Process Automation (RPA)

What is robotic process automation (RPA) and when is it beneficial?

RPA is often described as intelligent automation or smart process automation because it relies on artificial intelligence to assist businesses. And while RPA might not be fully available through leading outsourcing solutions, it’s certainly something to watch in 2020 and beyond. However, it's important to note that businesses that outsource through RPA will still get to experience that human touch through personalized service and virtual assistants. 

What are some necessary RPA tools & RPA software?

RPA as a service is still being developed but there are some opportunities available  to automate your tasks through outsourcing partners like Invisible. 

What are some RPA examples?

Here’s an idea of what you can expect to start seeing as early as next year. 

  • More advanced help desk software that can anticipate the needs of any visitor based on past site behavior and a series of short survey questions. 
  • Digital troubleshooting on webpages and within software products themselves can easily be fixed by add-ons or extensions that monitor, identify, and fix bugs. 
  • Payroll, form, and PTO request processing can all be streamlined without the need for human approval until the very last step. 

Now that we’ve explored the major components and terms contained in the outsourcing hierarchy, here’s how you can begin to take advantage of its many benefits.

 

Outsourcing Trends To Watch in 2020 and Beyond

Outsourcing Trends

We’re already seeing some of these changes in 2019, but in 2020 these trends will completely take over. 

1. Outsourcing saves the average employee 69 entire work days per year. 

Tasks like meeting scheduling, sales follow up emails, and other basic administration work cost businesses a lot of time and money. If every business worked to automate these every day tasks, studies show they’d collectively save $5 trillion annually. 

2. It will eliminate the damaging consequences of multi tasking. 

Switching between tabs and activities costs businesses 40% of their workforce’s productivity. But with help from outsourcing, your employees can concentrate on a smaller to-do list and work more effectively.  

3. Outsourcing will change the way we look at employee wages. 

The McKinsey report states that 45% of paid activities across industries can be outsourced. Which means that businesses can focus on compensating employees for their expertise and skilled labor.

4. Outsourcing tasks will allow businesses to sidestep complex or strict regulations.

Outsourcing often involves hiring freelancers. Given the tax structures set up around roles like these, they’re often exempt from certain fees and benefits. Which makes outsourcing far more cost efficient than hiring full time employees.

5. Profit margins will increase. 

Outsourcing reduces overhead, keeps prices competitive, and streamlines production. 

6. Higher value will beat out cost savings. 

Now that the market has grown, businesses are looking to invest in better quality products and services. For example, Walmart (a brand infamous for their affordable goods produced in outsourced markets overseas) has recently made an initiative towards shifting their products back towards quality over quantity. As part of their “America at Work” campaign, they outsourced the manufacturing of their high efficiency light bulbs to American-based General Electric, a true expert in all things energy and light related. 

7. Outsourcing central business operations will be the new normal. 

In the past, businesses focused on outsourcing more basic tasks. Now they have the opportunity to outsource more niche specific needs thanks to the digitization of most jobs. In fact, Google outsources roughly half of their employees across all departments, which isn’t so surprising when your consider the breadth and scope of all their many products. It helps them bring on more specialists and cover in-house employees during long leaves of absence. 

8. Artificial Intelligence will become commonplace.

Most manual processes will be outsourced through advanced software tools rather than third party vendors. For example, beauty giant Nu Skin uses AI to personalize skin care and makeup suggestions for all their customers. They also use it to manage supply chains and promote their sustainability initiative, a central aspect of their platform and brand identity. 

These trends are just the tip of the iceberg. And in order to prepare for this massive new wave of outsourcing practices, you’ll need to know some important jargon. Given these advantages, it should come as no surprise that businesses around the world want in on the movement.

How to Get Started with Outsourcing

There are a lot of options but they won’t all be right for your business. The key is to invest in a company that treats outsourcing like a partnership. In addition to providing high quality service, you can expect a quality outsourcing company to provide an excellent customer experience. Plus, they should take care to keep things as simplified as possible for you and your team. Invisible, a company that is changing the way people get things done, does all that and more. 

Outsourcing with Invisible

As we’ve already mentioned, the best outsourcing solutions for enterprising businesses offer a full package of options paired with stellar service. But they’re also adept at finding solutions that are created with your industry in mind. Here are just some of the groups Invisible has helped reach their full productivity potential. 

