If you find yourself at either end of the outsourcing tunnel, you already know the importance of the trends in the industry. Digital and business transformations, along with a country’s economy, could have direct implications on your company’s performance. Take a look at the predicted outsourcing trends for 2020 that can give you valuable insight into devising marketing strategies to your benefit.
What do companies expect from outsourcing providers in 2020? Will access to technology have an adverse effect on the industry? Are companies willing to up skill their in-house staff with product management training courses, or will they step-up their collaborations with offshore service providers?
The IT outsourcing industry is one that has direct implications with the evolving technology. If you are a small business owner, even the minor shifts could impact your firm substantially. You might need to upgrade your in-house staff or rely on the excellent offshore software development company Ukraine has. Whatever you choose, it has to be an informed decision, based on the current trends of the industry.
2020 seems to be welcoming a new wave of outsourcing strategies. Read on to find what the year has in store for you.
Different Motivations
A survey conducted in 2019 observed that 59% of companies opt for outsourcing software services for cost-saving. However, today, it is not merely the money factor that encourages organizations to delegate tasks outside their in-house workforce. 47% of business owners agree that outsourcing can solve capacity issues, while for 28%, it is about addressing a critical business need.
The reasons vary, from being able to access talent capital, managing work environments to speeding up the workflow. The customer-centric approach has resulted in companies discovering the diverse capabilities of outsourcing than controlling the expenses alone.
Growth of Cloud-Computing
Deloitte’s latest Global Outsourcing Survey points out that 93% of organizations are preparing to adopt cloud solutions. It is no longer possible to stick to traditional data storage methods, whether or not you intend to outsource. This major transformation will bring several positive impacts to the outsourcing industry.
Gartner suggests that technology provides should view this shift to cloud migration as a market opportunity. By 2022, over 1.3 trillion USD in the IT sector would be affected by the cloud. 29% of this share is into business process outsourcing. SMBs should assess these growth rates and use it to their advantage. Cloud computing could be the biggest motivation to hire an outsource development company and for businesses to embrace outsourcing.
AI and RPA-powered Services
Artificial Intelligence and Robotic Process Automation are two other technological advancements that would significantly affect the future of IT. 72% of business owners want to make a switch to RPA solutions along with cloud computing. Both AI and RPA can perform the functions of humans, at times, with more accuracy. For instance, automated and AI-powered chatbots are already replacing human customer support to a large extent. Reports show that 70% of Millennials prefer to interact with chatbots over humans for their customer queries.
With enhanced automation, increased security and control, AI and RPA combined could substitute humans in many tasks that are often delegated to offshore providers. This is likely to reduce the type of services purchased from outsourcing vendors. On the brighter side, this would mean that the workload would be managed more efficiently and can bring more value to the actual human interaction.
Strategic Collaborations
Building trust and productivity with a remote team is not an easy task. Beyond product management certification and credentials, companies are more focused on finding a reliable vendor to build long term partner relationships.
This strategy to include vendors for project innovations will blur the lines between outsourcing core and non-core tasks. Offshore teams would work closer than ever with clients’ organizations, essentially as a team extension. This means outsourcing vendors would be expected to provide tailored solutions to every client and would be handling more responsibilities.
Improved Contracts
The new technologies and market shifts are also expected to bring changes in contracts in favor of the clients. Companies are looking for partners who can adapt to their business ethics quickly. Vendors would be required to deliver teams that are flexible, ready to upskill, attend product management courses, and integrate with the in-house team promptly.
Contracts would be result-based emphasizing outcomes and partnerships. The parameters might vary depending on the quality of results and in terms of performance levels. Nevertheless, companies today are more development-oriented than merely being driven by cost-cutting. Clients are becoming increasingly eager to appreciate professional skills and bring on-board teams from an offshore software development company that result in more significant benefits for both parties.
More Competing Countries and Platforms
China will continue their dominance in the sector for outsourcing software development projects. However, according to recent reports, countries in Eastern Europe are rising as strong candidates for the talent pool. According to reports, the market of offshore software development Ukraine has would be worth 5.7 billion USD in 2020. Countries such as Poland, Ukraine, Romania, Hungary, and Bulgaria are also presenting formidable competition as excellent choices hire dedicated software developers.
Organizations are also motivated to look into multicultural outsourcing based on the political stability of the countries they buy services from, be it near-shore or offshore. Global crises such as pandemics are affecting global businesses, including the export of outsourcing from the affected countries. Instead of depending only on one contract, companies would first identify potential risks from each place and then devise arrangements with a focus on contingency plans.
How can SMBs Prepare?
Small Business Clients are growing in numbers each year. Outsourcing is the best approach for such organizations to access the most competitive technology without having to invest a significant amount over hiring dedicated programmers.
Keeping a tab of the trends will allow business owners to deepen their understanding of outsourcing. What companies seek is a trusted partner, one that offers innovative solutions and can move swiftly with the new developments in the IT field.
