Is 21st century outsourcing still synonymous with cutting costs and laying off staff?

This seems to be a frequent association made when mentioning the industry, and one that I find is increasingly outdated and unfounded. In fact, I would go as far as saying that outsourcing is, and will continue to be, one of the key innovation drivers of our age.

For one, the world of outsourcing is changing: no longer are we seeing companies focusing solely on replacing their native headcount with teams working remotely from far flung places in Asia or South America. Instead, entities are increasingly focusing on working in partnership with specialist outsourcing providers, filling skills gaps in their own organisations with qualified staff who can add value, help streamline processes and work hand-in-hand with them to maximise efficiencies.

Research conducted by IBM reveals that only 27 per cent of companies outsource to cut costs, whereas 36 per cent use outsourcing to innovate and 37 per cent use it in pursuit of their overall growth. Remarkably, corporations are actively looking towards outsourcing providers for ideation and innovation, making them central players in the process.

Knowledge transfer is something that is regularly thought of as happening when business and academia combine forces, but it also often occurs on a business-to-business level too.

Secondly, outsourcing has moved on from tasks being merely delegated. Instead, business practices are being streamlined, automated and re-engineered. And increasingly robotic process automation and artificial intelligence are taking over boring and repetitive tasks to free up workers to use their time more productively and creatively.

Deloitte’s 2016 “Global Outsourcing Survey” found that 57 per cent of organisations surveyed look to increase process quality through innovation, with robot-driven end-to-end solutions lending themselves exceptionally well to this end.

Thirdly, corporations increasingly branch out into other functions, such as real estate, facilities management, and procurement. Deloitte notes this alongside growth of outsourcing across mature functions, including IT, human resources, and finance.

With the playing field for outsourcing widening, so is the potential demand for the development of innovative processes and technologies.

Over the years, I have been able to observe these trends and changes first hand across Dubai Outsource City, which is the region’s largest specialised outsourcing hub dedicated to the growth and development of the outsourcing industry, catering to large shared service providers as well as dedicated outsourcing specialists.

More than 160 companies — including major industry players such as Emirates airline, Abu Dhabi Commercial Bank, AXA and Jumeirah Group — call Dubai Outsource City home and benefit from the wider ecosystem which acts as a catalyst for business growth.

By bringing together not only those entities seeking outsourcing solutions but also those offering cutting-edge, innovative services, in an environment conducive to ideation and knowledge exchange, we are actively encouraging the development of new concepts and solutions in an industry which I am convinced will further revolutionise the way we do business in the future.

The writer is Executive Director, Dubai Outsource City.