IT projects are very complex undertakings. Not every business has the right elements to go through with it successfully. These businesses can opt for IT outsourcing to gain a competitive edge and grow in the market. It is a business model where you hire professionals from a global talent pool to work on your IT projects.
In addition to access to specialized skills, there are many benefits of outsourcing your IT project including improved efficiency, reduced costs, focus on your core competencies, and more.
The timing can never be more right to adopt this approach as IT outsourcing is expected to undergo some major upgrades thanks to the advent of innovative technologies such as AI, cybersecurity, cloud computing, automation, data privacy, and so on.
These trending technologies provide new opportunities to clients as well as service providers. This article discusses some of the major IT outsourcing trends of 2024 and how they are shaping the future of the industry.
1. Recent IT Outsourcing Statistics
- 66% of US companies use outsourcing for some business IT operations.
- Technavio predicts that between 2020 and 2024, the global IT outsourcing industry will expand at a CAGR of 98 billion USD.
- In the United States, 3 Lacs jobs are outsourced annually.
- To increase productivity, 24% of SMBs outsource their IT needs.
- Because it lowers the expenses of employing in-house people, outsourcing is considered cost-effective by 70% of organizations. If cutting operational costs & labor costs is one of your business objectives for 2024, then global IT outsourcing may be the way to go.
- Out of the entire foreign income of $92.5 billion generated by the global outsourcing company, $62 billion comes from the US market.
- With 37% of IT activities outsourced and a mean budget of 13.6% devoted to outsourcing, IT is the most outsourced sector and industrial work.
- Nearly 81% of businesses that use outsourcing services view their outsourcing providers in a good light.
- The outsourcing sector is projected to see a 4% compound annual growth rate from 2021 to 2025.
- In the wake of the epidemic, 45% of companies said they would increase their outsourcing actions, with many emphasizing finding specialized skill sets that their employees lack.
- Since the cloud enables teams to interact with more distant specialists, 90% of firms would be able to take advantage of new outsourcing options.
- Business process outsourcing is projected to surpass a value of $620 billion by 2032, provided that companies maintain their current level of contractor collaboration.
2. Top IT Outsourcing Trends
Before you choose IT service providers, here are some of the top IT outsourcing trends to consider.
2.1 Data-Driven Customer Service
Customer service is just another part of a data-driven society. Companies that want to impress their customers are increasingly using data-driven customer service. Organizations can predict customer preferences and requirements, provide more personalized suggestions, and enhance the quality of interactions by evaluating consumer data.
Outsourcing allows companies that focus on data-driven customer care to collect, evaluate, and use client insights to give outstanding service. Maximizing operating expenses while simultaneously increasing customer pleasure and loyalty is the end outcome.
The future of customer service needs a new model of operational excellence
— Vala Afshar (@ValaAfshar) October 9, 2018
1. Customer centricity
2. Outcome-first
3. Data-driven
4. Automation-focused
5. Ecosystem based https://t.co/KdnaA6PhPO pic.twitter.com/2Go32sDDWy
2.2 Cloud Computing & Cloud Platforms
When speaking about IT outsourcing trends, we cannot leave cloud computing behind. Among all the innovations, PaaS, SaaS, and IaaS markets cannot be ignored. Of course, combining software development and cloud computing might seem a pretty demanding and costly procedure initially but later on, you will feel relaxed when this strengthens business continuity in the long run.
What is possible by using Cloud computing? Right from high-end data protection to conducting faster data operations, enhancing business processes, and whatnot!
2.3 High Demand For Blockchain Services
Financial information needs high-level data privacy & security with the rising data breach concerns, it is a high priority for businesses to safeguard their financial information. Blockchain technology has disrupted the finance sector by coming to the rescue. However, it will have a comparable impact on other industries, including software & app development outsourcing, in the coming years. There is a spike in the development needs and hence for the developers too. Developers may use blockchain to construct apps that store sensitive data across multiple decentralized computers.
Blockchain also makes it so much easier to derive value from data in the form of business intelligence due to its decentralized nature (BI). We expect the need for blockchain outsourcing to increase as more firms recognize its potential.
2.4 Artificial Intelligence Solutions
We no longer see AI or machine learning only in science fiction films; it is now pervasive in our everyday lives. Using AI has helped around 52% of businesses save money and work more efficiently. For this and other reasons, AI-powered solutions may revolutionize IT outsourcing in 2024.
The ability of technological objects to carry out tasks that used to be performed only by humans is known as artificial intelligence. There will be a growing demand for niche businesses that can develop and deploy AI solutions as the technology develops.
