IT Outsourcing Trends for 2023

We used to wonder why IT outsourcing trends for 2023 have become so popular among businesses! 

But then we realized that with technology enhancement, managing everything independently is a hard nut to crack. Besides, the IT market is more global today, forcing organizations to serve their users locally and globally. 

This is where outsourcing has a crucial role to play. It lets businesses as you focus on the core competencies while leaving other duties to your hired partner. 

Sounds interesting, right?

But, like a coin has its two sides, outsourcing is no exception, and it is continuously growing and offering novel practices. 

We are sure to know you’re curious to know about the latest IT outsourcing trends, software outsourcing trends and tech outsourcing trends. But before that, here is something that will blow your mind!

The ​revenue in IT outsourcing is projected to show a yearly growth rate (CAGR 2021-2026) of 8.93% from 2021. This will result in a market volume of US$551,956.3M by 2026.

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So, without wasting a minute, let us move to the most talked about trends in IT outsourcing for 2022.

1. Cloud Computing Will Become Even More Popular

Cloud computing is a model for delivering information technology services in which resources are provided as a public service over the internet.

Simply put, cloud computing allows businesses to outsource the storage and management of their data, applications, and other IT functions. This allows companies to reduce costs and improve efficiency. And as the world becomes increasingly digitized, these benefits are only going to become more appealing.

According to MarketsandMarkets, the cloud computing market is expected to grow from $ 148.8 billion in 2019 to $ 246.8 billion by 2023. This presents an excellent opportunity for outsourcing providers, as businesses are increasingly looking for ways to move their operations to the cloud.

Surely, the market for cloud computing services will continue to grow in the next few years, and companies will increasingly turn to outsource providers for help with this.

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2. Blockchain Services Will be More in Demand

Blockchain technology is already disrupting the financial services industry. But in the coming years, it will have a similar effect on other sectors, including software development outsourcing. Blockchain allows developers to create applications that securely store data across decentralized computers.

This security is attractive for companies seeking to outsource IT functions or cloud storage. And due to its decentralized nature, blockchain makes it easier to derive value from data in the form of business intelligence (BI).

As more businesses realize this potential, we expect that demand for blockchain outsourcing will grow.

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3. Outsourcing Providers Will Focus More on Machine Learning Automation

Machine learning is artificial intelligence (AI) type whereby computers learn without being explicitly programmed. This technology has a wide range of applications, including in the field of outsourcing. 

Machine learning can help outsourcing providers optimize their operations and improve the quality of services. It can also help them identify and respond to issues more quickly. Machine learning will play an increasingly important role in the IT outsourcing industry in the coming years.

4. Growing Need for Cybersecurity Specialists

As businesses move more and more of their operations to the cloud, the need for cybersecurity specialists will continue to grow. Outsourcing providers that can offer cybersecurity services will be in high demand.

In the next few years, we predict that the demand for cybersecurity services will continue to grow. Providers that can offer these services will be in high demand, and we expect to see more providers focusing on this area of specialization.

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5. Increased Focus on Artificial Intelligence

Artificial intelligence (AI) refers to software that can complete tasks much like human intelligence. Applications of AI are becoming increasingly widespread, with many companies incorporating AI into their products and services. 

This includes offline applications, such as chatbots, and online applications, such as digital personal assistants.

As per Statista, here is the share of respondents who use AI in their businesses in the Asia Pacific in 2019, with a prediction for 2022, by type-

Indeed, the demand for AI services will increase in the coming years, and outsourcing providers will offer these services alongside traditional IT solutions.

Steve Jobs told his biographer that he “never saw robots stealing human jobs. I saw them as tools to enable people, freeing them up from repetitive tasks and opening opportunities for exploration.”

So what job can AI wear now?

The future will tell! But it’s better to be ready for one more thing to come.

6. The Practice of Remote Work Will Become Even More Popular

“The future we envision for work allows for infinite virtual workspaces that will unlock social and economic opportunities for people regardless of barriers like physical location…” – Andrew Bosworth, VP of Facebook Reality Labs.

Remote work is the practice of working from a location other than the office. It can be done permanently or temporarily and often involves using technology to communicate with coworkers and clients.

The popularity of remote work is increasing as more and more people discover its benefits. These include increased flexibility, improved productivity, and better work-life balance.

Undoubtedly, the number of people seeking remote work opportunities will continue to rise and more employers will offer these roles. As a result, outsourcing providers will need to increase their staff levels to meet this growing demand.

7. Eastern Europe will Claim More of the Outsourcing Market

Eastern Europe is home to some of the world’s most talented and cost-effective outsourcing professionals. As more businesses outsource their information technology requirements, these providers will increasingly turn to Eastern European countries for talent. 

There are several reasons why this region has become so popular among companies looking for talented IT professionals:

• The cost of labor is much lower than in developed countries such as the United States and the United Kingdom.
• The quality of labor is high, thanks to the region’s well-educated population.
• The infrastructure is well-developed, making it easy to do business there.

Eastern Europe will continue to be a popular destination for outsourcing providers in the coming years.

