Outsourcing

A Growing Trend

A MarketPoint Infographic

Outsourcing:

having certain job functions performed by people outside the organization,

so your employees can focus on what they do best

How Big is the Global Outsourcing Market?

More than two million U.S. jobs were outsourced to offshore providers
in 2013 (Selvaggio), representing:

38%

43%

of distribution

of research & development

of IT services

12%

26%

of call center work

$104 billion

$28.5 billion

$76.1 billion

Total value of Business Process

Outsourcing (BPO) contracts,
globally, in 2014 (Statista)

Value of information
services contracts
outsourced to
offshore providers
(Statista)

Value of Business Process

Outsourcing (BPO) contracts
outsourced to offshore providers
(Statista); Revenue from
outsourced services supports over
900,000 employees and more than
160,000 businesses (IBISWorld)

($104 billion = Enough to build

New Yorks One World Trade
Center, 27 times) (McCarthy)

Whos Sending Out All This Work? (Statista)

$54B
52%

$37B
36%

$13B

Europe,
the Middle East
and Africa

North and South

America

12%

Asia Pacific

53% of U.S. manufacturing companies take advantage of offshore outsourcing (Selvaggio)

Whats Driving the Tend to Outsource? (IBISWorld)

An improving U.S.
economy

Rising revenue in
the finance and
accounting sectors

Growth in the credit

card, insurance and
human resource
industries

Escalating expenses
driven by higher wages
and rising health
insurance costs

Why Do Organizations Outsource?

saves money by allowing organizations to function with leaner teams;
outsourcing can save companies as much as 20% to 40% through
improved efficiency and lower labor costs alone (Bhatia)

helps increase productivity by focusing

resources squarely on core activities, positively
impacting the bottom line (Bhatia)

enables your organization to grow while

restraining payroll and overhead costs
(Entrepreneur Staff)

provides more options for

flexibility than internal staff
(Entrepreneur Staff)

lets organizations tap into

a large pool of talented
workers from all over the

Outsourcing

planet(Selvaggio)

helps improve the economy by passing

savings along to consumers and clients
(Selvaggio)

enables organizations to improve their

technical skills, particularly in IT
(Selvaggio)

helps organizations improve

efciency in manufacturing
(Selvaggio)

improves business processes because BPO

providers are often more knowledgeable about the business

processes they specialize in than are the companies they
serve and produce higher quality work (Bhatia)

What Functions are being Outsourced?

Help desk
support

Database
management

Payroll

HR benefits
administration

Employee
training

Online technical
support services

Customer Relationship
Management (CRM)

Marketing

Food
services

Travel
accommodations

Patient care

Executive
support staff

How to Utilize Outsourcing

Balance
savings
against the
impact of
lost jobs
(Selvaggio)

6
1
2
3
4
5
6

Ask for references

to be sure youre
choosing a
competent provider
(Entrepreneur
Staff)

Key Areas for

Startups to
Outsource (Evans)

Choose a
provider who
can provide
the exact skills
you need
(Selvaggio)

Monitor and
manage your
outsourced
functions
closely
(Deloitte)

Learn to manage
and resolve issues
or disputes before
terminating
contracts
(Deloitte)

Virtually every internal business function can be

outsourced to a firm that will provide the service
to your company, in many instances at a lower
cost and higher quality than you could replicate
yourself.
Michael Evans, Forbes

Manufacturing. Acquiring a facility, manufacturing equipment and workers carries

significant costs and forces unnecessary delays. Leverage the expertise and facilities of
proven suppliers, instead.

Finance and Accounting Staff. Many small businesses use simple, off-the-shelf

accounting packages, so the biggest cost in your finance department is people. Consider
outsourcing all of your accounting and finance functions, or at least hire a fractional CFO.

Technology. Cloud computing services may delay your need to invest significantly in

technology and may even offer use-based pricing.

Office Expense. Shared executive office suites can eliminate fixed costs such as rent,

administrative and support costs, utilities, security, phones, and office equipment even
in multiple locations.

Human Resources. Most small and mid-sized companies should consider outsourcing
responsibility for hiring, benefits, personnel management, and HR compliance.

Sales and Marketing. Rethink your marketing approach and improve ROI by

reallocating funds planned for advertising, trade shows and events. Some Marketing
providers can even manage the sales process.

Bhatia, S. Todays Top Trends: Business Process Outsourcing. 9 January 2015. Blog. 24 August 2015.
<https://spendmatters.com/2015/01/09/todays-top-trends-business-process-outsourcing/>.
Deloitte. "Deloittes 2014 Global Outsourcing and Insourcing Survey: 2014 and Beyond." Survey Results. 2014. PDF. 13 August 2015.
<http://www2.deloitte.com/content/dam/Deloitte/us/Docments/strategy/us-2014-global-outsourcing-insourcing-survey-report-123114.pdf>.
Entrepreneur Staff. Small Business Encyclopedia: Outsourcing. n.d. Web Page. 13 August 2015.
<https://www.entrepreneur.com/encyclopedia/outsourcing>.
Evans, Michael. "6 Key Areas To Outsource When Starting A Business." 13 April 2015. Forbes. Article. 24 August 2015.
<http://www.forbes.com/sites/allbusiness/2015/04/13/6-key-areas-to-outsource-when-starting-a-business/#765155838bad>.
IBISWorld. "Outsourcing Services in the US." July 2015. IBISWorld. Report. 25 August 2015.
<http://www.ibisworld.com/industry/business-process-outsourcing-services.html>.
McCarthy, Niall. "One World Trade Center is the world's fourth tallest building." 6 November 2014. Statista. Web Page and Chart. 30 August 2015.
<https://www.statista.com/chart/2917/tallest-buildings/>.
Selvaggio, Lisa. "Outsourcing Statistics: The Pros and Cons." 2 April 2014. Udemy. Blog. 13 August 2015.
<https://blog.udemy.com/outsourcing-statistics/>.
Statista. "Global market size of outsourced services from 2000 to 2015." 2016. Statista. Web Page and Chart. 1 September 2015.
<http://www.statista.com/statistics/189788/global-outsourcing-market-size/>.
. "Global outsourcing industry revenue from 2010 to 2015, by region." 2015. Statista. Web Page and Chart. 30 August 2015.
<http://www.statista.com/statistics/189795/global-outsourcing-industry-revenue-by-region/>.

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