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More than decades ago, companies started outsourcing their business processes and functions to offshore locations, primarily to cut down on costs and focus on core business activities at home. Since then, the global outsourcing industry has come a long way.

Advancement in technologies has made it much easier to perform work from a remote location, and consequently, the offshore outsourcing industry has grown tremendously. Research studies have been conducted to provide insights and statistics on popular outsourcing destinations and the outsourcing providers that offer their services to customers from all over the world.

Outsourcing statistics

We've compiled the ultimate list of outsourcing statistics to help stay up-to-date with the trends. Check out this infographic and read on to learn more about the global outsourcing industry.

Outsourcing Statistics Infographic

The Global Outsourcing Industry

According to Deloitte's 2016 Global Outsourcing Survey, 78% of respondents claim that they feel positive about their outsourcing relationship.

When asked about the reasons for outsourcing, 59% of businesses cited cost-cutting as the primary reason, while 57% claims that it enables them to focus on core business functions. Another 47% of businesses claim that outsourcing solves business capacity issues.

Other reasons for outsourcing include the enhancement of service quality, critical to business needs, access to intellectual capital, business environmental management, and wider transformational change.

This is why more industries are outsourcing their business processes, especially IT and customer service. Outsourcing sectors include IT-BPO, healthcare and pharmaceuticals, energy, travel and transport, telecommunications, and media.

In KPMG's recent Global IT-BPO Outsourcing Deals Analysis, telecommunications sector consistently remains one of the top contributors to the outsourcing industry. It's because this sector is increasingly leveraging information and communication technology as well as social, mobile, analytics, and cloud technology.

Adoption and Revenue

Another study revealed that since the Great Recession in the United States, the country had outsourced more than 2.4 million jobs. In fact, 57% of companies in the United States increased their use of outsourcing, while 34% significantly restructured outsourcing agreements and only 9% terminated their outsourcing agreements.

When KPMG analyzed the deals closed in the first quarter of 2017, they found that albeit decreasing, the Americas is continuing to be a major outsourcing region that contributes 42% of the total deal value (from 68% the previous quarter). Of these, 41.5% came from the United States alone.

Meanwhile, the EMA (Europe, Middle East, and Africa) and ASPAC (Asia and Oceania) regions are not far behind and have increased their adoption of outsourcing. In the previous quarter, EMA contributed 27% of the total deal value, but during the first quarter of 2017, their contribution increased to 35%. Of this percentage, 22.07% of deals came from the United Kingdom.

ASPAC, on the other hand, contributed 23% this quarter as compared to only 16% in the last quarter. Australia and India were also identified as a key outsourcing market in the same report.

Since the advent of outsourcing, revenue has almost doubled. In 2000, the global market size for outsourcing was at 45.6 billion U.S. dollars and that number has continued to grow until it reached 88.9 billion U.S. dollars in 2015. However, the same source reported that last year, the global market revenue went down to 76.9 billion U.S. dollars.

Automation and Outsourcing

The global outsourcing industry has evolved, as automation technology is taking over much of business processes. Traditional IT-BPO offshoring models are evolving. In the past, operations of an entire business function are contracted. Today, specific services can be contracted and delivered across distributed environments in the world.

But, because automation is a relatively new technology, it still needs to be closely monitored. As a result, new jobs are created as human decision-making and critical thinking are still required in creative and more complex processes. These new positions require more advanced skills for the building, training, management, troubleshooting, and improvement of the technology. In effect, the demand for low-skilled jobs in offshore BPO companies is declining, and the demand for higher skilled workers that can manage and improve automation technology is rapidly increasing.

As such, new offshore positions are being created in rhythm with the trend of outsourcing higher-skill jobs, and creative tasks that cannot be automated is rising. According to MicroSourcing, the most common business processes that companies nowadays outsource are for small or one-time projects, photography services, administrative tasks and repetitive processes, accounting and bookkeeping, and graphic design projects.

