What are the business outsourcing industry trends to watch in 2024?
Companies looking to outsource tasks should stay abreast of the latest business process outsourcing industry trends to maintain competitiveness, foster innovation, and make informed decisions. By adopting outsourcing, you are not simply following a fad but gaining access to a wide range of benefits. It goes beyond just reducing costs; it involves injecting your processes with flexibility and knowledge from various parts of the world. By utilizing this approach, you can focus on honing your critical abilities while tapping into a vast pool of talented experts, thus swiftly introducing your products to the market, giving you a notable edge over your competitors. With digital advancements reshaping industries such as technology, banking, eCommerce, and healthcare, and the growing interest in streaming, gaming, EdTech, and FinTech, aligning with the need for outsourced services is no longer a choice—your business must evolve and remain relevant.
At SupportZebra, our firsthand experience has given us a unique perspective on the BPO industry trends, particularly how automation and AI are reshaping the landscape. These advancements have streamlined our operations and enhanced our decision-making capabilities. This blog will delve into the trends currently dominating the BPO industry. However, to fully appreciate these developments, we’ll begin by tracing the origins of Business Process Outsourcing (BPO) and examining how it evolved to become the fertile ground for these innovative changes.
The Emergence of Business Process Outsourcing
How Did BPO Begin?
Reflecting on the trajectory and development of the BPO industry, it’s clear that the history of Business Process Outsourcing has been a path filled with innovation, adaptation, and strategic rethinking, spanning from the late 1880s to the present. This journey began with the Industrial Revolution when businesses of all sizes sought to gain a competitive edge, expand their markets, and increase profits. This laid the groundwork for the BPO industry trends we observe today.
By the 20th century, the dominant business model had evolved into a large, integrated firm prioritizing operational control across the entire production and distribution chain to drive revenues independently. However, a pivotal shift occurred in the 1960s, steering towards diversification and economies of scale. This shift aimed to protect businesses from market fluctuations despite the initial high costs and management complexities, marking a significant phase in the evolution of BPO industry trends.
How Was Outsourcing Coined as a Strategy?
In the 1970s and 80s, the push towards global expansion highlighted the complexities of managing extensive operations and the burden of elevated costs, setting the stage for pivotal BPO industry trends. The advent of the internet in the late 1980s catalyzed a shift towards prioritizing creativity and flexibility, heralding a new era that emphasized streamlining core business functions through outsourcing.
By 1989, the practice of outsourcing had crystallized into a strategic business approach, acknowledged for its potential to reduce expenses and boost efficiency, aligning with emerging BPO industry trends. From the mid-1990s through the early 2000s, the integration of outsourcing into corporate strategies took a significant leap. Businesses began leveraging domestic and international providers, tapping into skilled labor markets in India, China, and the Philippines. This strategic move facilitated the ability to operate globally, offering services across various time zones, thus reflecting a critical evolution in BPO industry trends.
How Does BPO Stand Today?
From 2000 to 2019, the BPO industry experienced remarkable growth, reaching a global market value of over $91 billion. BPO companies expanded their range of services to include customer service, sales, technical support, administrative tasks, and other support functions. This diversification made BPO an appealing choice for all types of businesses, whether they were starting out or already established. The COVID-19 pandemic further emphasized the importance of these BPO industry trends, as companies increasingly relied on outsourcing IT support to overcome the challenges of remote work and the shift towards digital transformation.
Today, the BPO industry plays a crucial role in digital transformation, constantly evolving with new trends and innovations. It continues to drive innovation, efficiency, and strategic advantage, adapting to the ever-changing needs of the global business landscape.
BPO Industry Trends in 2024
Now that we’ve delved into the growth of the BPO industry, from its humble beginnings to becoming an integral part of global business strategies, it has become even more crucial. The global BPO market is projected to reach a staggering $261.9 billion in 2022, driven by the desire to cut costs, focus on core strengths, and improve flexibility and efficiency. Businesses of all sizes are increasingly embracing outsourcing.
