In the year 2020, the IT outsourcing business changed the game. Some unexpected technology sectors have also seen a boost from COVID 19’s rapid innovation pace. Social distance in sectors like food and healthcare has sped up the pace of service delivery.
According to the findings of this study, technology outsourcing firms have evolved into the cure for all ailments.
Covid-19’s Business Implications
The new Covid 19 outbreak was officially designated a pandemic by the World Health Organization on March 11, 2020. Viruses like this have taken over the spotlight and are mostly to blame for the present economic downturn.
Tolls on human life are staggering, and the global economy is in danger. There has been a significant decline in many sectors and enterprises. Some of them may be shut down right away.
Covid-19 hurt 82% of firms, and 70% predict a rebound within a year, according to the report. Many nations are still in recession because of a sharp decline in GDP and the closure of businesses.
Global GDP shrank by 4.4% in 2020, according to the International Monetary Fund (IMF). The drop has been dubbed the greatest since the Great Depression of the 1930s by the organization in question. China will be the only nation whose economy will be on track in 2020. It grew by 2.3 percent throughout the year.
On the other hand, the IMF expects global growth to be 5.2% in 2021, with India and China leading the way with 8.8% and 8.2% growth, respectively.
Despite the economic downturn, the IT industry has managed to hold on and has even grown considerably during this turbulent year. A CAGR of 5% is forecast for the IT Outsourcing Market between 2020 and 2024, according to Technavio.
According to Statista’s most recent estimates, revenue from application outsourcing will reach $108,748.6 million in 2021.
Major Obstacles to the Business
Businesses’ supply lines were put under a lot of strain during Covid 19. The acquisition, manufacture, and shipping of commodities and raw materials became more difficult, and there was no short-term strategy.
While this epidemic raged, businesses were still managing their most critical company asset: cash flow. This included making payments to suppliers and workers, recovering debts, and more.
Investigate these significant issues for your company:
- Complications in collecting data from management and other resources
- Discomfort in getting to and from the workplace or other places of employment
- Having access to the most important management tools for short-term use of other business units
- Problems in evaluating the effect on cash flow
- Taking a toll on the employee’s output
- Despite using the company’s messaging platform, there are communication gaps among team members.
- Companies are scrambling to deal with the problems brought on by Covid 19.
IT Outsourcing Data
Many firms across the globe intend to outsource some of their key and non-essential company services to third-party enterprises to save money while also simplifying operations.
Recent studies regarding IT companies and their contribution to the global market’s ability to prosper in the face of pandemics that have been based on recent online polls have revealed the following:
- In 2020, the worldwide business process outsourcing market was valued at USD 232.32 billion. Between 2021 and 2028, this massive expansion is predicted to rise at an annual CAGR of 8.5%.
- In the Asia-Pacific region, the largest BPO share belongs to IT outsourcing.
- The primary rationale for IT outsourcing is a 70% cost reduction.
The second reason is that it gives 40% of the company flexibility and 20% of the time to market.
3. Robotic process automation (RPA) has been selected as a digital enabler by 64% of top organizations.
With 68 percent of the world’s most important sectors relying on the Cloud to facilitate digital transformation in 2020, the world’s most famous Cloud is 4 percent ahead of the pack.
4. As a result of the Covid 19, 48% of firms globally may expand RPA implementation by 5% or more.
After the epidemic, dealing with automation will be a major concern. Employees at 57 percent of organizations say they’re worried about these developments.
Approximately 75% of businesses now use RPA to assist their remote workforce.
5. As of now, 93% of businesses use cloud computing services.
As more and more businesses shift toward cloud computing, they will become more competent and responsive. They will be able to extend their offerings in both current and new markets swiftly.
6. 58.8 percent of US marketers reported no modifications in the outsourced marketing process due to COVID.
In 2020, just around 19.4% of US marketers reported a shift in marketing outsourcing.
7. Larger enterprises (66%) are more inclined to outsource than small businesses (29%).
Organizations with less than 50 workers cannot afford outsourcing services, while larger companies have more money available.
8. The top three reasons that firms gain from outsourcing are:
- Enhanced Cash Flow
There are five primary issues that any organization has to contend with:
- Recruiting new workers (50 percent )
- Boosting profits (46 percent )
- Employee healthcare (44percent).
- Increasing profits (39 percent )
- Maintaining a positive cash flow (34 percent )
As a general rule, outsourcing allows you to do two things simultaneously. How? Even if outsourcing cuts down on employment and health care costs, it nevertheless provides a significant boost to the aforementioned sectors.