Software Development Outsourcing – What You Ought to Know?

by Satya K Vivek | November 11, 2022 Software Development Outsourcing – What You Ought to Know?

Companies with dependency on IT, outsource for various reasons such as operational requirements, leveraging of latest technology skillsets, and cost reduction. However, trends in the market are changing.  According to the report made by GSA UK, some outsourcing trends will be less significant than they are presently. 2021 was the year when the change was evident and in 2022, it is accelerating.  Companies that want to have contemporary technology must keep abreast with current trends in IT outsourcing.

What do we mean by IT outsourcing today?

To reinvigorate your memory of what we understand about IT outsourcing, let’s look at the list of the most outsourced IT operations that ended in 2017 and present outsourcing trends.

The functions recorded from the most popular to the least used are web or mobile app improvement, software application sustenance, datacenters, IT frameworks, helpdesks, networks, integrations, and HR. The list mentioned above are expected to go through changes in the future.  The National Outsourcing Association has accomplished a research campaign that unveils the direction of modern outsourcing that will be prevalent soon.

Expected IT Outsourcing Trends

It is difficult to predict the future with certainty. In general, the anticipated IT outsourcing trends are:

  • Value over cost – collaboration will not focus on the lowest prices anymore. Value is the thing that is acknowledged more.
  • Various providers – clients will tend to select multiple partners with an aim to establish relationships with multiple collaborators.
  • New outsourcing sectors – IT developers from Central and Eastern Europe are predicted to be selected.
  • Changing business models – outsourcing partners may share burden of delivering results measured on non-technical parameters. So, the agreements are becoming more outcome based.
  • Automation – virtual foundations like bots, AI, and robots will become technically skilled to perform routine IT tasks.
  • Cloud-based platforms – IT sector will witness a rise in storage and safety related projects.

The most notable IT outsourcing trends for 2022:

  • New inspirations 

    Both outsourcing clients and providers were called for reasons to outsource. Among them, 35% answered that cost reduction is the most significant, and 23% said it was customer experience. It is also a fact that the latest IT outsourcing is growing together with the number of people interested in outsourcing more tasks. 

    The main reasons behind outsourcing companies may vary, but the majority accept that a customer-oriented approach and discovering new proficiencies are more lucrative than cost-cutting. These things often become a decisive factor when selecting whether to perform a task with a partner on-shore, near-shore, or off-shore.

  • Focus is on outcomes and adding value

    According to the GSA UK, about 90% of respondents firmly believe that both purchasers and providers will be signing outsourcing agreements focused on outcomes and value going forward. Also, 69% of the surveyed people predicted that the outsourcing suppliers are expected to work as system integrators. About 31% expected that outsourcing suppliers would lift all the risk on themselves.

  • Businesses concentrating on alternate delivery models

    More and more business decision makers are considering alternate delivery models including Software as a Service (SaaS), business process utility (BPU) and infrastructure utility services. Notice periods and the length of agreements may become a bit curtailed compared to what is prevailing now.

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