Addis Ababa, Ethiopia (24 April 2022)
The days of using technology to a limited extent for the optimization of business outsourcing are fading away as companies now outsource to take advantage of more sophisticated provider services such as AI, analytics, and machine learning.
In a February article, McKinsey reported that outsourcing that explicitly calls for next-generation technologies accounts for only a small share of the $230 billion that companies worldwide spend on managing businesses. But the number of such deals almost doubled over the five years between 2016 and 2020. Further, the digital share of total contract value (the entire revenue generated from one particular contract) in outsourcing went from 28% to 72% during the same period while the number of new outsourcing deals with a digital component has steadily increased to almost 50 percent in 2020.
The exponential growth in customer demand for digital products and services, the worldwide adoption of cloud technologies across industries, and the quality results are sighted to be the main reason for the growth of digital outsourcing. Such deals are yet to be popularized as of yet, creating a much-needed gap in the market for providers and service-buyers smart enough to exploit the opening. McKinsey, however, warns that the window of opportunity to capitalize on those advantages is closing. To read the full article, visit: https://www.mckinsey.com/business-functions/operations/our-insights/getting-business-process-outsourcing-right-in-a-digital-future
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