In a fast-changing modern business world, companies strive to make the best of their existing capacities and achieve their goals faster. How do they do it you’ll ask? It’s simple – through outsourcing.
The outsourcing ecosystem is evolving rapidly. According to Statista, the global outsourcing market amounted to 85.6 billion dollars in 2018 and reached 92.5 billion dollars in 2019. The market will continue to grow, the analysts say, but growth is not the only thing that will define the future of IT outsourcing. Let’s look at some interesting trends for 2020 and beyond.
More custom-tailored solutions
Outsourcing isn’t exactly something new. For decades, many big businesses used to outsource large parts of their IT tasks to third-party companies. Since then, it’s not only the scope of the contracts that changed, but also the clients and the tasks. Today large/medium businesses, small companies, and startups can find a proposal, designed particularly for their project needs, whether it is a complex full-fledged solution or a small simple prototype. Due to the competition growth and technology advancement, the demand for custom-tailored services will only grow while the tasks will become even more fragmented.
High demand, bigger budgets
The major new challenges today’s businesses face make outsourcing more and more popular. According to Clutch, 37% of small companies already outsource some of their business tasks, and 52% of them planned to do so in the near future. The Computer Economics study reveals that companies are increasing their spending on outsourcing constantly. While in 2018 the companies committed 9.4% of the total IT budget on this purpose, in 2019 this figure rose to 12.7%, which cemented a several-year trend toward increased outsourcing.
AI-specialists are wanted
With artificial intelligence technologies evolving at an incredible pace, AI is used for carrying out business tasks frequently. The growing market competition makes AI an important tool for automating processes that most companies need. AI helps to implement innovative solutions easily and beat the competitors fast. Therefore, finding the right outsourcing partner with specialists in the AI area is the task of particular importance. While the benefits of RPA, such as saving costs, are becoming clear, the demand for qualified RPA engineers is increasing too.
Innovation as the main driver
In the past, the outsourcing market and outsourcing models, in particular, were shaped mainly by the clients’ needs which usually meant access to cheaper costs and more human resources. The companies mostly wanted to delegate some of their tasks to external providers, so they could concentrate on the core tasks. The lower costs and ability to focus are essential, sure, but fast tech integration is way more important. Now it is the technology itself that becomes the driver for the outsourcing development as it forces companies to rethink their operating models, so they can meet the fast-changing customer needs.
Clients are looking for partners
Apart from technology, it is the new customer approach, that is changing the outsourcing landscape dramatically. Companies now are less interested where the provider is based or how much its services cost, but what value it can add to his business. What collaboration models does the outsourcing provider offer? How large its tech stack is? Is the quality up to my business standards? Can they think outside the box and find the solution that meets my business needs best? Those are the questions that companies have when they decide to outsource. The reason they do that is they want not only to fill skill gaps, but to build a business that lasts. Therefore, they are not looking for a service provider anymore, but for a tech partner that will help them to achieve their biggest goals. You may think of it as of a business friendship, I guess.
The basic requirement for the success of any IT outsourcing project lies in the decision-making phase and in the selection of a reliable tech partner. Knowing the latest outsourcing trends may help you make the right choice that will contribute to your company’s success in the long run.
Sandra Parker is the head of BizDev at TestFort.