The future of IT outsourcing is a topic that is relevant and interesting not only for IT vendors but also for the global business community. Mostly because IT projects outsourcing has proven to be one of the most efficient yet cost-effective cooperation models when it comes to high-tech software implementation. So no wonder both entrepreneurs and IT experts want to know what the future holds for them and what are the possible opportunities and challenges they should prepare themselves for.
All of the things listed above will be the topic of this article. We’ve thoroughly analyzed a multitude of online resources to construct a well-rounded picture of what the future of IT outsourcing might look like. Let’s dive right into it!
Which trends will be prevalent in the future of IT outsourcing?
Contrary to popular belief, outsourcing IT-related tasks is not just for small businesses with limited resources or for startups. Many global corporations like Google, Amazon, and Shell also benefit from it. Indeed, 65% of businesses utilizing outsourcing indicate that it allows them to focus more on their primary tasks, consequently improving their overall performance. This means that all of the hottest global IT trends equally apply to all of the market players regardless of their size, profitability, or brand power. This fact allows us to predict which direction technological development is most likely to take during the next years.
1. AI/ML- Future Of IT Outsourcing
The growing importance of artificial intelligence and machine learning for present-day software development has been discussed for several years now. AI/ML has been regularly topping the lists of IT trends since 2020. But only now, in 2023, has it become truly popular and widely used. Statistic proves that.
Smart assistants, AI-powered design tools, content-creating solutions, multifunctional bots that can answer literally any request, from constructing a personalized workout to inspecting the quality of the code written by a developer… AI/ML-driven software development is the future of IT outsourcing, there’s no doubt about that.
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2. All-inclusive service
It is not uncommon for businesses to use outsourcing as an additional tool in a well-established IT arsenal. This means that many companies actively cooperate with different IT vendors but choose to outsource only specific tasks or certain parts of the project. However, this tendency is expected to change in the future of IT outsourcing as the popularity of this cooperation model, as well as the number of investments in it, will be growing rapidly.
In 2023 and beyond, businesses will begin to understand that trusting the right outsourcing provider is not risky or burdening, on the contrary, it allows the team members to focus on business-related aspects, forge stronger relationships with the audience, pay more attention to marketing while technical tasks are outsourced to a qualified vendor.
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3. Long-term cooperation- Future Of IT Outsourcing
This trend isn’t particularly new. Many businesses that have already reaped the benefits of well-established outsourcing cooperation know that finding a provider that caters to your needs and does it while offering affordable rates is like striking gold. Such business relations last for many years as no entity is interested in jumping from one vendor to another, having to set up processes time and time again.
Ergo, the experts foresee the growing importance of lasting cooperation in the future of IT outsourcing. The array of perks this trend is capable of bringing is truly impressive. Think about growing operation efficiency, reduced delivery time, easier maintenance, saving costs, and more!
4. Blockchain and Web3
Another technological trend that can’t be overlooked when it comes to the future of IT outsourcing is Blockchain-based software and Web3 development. In 2023 decentralized Internet isn’t really a thing yet rather a promising concept. However, teams that have experience developing Blockchain-powered software, smart contracts, and Web3 software are in demand, and many companies turn to outsourcing to find a proficient contractor that can get the job done. And in the future, this tendency will remain dominant.
Which challenges may outsourcing face in days to come?
While outsourcing is much appreciated by entrepreneurs all over the world, the industry still has its problems and obstacles that will have to be resolved. Some of the most common issues that we might face in the future of IT outsourcing will be listed in this section.
1. Talent shortage- Future Of IT Outsourcing
Since the very beginning, outsourcing practices have been aimed at helping businesses fight talent shortages and access qualified experts that work with cutting-edge technology. Yet still, the problem with the small IT talent pool hasn’t been resolved completely and probably won’t be resolved in the nearest future.
The thing is, the IT industry develops rather quickly. Every year we see a myriad of new technology emerging and getting popular. It’s hard for tech professionals to keep up with that pace and master all of the new tools while still working on existing projects. So there’s no wonder that businesses virtually fight for the best IT talents.
2. Fierce competition among outsourcing destinations
Certain territories have already earned the reputation of “outsourcing paradise.” India, China, the Philippines, and some other countries are popular among businesses of all levels because they offer relatively low rates and quick turnaround times. But if we’re talking about the future of IT outsourcing and are making predictions, it’s safe to say that Easter Europe and Latin America will become the main competitors of Asian countries very soon.
And while this is great for the customers as they will have a greater selection and lower software development prices, IT vendors will have to become more inventive to attract new clients.
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3. Data security risks- Future Of IT Outsourcing
In the modern age, information is the equivalent of gold. And outsourcing essentially means trusting your trade secret to a service provider you don’t really know. The future of IT outsourcing may hold stricter regulations, but it will still differ depending on the country. Consequently, business owners will have to be very careful during IT vendors’ screening and selection process and protect sensitive information with relevant legal documents.
Entrepreneurs have to face similar challenges now, but as hackers get more inventive and cyberattacks become more dangerous, data protection will have to become a priority.
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Business opportunities IT outsourcing is ready to offer
Whether we’re discussing the present day or the future of IT outsourcing, this method of workflow organization helps businesses become more effective, competitive, and successful. How exactly? Here are just a few of the major benefits outsourcing is known and appreciated for among business community members:
- Ability to outsource either the whole project or a specific task
- Several approaches to select from (dedicated team formation, time and materials, and fixed-price development)
- Lower software development costs
- Faster time-to-market
- Ability to make changes on the go and test out different hypotheses by building MVPs first
- Maximum flexibility when it comes to the staff (ability to easily scale the project up or down depending on the current business needs)
- Access to professionals who already have experience with advanced technology
- More time to focus on business activities that are not related to the company’s IT needs
Conclusion on the Future Of IT Outsourcing
Keep in mind that this list of business advantages is not complete, and each entrepreneur will have their own reasons for opting for outsourcing. In fact, it only proves that the IT outsourcing niche will not fade away in the future and will continue to provide businesses with an easy and convenient way to take care of their tech-related business needs.
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