The global COVID-19 pandemic has dynamically transformed the way startups and enterprises operate. Practically every company is revisiting and revising its budget to put itself in a position of financial stability. There is an added focus on revenue-generating activities and mitigating the effects of COVID-19 through IT outsourcing services.
According to CompareCamp, the international outsourcing market was $92.5 billion in 2019, and we can expect BPO to reach $262.2 billion globally in 2022. These are fascinating figures and something worth looking into. In this post, we shall explore IT outsourcing as an approach to survival during COVID-19 for both startups and enterprises. In this blog, we’ll look at
outsourcing Covid-19 business strategy. So, let’s get started!
IT Outsourcing Trends
WFH is the new reality for most companies, as almost everyone performs their job duties online. The truth is that with the variety of technologies available today, businesses are already progressing towards remote working. It is just that they found themselves embracing digital transformation sooner than expected because of COVID-19.
Apart from addressing more complex IT demands, ensuring business continuity is vital due to this sudden change. This means capitalizing on key areas to reduce costs and strategizing so that human resources can improve efficiency and productivity. The solution is to work with top IT outsourcing companies.
Why? Let’s find out next.
Working Smart
From IT to sales, marketing, HR, and accounting, outsourcing offers limitless opportunities to help your company work smarter, not harder. SMBs lacking the capital for dedicated in-house departments such as finance, HR, and software engineering will find this useful. Outsourcing brings valuable, one-time opportunities arising from the disruption of the pandemic.
Organizations can create a pool of extra funds by eliminating the expenses they would otherwise incur from managing activities that IT outsourcing companies can handle. This leads to greater potential for growth, and you can innovate products or services that effectively meet customer needs. There is no need to hire and train new employees, which would increase investment in additional office space and equipment. Not to mention how outsourcing as a COVID-19 outsourcing business strategy makes better use of existing talent and increases team morale.
There are other benefits of IT outsourcing services and reasons why you should opt for it, as we shall see next
Access To the Latest Technologies
In addition to saving time and money, what can IT support outsourcing do for you? To begin with, it offers access to modern technologies, including systems and best practices. As we expect technology to evolve further in the coming years, businesses will be spending on state-of-the-art solutions for maximum success. This even applies to small business IT outsourcing that makes sophisticated technologies easily available and accessible. Companies can then encourage unique thinking, innovative capabilities, and the freedom to scale when necessary.
Business Impact of Covid-19
In March 2020, the World Health Organization marked Covid-19 as a global pandemic, triggering a significant financial crisis.
This outbreak has severely impacted various industries, causing widespread downturns and, in some cases, immediate closures. Over 82% of businesses reported negative effects from Covid-19, with 70% anticipating recovery within a year. Many countries are in recession due to sudden drops in GDP and business closures.
In 2020, the global economy contracted by 4.4%, the most significant decline since the 1930s Great Depression. China was the exception, showing 2.3% growth.
Looking ahead, the IMF predicts global growth of 5.2% in 2021, with India and China driving this progress at 8.8% and 8.2% respectively.
Despite the economic challenges, the IT sector survived and even thrived during this disruptive period. Reports indicate that the Global IT Outsourcing Market will soar by USD 98 billion from 2020 to 2024, growing at a 5% CAGR. Moreover, the application outsourcing segment is expected to hit $108,748.6 million in revenue in 2021, according to Statista.
IT Business Challenges During Covid-19
Throughout the Covid-19 period, business supply chains faced significant strain. Procuring goods/raw materials, production, and transportation became immensely challenging, with no clear short-term solutions.
During these difficulties, companies grappled with managing their critical business lifelines, especially cash flow. This included navigating payments to suppliers and employees, recovering debts on time, servicing bank loans, and more during this unprecedented pandemic.
Here are the prominent business challenges faced:
- Difficulty in obtaining information from both management and non-management resources.
- Obstacles in accessing physical workplaces like offices, factories, or warehouses.
- Key management resources deployed elsewhere, affecting short-term operations.
- Challenges in assessing the impact on cash flow.
- Addressing employee productivity concerns.
- Communication gaps among team members, despite utilizing the company’s messaging platforms.
What About COVID-19?
With organizations operating in a rapidly evolving landscape during COVID-19, authorities are introducing regulatory changes and continuous tech developments. We are essentially looking into two aspects here. The first one is simple. We must keep up with tech advancements to stay relevant and competitive.
However, when pandemics like COVID-19 strike, there is uncertainty everywhere. While such situations make it difficult to take risks, we can rely on outsourcing for uninterrupted access to relevant knowledge and tools. Technology-driven business models are more responsive to evolving market demands and trends.
Also, IT partners offer next-generation tech solutions at reasonable prices so that economies can stay afloat. You can collaborate with them to build a team of skilled experts with hands-on experience in technologies that define the future of work. These include AI, ML, Big Data, IoT, and cloud computing.
Outsourcing Covid-19 Business Strategy
Infrastructure Development
Outsourcing goes beyond reducing costs and providing access to modern tech solutions. It ensures that your in-house employees invest their time, energy, and resources in core competencies. When you outsource, you no longer have to manage tasks like daily functions, payroll, customer support, digital marketing, etc.
While these play a critical role in business success, they require time to execute, so why not leave it to a trusted company? You can then focus on what your in-house teams do best.
What we have discussed so far is practical, but here’s some food for thought. When you shift to WFH because of COVID-19, building IT infrastructure for remote communication and collaboration is the top concern. Chief information, business, and marketing officers must highlight remote working training and solutions as everyone moves away from on-prem models. The answer is simple. Outsource IT to companies who are familiar with remote development and working in distributed teams. Ideally, they will have information related to industry best practices that they can replicate to set the benchmark for high productivity from the very beginning.