This widespread adoption has paved the way for new developments in the BPO sector, shaping the landscape in 2024. Let’s explore some of this year’s noteworthy BPO industry trends.
1
Automation and Artificial Intelligence (AI) in Outsourcing
As a forward-thinking business, staying up-to-date on the latest BPO industry trends is our priority. Recently, operational methodologies have transformed noticeably, largely influenced by the progress in artificial intelligence and automation technologies.
A significant number of companies, 35% to be exact, are already reaping the benefits of these technologies. It’s not just about efficiency; these advancements are changing the game by reducing costs, improving productivity, and transforming operations.
Customer service is also getting a boost from AI, as 75% of consumers find chatbots convenient for handling routine inquiries, allowing human teams to focus on more complex matters. Additionally, 60% of entrepreneurs see AI as essential for enhancing customer relationships, thanks to its ability to process data and make informed decisions.
This shift towards AI and automation isn’t just a fad; it’s a strategic decision to deliver more personalized customer interactions and drive innovative business strategies.
2
Remote Work and Distributed Teams
Another emerging BPO industry trend becoming more popular worldwide is the move towards remote work, significantly sped up by the COVID-19 pandemic. By 2023, 28% of employees will be working remotely, enjoying the perks of flexible schedules and the option to work from anywhere.
Despite the challenges like feeling isolated and maintaining team unity, most workers (91%) prefer a mix of remote and office work. Businesses are adjusting by considering hybrid work setups and using technology to connect employees, ensuring access to talent and cost-effectiveness.
This shift towards a more adaptable, diverse, and effective workforce represents a more inclusive and productive future.
3
Data Security and Privacy
In 2024, the BPO industry trends highlight the balance between achieving cost savings and enhancing efficiency through outsourcing, given growing concerns about data security and privacy.
Sharing sensitive data with external parties can heighten the risk of exposure, especially when subcontractors are involved. To address these challenges in 2024, the emphasis is on implementing stringent security measures and effective risk management practices with third-party suppliers.
Contracts that restrict data access, require unique vendor accounts, and perform routine screenings and external audits are essential to protecting an organization’s data confidentiality.
4
Sustainable Outsourcing
According to the Deloitte report, 93% of CEOs believe sustainability is essential for their companies’ future success, highlighting a key factor in BPO industry trends. This has led to a significant shift in the BPO industry, with a strong focus on sustainable practices. Not only does this benefit the environment, but it also positively impacts communities in developing countries by creating job opportunities and improving living standards.
Additionally, it attracts socially conscious clients who value companies that prioritize sustainability. The BPO industry’s commitment to sustainability involves various initiatives, such as carpooling and partnering with vendors who comply with ESG standards.
These efforts contribute to a greener future, offering environmental and societal benefits. Moreover, they highlight the significance of social responsibility and corporate ethics in professional conduct.
5
Cloud Computing
Cloud computing dramatically impacts the BPO industry trends, providing scalability, flexibility, and cost savings. Companies are moving away from on-site data storage to utilizing services and resources from a distance, adopting SaaS, PaaS, and IaaS.
This shift cuts costs and allows for quick adjustments to market shifts. By utilizing cloud-based outsourcing, businesses can operate on a global scale efficiently, breaking down geographical barriers and improving remote work and resource management.
6
Industry-specific Outsourcing
One major shift we’re seeing is companies moving away from generic services and instead working with outsourcing partners with expertise in specific industries. This BPO industry trend highlights a shift towards more personalized and effective outsourced services better suited to meet each business’s unique needs and challenges.
For instance, healthcare organizations may collaborate with firms specializing in medical billing, while retail companies may prefer partners who are well-versed in eCommerce and consumer analytics. These specialized outsourcing firms provide valuable insights and solutions that general service providers cannot offer, resulting in improved operational efficiency, higher service quality, and a competitive advantage in the market.