The Philippines as a Top Outsourcing Destination

Because SMAC and automation technology is rising, A.T. Kearney took digital competence in consideration to identify the top outsourcing destinations in its Global Services Location Index (GSLI). Along with this, they used 38 metrics surrounding financial attractiveness, people skills and availability, and business environment. In this GSLI, the Philippines ranks as the 7th best offshoring landscape.

Meanwhile, the Tholons Services Globalization Index added digital innovation this year as one of the metrics in coming up with the top outsourcing destinations in the world. It places the Philippines 3rd on its list of top digital nations. Manila is also ranked 4th on their list of top super cities.

These rankings confirm that the country is holding steady as an industry leader in outsourcing. As one of the world's largest English-speaking nations with a 95% literacy rate, the Philippines is an undisputed leader in customer service and BPM (Business Process Management). In fact, 16 of the top 20 offshore call center projects in 2016 were located in the country.

More importantly, the Philippines is gaining ground in high-value fields including legal-BPO and engineering. The country is constantly updating the skills and knowledge of their talent pool to keep up with the evolution of outsourcing trends and automation technology.

Final Words

Digital forces such as robotics, AI, cloud storage, social media, mobile technology, and big data are shaking up the traditional model of outsourcing services. As such, the global outsourcing industry is becoming increasingly competitive, with Canada, Chile, Israel, and Brazil disrupting its landscape. Outsourcing companies and third-party providers need to innovate and re-invent their services to keep up with evolving demands.

At MicroSourcing, we enable organizations and enterprises to get the most value for their money and grow their business exponentially in response to today's digital demands. Whether you're a startup company or an established enterprise, we make sure to offer a strong outsourcing option to help your business thrive.


5 Signs Your Business is Ready to Outsource

by: Sidney Liquigan

Wednesday, October 10, 2018 | Comments (0)

Category: Outsourcing Research / Trends

When you don't have enough resources or time to focus on the growth of your business, it might be time to consider outsourcing. There are also other factors or signs to look out for that can help you decide if you should be outsourcing an area of your business.

Your Business is Growing Fast

Through social media and other forms of innovative marketing techniques, it is now possible for businesses and brands to gain popularity at an accelerated pace. Don't let the hype become just a phase; turn it into long-term success by having a long-term growth plan. As you transition from a startup to a growing business, outsourcing some of your processes is the way to go. Start by outsourcing time-consuming tasks to free up your time to focus on core processes.

You Need Help but You are Not Ready for Full-time Staff

When you don't have the budget or infrastructure to accommodate additional in-house or full-time staff, outsourcing will enable you to expand capacity without the need for fixed costs and investments. With outsourcing, you only get to pay for what you need and have the choice of assigning the tasks only when you need to. This way, you don't have to worry about overhead costs.

You Have IT-enabled Work Processes

Having IT-enabled work processes in your company makes them easier to be performed from a remote or offshore location. IT provides opportunities for processes to be executed simultaneously across networks, even when the process is executed remotely. It also makes it easier to monitor the status of the process, collect and analyze data, and disseminate information.

You're Turning Down Work

When you're already turning down work from potential clients because you’re already at capacity, then it’s time to outsource. You can outsource your back office processes, some of the production work, or your customer service and marketing. Either way, streamlining your operations and outsourcing to offshore providers improves your productivity and provides you with the infrastructure and resources at a fraction of the cost of expanding your in-house team.

You're Going Global

When people reach out to brands and businesses via contact form, chat, email, or call, they expect to get an answer right away. As an international business, you will receive inquiries coming from different time zones. Outsourcing a global support team allow for 24/7 accessibility.

Don't wait until you're overloaded and your business is starting to suffer. If you're hesitant to give up control to offshore delivery centers, you can ease into the idea of outsourcing by going for managed operations. Your managed operations partner will establish, host, and help you manage your offshore team. At the same time, the control over operations is still yours.


