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IT Outsourcing Trends: Be the First to Use Next Gen of Outsourcing Benefits
11 min.

Information Technology outsourcing trends are on the rise! According to Statista, by 2027 IT Outsourcing revenue will reach 145.7 Billion dollars! That’s a lot of money, right? Now that I have got your attention, let’s clear one thing. What is Outsourcing? 

Outsourcing is – a business practice in which a company hires a third party to perform tasks, handle operations or provide services for the company

Enterprises like IBM, NEC, Microsoft, HP, etc are all relying on outsourcing and are considered some of the key players according to IT outsourcing statistics. Procoders has collected detailed information on every hot outsourcing trend for 2023 for you including all the key technologies!

it outsourcing trends

Why do Companies Outsource?

Well, the answer is quite simple, Outsourcing is cost-effective! With outsourcing companies, start-ups can hire technical experts even if they lack the technical knowledge themselves and the icing on the cake is that it saves you a lot of time because usually, these outsourcing  providers have developers waiting for a project to hop on! 

Covid Impact!

During the pandemic, due to social distancing remote work was preferred and people generally became more open to the idea of outsourcing, because it did not matter if an employee was located 10 miles from where you are or 1,000 miles as long as the productivity is increasing! Still, according to the statistics, there was a small drop in 2020 in the revenue generated, which is most likely because everyone was still figuring out how their business process would function! 

Top 5 IT Outsourcing Trends for 2022/23

While outsourcing services are on the rise, there are still a couple of things to consider and find out why and how it might be good for your organization.

For example, the expertise of the outsourced teams can quickly and positively impact your product or with the help of outsourcing, you can also implement emerging technologies first and reap the benefits before anybody else does.

Here at ProCoders, we have the privilege of working with many wonderful people with different requirements and have first-hand experience in working with these trends! Hence, we are going to look into the top IT outsourcing trends 2022 and the future! 

1. Cloud Services

Businesses use cloud computing to outsource the management and storage of their data, applications, and other IT tasks. In order to work efficiently with teams around the world and exchange and modify information in real-time. This results in cost reduction and improved efficiency.

The main cloud-based services used are: 

  • Software as a Service (SaaS): Instead of installing software, a cloud provider hosts them and makes them accessible to end users over the internet.
  • Platform as a Service (PaaS): Businesses use them to create, administer, and operate their own apps without having to develop and maintain the platform or infrastructure.
  • Infrastructure as a Service (IaaS): Another one of the current IT infrastructure outsourcing trends, It is a pay-as-you-go service where a third party offers you cloud-based, internet-based infrastructure services as you require them, including storage and virtualization but the operating system, any data, programmes, etc are your responsibility as the user.

2. CyberSecurity

As Cyber attacks increase in frequency, high-level data security will be one of the most important topics in the coming years and there will be a considerable need for outsourcing companies that can provide cybersecurity services. 

Despite the fact that many cloud service providers do have security solutions, these are frequently insufficient for establishing enterprise-grade security. Additional third-party solutions are usually required to defend against data breaches and targeted attacks.

3. Artificial Intelligence (AI)

One of the top global IT outsourcing trends, AI refers to machines or systems that can accomplish tasks and can improve themselves depending on the data they gather by mimicking human intelligence. AI can appear in a variety of ways. Some examples are:

  • On the basis of users’ viewing patterns, recommendation engines can automatically suggest TV shows to them.
  • Chatbots use AI to understand consumer issues more quickly and offer more effective solutions.

According to Statista, in 2019 a percentage of every industry has been using AI technology in their businesses in the Asia Pacific region with the numbers set to increase with their 2022 predictions.

information technology uses

As AI technology becomes popular, the outsourcing market has taken notice and there is a growth in the number of companies providing such services.

4. Machine Learning Automation

The machine learning market is expected to grow from USD 1.03 Billion in 2016 to USD 8.81 Billion by 2022 making it one of the top it outsourcing industry trends. Machine Learning Automation is a form of AI, it focuses on using data and algorithms to mimic how people learn, thereby increasing its accuracy.

