Outsourcing in 2019: What’s Ahead?

Experts correctly predicted 2018 would be a big year for outsourcing, especially within the IT sector of the industry. Some of the most discussed trends throughout the year were cloud computing, artificial intelligence (AI) or automation, data security and so much more.

According to several online reports, China, Poland, Brazil, India, Malaysia and Philippines are still the top offshoring providers worldwide. In the Philippines alone, the projected total income range is expected to hit between $40 to $55 billion by 2020 according to an ASEAN report. More than 70% of outsourcing buyers around the globe are positive about the ongoing use of outsourcing or offshoring solutions.

2019 next

With 2018 coming to a close everyone has their eye on the future, 2019. Key research speculating on the next couple of years reveals 70% of outsourcing buyers are set to increase their outsourcing resource requirement. Majority of outsourcing providers are also expecting growth in the industry, 35% are planning on significant growth.

IT outsourcing, Innovations and AI

In the wise words of the often-quoted Uncle Ben, “With great power comes great responsibility.” Modern outsourcing is definitely here to stay and believe it or not, experts will be spending the next few years enhancing what outsourcing is and the extent of what it can achieve.

There is no doubt growth comes with its own challenges and increasingly outsourcing buyers are demanding more IT professionals and better IT services. Short supply of qualified IT professionals is a concern for many buyers. Buyers are also shifting into cloud-based IT infrastructure to accommodate the offshoring model, many providers agree that the offshoring model and cloud-based technology are a match made in heaven which is reflected in the exponential growth in cloud computing in the outsourcing industry. According to Cisco’s Global Cloud Index report, cloud traffic is predicted to increase 3.7 fold by 2020. These days, very few outsourcing buyers utilise a legacy-based or non-existent (paper) IT infrastructure setup.

Artificial intelligence or AI is also hitting the mark better than robotic process automation (RPA). Hence the number of outsourcing providers using AI is increasing – people want advanced technology, not a technology that simply mimics human actions.

Knowledge Process Outsourcing

KPO or the Knowledge Process Outsourcing has been around for many years. BPO is all about outsourcing tasks and processes overseas for businesses to focus on their core activities locally. KPO allows the outsourcing of core activities that will help buyers grow their business and operation. Demand in the industry does not fall only in the IT sector. KPO is active in analytics & market research, engineering, finance, accounting, legal process, design, research, publishing outsourcing and others. According to Grand View Research, the KPO market by 2025 will reach USD $124.29billion. Top contributors to that number are IT and telecommunication.

Data Security and Resiliency

In cloud computing, data security is everything. There have been many campaigns and laws benefiting data security in several countries but there is still plenty of room improvement. Good or bad data security can lead to the success or downfall of an outsourcing company. In 2018, the Facebook-Cambridge Analytica data breach took the world by surprise. There are also several reports about outsourcing providers stealing business models from their clients and then building their own companies based on those data and frameworks. A global call-to-action to improve data security and resilience in the outsourcing industry will be apparent in the coming 12 months and beyond.

In a nutshell

The most speculated trends to dominate the outsourcing industry in 2019 are related to IT solutions and cloud computing. But that is not all, more and more industries are gaining headway in outsourcing. Manufacturing and customer support are the top industries utilising outsourcing solutions. But this year, we saw a significant increase in real estate, health care, legal law, design and engineering. Who knows what’s in store for us all in the coming year.

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