9 tips to go digital in the outsourcing sector
Digital developments offer interesting growth opportunities. This document gives nine tips related to digital developments in the IT and business process outsourcing sector.
Contents of this page
- The influence of digitisation
- Get involved in strategic automation
- Work with remote collaboration tools
- Use open talent platforms to find new business
- Use open talent platforms to find new employees
- Use new technologies for marketing and business
- Big data applications for a smoother running business
- Online events: meet new buyers digitally
- Stay up to date: source digital technologies
1. The influence of digitisation
Digitisation influences the international market in four ways:
- The internal organisation of companies.
- How companies make sales.
- Demand for products and services. This is important for the outsourcing sector, but is not covered in this document. For more information about this, see the demand section of our product studies.
- How companies deliver products and services (this factor is not important for outsourcing, which mainly involves intangible products).
2. Get involved in strategic automation
Automation means the use of machines or computers instead of people. It is a proven way to increase efficiency and reduce costs. But it does not have to cost jobs. Many people in the IT and BP outsourcing sector say, “we will always be short of talent”. The nature of jobs may change, but the number of jobs will not decrease.
You do not have to fear automation for the loss of jobs. If you do it right, automation can improve your business and secure your business for the years to come. Automation is also known to make jobs more productive. With the right automation tools, you can therefore do more work with the same number of people.
The increasing automation of work will mostly affect repetitive and low-skilled jobs. This means you will have to shift your business model towards more medium and high-skilled jobs. You will need to become a high-quality employer that invests in supporting and training their staff.
Example: automation in customer contact services
Automation is very important in the contact centre business. In 2021, more than half (51.8%) of contact centres are working with Artificial Intelligence (AI) technologies, almost two/third say are investing in (more) self-service solutions and the use of Robotic Process Automation (RPA) is becoming mainstream.
These types of automation mean fewer contact centre agents are needed to solve customer issues. But European companies are often not able to host their own self-service applications. This offers opportunities for you.
In addition, automation can make customer agents’ jobs easier. For example, because computers can process large volumes of data, create summary scripts, update customer profiles and make predictions. Agents can then use this information in their customer interactions and work more efficiently.
- Invest in your staff. Simple/repetitive/rule-based tasks can be automated, but human creativity and interpretation are required for the more complex processes. If you can offer that type of staff, you have a big competitive advantage over companies that do not have that.
- Enable your employees to work remotely by investing in secure technology and negotiating realistic terms in new employment contracts.
- Look online for examples of contact centres that use RPA, such as on the websites of Maruti and Gartner. For more inspiration, see Probe’s Five examples of RPA in contact centres.
- For more information about the contact centre services industry, see our study on exporting contact centre services to Europe.
Example: automation in software testing services
Automation testing, or test automation, is a software testing technique that uses special automated testing tools to validate whether software works correctly. The testing software can also input test data in a system under test, compare expected and actual results and generate detailed test reports. The downside of test automation is that it requires large investments of money and resources.
Which test tool you should use depends mainly on the technology on which your application is built. There are many resources available to help you select the right strategy and tools for your business. Some examples of automation tools and suppliers are: Unified Functional Testing (UFT, previously known as QTP), LambdaTest, TestComplete and Selenium.
- Look at the top 20 of Best Automation Testing Tools by Software Testing Help.
- For more information on software testing services, read our study on exporting software testing services to Europe.
3. Work with remote collaboration tools
Remote collaboration tools are a digital development that got a huge boost from the COVID-19 pandemic. Working from home has become normal in Europe, but human contact remains vital for good functioning collaboration. Good remote collaboration tools are the bridge between workers in different locations.
Most companies in the outsourcing sector were already used to working digitally and in teams. But they had little experience with remote work. Working as a team can be hard when you are not all in the same physical location. Better tools and more widespread use of these tools have made digital communication much easier and more natural.
Because of the pandemic, European companies invested in remote collaboration tools, blurring the distinction between in-house, nearshore and offshore teams even further. In fact, it opened more chances for IT and business process outsourcing providers as these tools lowered the threshold towards outsourcing. This means remote collaboration tools are here to stay.
Lower communication barriers between your own staff and your customers will benefit your business greatly.
Some collaboration tools are designed for general remote working, while others are meant for specific tasks. Most popular among developers worldwide are GitHub, Slack and Jira. A 2022 survey of professional developers by Stack Overflow found that almost 82% use GitHub as a collaborative tool and more than half use Slack.
- Look at different kinds of remote collaboration tools. Try out those that best fit your business to get some experience using them.
- When talking with existing or potential customers, ask about their experiences working with remote collaboration tools. Emphasise that you value working as a team.
- For more information on (remote) collaboration tools, also read our study on hybrid workspace technology.
4. Use open talent platforms to find new business
Digitisation has also made its way into new business. And even though outsourcing services are traditionally not sold via e-commerce channels, it is quickly becoming more mainstream to use business-to-business (B2B) outsourcing platforms to promote your company/services and attract new buyers. In fact, experts expect this to become the most popular sourcing model in the next few years.