1. Sales Process Outsourcing

sales process outsourcing

No matter what your sales goals are for the quarter, you can work with Invisible to achieve them in less time. For example, if you’re interested in finding new leads, the Invisible team will search for, clean up, and organize new contacts for you. Or if you’re looking to expand your LinkedIn outreach, they can follow up after meetings, calls, or conferences and secure those connections for you. 

Wade and Wendy, an AI chat-driven recruitment brand, used Invisible to make their entire process faster and more efficient. From sourcing to screening to evaluating to scheduling meetings, Invisible was able to take over a successful, established workflow and save the employees of Wade and Wendy a lot of time. 

5 Tips for Sales Professionals Looking to Outsource Lead Generation and Prospecting

These are the two biggest time consuming (and often frustrating) activities all sales professionals deal with on a daily basis. 

  • Establish sales goals before you add automation to the mix. That way you’ll be able to measure the success of your outsourcing with tangible figures and readjust as you go. 
  • Have a clear idea of who your ideal customer profile is before you outsource prospecting. The key is to find high ROI leads and communicating all the nuances of your target demographic to your outsourcing partner will really help with that. 
  • Remember to keep things personal even if you’re looking to scale your business. In terms of outsourcing, this usually means giving your collaborators supervised access to tools like your CRM or client notes. 
  • Working faster doesn’t always mean working smarter. In order to get the most bang for your outsourcing buck, choose a partner that values quality lead information over the quantity. 
  • Systemize your outreach process ahead of time so that you can easily pass it on to your outsourcing team. 
4 Everyday Tasks Real Sales Teams Outsource  
  1. A leading healthcare tech company uses outsourcing to find new audiences and develop detailed buyer personas. 
  2. The Nintex Promapp team use their process management tool to switch years’ worth of customer data from a legacy CRM to Salesforce without disrupting operations. 
  3. Cartelligent outsources their complex digital sales intake forms to keep their internal team small while managing a large volume of new leads. 
  4. Raddix outsources their semi monthly new product testing to ensure every new offer is high speed and efficient. 

By now you’re probably already brainstorming outsource projects for your sales team. But what about your HR department? They can get in on the productivity too. Here’s how. 

2. HR Business Process Outsourcing

HR Business Process Outsourcing

The human resources division of any company is tasked with finding, evaluating, and recruiting top candidates to fill out your team. Their jobs are very time consuming and much of their head hunting can be streamlined to help cut down on unnecessary labor hours. Tasks like filtered sourcing lists, candidate outreach, and information collection can all be successfully outsourced. 

One real world case study shows how a medium-sized data acquisition company used outsourcing to complete tasks like employee compensation package analysis and a streamlined help platform for their national branches. They even used outsourcing to scale during peak seasons without hiring any new employees for their company or incurring more fixed costs. 

4 Tips for HR and Recruiting Professionals Looking to Outsource Talent Prospecting

Outsourcing companies have a lot more capabilities than staffing agencies but you’ll need to keep the following points in mind when you start out: 

  • Look for a partner that will talk with you about your goals in-depth. Their investment in the success of your business should rival yours. 
  • The foundation of a great outsourcing collaboration is the ability to be flexible and the confidence that both parties will work well together. Ask yourself if they’re willing to be transparent about candidates shortcomings when they need to be. 
  • The HR process will usually adapt and change to fit the role they’re trying to fill. Can your outsourcing partner help modify your recruitment processes on the fly? And, perhaps more importantly, will you trust them to make those changes as needed even if you can’t be reached in the moment? 
  • Choose an outsourcing company that has worked with clients like you in the past. Or, at the very least, make sure they have experienced HR professionals on staff who can really speak your language. 
5 Everyday Tasks Real HR Teams Outsource 
  1. Scottish Fire and Rescue digitizes their payroll through a third party service that created their timesheet design and financial system.  
  2. SSCL outsources the automation of more than 100 transactional tasks, including new job application processing and converting this data into downloadable daily reports.  
  3. This large organization outsources their new hire assessments. 
  4. University of Maryland Upper Chesapeake Health outsources their new employee onboarding process. 
  5. Schnitzer Steel, Inc. uses outsourcing to streamline performance reviews, keep employee files up to date, and check records for errors or inconsistencies. 

