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.

1. The influence of digitisation

Digitisation influences the international market in four ways:

1. The internal organisation of companies.
2. How companies make sales.
3. 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.
4. 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.

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.

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.

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

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.

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:

1. Identify problem/issue/opportunity
2. Select data source (or create data sources if not available digitally)
3. Obtain and store data (data source integration)
4. Data analytics (tag, classify, categorise)
5. 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.

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.

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.

This study was carried out on behalf of CBI by Globally Cool in collaboration with Laszlo Klucs.

Please review our market information disclaimer.