The traditional offshore outsourcing landscape has been profoundly influenced by third platform technologies, such as mobility, social business, big data, and cloud solutions. In 2023, the forefront of software solutions is dominated by artificial intelligence, augmented reality, blockchain, and digital transformation.

Companies continue to partner with third parties for software research and development (R&D), with a clear preference for single-source offshoring and multi-source onshore outsourcing. Most service providers offer comprehensive services that range from planning and design to maintenance, allowing buyers to work with one provider that has in-depth understanding of their product. Long-term outsourcing relationships are beneficial because they can drive down costs even further when the buyer and vendor work on several projects over time

Key Destinations: India and Asia

For years, India has taken the forefront in the offshore software development sector. The mean hourly rates for software developers in India fall within the $18-$40 range, making it notably more budget-friendly than comparable rates in other nations. The Philippines and China, however,  have risen as prominent choices for software development services, primarily attributed to their combination of cost-effective labor and elevated developer efficiency.

Increased Security Initiatives

Security remains a top concern when offshoring software R&D projects. Ensuring the protection of sensitive data, intellectual property, and proprietary information is crucial to maintaining the integrity of the project and the business as a whole. Offshoring can introduce additional complexities and potential vulnerabilities in terms of data breaches, unauthorized access, and cyber threats.

To address security concerns, organizations should establish comprehensive security protocols, conduct due diligence when selecting offshore partners, and establish a culture of security awareness among all team members involved in the project. Collaborating with experienced security professionals and legal experts can help ensure that all necessary safeguards are in place to protect sensitive information throughout the offshoring process.

Artificial Intelligence

Outsourcing with AI involves delegating tasks, processes, or functions to external AI-powered systems or service providers. These AI-driven systems can automate repetitive tasks, perform data analysis at scale, and provide valuable insights to streamline operations. By offloading routine and data-intensive tasks to AI, organizations can free up their in-house teams to focus on higher-value activities, driving productivity and effectiveness.

Case Study: UiPath and RPA Outsourcing

A case study highlighting the power of outsourcing with AI revolves around Robotic Process Automation (RPA) leader, UiPath. UiPath provides a platform that enables organizations to automate rule-based tasks by deploying software robots. A multinational insurance company, AXA, partnered with UiPath to enhance its claims processing. By outsourcing the implementation of UiPath’s RPA technology, AXA was able to automate repetitive and manual claims processing tasks. This resulted in a significant reduction in processing time, improved accuracy, and enhanced customer satisfaction. Outsourcing the expertise of UiPath’s AI-driven automation platform allowed AXA to achieve operational excellence and elevate their service quality.

Outsourcing with AI also fuels innovation by bringing specialized expertise and advanced technology to the table. Organizations can collaborate with AI-focused service providers, research institutions, or startups to develop novel solutions, conduct research, and accelerate product development. This collaboration enables businesses to tap into AI’s potential for predictive analytics, machine learning, natural language processing, and more, giving them a competitive edge in their respective industries.

Outsourcing with Artificial Intelligence is a strategic approach that empowers businesses to harness AI’s capabilities, driving efficiency, innovation, and growth. Whether it’s automating tasks, developing advanced AI-driven solutions, or collaborating with AI-focused partners, this approach opens doors to new possibilities and accelerates an organization’s journey into the era of intelligent technology. The UiPath and AXA partnership exemplifies how combining outsourcing with AI can yield tangible benefits and shape the future of business operations.

Digital Transformation

Outsourcing with Digital Transformation involves collaborating with external partners to modernize and optimize existing business processes. Through automation, integration, and data-driven insights, organizations can streamline operations, reduce inefficiencies, and enhance overall productivity. By outsourcing digital transformation initiatives, businesses can tap into specialized expertise to design and implement solutions that drive tangible process improvements.

Case Study: Rolls-Royce and Predictive Maintenance

An example of digital transformation can be exemplified  by Rolls-Royce’s partnership with Microsoft. The British aerospace and defense corporation has adopted scalable low-code applications to construct digital tools that are enhancing a range of areas, including efficiency, rapid prototyping, research and development, testing, as well as employee engagement and well-being.

Stuart Hughes, the Chief Information and Digital Officer at Rolls-Royce, highlights the essential role of significant data, analytics, and the Internet of Things (IoT) in their entire business model. He emphasizes that the convergence of digital transformation with the shift towards net zero and sustainability is significantly reshaping work dynamics. Being a frontrunner in this transformation is imperative for Rolls-Royce to ensure the longevity of their business endeavors.

