6 Information Technology Outsourcing Trends and Their Benefits

For those planning to get software development, these changing practices mean greater focus on forming a stronger relationship. Certainly most of the major Indian service providers are already established in at least one of the major centres in China , as are some of the US service providers. When all statistics are taken into consideration, we can say that outsourcing will continue to grow in the future. In fact, around 80% of logistic leaders plan to increase their outsourcing budget by 5%. As a result, the global LPO market size is expected to reach $40 billion by 2024, and it was only $6 billion in 2016.

The new IT services outsourcing trend is the choice of a highly skilled software vendor with employees with extensive experience in specific areas who can provide excellent results to the client. We discussed the top technology outsourcing trends for 2023, but these are only some of them. Next, you’ll find more IT services outsourcing trends deserving your attention. This is by no means a complete list, but these are the most interesting and most advanced applications of IoT today.. Nevertheless, the technology is widely used in medicine, education, and logistics. Many solutions are being developed with its application, and the demand will be even more significant for IT services outsourcing trends in 2023.

technology outsourcing trends

These industries tend to follow IT outsourcing trends and are the most likely clients to seek IT outsourcing services. Entrepreneurs prefer to outsource such software development to outsourcing software providers, allowing them to reduce costs and get high-quality results. If you are a retail business owner, you should pay attention to the outsourcing trend of automation in your field to beat the competition. Moreover, an experienced software provider will help you integrate all your software into one system so you can work faster and more efficiently. In just a few months, Covid-19 has fast-tracked digital transformation for global companies by an average of six years, according to some experts. The crisis has forced an increased reliance on digital tools to communicate and collaborate online securely.

24.5% of all organizations are going to increase outsourcing efforts or outsource for the first time in 2021.

Figures estimating the market size of IT outsourcing vary depending on how particular sources define “outsourcing” and type of industries, services, and segments are included. Statista’s Technology Market Outlook divides the IT outsourcing industry into administration outsourcing, application outsourcing, web hosting, and other IT outsourcing. In total, these segments accounted combined revenue of nearly 400 billion U.S. dollars in 2022.

technology outsourcing trends

But, contrary to popular perception, it’s unlikely that they will shift from their current dependence on service providers. As the crisis abates, businesses are likely to invest in developing critical capabilities in-house even while using their relationships with service providers to step up the pace of digital transformations. That, in turn, places the onus on service providers to expand their skills and offerings. Coming out of the crisis, service providers would do well to be prepared not only to renegotiate costs but also to grab the capabilities-based opportunities that are bound to come their way. Only then can service providers hope to become trusted partners in companies’ digital transformations.

Accounting is the most outsourced industry sector.

The number of jobs outsourced by US companies continues to grow. In fact, outsourcing all kinds of professions has been around for decades. Moreover, many organizations take advantage of hiring a low-cost workforce outside the US borders. Businesses didn’t allow the urgent to drive out the important, though. Sixty-one percent of the companies we surveyed said that they accelerated parts of their digital transformation over the course of the year, although 42% noted that they slowed down some projects. (See Exhibit 2.) Thus, the popular perception that digital transformation has only accelerated in 2020 may be misleading, with some qualifications becoming necessary to understand the ground realities.

While the current worth of cloud computing has reached a high mark of $180 billion worldwide, the SaaS alone is expected to earn $113.1 billion in 2021. Why Central and Eastern European countries are a sweet spot for global companies seeking high-end tech at a sensible price. Download the full report to explore detailed findings and analysis, insights from executives, and takeaways on how you can enhance it outsourcing trends your sourcing model to unlock immediate and long-term business value. Communication has always been one of my key strengths, whether vocal or written. I started my career as a marketing professional, and in my journey as a marketer, I realized that Copywriting is my true passion. Over the years, I have honed my skills as a creative writer by working on various content formats for B2C and B2B clients.

Above the clouds: Taming multicloud chaos

This allows them to cut costs without wasting time looking for their specialists. It also frees them from the cost of permanent maintenance of employees, the need for which does not arise regularly. However, by 2023, IT services outsourcing trends will also include increased demand for services from third-party software providers among startups. The demand for outsourced IT professionals has increased since then. The need for data security, process automation, and AI solutions has caused the growth of the IT outsourcing industry.

  • By the end of 2021, the overall value of outsourced IT services will surpass $413.72 billion.
  • By examining and comparing data, we’ve been able to identify why companies in the US decide to use outsourcing as a business strategy.
  • The current outsourcing model includes services offered by people and powered or supported by tools.
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  • This allows them to significantly increase the speed of interaction between team members and other businesses.