2.5 Cybersecurity
Businesses are placing importance on strong data security measures in response to the increasing number and complexity of cyber attacks. Protecting sensitive information and staying in compliance with regulations will be the major emphasis of IT outsourcing companies. Their complete security solutions will include identifying security risks, data encryption, and handling incidents.
Ruth Porat (CFO of Google) speaks on the importance of cybersecurity and misinformation in the age of AI. pic.twitter.com/g5KjhZyN72
— Rowan Cheung (@rowancheung) January 17, 2024
2.6 Remote Work
The post-pandemic has brought a change in the way we work. Remote working was never in the picture until before but then this is the new norm now. Everyone is now aware of the fact that working from a location other than the office is referred to as “remote work.” It can be done on a regular or temporary basis, and it frequently entails communicating with coworkers and clients using technology.
As more individuals learn about the advantages of remote work, it is becoming increasingly popular. Remote working offers multiple benefits such as cost savings, enhanced flexibility, increased productivity, and improved work-life balance just a few of the benefits.
Without a doubt, the number of people looking for remote jobs will continue to climb, and more firms will offer these positions. As a result, outsourcing companies will have to hire more people to keep up with the demand.
2.7 Strategic Partnerships Finding
Development irrespective of its type is always a team effort. There is no I or me, it’s always considered as we or us. Therefore when you happen to work with so many people all at once it is advisable to have a solid rapport and collaboration to create a partnership that lasts for the long haul.
Now partnerships don’t happen just like that, one has to strategize immensely and lead a proactive role and it’s better if you are the one to do so. But the question is how? To begin with, you can try conducting effective communication. Since it’s a two-way street just ensure that both businesses, as well as outsourcing partners, stay in touch now and then. Fortunately, we have a plethora of tools around to aid for example skype, WhatsApp, Google Meet, Zoom, Facetime, and whatnot! Also, try having scheduled bi-weekly or monthly meetups. Here you won’t just get to know the progress of the project but also can discuss the emerging trends and changes required to be done in the following project.
The next aspect to consider is not to be rigid. The world of software development is changing every second and so should you. Try to be as flexible as you can whatever decision you make just ensure that it’s for the betterment of the project. Above all, trust your tech partner. Yes, they are here for a reason so trust them they exactly know how to get things done right.
2.8 Rise of E-commerce & Automation
As online businesses undergo technological transformation, online buying will continue to become even more comfortable. To save both energy and time, many businesses are already automating routine tasks.
Consequently, automating procedures within IT outsourcing services is becoming more popular.
Chatbots are one option; they can handle purchases sent via social media and answer simple customer care questions. Additionally, chatbots can monitor stock levels and sales by integrating with other systems.
2.9 Cryptocurrency Payment Integration
The number of people who hold cryptocurrencies exceeds 300 million. Because of this, there is a pressing need to upgrade existing payment systems and add new ones, such as the ability to accept cryptocurrencies.
Cryptocurrency payment integration is essential in many industries beyond IT, including the legal sector, the food industry, and the gaming industry. Some firms, like KFC, Tesla, and Steam, have integrated the option to pay with blockchain in the last decade.
When compared to their competitors, businesses that use cryptocurrencies in their operations have more room to expand. Among the many advantages of this change, including an enhanced user experience, are, security, faster transactions, and accessibility.
3. Conclusion
So this is it! That’s everything you should know about IT outsourcing. The future of the IT industry is extremely bright. All outsourcing services needed must consider best practices so that they can stay in the league for the long run. So that’s all for now! In case, if you have any doubts or queries, feel free to mention that in the comment section below.
Pandemic has given rise to several progressive trends. By studying these trends we can develop successful business plans. Reading these trends can help you handle uncertainties in your business. We can see that the pandemic has given rise to remote work. Now companies are adopting these hybrid working models.
This article explained very comprehensively all these trends. There are some trends missing in this article. I think augmented and virtual reality will also impact the upcoming future. AR and VR will impact eCommerce and other sectors. The 5G network will also cause mass disruption in the future.
This Article predicted trends which are now very visible. It also elaborated about these trends in a very efficient manner. I enjoyed reading this article. This article can be also very engaging if it includes how these trends are affecting or will affect our lives.
As we can see, outsourcing is advancing beyond the traditional workplace culture. Some of these trends have already been adopted by firms, but others will only gradually catch on over the coming years. But in order to take advantage of these developments in IT outsourcing, you'll need a reliable, efficient, and skilled outsourcing IT partner.