7 Tips for Effectively Managing Offshore Teams

by: Sidney Liquigan

Tuesday, October 2, 2018 | Comments (0)

Category: Outsourcing Research / Trends

Offshore outsourcing can go terribly wrong if not managed properly. And this is usually a concern for businesses new to this approach—how do you manage an offshore team if you are physically not with them to oversee operations? Companies looking to offshore outsource part of their business for the first time are often skeptical and hesitant about the results they can expect.

Here are some tips on how you can effectively manage your offshore team.

Screen staff thoroughly

Before hiring your offshore staff, aside from reviewing their resume and interviewing them, practical tests can be inserted in the selection process. This is to find out if their skills and level of professionalism match the requirements of the job, as well as to see if they can work well in this kind of working arrangement.

Focus on communication skills

With English being the universal language, your offshore employees must be able to effectively express themselves in English, both verbal and written. Choose an outsourcing destination where people use English as their second language and even excel in native English, such as the BPO workers in the Philippines.

Hire a local manager

A local team manager who knows the culture of the offshore location and has the experience working in an offshore outsourcing environment will be a priceless asset to your company as it tries to do offshore work for the first time.

Make your values and goals clear Your offshore team is also a part of your company. It is important that they have a clear image of what your business goals are and the purpose of the project they are working on. As they also represent your company and brand, the values must also be clear to them.

Integrate your offshore team into your company

Get to know your offshore employees. Remember to communicate with them personally by asking about their interests and hobbies. Commending them for their work will also boost their confidence and motivation. Doing so will make them feel that they are a part of your company as much as your in-house employees. To build relationships between your in-house and offshore team and promote effective communication, set up an online chat room where both teams can talk about work-related and even miscellaneous topics. Keeping your offshore team updated and in the loop helps in making the workflow more efficient.

Establish a project management system

All teams, both in-house and outsourced, must follow a single, consistent process and transfer deliverables in the same format. Cloud-based software like Jira, Trello, and Asana automate workflow management and allows collaboration across teams work seamlessly. Using tools like these allows everyone involved in the task to access the files in real time. This also makes adding comments and feedback, distributing tasks, and project tracking more efficient.

Be involved

To ensure that you can monitor and manage your offshore team according to your standards, you must have an adequate amount of control over your offshore operations. Look for an outsourcing partner that can manage its workflow independently and efficiently, but at the same time, gives you the amount of control you require. MicroSourcing's approach to outsourcing follows the managed operations model, where clients get the benefits of both outsourcing and managing their own operations in the Philippines without the risks and extra costs.

Conclusion

With help from today's technology, as well as from efficient solutions provided by outsourcing companies, it's now easier to manage an offshore team. Couple that with care and consideration to keep employees engaged and passionate about working towards your business vision and goals.


4 Reasons for Outsourcing Data Processing

by: Sidney Liquigan

Tuesday, September 25, 2018 | Comments (0)

Category: Outsourcing Research / Trends

Every company, regardless of size, will have a need for data processing and data analytics. Making sense of raw data and turning it into meaningful information is important in helping businesses make strategic decisions. Data processing can go beyond simple data capture and data entry tasks and can also require higher analytical thinking and analysis to produce information that is accurate and actionable.

Data processing is one of the first, and remains one of the most common business processes to be successfully outsourced. Here are the 4 reasons why you should consider outsourcing your data processing needs:

Reinvest Your Time and Money

Managing and processing large quantities of data is time-consuming and requires a lot of resources. By outsourcing data processing, you can reinvest your and your in-house staff's time to focus on core business processes. You also get to save up to 60% on costs, which you can allocate to improving your products, services, or other important facets of your company.

Know-How

Outsourcing providers that specialize in data processing have various technologies to handle different kinds of data processing work, from simple to complex tasks. These providers also have the people, skills, and processes in place to efficiently process large amounts of data in the most time effective way.