7
Customer Experience and Personalization
Meeting customers’ rising demands now requires personalized experiences, which are essential in today’s market. As a result, numerous companies are opting for outsourcing to cater to these requirements. This change underscores a notable BPO industry trend: Businesses increasingly depend on third-party collaborators to fulfill the need for individualized services.
Businesses can enhance customer support by collaborating with BPO providers with advanced data analytics and AI technologies. These outsourcing partners are experts at analyzing customer data to understand individual preferences and behaviors, allowing them to tailor offers, recommendations, and support to each customer’s unique needs.
This high level of customization enhances the overall customer experience. It builds loyalty and retention, highlighting the crucial role of outsourcing in turning customer interactions into personalized journeys that genuinely connect.
8
BPO for Startups and Small Businesses
We’re also noticing another BPO industry trend: outsourcing is no longer limited to big corporations. It now serves companies of all sizes.
According to a Clutch survey, 83% of small businesses plan to maintain or increase their investment in outsourced services by 2023. Startups, especially during the pandemic, have embraced outsourcing for its numerous advantages, such as reducing operating and labor costs, minimizing employee turnover, utilizing specialized BPO expertise, adopting advanced technologies, and leveraging BPO firms’ vast resources.
9
Omnichannel Solutions
Omnichannel strategies utilize various channels to connect with customers and meet their shopping preferences on different platforms.
The most recent Bazaarvoice study reveals that 70% of shoppers prefer using various channels for shopping. Surprisingly, only 20% of them mentioned in-store as their preferred choice, while an even smaller 10% opted for online shopping. These strategies enable customers to access products or services through online channels, digital platforms, and mobile devices, with customer service available on social media, live chat, email, and call centers in addition to the website.
Implementing omnichannel solutions is a crucial BPO industry trend, significantly helping companies expand their global reach, enhance customer engagement, and boost satisfaction. Effective outsourcing is essential for successfully implementing comprehensive omnichannel strategies, highlighting its importance in current BPO industry trends.
10
Social Media in Business
Hootsuite points out that there are 4.62 billion social media users worldwide, making platforms like Facebook, Instagram, Twitter, LinkedIn, TikTok, and YouTube essential in our daily digital routines.
Social media is no longer just for personal use; businesses are increasingly using these platforms commercially. The same Hootsuite report reveals that social media made up 33.1% of online advertising spending, totaling $154 billion in 2021.
With social media playing a vital role in business strategies, the BPO industry is adapting by providing specialized social media management services. Companies understand the importance of outsourcing their social media tasks to BPO providers to stay competitive and visible digitally.
How SupportZebra Embraces 2024's Outsourcing Evolutions
The outsourcing industry is abuzz with significant BPO industry trends such as automation, AI, the widespread adoption of remote work, the paramount focus on data security, and a sincere drive toward sustainability. Embracing these trends is imperative for any business aiming to distinguish itself and thrive in today’s fiercely competitive outsourcing landscape. Whether harnessing AI to streamline operations or embracing remote work to tap into global talent, these trends reshape our perception of work and collaboration. Moreover, let’s recognize the significance of safeguarding our data and making our operations more sustainable. These practices are commendable and essential for fostering trust and demonstrating our commitment to our planet and its inhabitants.
To successfully navigate these changes, businesses must remain well-informed and adaptable. At SupportZebra, we recognize the significance of embracing and spearheading these trends. We are not mere spectators of these trends; we actively integrate them into our work and the solutions we offer, ensuring that we provide the utmost value to our clients and stay ahead of the curve. Our firm belief in the potential of innovation and unwavering commitment to excellence positions us as a reliable ally in tackling the outsourcing challenges and opportunities that lie ahead in 2024. By collaborating with a forward-thinking partner like SupportZebra, you prepare yourself for the future and actively contribute to shaping it.
Stay ahead of BPO industry trends and improve your business. Contact SupportZebra today, and let’s navigate the future together.
