Cost Reduction Will Make A Comeback
Back in the days, outsourcing was all about cost reduction in operations. But, with time, factors like talent shortage, infrastructure challenges, quality concerns, speed, and more started playing a role as well. In general, cost was moved to an ancillary benefit.
Following the business continuity mindset businesses have begun to change the landscape in which they manage their relationships. Being free to cut costs without limiting themselves.
Indeed, the 2018 Deloitte survey suggests that cutting costs was seldom the key objective behind outsourcing work anymore. Instead, buyers started favoring fast market reach, flexible structures, improved user experience, and a competitive edge.
However, the outbreak of Covid-19 has shifted the priorities yet again. Businesses have started to focus more on reducing costs and ensuring business continuity than ever before. The present pandemic is likely to change how we perceive outsourcing in coming years.
Businesses have been struggling since the pandemic hit in 2020. Many have had to find ways to outsource, cut costs, and change their relationship with vendors. Some have even gone so far as to implement new technologies and start a new revolution in tech. Artificial intelligence has been used more and more, and new services are being automated. Here are some of the tech trends that we think will continue into
But that’s not all. In fact, the cost-saving benefits of outsourcing are just one part of a much larger story.
The 2020 Hit
Then, the pandemic struck. And, with it, the need for operation cost reduction. The economic uncertainty that came with the virus did not go unnoticed, hence the renewed interest in value-oriented outsourcing agencies.
The cost of doing business in 2020 took a hit when COVID-19 hit. Businesses found ways to outsource, cut costs, and the relationship between buyers and vendors changed. Implementing new technologies and starting a new revolution in tech is one way that businesses are trying to stay afloat. Using artificial intelligence, and automating new services can help businesses save money and time. Here are some of the trends that we think will continue into 2022:
- Businesses will continue to try to cut costs.
- Technology will play an even bigger role in business.
- Artificial intelligence will be used more and more.
- Automation will become more commonplace.
Of course, how flexible and agile the vendors are, how much (and how easily) they can scale, and how tech-ready they are, remain top concerns. At the same time, the cost will usually tip the scales: the right price will make a successful outsourcing partnership as easily as the wrong price will break it. Discuss different benefits all you want, the final contrast decision will, once again, be in the finances’ hands.
When the COVID dust is settled, the cost concerns should loosen the grip on the whole situation. But that will not happen in the next ~12 months, we can tell you that much.
The Fourth Industrial Revolution
A little alarmist? Sure. But the changes are coming, and the tech ecosystem embraced these changes quite some time ago. Outsourcing agencies, on the other hand, are lagging a little behind product owners. Or were lagging a little behind, to be more accurate.
You can either fight change or embrace it. Challenging what most may feel is the norm for tech can feel like a stretch.
The pandemic forced a lot of businesses to start outsourcing some of their processes and services. Businesses that were afraid of the cost and quality concerns associated with outsourcing agencies suddenly had no choice but to take the plunge.
And you know what? It turns out that those businesses were pleasantly surprised. They discovered that outsourcing can be successful through third-party relationships.
The Third-Party Move
By and large, third-party vendors have relied on human resources first and foremost. But, again, the changes are coming, and outsourcers are gearing up as much as the next crowd.
Businesses have always been quick to adopt new technologies that help them save costs or improve efficiency. We’ve seen an acceleration in the adoption of automation and artificial intelligence as businesses look for ways to cut costs and manage their operations remotely.
Looking ahead to 2022, we expect to see more businesses embracing these technologies as they look to stay competitive. We also anticipate a continued focus on outsourcing and cost-cutting measures as businesses strive to remain profitable.
The upcoming tech revolution will help both parties (buyers and vendors) become more efficient, flexible, resilient, and productive, all while driving consistent revenue. Countless businesses are turning to automating new services and implementing artificial intelligence in order to stay afloat.
This is the new norm and will help establish a more secure future for companies. It is important organizations have already implemented new technologies into their companies’ policies, and more will jump on the hype train soon enough.
5G and AI
Barring the aforementioned cloud computing services, the biggest contributors will be 5G networks and artificial intelligence. Businesses will be able to harness the power of these new technologies to streamline their processes, improve customer service, and cost reduction.
For businesses, the cost of automation is always a concern. The good news is that it’s getting cheaper and cheaper to automate certain tasks. However, the initial investment can still be quite costly.
In fact, AI is expected to grow exponentially in the next few years. Businesses are already using AI for a variety of tasks, such as automatic customer support, fraud detection, marketing personalization, and more.
The 5G rollout is also gathering pace. By 2022, it is expected that nearly 20% of the world will be covered by 5G networks. This will enable businesses to take advantage of new opportunities, such as AR/VR, connected devices, and more.
Enabling blazing-fast wireless networking, five gees will elevate outsourcers to the next level. Management, communication, collaboration, data exchange, you name it – 5G networks will improve it all.
Working with the flow
In the same vein, artificial intelligence will streamline IT companies’ workflow and improve efficiency across the board. Software bots will handle the lion’s share of repetitive tasks, covering the processes that don’t require human interference. The existing AI-powered bots are no dummies already, and the upcoming iterations won’t just make outsourcing more tech-savvy but also save time, cut costs, and reduce unnecessary human efforts.
In some way, shape, or form, any business can find uses for AI in their daily workflow. Whether it’s data entry, cataloging, or just customer services. An artificial element added to your workforce will find a way to bring efficiency to your business.
In 2021, we saw the beginning of a new tech revolution, with artificial intelligence and automation becoming more commonplace. Businesses are starting to adopt these technologies to stay ahead of the curve.
Of course, the bad news is that automation always entails lay-offs. With that in mind, we would advise those whose job covers primarily repetitive tasks to look into acquiring new skills ‘cause the robots are coming. We will not stop them from entering 2022, and neither will you.