Outsourcing in 2020: What the Future Holds

Outsourcing has continued growing from one strength to the next. As more companies continue seeing the benefits it holds for them – in terms of a reduction in cost, and an exploitation of proven talent at minimal risk – the industry is rising to encompass biotech and pharma companies, the manufacturing services, as well as everyday small businesses and startups. So, what does the future hold for this industry in light of technological innovation and process automation? And what will outsourcing in 2020 look like? Read on to learn more:

The Future of Outsourcing

In case you are planning to start outsourcing or you have already been doing it, chances are that you might feel worried that it won’t survive in the next few years. However, these worries are unfounded. In fact, it is more likely than not that outsourcing might be the bane of future economies. The other significant changes in the outsourcing industry will include:

  1. Automation

The industry will start capitalization on automation – particularly where IT tasks are concerned. More particularly, the inevitable dominance of Artificial Intelligence and cloud services will make more jobs in the information sector obsolete because companies will prefer to outsource them.

  1. The Cloud

In the same way, cloud services will become more reliable, powerful, and affordable than ever before. To remain relevant, the outsourcing sector will need to offer these services, or at least to hire people qualified to provide these services. Needless to say, these cloud service providers will have to be oriented more towards architecture as well as to think abstractly.

  1. Artificial Technology

By 2020, these technologies will have become powerful and usable. More companies will open up their own AI tech or make it available to others through cloud services. As a direct result, artificial intelligence will more likely replace jobs and the outsourcing industry will have to provide these services and get experts to work with the technologies.

To Outsource or Not To

Whereas most businesses swear by the benefits and advantages that outsourcing has to offer, the debate around the industry is focused on its sustainability over the long term. This is why it is so important to take a critical look at outsourcing in 2020, and what the future holds for the industry.

Opponents argue that this model lacks quality control, is besmirched by low prospects of innovation, and reduces the hold that companies have on project management. Critics have also pointed out that the rise in salaries in popular outsourcing destinations has already started taking the sheen away from the cost benefits initially associated with the business practice. To them, the industry might not prove as profitable as it once was in 2020.

Anyway, in spite of these negative aspects perceived by those who are against the industry, outsourcing continued growing. Actually, it has now been embraced by all domains and sizes of organizations. From the atypical startup to the large, conglomerate enterprise, outsourcing is a tool of choice for anyone looking for that competitive advantage in their chosen line of expertise.

Businesses have also moved over to such platforms as mobile, social, and cloud. In the same way, stakeholders are increasingly distributed geographically. In this disparate business environment, it is not surprising that outsourcing has managed to adapt so easily and seamlessly with and into the change.

Trends for the Future: Outsourcing in 2020

Relationships within the industry are increasingly standardized. As a result, outsourcing is driven by people and processes, and not by price. This change has leveled out the playing field and will continue doing so for the service providers. Other changes expected in the industry include, but are not limited to:

a) Contracts

It is likely that the cost pressures will lead to customized contracts that are more flexible in their scope of delivery and service level agreements (SLAs)

b) Adoption

Similarly, SOHOs, startups, and small businesses will adopt outsourcing more for purposes of increasing time to market and reducing operational inefficiencies

c) Operating Costs

The rising cost of oil, transportation, and raw materials mean that more companies will take a serious look into the industry so as to reduce their operational costs

d) Business Functions

Going by the current trends, companies will outsource their high end critical business functions; at the same time, the outsourcing of most low end corporate services will continue stabilizing on account of automation and technological innovation

e) Collaboration

The outlook on outsourcing in 2020 will be marked by increased collaboration between both large and small companies and those providing the outsourced services. The extent and value of outsourcing will compel more firms, therefore, to collaborate on core business functions. This will be unlike in the current industry where most companies only outsource smaller, mundane tasks to experts elsewhere. Technology – through the automation and digitization of certain tasks – will also allow remote parties to collaborate like never before.

The most successful of the collaborative business relations will be based, of course, on a foundation where every company involved will work on well defined roles – playing to their individual strengths while sharing their knowledge with others in the partnership. This way, such companies will enjoy competitive advantage because they will be able to maximize their individual productivity while cutting down on the costs of operation.

Concluding Thoughts

As seen above, and by what is happening in the industry, outsourcing will definitely survive. More than that, outsourcing in 2020 will be a thriving economy – with most people preferring to provide their services through this way than in a regular 9 to 5 business.  This is notwithstanding the automation of processes and the emergence of new technology.


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