The Top IT outsourcing trends to watch in the coming years

It's no secret that IT outsourcing is on the rise!

By 2027, Statista predicts IT outsourcing revenues to reach 145.7 billion dollars! That's a lot of money, isn't it?

In recent years, outsourcing has become more sophisticated, driven by technological advancements, changing market dynamics, and the emergence of new service delivery models.

The Covid-19 pandemic has impacted organizational functioning and has transformed organizations toward the digital world where cybersecurity is critical. Almost 87% are now transferring key processes and procedures to the cloud owing to the impact of remote work and focus on enabling faster and easier enterprise environments.

So, what's the big deal with outsourcing?

Cost-effectiveness is one of the answers to this question! Even if start-ups lack technical expertise, outsourcing companies can help them hire experts. As a bonus, these outsourcing providers have developers waiting for new projects, which saves you even more time! 

IT outsourcing has become an essential strategy for many companies looking to reduce costs and improve operational efficiencies. In recent years, outsourcing has become more sophisticated, driven by technological advancements, changing market dynamics, and the emergence of new service delivery models.

Visit our blog to read more about the benefits of outsourcing software developement.

And now, let's review the hottest outsourcing trends in 2023, including all the cutting-edge technologies!

Top IT Outsourcing Trends to Watch in the coming years

Focus on Multi-Sourcing

Previously, companies often relied on a single outsourcing provider to manage all their IT needs. However, this approach is now being replaced by a multi-sourcing strategy that involves working with multiple providers to achieve better outcomes. Multi-sourcing allows companies to leverage the unique strengths of different providers and increase competition, driving innovation and improving quality.

Adoption of Cloud-Based Solutions

Cloud computing has become a game-changer in outsourcing, offering more flexibility, scalability, and cost savings. As more companies look to adopt cloud-based solutions, outsourcing providers are also evolving their offerings to include cloud-based services, including infrastructure, platform, and software as a service (IaaS, PaaS, and SaaS).

Cloud-based services include:

• Software as a Service (SaaS): An internet-based platform that hosts software rather than installing it and makes it accessible to end users.
• Platform as a Service (PaaS): This enables businesses to create, manage, and operate their own apps without developing and maintaining their infrastructure.
• Infrastructure as a Service (IaaS): IT infrastructure outsourcing is another trend. The cloud-based service offers storage and virtualization services based on your needs and is a pay-as-you-go service. The user is responsible for their operating system, data, and programs.

The development and implementation of software applications are expensive from a cost and time perspective but can be challenging without a professional software engineer. Valued time devoted to the development of applications on the ground could be more effectively used for implementing revenue-generating business initiatives. Outsourced services through partnerships with trusted professionals are a critical part of every company-transforming project.

Cyber Security

Cyber attacks and data breaches increased by as much as 4 percent from 2017 onwards, and the overall cost was up 6% from 2017. The IT industry is at the highest level seen in nearly 17 years. Data protection is a central theme for the future. Gartner estimates the global IT security market to grow to 1.7 billion by 2020. Cyber attacks and data thievery pose incredibly high concerns for executives and companies looking for outsourcer solutions for their operations.

As cyber threats become more sophisticated, security has become a top priority for outsourcing providers and clients. In the coming years, outsourcing providers must invest in security measures to protect client data and infrastructure from cyber-attacks. Companies will also demand greater transparency and accountability from their outsourcing providers, including regular security audits and reports.

However many organizations do not have paid for a higher level of cyber risk for the challenging task at hand. Many of them however are especially interested in regional or local deliveries. The problem will only worsen with increased cyber security incidents and the increased complexity of business.

Also, read Cyber Security: meaning, options, tools, and best practices

Growing Importance of Artificial Intelligence

AI is a top global IT outsourcing trend since it refers to machines or systems that mimic human intelligence and can accomplish tasks.

AI has the potential to transform outsourcing by automating repetitive tasks, enhancing decision-making, and improving productivity. Outsourcing providers are already using AI to automate routine tasks such as data entry and customer service. As AI becomes more sophisticated, outsourcing providers must adapt their services to incorporate AI solutions and help clients leverage these technologies.

