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Why The Pandemic Led To An Increase In IT Outsourcing

Of all the IT services, most companies engage in RPA and software outsourcing. However, there’s now a growing demand for transparent communication with outsourcing companies. Companies are handing over cybersecurity to MSPs as they’re more likely to have cybersecurity experts and advanced solutions. The demand for MSPs is so high that it was worth $152.02 billion in 2020 and will grow to $274 billion by 2026, as per Statista. This market will expand at a compound annual growth rate (CAGR) of 38.2% from 2022 to 2030.

When teamed with your in-house employees, these digital workers have been shown to streamline operations, reduce TAT, eliminate human errors, and enhance process compliance. To avoid such a scenario in the future, companies today are actively seeking solutions to upgrade their technologies and fast-track their digital transformation. Statistics for the 2023 IT Outsourcing market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. IT Outsourcing analysis includes a market forecast outlook to 2028 and historical overview. Outsourcing has been empowering companies to get more tasks completed at a lower cost since the 1980s. However, the way businesses got their work done then, (with fewer technologies and less to no internet), is very different from how companies outsource today.

Information Technology Outsourcing Trend #3: Greater Demand for Cloud Services

The increase in IT spending will be accompanied by an increase in the use of outsourcing services. Along with the expectation of partnership when it comes to long-term goals, integrating processes is now a requirement as well. The latest Information Technology Outsourcing Trends in vertical integration means that one department will manage everything, which is why an MSP is such a good option. From Tech Consulting, End-to-End Product Development to IT Outsourcing Services!

Artificial intelligence will become progressively more important in e-commerce. From Chatbots to bespoke shopping suggestions, AI will become more widespread in E-Commerce and software development. As a corollary, customer support representatives can focus on more complex issues.

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Thus, these countries will emerge even stronger in the post-pandemic normal. Take the case of Ukraine—presently it has over 166,000 software developers and the number is expected to increase to 250,000 by the end of 2020. No wonder we will see the country rising as a bigger competitor for India, China, and other leading countries.

Also, if you need more qualified specialists than in your region, you can consider outsourcing to the area famous for the most experienced developers. AI-powered systems can do all these, also more than these with great results in the real-world. This might astonish you, AI is not a technology introduced today or yesterday, it’s been there since 1956. But, you might have a question like – how is it going to work for the digital transformation of my business?

Special focus: Indian IT services market

But as this requires more capital and technological capabilities on the firm’s end, transitioning back to insourcing is losing significance. This is an approach where companies hire an external team that acts as their internal team and the two parties work in collaboration. Both the internal and external teams work together, side-by-side to create value. Together, they share the risks, face issues, and come up with quick solutions.

  • In the organization of work, it is imperative to adhere to specific rules and roles.
  • Rather than risking whole business lines with a single service provider, smaller value and shorter transactions allow customers to spread operational risk and develop new relationships.
  • Operating in China still remains complex and we advise clients to invest enough time up-front to make these ventures work.
  • As the question of business continuity looms over all businesses, in the coming times, businesses would form new recovery plans to combat such disastrous situations.
  • Moreover, outsourcing enables companies to offer their clients customized solutions.
  • Best practice standards like ISO and ITIL have been around long enough to prove their effectiveness.

Outsourcers use VPN, SSL, and multi-factor authentication tools to secure their clients’ data. 2023 will likely please us with new technology outsourcing trends related to protection against cyber attacks, as the industry promises to develop rapidly. The cybersecurity market worldwide will grow by $355.44 billion by 2030 compared to 2020. One report by Grand View Research found that the global BPO (business process outsourcing) market reached a value of $261.9 billion in 2022. BPO is an aggregate term that refers to outsourcing a large variety of business functions, operations, and responsibilities to external service providers. A study by Gartner found that businesses spending on cloud services went up to 6.3% in 2020.

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To sustain in the market and retain their clients, companies are developing advanced technologies to play on the competitive edge, thereby intensifying the competitive rivalry in the market. The outsourcing industry is undergoing a digitally disruptive change in 2020. The technologies that are now erupting in the digital ecosystem will seep deep within and influence the majority of outsourcing operations. As businesses are faced with an unprecedented situation, managing offshore teams could be a challenge. With the majority of the employees moving their workstations home, there has been a confluence around the security of projects and setting up VPNs.

technology outsourcing trends

In fact, many of the Indian-origin service providers now have delivery centres in all the key geographies. This has helped them win more deals from the Tier 1 service providers and to move beyond their typical strengths in applications development and maintenance (ADM). Customers feel that it is not realistic for one service provider to be good at everything, and concentrating on best-of-breed is more likely to deliver value. This strategy comes with a cost because customers now need to spend more time and money managing their various service providers.

Contact CSM to Find Out if Information Technology Outsourcing Makes Sense for Your Business

Because qualified personnel would be working for the company, it would benefit both the firm and the outsourcing company. A firm with professionals in multiple different sectors could give high-quality services to corporations. The evolution in the development and use of AI in computing is built on machine learning. AI can now be trained to predict success using old data and give suggestions on how to improve processes. Cloud-based advancements will enable teams to have the tools to remain productive. As more workforces shift into a remote setup, this technology will help businesses collaborate better.

technology outsourcing trends

No matter what industry you’re in, it’s important to stay up-to-date on the latest trends and technologies. As more businesses realize this potential, we expect that demand for blockchain outsourcing will grow. Software outsourcing resulted in lower prices, more access to qualified workers, and a reduction in manpower. Companies these days consider more than simply price when selecting a software outsourcing partner, as talent in many places is on the rise.

IT Outsourcing Market Analysis

One best option to satisfy your customers is through implementing the trending technologies in your business. Many businesses fail as they outsource vendors without it outsourcing trends considering their requirements. The aftermath of the COVID-19 has ideally taught us the perks in gearing up the wheels on the roads of digital transformation.