In 2020, professional services company Deloitte Touche Tohmatsu Limited released its 2020 Global Outsourcing Survey. It sought to understand the motivations, challenges, and future plans of organizations engaged in global outsourcing. This article explores its key findings to help you make your next business move.

Cost Reduction as the Primary Objective

The survey revealed that global outsourcing continues to be a critical growth strategy for organizations. However, due to the impact of the COVID-19 pandemic, survey results showed a significant uptick in organizations prioritizing cost reduction versus other business considerations.

Diverse Outsourcing Approaches

Organizations are adopting diverse outsourcing approaches, including traditional outsourcing, cloud-based services, and business process as a service (BPaaS). This reflects the evolving nature of outsourcing and the growing preference for flexible and scalable solutions that meet specific business needs. The microservices sector in particular is seen to play an increasingly larger and even disruptive role in providing end-to-end tailor-fit solutions in the near future.

Cost Efficiency and Access to Talent

Cost efficiency remains a primary driver for global outsourcing, with organizations seeking to reduce operating costs and optimize resource allocation. Additionally, accessing specialized talent and expertise, particularly in emerging markets, was identified as a key benefit of global outsourcing.

Strategic Focus

Organizations are increasingly viewing global outsourcing as a strategic enabler rather than just a cost-saving measure. They are aligning outsourcing initiatives with their overall business strategies, aiming to enhance operational efficiency, drive innovation, and gain a competitive advantage. On this score, cloud technology remained the top digital enabler for business process outsourcing and has become more attractive than ever. As the post-pandemic normal continues to fluctuate and adjust, the cloud model offers scalability and flexibility to meet consumer demand.

Risk Management

As organizations expand their outsourcing activities globally, they face various risks, including geopolitical uncertainties, data privacy concerns, and regulatory compliance issues. Mitigating these risks is crucial. Organizations are investing in robust risk management frameworks and establishing strong governance structures to ensure effective oversight of outsourcing relationships.

Collaboration and Partnerships

Successful global outsourcing relationships are built on collaboration and partnerships. Organizations are prioritizing open and transparent communication, fostering trust and mutual understanding with their outsourcing providers. Effective collaboration allows for better knowledge sharing, alignment of goals, and joint problem-solving, leading to successful outcomes.

Technological Advancements

Technological advancements are transforming the global outsourcing landscape. Robotic process automation was revolutionizing processes during 2020. It enabled organizations to achieve greater efficiency, accuracy, and innovation in their outsourcing initiatives. Even as early as 2020, artificial intelligence was catching on as the technology developed and matured. These technologies are reshaping the outsourcing industry and offering new opportunities for organizations to leverage in their global operations.

Future Outlook

The post-pandemic “new normal” has altered the way business is conducted and work is perfomed. COVID-19 tested the limits of business continuity planning, and has caused BCP to evolve rapidly to account for similar black swan events in the future. Migration to the cloud model is expected to continue as its versatility during lockdown situations became apparent. With these developments, organizations gradually adopted remote work cultures. As the remote work culture becomes more ingrained into corporate structures, the prospect of business process outsourcing becomes even more attractive. With a net positive combination of access to global talent, risk-hedging, and cost savings, companies are predicted to lean into outsourcing.

In conclusion, the Deloitte 2020 Global Outsourcing Survey highlights the significance of global outsourcing as a growth strategy for organizations. It showcases the diverse approaches, strategic focus, and collaboration that drive successful outsourcing relationships. With a strong emphasis on cost efficiency, talent access, and risk management, organizations are leveraging technological advancements to unlock the full potential of global outsourcing and drive future success.