24/7 Workflow

Offshore providers have the ability to work around the clock, guaranteeing a quicker turnaround time and enabling your work to be processed outside of your usual business hours.

Operational Flexibility

Your outsourcing partner can scale up or down operations easily, at no additional costs to your company. This gives you a lot more operational flexibility and avoids unused resources within your own company.

MicroSourcing has been processing data for a wide variety of companies for a long time, and we can help you establish your own custom-built data processing unit in the Philippines.


There is much more to medical billing and medical coding than their names suggest. Collectively referred to as revenue cycle management, the process involves eligibility, payment, coding, charge posting, along with other critical tasks that are reliant on each other and are all necessary to receive your payment accurately and on time.

Essential questions to ask when looking for an outsourcing partner

In order for medical practices to perform core duties better, outsourcing medical billing and coding is a great way to make sure that you have the right resources to stay on top of your billing. There are a few questions you need to ask your service provider when looking for a potential outsourcing partner.

What is the level of experience of the provider's employees?

Medical billing and coding is a complex process and should be delegated to professionals who have the right experience. It is important to know if the provider has the specialties you are looking for and if they have enough experience to handle your requirements. When you outsource to managed operations providers like MicroSourcing, it will be up to you to set the requirements or job descriptions, so make sure to tell your provider the level of experience and technical capabilities you require.

What are their credentials?

Usually, you can see on the provider's website the list of certifications and licenses they have. However, knowing this does not always guarantee that they can meet all your requirements. For outsourcing providers, ask if they have the capability to host HIPAA-compliant operations.

Medical billing and coding involves handling sensitive and confidential information. Ask the provider about the procedures they have to protect privacy of information. Ask about their data security standards like ISO 27001 and their experience and certification for these standards. Make sure that their technology and communication channels are secure and consistent with compliance requirements.

How adaptable are their services?

Ask them about their ability to work around your processes and if they have the flexibility to do so. Minor changes can take place, but the medical billing provider should be able to adapt to the processes that you already have in place.

What is their contingency plan?

Every business should have risk management plans in place. Ask the provider about their Business Continuity Plan and run through a number of scenarios to make sure that the BCP capabilities of your potential outsourcing partner match those that your business needs.

Can they provide you with references?

Some providers will show you case studies on previous clients and how their processes and services were executed. You can dig deeper by asking for references that you can contact to ask about their experience with the provider. You can also look around online to find reviews and testimonials.

 

MicroSourcing's managed operations model allows you to outsource your medical billing and coding work to the Philippines and have full control over the operations at the same time. The processes and resources will be up to your specifications, while we provide all the support services and assets that your account will need. We will help you manage your Filipino medical billing and coding team.


Top 3 Problems Fast-Growing Businesses Have

by: Sidney Liquigan

Wednesday, August 29, 2018 | Comments (0)

Category: Outsourcing Research / Trends

Needless to say, it's always a good thing to have a fast-growing business. Your hard work is finally paying off and now it's time to expand to meet increasing demands. However, dealing with the growth can also easily get out of control. It’s important to have a growth plan in place and prepare in advance for the challenges ahead.

The first step that you could take is to be aware of the common mistakes that fast-growing businesses make and know how to avoid them through outsourcing. Recognizing what could go wrong makes planning easier.

Problem #1: Limiting Expenses by Keeping Everything In-house

When you are a growing business, you want to keep track of your company’s expenses and make sure that the money that goes out to third-party service providers are kept at a minimum. Because of this, businesses tend to hesitate to outsource some of their processes and choose to do everything by themselves. In reality, this is a lot more expensive and counterproductive.

How Outsourcing can Help: Do More with Less

Fast-growing businesses have limited financial resources which could put a strain on the growth potential of your business. Outsourcing enables you to increase capacity without having to invest in office space and infrastructure. It turns the usual capex items into opex, enabling your growth to be self-funding.