Recently machine learning is becoming one of the hottest IT services outsourcing trends because the demand for talent in this field is increasing and rather than hiring these experts in-house for huge costs outsourcing saves everyone a chunk of their budget while getting the best service by competent software development companies. 

5. WEB 3.0: ​​The Metaverse, Blockchain Services

Developers can create applications using blockchain technology that safely store data across multiple decentralized computers. While the most recent Internet technology, known as Web 3.0, uses blockchain, artificial intelligence, and machine learning to enable real-world human contact. Whereas, in the metaverse, people move through a virtual environment that closely resembles the actual world utilizing technology like virtual reality (VR).

Blockchain Services will be the biggest IT outsourcing future trends because the idea of a decentralized web is appreciated by everyone and this digital transformation will become of the key assets in the business world where majority of the businesses will switch to blockchains and the demand for competent software vendors. We make sure that we are up-to-date with this and that our clients do not miss out on anything!

How the Cooperation Models are Evolving?

If you thought right now is the time to weigh the benefits and risks of outsourcing software developers then you should give the article inserted a read, it goes into the advantages and disadvantages in detail while here we simply stick to the current trends in IT outsourcing. So let’s take a loot at how these cooperation models are changing

Engagement Models

There are a couple of engagement models out there which are currently in use

  • Fixed Price Model: a business partnership with a pre-set price. A fixed fee will be charged despite the time and money spent on the project. Even though the fixed priced model has been around since forever but here at ProCoders, we explain to our clients that there is no flexibility with this model and you might end up overspending still
  • Time and Materials Model: Businesses just need to pay for the materials and time used during the development process. This is one of the oldest and most established techniques for developing software. ProCoders likes this model and it can really help out when someone has a short-term requirement. It is indeed one of the ​​top it outsourcing trends
  • Dedicated Team Model: The client gives their outsourcing partner a set of duties. Numerous skilled developers are frequently available at outsourcing companies and ready to join a project. The vendor selects a development team based on the specifications provided by the client. Typically, the client is billed on an hourly basis. That is why we believe that this is the best model out there because you have complete control over every single thing that goes on! 
Find Out, Which Model Fits Your Project Best!

Payments

There used to be a time when bank transfers were the only option people had when making payments to their outsourcing partners, we have come a long way since then. 

Now there is a list of options to chose from, some projects are charged by the hour, some come with a fixed fee, it is all down to the client and their outsourcing partners. 

In terms of making payments, they can be made on the blockchain using cryptocurrency itself, apart from that we have got lightning fast transfers with platforms like PayPal, Payoneer, Wise, etc.

NDAs

One of the most important thing is an NDA (non-disclosure agreement) when outsourcing because your million dollar idea and the way you work will definitely be shared with your outsourcing partner, if you have an NDA signed by both the parties this pretty much means that your ideas are safe. Nowadays, NDAs are one of the initial requirements when outsourcing, this wasn’t the case back in the days. We love NDAs, really, they make our clients feel more secure and we feel more comfortable in asking the details in terms of their requirements so we can serve them better!

Outsourcing Teams Contribution Benefits 

Since there is such a huge demand for developers, locals are quickly hired, so if you live in the US or the UK, it may take you several months to find an expert. In the previous few years, things have only gotten worse. Therefore, an increasing number of businesses are turning to the foreign market in order to find high-quality staff.

Furthermore, suppose you have an idea but lack the technical knowledge to implement it; in this case, your outsourced team would assist you because they will have the necessary expertise in bringing your idea to life! 

Industrial Expertise’ Level

Due to the abundance of outsourcing firms and the substantial supply on the market, businesses start to compete with one another and buyers are being spoiled with customer-centric outsourcing companies with extensive experience in the industry the client is a part of, consequently, technical decisions that are based on this frequently prove to be successful.

Why Business Should Adopt IT Outsourcing Industry Trends to Leave the Competitors Behind?

IT departments outsourcing trends are on the rise, organizations are outsourcing all around the world, from Eastern Europe to India and all the way to South America! It saves them time, reduces costs, provides professionals with experience in their field. On top of that you do not even need to have the technical knowledge required to run a team. So, the question here is, why shouldn’t you Outsource?