The emergence of "Outstaffing"

Outstaffing is a relatively new outsourcing model that involves hiring developers and other IT professionals directly from a talent pool rather than working with a provider that manages the entire outsourcing process. Outstaffing can offer significant cost savings, greater control over the hiring process, and improved communication and collaboration with the remote team.

Focus on Sustainability

Sustainability has become an increasingly important issue in IT outsourcing. As companies seek to reduce their carbon footprint, outsourcing providers respond by developing sustainable solutions, such as renewable energy data centers and eco-friendly supply chains.

Continued Growth of Nearshoring

Nearshoring, the practice of outsourcing to companies located in nearby countries or regions, has become an increasingly popular outsourcing model. Nearshoring offers many benefits, including cultural and linguistic proximity, lower costs, and reduced travel time and expenses.

Machine Learning Automation

It is the next top outsourcing trend. According to previous research, MLA is projected to reach USD 8.81 Billion by 2023 from USD 1.03 Billion in 2016. The goal of machine learning automation is to mimic how people learn and boost accuracy through data and algorithms.

As the demand for talent in this field grows, machine learning is becoming one of the hottest IT services outsourcing trends. Software development companies provide competent service at a fraction of the cost of hiring these experts in-house.

WEB 3.0: The Metaverse, Blockchain Services

Using blockchain technology, developers can create applications that securely store data across multiple decentralized computers. Web 3.0 uses blockchain, artificial intelligence, and machine learning to allow real-world human contact. Metaverses give users the opportunity to move through virtual environments that resemble the real world using technology like virtual reality (VR).

Since the idea of a decentralized web is appreciated by everyone, blockchain services will be the most prominent IT outsourcing trend in the future. As more businesses switch to blockchains and the demand for competent software vendors increases, this digital transformation will become a critical asset in the business world.

IT outsourcing continues to evolve, and companies that keep up with the latest trends will be better positioned to take advantage of new opportunities and remain competitive in the marketplace. By adopting multi-sourcing, embracing cloud-based solutions, prioritizing security, leveraging AI, exploring outstaffing, focusing on sustainability, and nearshoring, companies can stay ahead of the curve and achieve better outcomes.

Crucial skills for developers in future

The future will require developers to master several key skills to stay competitive and relevant as technology evolves and shapes the world around us. The following are some of the top skills developers will need in the future:

1. AI and ML: As AI and machine learning advance, you can see fundamental changes in how you interact with technology. Engineers who can master these technologies will be in high demand in the future.

2. Data Science: With the explosion of big data, developers skilled in data science and analytics will be highly sought after. With the help of these developers, organizations can make sense of and act on the vast amounts of data they collect.

3. Cyber Security: Cybersecurity-skilled developers are essential. They will be responsible for building secure applications and systems that can withstand cyber attacks.

4. Cloud Computing: Skills in cloud technologies like AWS, Azure, and Google Cloud will be highly valued.

5. Mobile Development: Developers with experience in mobile app development will be in high demand as mobile devices become more prevalent. These engineers will be responsible for building mobile apps that are user-friendly, responsive, and secure.

6. DevOps: This set of practices brings together software development and IT operations to provide faster and more reliable software deployments. By using DevOps, developers can streamline their development processes and deliver software faster.

The most successful developers will be those who stay current with the latest technologies and trends. Developers can ensure they remain competitive and valuable in the job market by continuing to learn and develop their skills.

Also, read What you should know about hiring remote developers

Final thoughts

Studying these trends can guide you to develop successful business plans for the coming years. Learning about an outsourcing trend can also help you handle uncertainties in your business and manage internal stakeholders effectively. You can review the top outsourcing trends above to develop a strategic plan for successful outsourcing in the coming years.

As the IT outsourcing market evolves, IT outsourcing providers must stay current with these trends to ensure they remain competitive. Customers-centricity, transparency, and trust will appeal to leading partners.

Keeping up with the newest technologies and protecting customer data will soon become more important. Sharing risk can lead to great success and effective partnerships.

Market leaders in the next decade might gain a competitive edge by implementing these top IT outsourcing trends.