For the last 15 years, outsourcing has been on an upward growth trajectory. The global outsourcing industry has increased in size from US$45 Billion to US$105 Billion in 2014. It is estimated that the global outsourcing industry is worth US$250 Billion.
The growth of outsourcing corresponded with increasing global uncertainty beginning the new millennium. From 9/11 to the Eurozone Crisis of 2009 to global recession in 2014, volatility ushered new demand for outsourcing services. Businesses were looking for ways to streamline costs without affecting productivity.
Now we are nearing the end of 2016 and the world has been thrown in chaos once again with changes happening everywhere.
Does this mean outsourcing will reach greater heights in 2017?
Greater Integration of Virtual Assistants – Businesses will continue to contract the services of virtual assistants in 2017. Having virtual assistants onboard your company is the most cost efficient strategy to moderate risks while expanding your business.
Virtual assistants will reduce your cost of business and improve business flexibility. By delegating non-essential work to virtual assistants, you can focus more on your core business and increase productivity. US companies are expected to increase the allocation for virtual assistants in the workforce by another 15%.
The Rise and Rise of India – Philippine President Rodrigo Duterte’s decision to shift foreign policy away from the United States and Europe and toward China has rattled the Philippines’ outsourcing sector.
The largest beneficiary of Pres. Duterte’s foreign policy is India which will seek to reclaim the markets it had been losing to the Philippines since 2013. The Philippines stands to lose out on an estimated US$25 Billion income from export receipts in 2017 and US$48 Billion in 2020 if Duterte’s administration does not address diminishing investor confidence and the increasing outflow of capital.
In the first week of November 2016 alone, US$800 Million worth of capital outflows hit the Philippines’ equities markets.
Greater Demand for Remote Teams – More businesses will be seeking to set up remote teams. There are composed of virtual assistants that have specific skill sets.
Offsite operations have been on the uptrend for the last few years. It is an effective way to outsource services because margins can accommodate negotiation. Clients can improve profit margins while service providers can build their portfolios.
Offshoring on Hold – Donald J. Trump’s unexpected win of the US Presidency has thrown a curveball on international business relations. While Pres. Trump’s policy remains unclear, his campaign promise of “Let’s Make America Great” may put a damper on offshoring.
Many US companies offshore to China, a country by which Pres. Trump has had a contentious relationship. It may also affect US companies that initially outsourced to the Philippines with a plan to transition to offshore in the near future.
It seems that foreign policy would determine the future growth of outsourcing. Given the uncertainty of US and Philippine foreign policy, it is highly possible that new markets for outsourcing would open up for clients and service providers.
Put simply, outsourcing is too valuable strategy to pass up. It is the only business development strategy that can potentially reduce costs, increase revenues while decreasing the risk of expansion.