What Can the Business Lose if it doesn’t Use Outsourcing to Implement Emerging Technologies?

You know the answer to this, they will be left behind by their competitors, because if you are not ready to evolve, most probably you will be working with technologies that are outdated and that is going to end up costing you your business! 

bad news

Benefits You’ ll Bring to Business with Outsourcing Engagement Model

Some of the benefits have been mentioned above but lets try to cover the main advantages of Outsourcing:

  • Cost reduction
  • Saves time 
  • Helps you get expert opinion
  • Opportunity to work with people experienced in your industry 
  • You do not have to provide a workplace 
  • Technical Knowledge not required

Start to Implement the Best Outsourcing Trends for Your Company with ProCoders

A lot of people wonder, how does Outsourcing start, what are the steps needed, how does it work? Well, I am going to walk you through the steps of how it works with us here at ProCoders and if you are interested in the increasing trends and our help with mobile development, please check out outsource mobile app development

NDA

There is always a chance that confidential information may end up in the hands of someone we wouldn’t want to know about our business plans, ideas, etc. So, the first thing we do is sign an NDA (Non-disclosure agreement) to ensure that everyone participating is legally obligated to never share any sensitive information with anyone unless they are working on the project!

We take this extremely seriously because many of our clients approach us with what they consider to be their “million dollar idea,” and we want to make sure that ProCoders is a name they can rely on.

Discovery Phase 

We go back to the drawing board and develop a strategy after we have a better understanding of your ideas and requirements. We estimate the required time and develop a timeline for your project’s development. Typically, we have experts in our pool ready to begin working on a project.

Start your Discovery Phase with ProCoders Today!
Get Started!

Team Selection

During this step, we have to determine the number of developers you would need for the project and who will be working on your project based on the engagement model. If the developers are in our pool and prepared to work, it takes less than 5 days to start the process, which is something we make sure of here at ProCoders. It is our responsibility to hire top specialists with all the necessary tech skills, if we don’t already have such experts on hand.

All of our developers go through a thorough hiring process in which we focus heavily on both their technical and soft skills as well as their English proficiency.

Interview with the Client

No matter what the engagement model of outsourcing would be, we always prefer that our clients are at ease and kept in the loop, that is why after selecting the team, we give the client a chance to interview all the personnel. So they can decide if these are the people they want working on their product! 

FAQ
What are future trends in outsourcing?

There are a lot of trends out there to talk about but the main things that we can put are focus on are the use of agile, with numerous engagement models, like dedicated teams and etc. On top of that we are looking at dedicated R-n-D centres as well!

 

Some top IT outsourcing trends according to the technologies for the future are: 

  1. Cloud Services
  2. CyberSecurity
  3. AI (Artificial Intelligence)
  4. MLA (Machine Learning Automation)
  5. Web 3.0
Is IT outsourcing dead?

IT outsourcing is certainly not dead, quite the opposite actually, IT outsourcing is on the rise and Statista predicts that by 2027, IT Outsourcing income will total 145.7 billion dollars. This certainly gives us an idea that outsourcing is doing quite well. The reason for that being less responsibility is on the shoulders of the project owner as the outsourcing partner helps with the development, delivery and maintenance of their product. 

On top of that, IT outsourcing is a way to save time and resources, so if you do end up outsourcing, it will be a win-win situation for you and your vendor.

Is outsourcing a global trend?

It certainly is! About 48% of businesses in the UK outsource business operations. It doesnt stop there. By 2022, the worldwide outsourcing market is expected to surpass $10 trillion, according to Deloitte and businesses will continue to use cloud computing, which is predicted to reach a staggering $760 billion by 2027, as part of their IT outsourcing initiatives. This does tell us that Outsourcing is a global trend.

Conclusion

Hiring In-house is so last year! Outsourcing is the future and it is here to stay. There might be some people worried about the disadvantages but a thorough research shows that the advantages of Outsourcing outweigh the disadvantages. You have to keep up with the top IT outsourcing trends in order to stay relevant because the digital world is transforming quickly and Outsourcing itself is the biggest trend for the future.

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