Trends Shaping IT Outsourcing for Enhanced Productivity in the Digital Workplace

IT services are responsible for approximately 72% of the outsourced contracts worldwide. Large and small-to-medium-sized businesses use IT outsourcing to cover skill gaps, reduce operational costs, and improve productivity. According to Statista, Singapore’s IT outsourcing market is expected to grow by 8.6% annually till 2030. But what drives this trend?

A couple of factors that include:

• The introduction of new technologies that optimise collaboration and productivity
• Hiring IT experts and using best-in-class solutions at affordable prices.
• Minimising cybersecurity risks and incidents.
• Flexibility and additional work hours to focus on core business responsibilities
• The increased adoption of hybrid work and digital workforces.
• To save operational costs.

Trends Driving IT Outsourcing

Adopting New Technologies

The world is experiencing a technology boom, defined by an influx of new solutions and advances in older ones. For example, the introduction of cloud computing led to a paradigm shift in how we work and store digital data. Today, developments in AI, edge computing, intelligent document management systems, digital twins, remote management and monitoring tools, etc., are changing conventional work processes in every industrial sector.

The introduction of new digital transformation technologies also creates new business trends and processes that the average organisation must leverage to remain competitive. However, to use these solutions, a technical understanding of how they are applied, the cost of implementation, and an organisation’s capabilities to use them is required. Insight into application capabilities helps decision-makers decide whether creating a new department or outsourcing IT services is the better choice when adopting new technologies.

Dealing with Cybersecurity Challenges

The growing number of cyberthreats is a worldwide trend that affects every organisation. For example, Singapore experienced a 52.9% increase in security incidents in 2023, and this number is expected to increase substantially in the coming years. Thus, it incentivises businesses to invest in securing IT infrastructure and digital business processes, but developing in-house response capabilities is not cheap.

Hiring a cybersecurity expert costs over S$120,000 annually, and setting up a functional department, including purchasing the needed IT infrastructure, considerably increases the total overhead cost. However, choosing not to invest in cybersecurity is even more costly, as ransoms for stolen data could hit the $5 million mark. Hence, organisations must determine the most cost-effective method to ensure cybersecurity.

Adopting Hybrid Work Trends and Managing a Digital Workforce

Businesses that intend to remain competitive must consider the work-life balance of current and prospective employees. As more workers choose the hybrid option, a mix of remote and on-site work, businesses that offer only rigid in-office jobs will struggle to retain talent. Hybrid work saves cost. The flexibility it provides saves the average organisation $11,000 per employee. It also leads to a 25% reduction in office space and a 33% reduction in the amenities used.

Organisations that offer flexible working conditions must also adopt the digital transformation solutions that make hybrid work possible. These solutions include collaborative platforms, document management systems, automation solutions, and operational technology that enables connectivity. The developed digital workplace must also be secured against threat actors looking to exploit technology loopholes.

Managing Operational Costs

Since ancient times, businesses have been driven by the need to save operational costs and maximise profit. Today, 57% of organisations say the cost reduction associated with outsourcing is why they outsource.  Organisations that choose the IT outsourcing route may save $6500 per month, and big corporations understand this advantage.

Approximately 66% of large corporations outsource their IT requirements to save operational costs. On the other hand, 37% of SMBs choose to outsource their IT requirements. This disparity may explain the differences in revenue generation capabilities across diverse organisations.

Commonly Outsourced IT Services and the Benefits

1. Help Desk Support – Outsourcing help desk, technical support, and other related user-facing mediums involves providing customers or end-users with the assistance required to resolve IT-related issues. Organisations that outsource their help desk do so to save operational costs and focus business operations on their core competencies.
2. Cybersecurity – Outsourcing cybersecurity generally focuses on ensuring the security of an organisation's IT infrastructure and network for its end-users. Organisations that outsource their cybersecurity requirements do so to reduce the cost of setting up dedicated security departments and to work with experts or professional managed-services providers.
3. Data Backup and Recovery – The failure of IT systems is responsible for approximately 67% of data loss, and software failure accounts for 10%. Hence, organisations outsource data backup and recovery responsibilities to experienced service providers to prevent data loss. Outsourcing backup and recovery to skilled service providers helps businesses overcome skill gaps in managing databases.
4. Managing and Monitoring IT Infrastructure – The cost of building scalable IT services or platforms and managing and monitoring these systems' performance exceeds most businesses' financial and technical capacity. Consequently, organisations outsource these capabilities to cloud computing and managed-service providers with the expertise to deliver these services.
5. IT Consulting – Seeking expert advice concerning implementing IT solutions is a major reason for outsourcing IT services. Consultants, either individual experts or managed service providers, help create implementation roadmaps, develop operational policies, train employees, and audit IT systems.
6. Mobile and Web Software Development – Outsourcing development and security operations to create high-performing applications helps businesses build resilient IT solutions. Expert development teams bring cutting-edge technologies and industry-specific knowledge to the table. They also help SMBs build proprietary solutions at reduced cost.
7. Digital Transformation Initiatives – Many digital transformation implementation processes fail due to challenges with adopting the right technologies and a lack of expertise. Organisations outsource their digital transformation journey to experienced managed-service providers to ensure optimised implementation, eliminate failure, and save costs.

Kick-starting Your Outsourcing Journey

Only 37% of SMBs choose to outsource IT services, far behind the 66% of large organisations that do. The reasons for the low adoption levels are misconceptions such as the astronomic cost of outsourcing and the belief that Managed IT partners do not work with smaller organisations. But this isn’t the case; managed IT services are often designed to cater to SMBs.

How can we help?

As a pioneer in document solutions for over 50 years, FUJIFILM Business Innovation Singapore has a deep understanding of how businesses operate. Our mission is to empower organisations to work efficiently and effectively in the digital age. We offer a comprehensive suite of digital transformation solutions and services, partnering our customers in managing data to automate workflows, leverage data intelligence, and build exceptional customer experiences.

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