8. The Internet of Things Will Create New Opportunities for Outsourcing

One report from Statista displaying the number of IoT connected devices globally from 2019 to 2030 (in billions)-

The Internet of Things (IoT) refers to devices such as cars, appliances, and even clothing being connected to the internet. This allows them to communicate with each other and exchange data.

The IoT is predicted to be one of the biggest technology trends of the next decade, and it is already creating new opportunities for businesses to outsource their IT requirements. For example, providers can now outsource the management of entire IoT ecosystems or individual components such as data analytics and security.

We predict that the IoT will continue to grow in popularity and that outsourcing providers will capitalize on this by offering more services related to it. This will include everything from system integration to app development.

9. The Use of Robotics Will Increase in the Outsourcing Industry

Robotics uses machines that can be programmed to carry out specific tasks. It is often used in manufacturing and other industrial settings but is also becoming increasingly popular in the outsourcing industry.

The main benefit of using robotics is providing a low-cost way to replace human labor. The increasing automation of data entry and transcription tasks will leave humans with more time to work on value-added tasks like strategy development, relationship building, and decision making.

Robotics in outsourcing will continue to increase in the coming years as businesses strive to find ways to reduce costs and improve efficiency. This will lead to a rise in providers offering robotic services such as process automation and software development.

Well, that is all about the future of IT outsourcing. However, to reap the maximum benefits of these IT outsourcing trends, you need a trusted, expert, and experienced outsourcing IT partner.

Well, if you are thinking about how to choose? Do not worry! we am here to resolve all your queries.

Some Crucial Tips For Choosing the Right IT Outsourcing Company

• Always eliminate outsourcing IT companies that don’t have a track record of successful projects and delivery timelines. This is the first and foremost factor you should consider while choosing an IT outsourcing company. It’s more important than other things like low cost, high customer satisfaction, etc.
• Since we are talking about future trends, choose an outsourcing company that is keen on exploring and adopting new technologies. This will give you the confidence that your project is in safe hands and delivered as per your expectations.
• Make sure that the outsourcing company has a good understanding of your business processes and requirements. You can do this by checking their experience in your specific domain or industry.
• Look for companies with the required resources, technologies, and workforce to deliver your project as per your expectations. You can look at their skilled staff strength or their cutting-edge infrastructure as critical factors that will help them cost-effectively meet your requirements.
• Always choose a company with a proven track record of successfully managing multiple projects of various sizes and complexities. This will prove that it can handle your project effortlessly.
• Check if the outsourcing company has a process to measure its success rate and customer satisfaction levels through regular benchmarking studies or other similar means. Well, this may sound stupid, but you would be surprised to know that many companies out there are just looking to make money at the cost of their customer’s satisfaction and long-term success.
• Lastly, trust your gut feeling while making the decision. If you feel comfortable with a particular outsourcing company and have a good rapport with their representatives, there is no harm in choosing them. However, if you have second thoughts, it would be better to look for other options.

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Final Thoughts 

So, these are the nine future IT outsourcing trends that you can expect in the industry in the coming years. While some of them are already being adopted by businesses, others will slowly gain traction in the next few years.

Also, you can hire experts to get the best and advanced IT outsourcing services by following the tips we have discussed above. Are you still juggling with questions? Mention them in the comment section below!

Frequently Asked Questions(FAQs)

1. What are the benefits of IT outsourcing?

There are several compelling reasons why businesses should consider outsourcing their IT needs. Here are five of the most important benefits:

• Cost savings. Outsourcing your IT department can save you a lot of money in the long run. When you contract with an IT services firm, you only pay for the services you need, which can be a fraction of the cost of hiring and maintaining an in-house IT staff.
• Expertise and experience. By outsourcing your IT needs, you gain access to the expertise and experience of a team of specialists who can help you with everything from network security to data backup and recovery.
• Increased efficiency. An external IT services team can handle the day-to-day upkeep and operations that can take up a lot of your time, leaving you free to concentrate on your business.
• Scalability and flexibility. Outsourcing allows you to scale up or down as needed without having to bring any new people onto staff – all you need is access to the experienced IT providers that you’re already paying for.
• Peace of mind. With a dedicated team to handle everything from network security and daily backups, you can have peace of mind. Your most critical business functions are being handled professionally by experienced people who don’t have other jobs on the side. There’s also no need to invest in redundant, stifling systems and procedures that aren’t flexible enough to handle your changing needs.

2. Is IT outsourcing right for my business?

It depends on your business requirements and the outsourcing company’s ability to meet them. However, in general, IT outsourcing is a good option for businesses looking for cost savings, improved efficiency, and increased scale.

3. What should I consider while choosing an IT outsourcing company?

Some of the crucial factors you should consider while choosing an IT outsourcing company include experience, domain knowledge, skills, cost-effectiveness, and customer satisfaction levels.

4. How can I find the best IT outsourcing company?

The best way to find a good IT outsourcing company is by asking friends or business acquaintances for recommendations. However, if you have no such contacts at your disposal, you can look for companies online and compare their features and pricing.