Which software development outsourcing trends will be significant in 2021?
Digital developments will continue to shape the pace of innovation as technology evolves rapidly and the need for efficient software development grows every year. This growth has led organizations to increasingly turning to software development outsourcing.
The year 2021 presented the technology industry with unexpected challenges that shaped its anticipated future software development outsourcing trends. This article focuses on the software development outsourcing trends predicted for 2021.
Software development outsourcing in 2021
In 2019, the global software development outsourcing market $92.5 billion, according to Statista. It is forecast to grow to USD 103 billion by 2027.
The demand for software development in organizations has increased in recent years, leading to an urgent need to improve in-house capacity. They are increasingly relying on outsourced development as a strategy to keep pace with competitors. Global Industry Analytics, Inc. reports that the value of the IT outsourcing market expects to grow by 5% annually between 2021 and 2024.
The pandemic of the past year has reshaped the factors driving organizations’ outsourcing needs, including an organization’s roadmap for digital adoption. For organizations, 2021 brought unprecedented changes in business models, internal operations, and workforce engagement habits. Organizations had to move to telework, resulting in an increased reliance on digital tools.
The financial sector, for example, had to adapt quickly to meet growing customer demand for online activities. According to the McKinsey Global Survey Of Executives, “[d]uring this pandemic, consumers have dramatically shifted towards online channels, and businesses and industries have responded in turn. The survey results confirm the rapid shift towards interacting with customers through digital channels.”
Digital transformation was predicted to progress strongly in 2021, although the pace of change was faster than initially expected. According to Deloitte’s Tech Trends 2019, “Unexpected changes in the global economy put technology and other IT leaders under intense pressure to accelerate the adoption of digital technologies to meet newly increased customer demand.”
Organizations surveyed by McKinsey found that “companies have been accelerating the digitization of their customer and supply chain interactions and internal operations for three to four years.” And the share of digital or digitally enabled products in their product portfolios has accelerated a shocking seven years.”
The increased focus on outsourcing software development helped organizations increase the delivery of solutions that helped them sustain their operations through 2021.
Four key trends in software development outsourcing expected in 2021
As organizations increasingly focus on improving their development outsourcing strategies, here are four key software development outsourcing trends to expect in 2021.
1| Greater emphasis on cybersecurity
Organizations expect to focus more on cybersecurity in 2021. As the need for software development outsourcing increases, so does the need to improve enterprise data security. Organizations will focus on protecting their data by reducing internal and external vulnerabilities to cyber-attacks to avoid the high costs of hacking.
Earlier in 2021, we reported on the Way Dev cybersecurity breach and the high reputational costs it caused. The 2017 Official Annual Cybercrime Report estimates that cybercrime will cost $6 trillion per year by 2021. In 2015, it cost $3 trillion.
2| Increased use of cloud services
Louis Columbus, the editor of Forbes magazine, has predicted that 83% of business workloads will move to the cloud by 2021. This trend will continue into 2021.
To stay agile and meet customer demands, companies are increasingly using cloud services. Synergy Research Group analyzed the impact of Covid-19 on the growth rate of cloud infrastructure in the broadest sense and found that spending on cloud services was three times higher than expected. According to Stepwise, a report by Gartner, Inc., By the end of 2021, businesses will spend approximately $1 trillion on cloud infrastructure, according to a Gartner report.
3| Focus on product quality
In the past, the main reason companies outsourced software development was to reduce costs, but this has changed in recent years due to a lack of skilled talent to meet their internal development needs. InfoQ reports in the National Outsourcing Association’s 2021 report, Outsourcing In the National Outsourcing Association’s 2021 report, we say the following Product quality is now a more important driver for outsourcing than cost reduction.
4| Building better partnerships
As companies focus more on product quality than cost reduction, they must also focus on improving communication and relationships with suppliers. With this growing shift and the increasing value of outsourcing, organizations evaluate their interactions with suppliers, and the focus is increasingly on the year 2021.
In 2021, we expect it to be even more critical to approach vendors to ensure the quality of their products. Commenting on the changes, Medium said.
“The new trend in partnerships is more people-centric. The focus is on collaboration and quality of execution, simplifying the process but not lowering the price. With this strategic focus, we can be confident in the quality of the final product when our trusted partners have a good understanding of the client’s processes.
Managers recognize the importance of collaborative relationships, their impact on quality, and ensuring that the right features are delivered.
In 2021, the importance of software development highlighted and the need for organizations to adapt quickly to gain a competitive advantage. The solution had to be even more future-oriented than initially planned and better adapted to today’s challenges.
By top software outsourcing companies in India can build competitively priced solutions faster, and the trends identified in this article that helped organizations in 2021 will continue to shape software development outsourcing in 2021.