It’s easy to see how the use of technology has exploded in the last few years with digital transformation and new IT solutions continuously entering the market. This led to a total IT spending of $3.8 trillion worldwide as stated in the 2019 Gartner report. Statista estimated that in the same year, $92.5 billion was spent globally on IT outsourcing. Both figures are set to increase for 2020.
With this growth, more and more companies are turning to IT outsourcing for their software development as not only can they get their product out into the market faster, but they can also stay ahead of rivals in the industry.
We have put together a list of the top 10 IT outsourcing trends that you should know about in order to benefit.
- Highly specialized software companies
While some will still prefer to use a company that offers multiple specialties, many are turning to those that focus on one. This is because as technology advances, there is no way that an in-house team can keep up with the latest solutions. Opting for an outsourcing company with a higher level of expertise in one area allows them to gain from access to better knowledge, even if that means a company has to choose multiple outsourcing providers. Although, the outsourcing provider who is able to provide multiple highly specialized services is naturally going to come out on top.
- Companies will be looking for the integration of AI and IoT
COVID-19 has caused a surge in online shopping across all of the generations. As more people are preferring to buy online, more companies are investing in User Experience (UX). If a customer has a positive online shopping experience, they are likely to spend 140% more. AI and IoT include solutions like chatbots, real-time data, and a more personalized shopping experience, enhancing satisfaction levels.
- Increased demand for Blockchain services
Blockchain includes things like smart contracts and microtransactions. It can fortify security, improve transparency, and provide novel money-making solutions for startups. Spending on Blockchain services is expected to reach $16 billion a year by 2023, but there is still a shortage of Blockchain experts, so it is often necessary to turn to outsource for solutions.
- The essential need for IT security
Cyberattacks are nothing new, and while financially they still cost millions, there is another aspect that is becoming equally important- data protection. Data is like gold to a company and since new legislation was introduced (General Data Protection Regulation, GDPR) more companies need to hire IT security experts to make sure their business is protected as well as compliant.
- It’s all in the Cloud
The amount of data that is gathered around the world is unimaginable, and it all has to be stored somewhere. Rather than traditional on-premises storage, companies are making the move to cloud storage, with spending close to $1 trillion. Companies will use outsourcing firms to create and manage their cloud platforms.
- The digitalization of Fintech, healthcare, and telecom
There are three key factors that have changed the above-mentioned industries and their outsourcing trends. In Fintech, we a greater need for AI, Blockchain, and Peer-to-Peer transactions. Healthcare now relies on VR backed by AI to be able to lead the way in diagnostics. And 5G network in telecom will lead to new opportunities for extensive connections to IoT networks.
- Expansion of IT outsourcing in Eastern and Central Europe
In the past, companies were tempted by lower rates to cut operational costs. Today, the focus turns to quality. While China and India have always been able to offer some of the lowest rates, Eastern and Central Europe are becoming more attractive. Countries like Romania provide a high quality of service, excellent skill levels, and rates that are still lower than the U.S. and Western Europe.
- The AR and VR boom
Remember how popular Pokémon Go was? New smartphones will need to have AR and VR solutions in order to stay ahead in the market. Such technologies will improve the shopping experience, as well as having a positive impact on e-learning, tourism, manufacturing, and far more.
- More companies will look to Robotic Process Automation
RPA has a great number of advantages, for example, fewer mistakes, reduced operating costs, etc. and it can be used across a wide range of industries for things like payment processing and more personalized service. Virtual assistants are a perfect example of how this technology will help company operations. IT outsourcing providers are heavily investing in automation and augmented analytics.
- A growing interest in Progressive Web Apps
Progressive Web Apps allow for websites to have an application-like experience. Take Google as an example, the user experience is the same for smartphone and desktop use. Customers will no longer accept poor UX so companies will look for IT outsourcing providers that can apply PWA.
If your in-house team can’t keep up with the rapidly changing technologies, you will not be alone. However, doing nothing will only mean you fall further behind your competition. If you are looking to create strong partnerships, benefit from IT expertise, and provide an excellent quality product or service in 2020 and beyond, IT outsourcing is definitely a solution worth considering.