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

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

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

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. And most importantly, it is necessary to 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 talented 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 percent 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 forcing 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, which can affect their performance and distract from regular tasks. That is why employers are looking for talent 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 worth of Big Data industry will be estimated at $77 billion by 2023. Big Data systems are getting more sophisticated than ever, which means that companies will have to ensure they enroll skilled and experienced Big Data specialists who can create superior solutions. It is no wonder 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. Despite the challenge, employers are ready to pay more to an outsourcing company if it has the required technical background and skills. What is more, a low hourly rate isn’t seen as a decisive factor in choosing the right contractor. Many entrepreneurs are ready to increase IT outsourcing budgets to find a software company 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, experts predict that IT jobs will see a significant boost in the coming years. It is no wonder that the global IT service market is going to expand, breaking previous records in the years to come.

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 percent 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 than choosing in-house specialists. This helps to reduce time-to-market and entrust your software product in reliable hands while 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 companies and their outsourcing partners. Apart from giving access to specialized tech talent, outsourcing can offer a way to stay up-to-date with the current trends that shape the global market.

We at Geomotiv regard outsourcing as a way to establish a fruitful and transparent partnership rather than provide our team members for “just another project”. So, if you are planning to choose an outsourcing software development partner, you have come to the right place.

Olga Demidenko

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