Globalization and outsourcing: How the industry evolved over time

How are globalization and outsourcing connected?

Globalization and outsourcing grow together: globalization opens new markets, and outsourcing gives companies the global talent and tools to serve them.

• Globalization lets firms reach customers and workers around the world.
• Outsourcing gives them the people and tech to scale in those markets.
• Better technology keeps pushing both trends forward each year.

The outsourcing industry has come a long way from a simple cost-cutting move. Today, outsourcing is a smart way to run a business, tap new markets, and boost profit. Thanks to globalization, companies can also connect with customers better through delegated services and online tools.

Globalization and outsourcing have been linked for a long time. Aaron Fischer, Chief Customer Officer at Office Partners 360 (OP360), has seen this link up close. He has also watched this multi-billion-dollar industry evolve. Aaron and Derek discussed all of this in episode 354 of the Outsource Accelerator podcast.

Globalization and outsourcing

Globalization and outsourcing have been interconnected for ages. In fact, one usually triggers change in the other. Outsourcing often starts when businesses want to globalize and scale in a smarter way. So companies began to delegate non-core tasks like customer support and data entry.

In return, globalization brought positive effects to global businesses and the outsourcing industry. Better technology also made it possible for BPOs to offer a wider range of services. As a result, outsourcing connected businesses and workers more closely. It also proved remote work as an effective way to run operations. Because he has spent decades in the field, Aaron has seen these changes step by step.

How the outsourcing industry evolved through globalization

Evolution of technology used in outsourcing companies

The outsourcing industry began with telephony. According to Aaron, call centers used outbound automated dialers to reach people and boost “right party connects on an outbound basis.” Then email arrived in the early to mid-90s, and BPOs added inbound support. However, each channel stayed tied to one platform. So it was hard to offer a smooth, multichannel service.

Today, tools like CRM systems and cloud computing are common in the industry. As a result, apps and devices now work together to handle customer concerns better.

Pioneering an international outsourcing team

One of Aaron’s roles at Sitel involved Tata Infotech, a joint venture based in Mumbai, India. At the time, offshoring felt “foreign to the US-based call center employees as it was to the customers.” So there were early worries about “taking US jobs overseas” and losing sales.

Language and culture were common concerns back then too. As a result, Aaron and Sitel worked to teach US culture to teams in India. For example, they read USA Today and watched popular US shows on VHS. Today, globalization makes integration and interaction easier for offshore teams and their clients. Meanwhile, offshore countries now share more culture with developed ones thanks to Netflix, YouTube, and other online media.

The rise of BPO 2.0 companies

Aaron recalled that the era of Sykes and Sitel pushed BPOs to chase “highest volume, lowest cost” work. So they mainly went after large clients, much like Teleperformance did with its buyouts. Then TaskUs showed the industry two new ideas:

• Outsourcing can be “cool.”
• There is room for upstart companies to grow if BPOs back their frontline teams and target these new firms.

The idea of “BPO 2.0 companies” emerged over a decade ago. As a result, it paved the way for OP360 to serve “well-funded, fast-growing” companies. These clients often need help with flexibility and with building their customer experience (CX) strategies.

What to expect in the outsourcing industry in the future

Global outsourcing is in its prime, even though some still call it a “sunset industry.” So far, it has dodged many challenges and disruptions. It will likely keep shaping how businesses outsource. The following trends continue to drive this change:

• Revenue vs cost generation. More companies now see outsourcing as a “revenue play” rather than a “cost play.” This grows as providers build stronger client relationships.
• Pillars of delivery. The three pillars of delivery, which are customer care, customer support, and customer experience, help retain customers. This matters more with the increase in digital customer interactions.
• AI integrations. Finally, BPOs like OP360 keep adding automation to their work. As a result, they run more efficiently and remove “very simple [customer service] tasks.”

OP360 and the future of outsourcing

Founded more than 15 years ago, OP360 builds tailored solutions for emerging brands. These clients want to stay flexible and strategic with their services. OP360’s offers fall into traditional outsourcing, content moderation, and automation. One key benefit is the ability to shape each client’s setup, whether nearshore or offshore.

Check out their website, send an email to [email protected], and listen to episode 354 of the OA podcast here.

Frequently asked questions about globalization and outsourcing

What is the link between globalization and outsourcing?

Globalization opens world markets, while outsourcing supplies the global talent to serve them. So the two trends push each other forward.

How has technology changed outsourcing?

Outsourcing moved from phone dialers to email, then to CRM and cloud tools. As a result, teams now handle customer needs across many channels.

What is a BPO 2.0 company?

BPO 2.0 firms focus on frontline teams and fast-growing clients. In addition, they treat outsourcing as a way to add value, not just cut costs.

Is outsourcing still growing?

Yes. Many firms now see it as a revenue driver. Meanwhile, AI and automation help providers work faster and smarter.

Key takeaways

• Globalization and outsourcing evolve together, and each drives change in the other.
• Technology moved outsourcing from simple calls to CRM, cloud, and AI tools.
• BPO 2.0 firms like OP360 focus on value, flexibility, and customer experience.
• Outsourcing is now seen more as a revenue play than a cost play.