Global competition, technology, and Mother Nature are driving constant changes in business process outsourcing. We’ve identified seven trends that will influence and transform the BPO industry in 2016. Read on to learn more, and check out the infographic below!
1. The Philippines Phenomenon
A low cost of living and a young, educated and English-speaking workforce continues to draw BPO to the Southeast Asian island country. The Philippines will continue to shake up the Top 10 worldwide outsourcing destinations, now dominated mostly by Indian cities. In 2015, Manila grabbed the No. 2 ranking in the Tholons 100, pushing Mumbai down a rung. However, the government will have to address an infrastructure strained by rapid growth.
2. Risk Management Put to the Test
Natural disasters, such as the 2015 South India floods, are among the factors driving businesses to address the risks related to outsourcing. Multiple site visits by clients throughout the year to inspect work quality and to review disaster recovery and business continuity plans will become the norm. To test BC/DR, companies may intentionally, and without notice, “pull the plug” to see if the provider can quickly re-route work to delivery centers in other locations.
3. Long-Term Partnerships Explore Capability vs. Ability
Many successful outsourcing engagements have settled into comfortable relationships, some going on for decades now. Having proven their ability over time, service providers are looked upon as long-term partners. Familiar with a company’s core business and culture, providers are now offering clients management consulting process improvement services. Similarly, companies are asking for more provider capability: Can they take on higher-skill processes? Can they handle both the back office and the front office?
4. Outsourcing Makes a Social Impact
Impact sourcing, a business process outsourcing model built on a foundation of social responsibility, will become better known in 2016. Its aim is to deliver quality service at a low cost while employing socioeconomically disadvantaged people. Look for impact sourcing to gain traction as corporations work to meet objectives for diversity and social responsibility. The Rockefeller Foundation estimates impact sourcing currently employs some 780,000 people globally, with plenty of opportunity for future growth.
5. Knowledge Process Outsourcing Expands
Organizations that have years of experience working with BPO providers will turn to third parties for some core business services that may have once been considered “non-outsourceable.” Described as knowledge process outsourcing (KPO), this field encompasses tasks requiring high research and analysis skills, often performed by people with advanced business, legal, scientific or engineering degrees. Research and Market analysts forecast the global KPO market to expand at a combined annual growth rate of 23% by 2019.
6. Robotic Process Automation: Separating Reality from Hype
The marketing side of the IT-BPO industry loves to hype up any new bell or whistle, and it has done so with robotic process automation (RPA) for the past few years. RPA involves the use of “software robots” capable of replacing humans for mundane, repetitive tasks commonly found in BPO. However, it will take some time for the real world to catch up with the marketing hype (if it ever will). Industry surveys show only a small percentage of companies have hands-on experience with RPA, and many executives still struggle with understanding the technology and its realistic capabilities.
7. Tapping the Wisdom of Crowds
Crowdsourcing — farming out a complex task to a group of people connected online — has proven successful for scientific research, investigative journalism, design competitions, fundraisers and just about anywhere collective wisdom can be put to good use. So it’s no surprise BPOs are reaching out to the crowd to get clients’ work done. Service providers are using Amazon’s Mechanical Turk scalable workforce for data entry and other tasks. Others have created online communities to share ideas for improving clients’ processes, rewarding members whose solutions are selected for implementation.