It’s more of a coaching role, a person who sits between the project and the client. The Scrum Master does not control the team that produces the work – instead, he supports the product owner, coaches the team, and ensures that the Scrum processes are followed. These factors influenced the number of requests for developing corporate software that allows all employees to interact effectively. Founded in 2011, we’ve been providing full-cycle mobile and web development services to clients from various industries. The workplace transformation forced by the pandemic is set to make telework a permanent arrangement for many organizations. As office-based work is turning into a home office, new opportunities for outsourcing emerge.

IT Outsourcing Software Development Statistics in 2021

Take the case of Ukraine—presently it has over 166,000 software developers and the number is expected to increase to 250,000 by the end of 2020. No wonder we will see the country rising as a bigger competitor for India, China, and other leading countries. Co-sourcing will become the new norm as businesses choose to support each other and share the risks. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.

That will enable them to figure out the best way to plug capability gaps and determine the kinds of service providers they will need in order to do so. The outsourcing trends in 2022 reflect the changes the pandemic brought to the outsourcing market in the last couple of years. It suggests that businesses must look for providers with high-quality services, aim for high flexibility, and leverage updated technology while outsourcing in 2023. Businesses are now looking forward to more sustainable practices in outsourcing to continue having a long-term relationship. The pandemic forced businesses to revoke their outsourcing contracts with companies mostly because they couldn’t trust their project during uncertain times.

Various data on outsourcing show that this number hasn’t changed since the fourth quarter of 2019. In the third quarter of 2019, 66% of transactions were digital-focused. In this section, you will find more about key trends that will affect both the global and the US outsourcing market in 2021 and beyond. New analysis by the McKinsey Technology Council highlights the development, possible uses, and industry effects of advanced technologies.

When it comes to market shares, India will be one of the leading countries. By the end of 2021, the overall value of outsourced IT services will surpass $413.72 billion. When it comes to the United States outsourcing statistics, a large number of jobs are being sent overseas, leaving hard-working Americans without employment. Larger companies are 66% more likely to outsource than small businesses. Install real-time dashboards to monitor the work being done at the outsourced company and track each metric.

What Are We Outsourcing – The Trends

The process of providing outsourcing services is also constantly being optimized and changed. Therefore, let’s explore the leading IT services outsourcing trends related to the features of the organization of cooperation, which will be important in 2023. The future of technology outsourcing is likely to be shaped by emerging technologies like AI, blockchain, and cloud computing, as well as evolving business models and changing geopolitical landscapes. The IT outsourcing industry has seen an upward trajectory since its inception in the 1980s. More so in the recent past, when the global shutdown forced businesses to seek more viable ways to speed up digital transformation while optimizing operational costs. Honeywell International Inc. is an appliance, electrical, and electronics manufacturing company headquartered in Charlotte, North Carolina.

Emphasis on quality

Newer LPO trends include uncovering the background information before entering into an agreement, and that’s possible because of AI. To mitigate the risk of a transformation failing, many companies appear keen to build capabilities in-house. In the United States, regulators sued Facebook for illegally suppressing competition, and Google was hit with an antitrust lawsuit in October. The Chinese government has begun to crack down on domestic tech giants such as Alibaba.

In the following year, we’ll see the rise of the emerging IT outsourcing market located in Eastern Europe. Around 55% of the study respondents informed that they will increase budgets for outsourcing cybersecurity functions. The trend shows that middle-sized tech companies are on their way to reducing their business structure in order to serve the business. 51% are planning to hire a full-time cybersecurity team during 2021.

Data analytics outsourcing means that companies receive data reports from a provider. By 2028, the global data analytics outsourcing market will grow at a 34% rate and be worth $60.3 million. While many companies rely on a global footprint of service providers to prevent service breakdowns, that model doesn’t factor in the possibility of a pandemic washing over the world. Service providers, particularly in outsourcing hubs such as India and the Philippines, were hit hard, although they did their best to cope. For example, a service provider in India rented an entire hotel to ensure that its employees could work in a bubble. The company provided accommodations, access to food 24-7, stable broadband connections, and, later, regular COVID-19 testing.

Lens on innovation: Three areas of value

This strategy improves the experience of everyone who engages with your brand, from your employees to your end-users. Improving one of the three can significantly impact the other two, achieving an overall transformational business outcome. Optimize your staff recruitment, hiring, and onboarding process with RPO solutions. Build an experienced team of ecommerce professionals to manage your business.