Now you know how to use outsourcing for both sales and HR. But what about general business operations? 

3. Outsource Operations Management

operations outsourcing

Your day to day operations is often repetitive and time consuming, which makes it perfect for outsourcing. From back-office tasks to product marketing, you can easily hire help to complete even the most skilled processes. 

Here’s just a sample of the processes you can outsource for operations

  • Industry event ticket purchasing. 
  • Video to text transcription and translation for marketing. 
  • Organizing your digital to-do lists for projects, meetings, and events. 
  • Conducting scalable market research. 
  • Finding specific email addresses, sending personalized legal documents, and scheduling meetings. 
  • Researching, managing, and onboarding new hires. 
  • Creating and editing sales scripts as well as marketing materials. 
  • Using keywords to find the right people, products, or factories. 
  • Setting up and running basic e-Commerce websites. 
5 Tips for Outsourcing Operations Management

Because this category is a bit broad, you’ll need to consider the big picture when partnering with an outsourcing company. 

  • Use the same hiring questionnaire you’d use for a full time employee. For operations specifically, anyone you work with should ultimately be able to fill a role, not just complete a set of tasks. 
  • Yes, let go of the reigns a little. But make sure to build a rapport between your outsourced managerial staff and your in-house team. Regular progress reports and weekly check-in calls go a long way towards solidifying the collaboration. 
  • When interviewing prospective operations management sources, ask them about their mindset. Does it align with your company’s outlook on operations? Or can it take the brand in new, refreshing direction? 
  • Always maintain the final say for big picture decision making, even if your entire operations team is managed by outsourced help. 
  • Consider systemizing your staff training. Use videos, online tests, and pre-recorded Q&A’s to help onboard your outsourced operations solution. 
4 Everyday Tasks Real Operations Teams Outsource 
  1. The University of Auckland outsources their backend processes (like student transcript requests and class lists) so they can focus on higher ROI activities. 
  2. SharePoint outsourced their transition from paper forms and documents to digital ones. 
  3. AsiaCell uses outsourcing to manage product lifecycle, speeding up a process that once took five months down to just two weeks. 
  4. KBA Incorporated outsources their mobile workflow and PDF conversion for their field teams. 

Clearly there’s a lot you can accomplish when you automate your operations. And, as if that weren’t enough, outsourcing is also extremely valuable for any insurance business process too. 

4. Insurance Business Process Outsourcing

Insurance Business Process Outsourcing

Given how regulated the insurance industry is, it’s important to properly vet anyone who will have direct access to your procedures and information. But once you find an outsourcing company that is trustworthy, you can outsource many insurance operations processes including everything from claims to customer support to adjustments. 

For example, Invisible has worked with insurance businesses to help service hundreds of thousands of employees all at the same time. They clean up application processes and data. They keep operations running quickly and accurately. They even help shape company culture; when employees can focus on what’s most important to them their workplace satisfaction increases. 

5 Tips for Insurance Business Process Outsourcing 

No matter who you choose to work with, keep these insurance BPO best practices in mind:

  • Have a plan for what employees will do with their new schedule. Because outsourcing is all about saving businesses time, you’ll need to have a vision for how your team will spend it once your outsourcing is in place. 
  • Password protect all sensitive documents. Set up an email reminder to update all passwords whenever an outsourced employees finishes their project or leaves the team. 
  • Document all relevant conversations through a streamlined communication platform so you’ll have everything in one place. It’s better than sifting through email threads to find information on the fly. 
  • Remember that the best outsourcing solutions are typically the ones that are easy to adopt and implement. The transition should be smooth.  
  • Consider having a trial period (either with 1 project or for 1 month) to get to know your remote team. This is especially helpful if it’s your first time outsourcing. 

As you can tell, outsourcing the majority of your business tasks is possible for all industries, even ones as complex as insurance. 

Now you’re ready to outsource your business this year and next! 

Given where outsourcing started out, it’s amazing how powerful and diverse it is now. No matter what your role, the advancements of modern outsourcing can help make your work more productive, efficient, and lucrative. Sales teams can save time curating high ROI prospect lists. HR departments can fill roles faster with resume screening. Operations professionals can keep back office to do lists on track. And that’s just the tip of the iceberg! Consider jump starting your strategy by partnering with Invisible to manage everything from sales and marketing to business operations and management.

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