Global Outsourcing Industry Predictions for 2014

Outsourcing has become a global phenomenon – it powers and empowers businesses large and small in nations around the world. Over time, the global outsourcing industry has changed. It’s grown, certainly, but the changes are deeper than simple expansion and greater acceptance. Industry evolution is necessary, and the outsourcing industry has not stopped evolving. In fact, there are some pretty interesting predictions for the industry coming up in 2014.

Significant Growth in 2013 Will Carry Forward

According to Gartner, the global outsourcing industry saw $288 billion in 2013, which was an increase of 2.8% over the figures for 2012. Those numbers are expected to carry forward into 2014, buoyed on the back of changes like upward growth in custom application outsourcing and infrastructure utility services (this should carry on into 2017 according to Gartner’s report).

Not About Cost

One interesting prediction for 2014 and the coming years is that the focus on outsourcing to save money will continue to decrease. Experts have already noticed this trend currently, but it is expected to continue becoming more and more paramount. More companies are outsourcing not for cash savings, but to take advantage of expertise, experience and skillsets that are not available to them within their local areas. Other factors include the ability to be more agile in competition, as well as for scalability, which is a vital consideration for businesses hoping to run leaner.

Offshoring vs. Nearshoring

Offshoring is the traditional form of outsourcing – companies in America outsourcing their needs to Mexico or India, for example. Today, that’s changing. More and more companies are finding the benefits of a new trend called “nearshoring”. Essentially, this is nothing more than outsourcing to other individual providers or companies within the same nation, but not doing those things in-house. Gartner reported that the impact of nearshoring would have the greatest impact on the IT industry, where overseas outsourcing is expected to drop by at least 15% by 2016.

Outsourcing Growth

While the shift away from offshoring things like IT services is present, other aspects of outsourcing are growing. For instance, marketing, professional video and audio editing, translation services, data entry and the like are becoming more and more commonly outsourced, particularly to lower-cost provider in overseas countries that nevertheless offer outstanding quality and excellent customer service (the pay less for equal or better quality model). In this, India certainly leads the way.

The growth in this type of outsourcing is centered outside of large businesses, as well. Larger businesses are much more likely to perform their functions in-house while medium and small businesses turn more and more to outsourcing. This makes sense, as larger firms are able to hire talented individuals, while that is often impossible for medium and small companies, leaving them little choice but to outsource their needs or to “go without”, which is not an option these days.

In the end, outsourcing will continue to grow and evolve. 2014 will usher in interesting developments, but those changes will continue for the long term.

– Back office Pro