More and more firms choose to outsource their IT operations and functions. IT outsourcing grows each year. The Gartner report announced that firms spent $3.8 billion dollars on IT outsourcing in 2019. They expect that the trend will continue. Companies aiming for digital transformation need partners and tools. They need tools that they cannot build in-house with speed and accuracy.
New innovations in IT inspire firms to transform the way they work. Digital transformation leads to more revenue. Digital transformation gives employees more time to do their best work. Automation builds systems where customer service agents have time to help their customers. They don’t have to spend their time on slow manual processes and inefficient ways of working.
Most of the time, these tools prove far too expensive to develop in-house. A firm that wants to automate some of their processes doesn’t need to hire a team of full-time employees. To create their marketing automation tools they can outsource. With outsourcing, they save money and start using their new tools sooner.
Outsourcing is here to stay.
What is the future of IT outsourcing?
Before the COVID-9 pandemic, many firms required their employees to work in the office. They relied more on in-house employees. During the crisis caused by the pandemic, firms realized the power of remote work and outsourcing. The flexibility of outsourcing helped firms to keep costs low and scale their projects.
COVID-19 caught us by surprise. At first, most activities came to a complete stop. Restaurants, movie theaters, and all travel and tourism disappeared over night. Most sectors recovered or even flourished after the pandemic subsided. IT services at first faced a decline as well.
That dip in IT spend didn’t last though. Companies might not invest heavily in massive IT projects, but they will still invest in IT outsourcing. Gartner reports that, “CIOs will gravitate toward spending on subscription products and cloud services to lower upfront costs. Infrastructure-as-a-service (IaaS) is expected to grow 13.4% to $50.4 billion in 2020 and 27.6% to $64.3 billion in 2021.”
The pandemic reinforced the need for strong IT outsourcing partners. Good relationships with outsourced teams allow companies to quickly respond to abrupt and drastic change. Many plan to use outsourcing partners even more in the future. They know they work well with teams that may not share the same location, or even the same continent. Diverse global teams are the future.
We learned many lessons in the aftermath of the COVID-19 pandemic. Digital transformation will keep us ready for emergencies. If we must social distance, isolate at home, then remote engagement becomes not a “nice to have,” but essential. IT partners that help companies digitize will provide us with future-proof solutions.
Read also: Outsource web development in 2021 and beyond
What are the upcoming trends in outsourcing?
1. Global IT spending will increase
Global IT spending will increase. Many experts agree that global IT spending will grow by 4% in 2021 and even more in 2022. The increase in IT spending will happen hand-in-hand with an increase in outsourcing. According to IDC, IT industry spending should grow by 4.2% by 2021 with total revenues of $5 trillion dollars.
2. Remote work expands
Remote working will grow and expand to more sectors. Companies must create new ways of organizing workflows. Many teams have seen increases in productivity as a result of remote work over the COVID-19 pandemic. Companies must adapt to this new normal and embrace the change.
3. Python will gain popularity
4. Cloud services will grow
Cloud services will continue to expand. Many firms find that the monthly payments and low overhead make cloud services a great solution. They do not need to worry about investing in expensive hardware upfront, but rather can save their resources to invest elsewhere. Cloud services obviously offer other advantages, helping teams work remotely. Gartner reports that cloud spending has gone up 6.3% more than other IT spending in 2020. In 2021 Gartner predicts that year-on-year growth of cloud services will reach 18%. Companies choose cloud services for their flexibility and scalability.
5. E-commerce sales will grow even more
E-commerce remains the only sector that saw extensive growth during the pandemic. Online sales continue to grow as the pandemic subsides. Statista reports that online sales will represent 22% of all retail sales by 2023.
6. Eastern Europe will claim more of outsourcing market
Eastern Europe will prove even more appealing for outsourcing. Outsourcing firms in CEE report growth of 20-25% year-on-year. Global growth was only 5%. Talent in CEE remains less expensive and highly skilled compared to their counterparts in the west.
7. Full-stack developers in high demand
Full-stack developers remain in high demand. They have knowledge of each part of the application, from the front-end to the databases and underlying technologies. Full-stack developers prove valuable because their wide understanding of applications and development make them agile and flexible.
8. Artificial intelligence will grow in popularity
AI will become an even bigger part of eCommerce. From Chatbots to custom shopping suggestions, we will see many more AI-powered enhancements in eCommerce and elsewhere in software development. This frees customer service agents to focus on personalized support and higher-level problems
Here at Blocshop, we are leading the trends. Our teams produce excellent results, on time and under budget. We pride ourselves on delivering the best results to our clients, both in Europe and further west. If you’d like to learn more about how we can help you make the best of your IT projects, please do get in touch!