This sourcing model will make you a ‘Service Provider 3.0’. After 25 years of working with the same delivery model (offline and in-person sales: the Service Provider 1.0 Model), the market moved towards a model driven by automation and transformation, for example with ‘software as a service’ (Service Provider 2.0 Model).
However, before this 2.0 model had fully taken over the market, it was already being surpassed by the Service Provider 3.0 Model.
Open talent sourcing brings the following benefits for service providers:
- Access to many potential projects worldwide
- Easier to compete with big brands
- Focus on talent, not big brand reputation
- Talent is seen as an investment instead of an expense
There are several talent platforms to find new businesses; some examples are:
The Global Sourcing Association (GSA). They launched the GSA Partner Platform, the first open platform that publishes and ranks the performance of outsourcing service providers. This platform lets you present and promote your company to a huge audience of prospective customers. It helps organisations find you based on performance reviews published by your customers.
Another option is to register on IT outsourcing marketplaces. There are platforms that specialise in SMEs, such as Appfutura and Talent Alpha, others specialising in freelancers, and platforms for both. Some examples are UpWork, Freelancer, Fiverr, ITeXchange, Clutch and pliXos. As a provider, you can usually join these kinds of platforms for free.
It can also be worthwhile to use professional social media channels such as LinkedIn to connect with potential customers and do market research.
You can also individually register some of your top employees on open talent platforms. Buyers sometimes search on people’s names, so if you are only registered as a company, they may never find you. If your employee gets a job and the buyer is happy with their work, they are likely to hire that person again.
It is important to note that the ITO and BPO business is a trust business. Therefore, always be clear about your intentions. If buyers reach out to one of your employees, let them know that the person works for your company and can do the project individually or with your team, but in both cases is in your employment.
- Tap into the global open talent market by signing up with one or more of the above-mentioned platforms.
- Use open talent platforms to sell your products or services.
- To learn more about finding buyers in the European IT and business process outsourcing market, refer to our Tips for finding buyers on the European outsourcing market and the European intermediary landscape for ITO and BPO services.
5. Use open talent platforms to find new employees
There is a global talent shortage, especially in the field of IT, but also for many business process jobs. This shortage is mainly felt in Europe and North America, but also companies in more developing countries are finding it hard to find and keep skilled staff.
Open talent platforms offer a good way to find new employees. At the end of 2021, The European Commission estimated that there were 28 million platform workers active in Europe. They expect this number to grow to 43 million by 2025. The shift towards the open talent workforce is expected to go even faster in the ITO and BPO sector. In fact, the tech industry has been the main driver of the growth of the gig economy in the past ten years. People working in the open talent market are also known as gig or contingent workers.
Open talent sourcing brings the following benefits for service providers:
- Access to talent worldwide
- Fewer fixed costs
- Keep an eye on new regulations for open talent platforms. For example, this directive to protect the rights of platform workers.
- Read the trends document to learn more about the global talent shortage and how it affects the outsourcing market.
6. Use new technologies for marketing and business
Try using new technologies such as VR or AR for your marketing or to do business. You can also combine a new technology with your core business.
Technology to promote your product
Getting new business by word of mouth has advantages and costs you nothing, but using technology can help accelerate your sales. For example, you can use virtual reality (VR) to sell your Internet of Things (IoT) solution. VR is a form of interactive software that immerses users in a three-dimensional environment to simulate a real experience. Most VR works with a headset that has special lenses, but there are also smartphone applications. A virtual ‘try-before-you-buy’ experience can help consumers make informed decisions.
Technology to do business
You can also use VR technology to show existing and potential customers your contact centre or software testing facility. Augmented reality (AR) applications overlay digital content onto the real world. You can use them to virtually sit in the ‘same’ room with a customer. This can be a worthwhile added marketing tool, especially if you are in the AR/VR business yourself. In that case, you can use this technology to sell your product.
Also, business travel is not back to its pre-COVID level and doing business digitally has increased significantly. Even though you might want to see each other in real life before you close the deal, there are good opportunities to meet your (potential) buyers online.
- Think about how your company can take advantage of new technologies to sell your product or service.
- Prioritise innovation so you can anticipate customer needs and expectations. Set up a research and development team, even if only a small one, also to help your sales team. To make innovation a priority in your business, you will have to invest in it. Your research and development team can be a platform for creativity and innovation.
7. Big data applications for a smoother running business
Companies use big data-based software solutions for, for example, orders and invoicing, accounting, human resources (HR), and compliance documentation. But these types of software are also increasingly used to enhance sales and customer satisfaction.
What is big data?
Big data refers to data sets so large that they are difficult to manage using traditional data processing applications. The data can be structured or unstructured and grow exponentially over time. With the right tools, big data can offer high value for businesses and governments worldwide.
Big data for your back office
What can big data do for your back office? Most organisations use it to improve efficiency, to identify and solve problems, improve pricing, help hire the right people, improve operations and/or trigger innovation. Your data sources can include CRM systems, websites, social media, machines and objects, HRM systems, satellite images, voice data, images, plans and KPIs, documents, etc.
