The outsourcing industry has entered 2024 during a period of significant growth and change, one that is being shaped by economic trends, technology advancements, and shifting customer expectations.

To understand the impact of the shifting business landscape, SupportNinja partnered with CMSWire and conducted a survey of 488 leaders to understand how these forces are shaping outsourcing decisions, vendor selection, and value measurement.

The results reveal five major storylines that are shaping the state of outsourcing.

Check out the full report here.

Economic Impacts on the Industry

There’s no industry that exists outside of the larger economic environment, and as it evolves, so too do the organizational priorities that receive the most focus. The current overall slowdown in the rate of global economic growth has made a value-conscious approach to operations a priority in most organizations.

In light of this, we were not surprised to learn that 78% of respondents said the current economic environment has at least some impact on their decision to outsource (47% reported a minor impact; 31% a major one).

Well-deployed outsourcing has long been a powerful tool for savvy organizations that want to maintain flexibility through changing times, but what might have been considered a fringe approach five years ago has become best practice today.

That evolution is present in the data: 63% of respondents reported an increase in their outsourcing budget over the past year. The range of options for outsourcing is bigger than ever, rising to meet the continuous growth in demand.

In fact, that connects directly with the next major trend we see in the data.

Value Outweighs Satisfaction with Current Providers

Consider these two outsourcing statistics side-by-side: 93% of our respondent organizations are at least somewhat satisfied with the level of service they receive from their outsourcing partners, but 63% are either actively considering or willing to consider a change to a new provider. What can we distill from these data points?

To us, they tell a clear story about what matters most to organizations, and that story is about value. Loyalty to a specific vendor seems to be less important to companies that utilize outsourcing than the quality of the solution that’s offered.

Our data about priorities ranks cost savings and service quality as nearly neck-and-neck. What does it all mean?

In 2024, companies are open to the possibility of something better.

Rapid innovation in the outsourcing industry means that when a contract is up, there may be an objectively better option out there, and value-conscious decision makers are willing to make the switch as often as is necessary to get the best balance of service and cost.

Top 6 Trends in Outsourcing: AI and Market Volatility Are On the Rise

The Tech Industry is Leading the Way

Finding new ways to scale fast is part of the tech industry’s DNA, so it should be no surprise that 65% of SaaS / tech companies say they have several outsourcing partners who fulfill critical business processes, as compared to 28% of respondents from other industries. For tech companies, outsourcing partners that are built directly into core functions have become the norm, because they grant access to both niche subject matter expertise and the ability to scale up teams quickly in response to rapid growth.

There’s also a strong affinity between the types of services most effectively outsourced today and the areas that tech companies often feel the most pressure to scale — things like customer and tech support, software development, and cybersecurity services. The high value placed on CX in most technology organizations that rely on continuously growing their MRR also means they’re more willing to invest in delivering the best support possible.

The best outsourcing vendors fit together with their tech clients seamlessly, like a jigsaw puzzle, enabling them to focus on growth without compromising their operations.

AI in Outsourcing is Maturing

AI isn’t just a “nice to have” anymore — it’s a key part of the decision-making process when companies select an outsourcing partner. 73% of respondents deemed AI capabilities as either "moderately important" or "very important" when choosing an outsourcing partner. And expectations around how outsourcing partners leverage AI to create real value are rising quickly.

Basic AI capabilities aren’t always enough to differentiate from other providers, especially as AI continues to develop. Most respondents say their outsourcing vendor(s) have basic (41%) or advanced (37%) AI capabilities. This makes sense, because working with an AI-enabled partner is a step toward future-proofing a business or outsourced program. But what matters more and more is how well is AI actually used to deliver outcomes.

Three Key Capabilities are Distinguishing the Best (and Worst) Outsourcing Partners

We see this trend as a mirror image of data we’ve gathered related to the biggest challenges in outsourcing. When comparing outsourcing options, beware of these common concerns:

• Higher costs than expected (40%) — Pricing that is opaque or misleading in any way is a major red flag. Look for an outsourcing partner who welcomes discussions around not just price, but value.

• Poor communication (28%) — Whenever two organizations work together, the boundary line between the two can be a breeding ground for poor communication, mixed signals, inefficiencies, and more. The best choice for growth-minded companies is to select an outsourcing partner who understands how important communication and accountability are, and delivers on that promise from day one.

• Difficulty finding the right vendor to fit their exact needs (24%) — Every organization has a slightly different combination of needs, goals, and requirements from their outsourcing partners, and every relationship has its own topography. How well various functions can be delivered by a single vendor has a real impact on the time and energy it takes to make an outsourcing relationship work, significantly impacting the overall value created. Finding a partner with flexible and diverse service offerings is critical.

Tracing the Bigger Picture

This data challenges some assumptions about the outsourcing industry and reinforces others.

Companies continue to see the value of outsourcing, especially amid economic uncertainty.

Value, represented by the balance between cost and quality, is a top priority for many companies.

Most would be willing to switch outsourcing providers under the right circumstances, and many are actively looking to switch in pursuit of greater value.

The tech industry is ahead of the curve when it comes to leveraging outsourcing, but the same growth-focused values that have made tech such a good fit are becoming more commonplace across all industries.

AI is on the rise, no longer a “nice to have” buzzword for an outsourcing partnership, but rather a key differentiator — companies are increasingly scrutinizing how outsourcing providers use AI to create value.

At SupportNinja, we’re excited to be in a space that we believe the data shows is rapidly evolving to favor the type of service and experience we deliver to our clients.

‍

‍