Remote Working
Companies are making remote working arrangements to support the future of work. When you do the same, you will integrate the appropriate information and data security measures into your outsourcing plan. This means considering electronic access control and technical controls to prevent data exfiltration from private systems.
You will also be able to control the performance you require from your service provider’s team. This is helpful, especially when physical supervision is not possible. So, your IT provider can electronically track individual productivity and create an output-driven model for teams to follow. In this way, you delegate service delivery and the potential risks of reduced efficiency in a remote environment to your IT partner.
A good service provider works with you to scale up key enablers in a remote work setup. These consist of job responsibilities, workflows, communications, VPN, network bandwidth, collaboration platforms, etc. It is also possible to create an in-depth plan with your IT provider to cater to network, data centre, and server support. You can ensure maximum uptime and proactively identify as well as resolve bottlenecks without affecting service quality or levels.
Talent Pool
Outsourcing IT management is one of the wisest decisions you can make. There is potential to tap into a skilled global talent pool with a lower cost base. This is useful, especially if you business needs a specific set of skills that your home country needs. Businesses often ask about outsourcing IT pros and cons in this case.
There is no drawback, even if your business needs specific skills that are not available in your country. With outsourcing, it is possible to gain access to a pool of global talent, and this is useful when you conduct operations within a certain budget.
During COVID-19, companies are offering the services of resourceful experts who can accept new opportunities at reasonable prices. Your business can hire them for your projects at the best rates, and it is a win-win for both sides.
Absolutely, the future of outsourcing is indeed evolving towards a more digital landscape. Here’s a revised version:
What is the Future of IT Outsourcing
The future of outsourcing is embracing a digital transformation. Best Software outsourcing companies are swiftly integrating digital systems to enhance their services, making them smarter, faster, and more cost-effective.
Automation will play a pivotal role, gradually replacing tasks currently handled by individuals. As a result, traditional outsourcing contracts will undergo a significant overhaul. Tech outsourcing companies adapt to the shift, acknowledging that digital tools supported by human expertise drive service excellence.
Drawing from insights within the IT industry, some prevailing trends are expected to shape IT outsourcing in the coming years. Let’s explore:
Hybrid Work and Safety Priority
The year 2020 witnessed a staggering 400% increase in remote workers. Surveys now indicate that 72% of employees favor the hybrid work model over full-time office attendance. This shift to remote work significantly impacted IT project implementations in two critical ways.
- Dispersed IT development teams effectively navigated projects, enabling operational continuity and seamless adaptation to new digital technologies amidst the pandemic’s challenges.
- Safety concerns prompt IT professionals and software project outsourcing companies other department members to continue working remotely. This shift is accelerating the adoption of technological solutions based on Distance Economic principles. Consequently, companies are increasingly seeking IT partners for robust digital support.
Evolving from Ad Hoc to Technology-Oriented Outsourcing
Nowadays, accessing in-demand technical skills poses a challenge for companies, intensifying the struggle to acquire the right talent. The role of outsourcing companies has significantly transformed. Today, it’s more about technology outsourcing rather than short-term personnel leasing.
Recent times have witnessed a notable shift towards digital transformation-centric outsourcing. Specifically, companies are delving into areas that fuel digital evolution, providing them with a competitive edge in the market, including:
- Cloud services
- Machine Learning and Deep Learning
- Artificial Intelligence
- Cybersecurity services
- RPA and automation services
- DevOps and DevSecOps
- Data Analytics
Why You Should Choose IT Outsourcing After COVID-19?
The aftermath of the COVID-19 pandemic has left no industry untouched. While challenges persist, there are strategic measures to navigate the long-term impact, with outsourcing emerging as a key solution to bolster resilience. Here are compelling reasons why you should consider making a better business strategy and choosing IT outsourcing service companies:
Lower Regulatory Costs
Apart from being a SaaS product development benefit, outsourcing offers a means to focus on core business operations by shifting technological workflows to trusted IT outsourcing partners. With low IT outsourcing costs, third-world countries provide a cost-effective option with high expertise levels.
Effective Compliance Management
Outsourcing tasks to professionals in crisis alleviate stress on the in-house team, allowing them to stay focused and maintain productivity.
Stay Updated with Latest Technology
Partnering with a reputable outsourcing firm provides access to cutting-edge technologies and methodologies, such as the waterfall model in software engineering, keeping your business at the forefront without requiring substantial time and effort investments.
More Focus on Your Core Business
In the wake of the pandemic, numerous Fortune 500 companies have embraced outsourcing models, allowing them to concentrate on essential business areas during challenging times.
Expand and Discover Opportunities to Scale
Successful businesses during the COVID-19 crisis expanded and scaled by outsourcing non-central and operational workflows, providing valuable time for strategic planning and rebranding.
Speed & Flexibility
External partners, whether in-shore or off-shore, enhance overall productivity with market expertise and optimization of workflows, delivering lasting benefits.
Set Yourself Free from Recruitment Processes
Outsourcing eliminates the hassles of time-consuming talent acquisition processes, allowing businesses to invest resources in result-oriented tasks.
If you want to know in more about how outsourcing can benefit businesses, read our guide: In-House Vs Outsourcing Software Development
Conclusion
COVID-19 has seen a significant impact on healthcare IT outsourcing and other forms of arrangements in the short run. Even then, we can expect an increasing and sustained demand for these services in the long run as part of digital transformation initiatives. Take steps to ensure that your CIO works with your outsourcing partner to improve IT services delivery and power your business forward continuously. Create the right Outsourcing COVID-19 business strategy. Choose FiveRivers Technologies as your IT outsourcing partner for your business success!