The process usually starts with identifying issues that need a solution or answer. But preliminary analytics may also point to an issue. In general, the process is as follows:
- Identify problem/issue/opportunity
- Select data source (or create data sources if not available digitally)
- Obtain and store data (data source integration)
- Data analytics (tag, classify, categorise)
- Interpretation, results
Big data to increase your sales
You can use your customer data to create profiles of the types of customers you serve. You can then categorise them by demographics, preferences or affinities for other types of purchases. Once you have created profiles of potential customers, explore your target marketing channels to reach them. You can also use big data sets to increase sales to existing customers. You can offer targeted upsell opportunities to existing customers through either discounts or special offers.
There are various options for data management software; some examples of the most popular ones are Zoho CRM, Hubspot, and Streak. They are mostly customer relationship management (CRM) systems that can also be used for data analysis.
Big data for improved customers service and customer satisfaction
Big data is already very popular in the contact centre industry. In 2022, the global market for contact centre analytics was estimated at almost €1.5 billion, and was predicted to reach €3.1 billion by 2028, growing at a compound annual growth rate (CAGR) of 11.2%.
In contact centres, big data can improve both customer experience and agent performance. You can use big data for speech analytics, self-service analytics, predictive analytics, agent performance and more. Examples of knowledge-based contact centre software are Talkdesk, Bloomfire and Zendesk Support Suite. Examples of artificial intelligence analytics for (amongst others) the contact centre industry are CallMiner, Qualtrics, NICE, Sestek and Verint Systems.
- Gather big data in your own company. Switch to paperless business operations so you can easily access your data and use it to solve pressing issues, improve efficiency and enhance sales.
- Invest in good planning and tool selection. Your process and tools should be as simple as possible and easy to use.
8. Online events: meet new buyers digitally
Attending industry events has long been expensive due to the costs of travel, accommodation, food and often entry to the event itself. The outbreak of COVID-19 and the associated travel restrictions led many industry events to be held online. In 2021, most events were held digitally and many of them did not charge entry costs. In 2022, many events went “in-person” again, but they also often had hybrid options to join the event from a distance. For 2023, it is forecasted that there will be more in-person events, but hybrid options will remain available. So, even if you have never attended an ITO/BPO event, this may be the perfect time for you to start.
For some time, European companies looking for a new outsourcing partner had to meet their potential partners online. This broke down the barrier for doing business online, even in the trust business that IT and BP outsourcing is.
It led to a more equal chance for all companies that were looking for new business. The travel gap was removed. Even now the travel restrictions are lifted, meeting buyers digitally is expected to stay, because meeting and selling online is effective and it has become more accepted.
Online webinars and seminars can also be good opportunities to find new buyers. Look for events that have a chatbox, which lets you ask questions and meet other attendees. However, do not talk too much in these chats, since you are there to listen to the speaker. After the event, you can connect with people through LinkedIn to continue the conversation.
- Look for events that fit your business. See the websites of business support organisations (BSOs) such as the German Import Promotion Desk (IPD) or Swiss Import Promotion Programme (SIPPO), as well as industry association websites such as the German Outsourcing Forum and the Global Sourcing Association. Or look at event databases like EventsEye, UK Exhibitions, or 10times.
- Also read our news item Outsourcing industry finds new ways to connect.
9. Stay up to date: source digital technologies
It is important to stay up to date on advances in digital solutions so you can decide which will best fit your company and situation. When choosing a digital solution, you need to be well-informed and critical. If necessary, get advice from experts or a business support office, or ask colleagues about their experiences.
Find and compare online
You can find a lot of information online. Many tech platforms post annual lists of their top-rated tools or programmes for specific products or services. Whatever your product/market combination, there will be articles about the latest digital developments in your sector.
Besides global sources, also look at IT(O) and BP(O) service providers in your own country to find out if there are companies and sources that can help you automate and digitise your operations.
Get help from organisations
If you are ready to start using digital technologies to enhance your business, it is time to look for companies and sources that can help you.
The tips above offer several product and segment-specific examples. In addition, you can ask for help with your digitisation process from organisations such as:
- OECD – the Digital for SMEs (D4SMES) Global Initiative is a knowledge-sharing and learning platform enabling governments, businesses and experts to work together on the digital transformation of SMEs.
- Protiviti – consultancy company with member firms around the world that offers a free digital transformation self-assessment.
- SME Vai – digital solutions for accounting, marketing and legal services in Bangladesh.
Visit trade events to learn about the latest digital trends
Trade events are useful not only for finding new business partners, but also to see what your competitors are doing and learn about the latest trends in your sector. Many different trade fairs are organised around the world, a large share of which are technology or service-specific. General ITO or BPO trade events no longer exist.
Attending online trade fairs is usually free of charge and since you do not need to travel to participate, it might be a good idea to start attending trade events. Look at the tip above to find sources to find events. Make a list of relevant events and update this list regularly.
Besides trade events, you can also sign up for webinars and panel discussions on digital trends that may be relevant to your sector. A good source to find such events is the Global Sourcing Association.
- Read our Tips for finding buyers and Tips for organising your exports for a better understanding of how to do business with European IT and business process product and service buyers and what it takes to become a successful exporter to Europe.
This study was carried out on behalf of CBI by Globally Cool in collaboration with Laszlo Klucs.
Please review our market information disclaimer.
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