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Home > Blog > IT Outsourcing Guide, Part One: Current State and Future Trends

IT Outsourcing Guide, Part One: Current State and Future Trends

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Alex Kharkauski
Chief Operating Officer, Geomotiv
Published: Oct 23, 2019
Outsourcing
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    1. IT Outsourcing: Current State of Things
    2. IT Outsourcing: Future Trends
    3. Outsourcing Is Here to Stay

    The time when software development outsourcing used to cause negative associations is coming to an end. Now new trends are shaping the industry. With trust and transparency dominating the niche, IT outsourcing providers become strategic partners.

    Nowadays a growing number of businesses opt for outsourcing as a model for building and expanding their IT departments. And they do it for many reasons. Among them is the demand for external teams with superior technical expertise and innovative approach to software development. That already makes numerous companies search for a trusted development partner. 

    Additionally, businesses and outsourcing software development companies have to understand the other trends that have already shaped the industry if they want to succeed on the market. In the next paragraph we'll figure out what the future holds for IT outsourcing. 

    IT Outsourcing: Current State of Things

    Lack of Specialists

    The shortage of talent has become an issue for numerous IT companies. An unprecedented demand for remote developers has shaken various IT sectors. According to Statista, lack of in-house engineering skill set in Big Data and Analytics, for example, accounts for 44% of cases in 2019. AI, Cybersecurity, and BI are among IT functions that experience the greatest skill shortages, too. Lack of developers in specific IT areas is the reason why hourly rates have increased. Certainly, it has forced companies to allocate budgets more efficiently.

    Rise of Challenging Projects

    New technologies are emerging as you read this, impacting the way businesses operate. It means that more and more in-house teams will have to adopt new technologies. This can definitely affect their performance and distract from regular tasks. That is why employers are looking for talents outside their companies to reduce pressure on their internal resources. 

    The demand for outsourcing is growing with the rise of Big Data  projects, too. According to Entrepreneur, the Big Data industry will be estimated at $77 billion by 2023. Big Data systems are getting more sophisticated than ever. It means that companies will have to ensure they enroll skilled Big Data specialists. No doubt Big Data development, analytics, and integration will dominate the list of IT outsourcing services in the next few years.

    Shift to Skill-Based Outsourcing

    As already stated, talent shortage has become an issue in the IT industry. Now, hiring the best specialists is all about paying higher rates for the positions that are difficult to fill. Nevertheless, employers are ready to pay more to an outsourcing company. They do it mostly beacause the vendor has the required technical background and skills. Moreover, a low hourly rate isn’t seen as a decisive factor in choosing the contractor. Many entrepreneurs are ready to increase their budgets for software companies that can bring true value to their business.

    IT Outsourcing: Future Trends

    The global software development spending is expected to total $3.79 trillion in 2019, according to Gartner. With people’s growing involvement in software development, the global IT market is going to expand. Experts predict that IT jobs will see a significant boost in the coming years.

    Based on this data, we can see that the future of outsourcing looks quite promising.

    The majority of businesses that outsourced in 2018 continue to do so in 2019. Almost 40% of small businesses have already opted for business process outsourcing for numerous reasons.

    Taking this data-driven statistics into consideration, many strategists predict that more and more offshore and nearshore companies are going to emerge to satisfy the outsourcing needs.

    Finding distant teams compatible with your requirements has become a faster process. It can be even faster than choosing in-house specialists. This helps to reduce time-to-market and entrust your software product in reliable hands. In the meantime, you can concentrate on business growth.

    Outsourcing Is Here to Stay

    The future of IT outsourcing looks promising. The above trends clearly display a potential to survive and bring value to both parties. On the one hand it gives access to specialized tech talent. On the other hand, outsourcing can help to stay up-to-date with the current trends.

    We at Geomotiv regard outsourcing as a way to establish a fruitful and transparent partnership. We are not the ones who provide team members for “just another project”. If you plan to choose a outsourcing partner, you have come to the right place.

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