Problem #2: Multitasking

Fast-growing businesses have a lot on their plates, so it is inevitable for them to handle more than one task at once. Contrary to the intention of shooting two birds with one stone, multitasking actually hurts your productivity. Instead of giving your 100% to core operations, your attention is divided and therefore wasting 25-50% of your time on something you could have delegated.

How Outsourcing can Help: Focus on the Core Business

The owners and top management of fast-growing businesses need to focus on their core product or service offering and expanding their market share. Outsourcing can help top management stay focused by taking care of the infrastructure and overhead needs of your growing business. In the case of MicroSourcing, we enable our clients to focus on their core business by taking care of their office space and IT infrastructure requirements and by providing all the overhead and business support services they need to have a smoothly operating overseas operation.

Problem #3: Skills Mismatch

With limited financial and human resources available, local businesses tend to settle for what they can access and afford. Don’t settle for less; outsourcing opens up a wide range of flexible, specialized solutions that won’t break the bank.

How Outsourcing can Help: Access to Qualified Personnel

It can be difficult for a small but fast-growing business to attract the best talent in the marketplace. This could be due to the limited availability of talent in their own location or because the company is too small to attract the best people. Outsourcing companies can help by opening up a much larger talent pool to your business. In offshore locations, salaries will furthermore be much lower.


Going through the growing pains of a fast-growing business will be easier with an outsourcing partner. Contact us to learn how the managed operations model of outsourcing benefits businesses of all sizes.


Technology plays a big role in business operations. As it evolves, businesses also strive to evolve and adopt new technologies to stay relevant and competitive. Besides, technology is always advancing to improve everyday processes, so it's definitely a smart move for businesses to take advantage of these innovations.

Advantages of investing in IT outsourcing

But not all companies have or can afford a robust in-house IT department. An efficient and cost-effective way to have the support you need is to outsource IT. There are also many other great benefits that you can get from investing in IT outsourcing.

Lower IT Costs

The fixed IT costs of installing an IT infrastructure are a huge investment that can be at risk of going to waste if ever you decide to restructure. Having your own IT infrastructure is very expensive, plus the maintenance costs. And subsequently, you would need to hire IT specialists and pay for their overhead. IT outsourcing offers flexible options at varying costs, which you can customize according to your needs and budget. This service is also easily scalable, with no loss on your end, whenever you decide to either upgrade or scale down.

Seamless Technical Support

Outsourcing to professional IT service providers ensures that you receive comprehensive and secure hardware and software management solutions. They have all the resources and experienced specialists to provide you with an uninterrupted flow of service. Most IT service providers operate 24/7, enabling them to support your business around the clock.

Peace of Mind

Delegating the work to IT professionals gives you a peace of mind that complex tasks and issues are handled competently by qualified experts. Moreover, most IT outsourcing providers can work within mutually agreed service level agreements.

Reduced Risk

Most businesses find it difficult to comply with industry and other governing standards and put comprehensive quality control procedures in place. Outsourcing to specialized providers will ensure adherence to international standards for data security and quality control.

Managed Operations

You can choose from different IT outsourcing models depending on what fits best with your company's processes and needs. A traditional IT outsourcing model is where you outsource all or large portions of your IT operations to a third-party provider. In this model, the external provider has full control of the functions and entails multi-year commitments. There is also the partial outsourcing where you can outsource individual IT processes. Compared to complete outsourcing, partial outsourcing is easier to roll back or assign different areas to different specialized providers. And then there's the managed operations model. This approach combines incorporating and outsourcing in a way that you get to outsource your IT operations but retain full control. MicroSourcing's managed operations model gives more direct control to the client company and keeps costs at an absolute minimum.

Aside from the employees, your company's data is your most important asset. It should be handled with care by well-equipped IT management providers. Take advantage of readily available resources by outsourcing your IT to offshore managed operations providers. Contact us to learn more.



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