Top 9 trends in software development outsourcing in 2021: everything you need to know
IT outsourcing continues to grow in popularity, bringing fundamental changes to companies around the world. According to a Gartner report, global IT spending, which will reach $3.8 trillion in 2019, is only set to increase in the coming years. At the same time, Statista estimated global outsourcing revenues at $92.5 trillion in 2019, with exponential growth projected for 2021.
These figures epitomize the unlimited potential of new technologies. With all the latest innovations in place, most companies have already accepted the inevitability of digital transformation. Companies of all sizes see current trends in software development outsourcing.
Outsourcing is shaping the global market, revolutionizing how companies view their development, and creating unprecedented opportunities. That’s why we’ve highlighted ten software development outsourcing trends for the outstanding 2021.
Trends in software development outsourcing: What we can expect in 2020
1|The rise of narrowly focused shop floor software companies
Opinions can vary: some say they prefer to deal with an outsourcing company. Others say they benefit from having multiple suppliers.
However, the evidence suggests that more and more companies need strictly specialized companies. This trend is due to the rapid development of the technology field. It is impossible to have an in-house team that can keep up with all the innovations that occur every day and possess all the necessary skills.
Companies are looking for qualified external suppliers to ensure the highest quality. Working with more than one supplier is not a problem as long as the desired results are achieved. However, suppose a large outsourcing company offers complete software development with a diverse team of skilled professionals. In that case, it will also have the great advantage of being a large supplier to create healthy and transparent relationships.
2 |Customers will want a better experience through AI and IoT.
Online shopping has long been part of our daily lives. And with the advent of VIDOC-19, it has become the new standard, according to Forbes, with even people over 65 saying they are likely to buy more online than offline. The growing demand for online shopping experiences drives companies to invest more in improving user experience (UX). Customers are willing to spend 140% more to have a positive experience.
Solutions with AI and UX capabilities will improve e-commerce by providing a more personalized customer journey. AI-powered chat robots are already replacing human interactions when it comes to giving customers the advice they need.
3|High demand for blockchain services
Global spending on blockchain is demanded to reach $16 billion a year by 2023.
This has made it one of the leading trends in IT outsourcing. From developing smart contracts to instant microtransactions, distributed ledger technology has improved security, transparency, and innovative financial solutions for start-ups.
As the demand for competent and capable blockchain services grows, so does the need for well-trained specialists. Today, there is a shortage of blockchain specialists.
Not only is the need for talent growing, but the shortage of such talent is forcing companies to compete to attract peer talent.
4|The growing need for more robust cybersecurity
Data has long been the most valuable resource. That’s not news. But that’s why it’s more important than ever to protect it.
With cybercrime on the increase, more and more companies invest in GDPR (General Data Protection Regulation) compliance. It has become essential to ensure that all data is well protected.
Especially when a government agency is the victim of a cyber-attack, whether it is an IT company or a small family business with a website, owners turn to outsourced cybersecurity services to address security, business data protection, and GDPR compliance.
5|The global cloud computing market is booming.
In another forecast from several sources, Gartner also reports that demand for cloud computing will only grow. It is estimated that global cloud spending will be around $1 trillion.
As the amount of data that needs to be stored increases, businesses will outsource an efficient cloud platform. Along with the need for security services will come the need to outsource cloud services. The number of public cloud storage platforms is already growing.
6| High-tech, healthcare, and telecommunications will be highly digitized.
Trends in outsourcing are emerging alongside technology developments that impact specific industries.
In particular, the demand for outsourcing services necessary for digital transformation will be high in industries such as fintech, healthcare, and telecommunications.
AI, blockchain, and peer-to-peer transactions will become the new norm for the fintech industry. Simultaneously, healthcare organizations, both public and private, will rely on outsourced AI-based VR services to expand their diagnostic horizons.
Not to mention the impact that 5G networks will have on the telecoms industry, opening unprecedented mass IoT connectivity opportunities.
7|IT Outsourcing Centres continue to grow in Central and Eastern Europe.
A few years ago, demand for outsourcing services primarily driven by the need to reduce costs, by 2021, will focus on quality rather than low prices.
This will lead them to explore profitable outsourcing destinations in Eastern and Central Europe rather than China and India.
Ukraine, Poland, and Belarus are becoming attractive hubs with experienced offshore development teams.
The growing development market in Eastern and Central Europe can be attributed to high-quality services, well-trained teams, and still affordable prices.
8|Automation of robotic processes
Reduced operating costs, improved work coordination, and fewer manual errors are just some of the continually evolving RPA technology benefits.
Business automation is a top priority in an ever-changing digital environment. Logistics management, payment processing, and a more personalized experience will benefit from RPA technology.
Virtual assistants and robots are just the tip of the iceberg to share the burden of repetitive and subordinate human actions. That’s why IT outsourcing companies are investing a lot of time in business automation and advanced analytics.
9|A growing interest in advanced web applications.
As the need for a better user experience grows, so does the need for PWAs. They are designed to create a similar application on websites.
The first wave was Google’s ease of access to a website without a mobile version. The second wave is customers themselves, who will not welcome a website with a harmful UX. This is why companies will look to outsourcers to handle PWAs and meet their clients’ growing demands.
Summary: Why are IT outsourcing trends on the rise?
Today we are facing a rapidly evolving technology environment. Companies that don’t want to be left behind already invest their time and money in digital transformation.
However, there are several challenges. One is the speed of innovation. While even large companies with well-equipped teams can’t keep up and are in desperate need of outsourcing specialists, small companies can’t engage in a complete digital transformation without the help of an outsourcing team.
We haven’t used the word ‘teams’ by mistake. One of the essential areas of outsourced software development is real strategic partnerships with multiple vendors. Companies face a talent shortage and are forced to contract out to specialists.
However, while relationships have been established with some outsourcing companies, these relationships will continue to change significantly.
The high demand for outsourcing will make these collaborations more transparent and interpersonal. Besides, companies are more focused on reducing costs than on saving them.
Therefore, cooperation with several suppliers, each specializing in specific services, will be a common practice.
Thus, to keep up with the times and meet the quality standards introduced in 2020, companies will look for outsourcing partners who share risks and create better value together.
