Any IT organization that is currently outsourcing IT services or planning to do so is probably wondering how the outsourcing practices are going to change with the current state of things due to the COVID-19 pandemic.

Here is what you can expect in terms of the most important changes in outsourcing practices and what might happen in the near future.

Stronger emphasis on building relationship networks

Outsourcing companies, just like IT companies in general, are moving towards digital transformation. This would eventually lead to a more scalable and flexible value network – or essentially, the connections you build in order to create value for your company. And there is more – the so-called multi-vendor approach, or when you outsource different aspects of your IT services to different companies. This way you can minimize the risks and get the best of it all.

A growing tendency toward co-sourcing

Co-sourcing – the approach that focuses on creating value for both the outsourcing service provider and the client – is emerging strongly recently and is expected to continue growing. The current focus is shifting from just cutting costs through outsourcing to mitigating the associated risks.

Small businesses and startups create more business

In the past, IT outsourcing was mainly the domain of large scale enterprises. These days though, small businesses and startups are blooming and also looking to outsource their services driven by the goal to reduce costs, get better quality, focus on core business, and so on. IT companies can expect to get a lot more business out of this trend and the digitalization of small businesses.

New competitors are emerging

For many years, India was on top of the list for IT outsourcing but currently, there are new countries fighting to take over the top. Romania, Ukraine, Poland, and Belarus have become quite popular recently and this trend will continue in the future. Offering better quality, lower prices, and most of all – not having a huge time difference with Western Europe and the US, are among the main reasons behind the shift in top IT outsourcing countries.

The growth of digitally automated tools

The future is already here – there are plenty of services offered by digital automated tools and the IT outsourcing industry will not stay behind. Up until now, it was the people providing the services supported by tools. A more digital-inclined model is already taking place in which services are offered by digital tools and people are only supporting these tools. With software bots, machine learning, automation, and robotic process automation, the new digital approach will soon become more and more popular in IT outsourcing and force the companies to create new strategies and systems.

In Summary

With the evolution of technology and new practices, the IT outsourcing industry is changing rapidly. New values and goals, new countries to rule the market, new tools and processes, and more business due to the thriving SMB and startup scene are among the most important trends taking part in 2020 that will continue to grow in the near future.