Augmented Reality (AR)

Outsourcing with AR involves collaborating with external experts to design and develop engaging AR applications that enhance user experiences. These applications can overlay digital information, graphics, or animations onto the real world, creating dynamic and interactive content. By outsourcing AR development, organizations can tap into specialized AR expertise, ensuring the creation of compelling and user-friendly experiences that captivate audiences and leave a lasting impression.

Case Study: IKEA and Virtual Furniture Shopping

A tangible illustration of outsourcing with AR is IKEA’s collaboration with AR solution providers. IKEA introduced an AR-powered app that allows customers to visualize how furniture would look and fit in their homes before making a purchase. By outsourcing the development of this AR application, IKEA enriched its customers’ shopping experiences and empowered them to make more informed decisions. This approach not only increased customer engagement but also boosted sales and customer satisfaction.

Outsourcing with AR fosters innovation by combining domain expertise with cutting-edge technology. Organizations can partner with AR-focused agencies, developers, or startups to create groundbreaking solutions that leverage AR’s potential for interactive training, visualization, and immersive storytelling. This collaboration enables businesses to explore novel ways of engaging customers, training employees, and showcasing products, leading to differentiation and innovation within their industries.

AR-powered outsourcing can also enhance communication and training initiatives. Businesses can leverage AR to create immersive training modules, interactive manuals, or remote assistance tools. By incorporating AR into their training efforts, organizations can accelerate learning, improve comprehension, and empower employees with real-time guidance and support.

Outsourcing with AR empowers organizations to harness the transformative capabilities of immersive technology. The IKEA example demonstrates how collaborating with AR solution providers can lead to enhanced user experiences and tangible business benefits. By incorporating AR into their outsourcing strategy, businesses can captivate audiences, drive innovation, and create meaningful connections between the physical and digital worlds.

Blockchain

Outsourcing with Blockchain involves partnering with external experts to leverage blockchain’s inherent security features. By utilizing its cryptographic principles and decentralized nature, organizations can ensure the immutability of data, transactions, and agreements. This significantly reduces the risk of data breaches, fraud, and unauthorized alterations, thereby fostering a more secure and transparent outsourcing ecosystem.

Case Study: IBM Food Trust and Walmart

A compelling real-world instance of outsourcing with blockchain is the collaboration between IBM Food Trust and Walmart. In an effort to enhance food traceability and safety, Walmart partnered with IBM Food Trust, a blockchain-based platform. Through this partnership, Walmart outsourced the development of a transparent and secure supply chain solution. Suppliers were required to input data about the origin, processing, and shipping of food products onto the blockchain. This allowed Walmart to trace the journey of products across its supply chain in real-time, facilitating swift recalls in case of contamination and bolstering customer confidence. Outsourcing with blockchain enabled Walmart to achieve unparalleled transparency, demonstrating the transformative potential of blockchain in supply chain management.

Blockchain-powered outsourcing can revolutionize supply chain management. Organizations can collaborate with blockchain experts to create end-to-end supply chain solutions that enhance traceability, authentication, and provenance of goods. This, in turn, enables businesses to improve inventory management, mitigate counterfeit risks, and deliver authentic products to consumers.

Outsourcing with blockchain also enhances customer trust and engagement. Organizations can outsource the development of blockchain-based solutions that empower consumers to verify the authenticity and origin of products. This transparency bolsters brand credibility, engenders consumer loyalty, and transforms the way customers interact with products and services.

To learn more about outsourcing, you can read our Top 8 Qualities of an Outsourcing Company in the Philippines article. We invite you to follow us on social media and to visit our website to learn more about our services.

About Us: Sourcefit is a widely recognized US-managed business process outsourcing company based in Manila, Philippines. We proudly serve over 100 clients with a workforce of more than 1,300 employees. Our global centers can serve multiple markets, and our staff is highly proficient in English, Spanish, French, and Portuguese. Whether you need a few or many employees, we can help you achieve your business goals and build high-quality offshore teams.

Latest Awards

Sourcefit’s commitment to excellence has been recognized through numerous industry awards and certifications.

We recently received the Fortress Cyber Security Award from the Business Intelligence Group. Sourcefit was also honored with the prestigious recognition of Best Outsourcing Solutions Provider in the Philippines during the 2023 Business Excellence Awards.

Other awards include: FT ranking of 500 high-growth Asia-Pacific, The Marketing Excellence Awards, Inquirer Growth Champion,  HR Asia Awards, among others.

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• How Outsourcing Software Development Helps Companies in the US, Canada and Other Developed Countries
• Software Development Outsourcing Destinations
• Offshore Software R & D: Guide to Outsourced Software Development & Research

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