What are some IT Outsourcing Trends that Will Rule in 2021?

Outsourcing is now the new norm. It has managed to transform many global industries. Therefore, companies are eager to implement impactful strategies.

"Digitalisation and globalization are rapidly changing customer expectations and require a shift in the way logistics managers approach outsourcing strategies," - says Courtney Rogerson, senior analyst at Gartner.

Last year, the IT outsourcing sector was worth $92.5 billion, up to $7 billion from 2020.

The outsourcing market is growing at an incredible rate and is penetrating more and more sectors.

By 2020, companies will focus on implementing new technologies to engage users and streamline internal processes.

Currently, 37% of companies outsource only one process. 24% of companies use outsourcing to increase efficiency, and 18% say the goal is to leverage expertise.

How can IT outsourcing be a success this year?

Outsourcing partners need to keep up with the trends and still get good results.

Regardless of the end goal, it is essential to have a suitable outsourcing partner.

Ultimately, it should be a partnership, and both parties should contribute to it so that the relationship becomes a mutual benefit.

What do most companies expect from outsourcers? Is collaboration always successful?

What trends in technology outsourcing should companies and offshoring firms follow?

The future of outsourcing is full of different possibilities; the new decade has a lot to offer.

An overview of the IT outsourcing market in 2021.

According to a report by Statista, the size of the IT outsourcing market is $66.52 billion.

It is anticipated to reach USD 413.7 billion by the end of 2021. This clearly shows that the global IT outsourcing expenditure is set to rise sharply.

The National Outsourcing Association of India says that 70 % of companies will be willing to outsource, and 35 % are already planning to do so.

This means that IT outsourcing will grow in the coming years.

Which companies will outsource more this year?

Cost reduction will continue to be the main reason companies outsource, but a diverse group's technical skills will be equally important.

Businesses and IT outsourcing companies will become more results-oriented. This will finally begin the development of strategic partnerships.

What are the future trends in IT outsourcing?

Statistics and figures can tell you a lot about current and future market opportunities, giving companies valuable planning insights.

Let's look at IT outsourcing trends.

This is not another guide or report full of statistics on IT outsourcing trends in 2021. But it is a detailed overview of the experienced offshore companies.

Key IT outsourcing trends that will characterize the year 2021

1. Strategic partnerships

Finding a reliable outsourcing company is a difficult task.

There was a tendency to outsource individual projects and tasks to different vendors because they specialized in the happenings.

However, companies are now focusing on outsourcing to a single vendor because it is challenging to manage multiple outsourcing companies.

It is, hence, up to them to identify and then mitigate the risks associated with outsourcing.

Businesses will now look at partnering. They will also consider how offshore companies will contribute to innovation in future projects.

The relationship between companies and IT outsourcing agencies will become more reliable.

Moreover, owners will no longer distinguish between core and non-core tasks and will outsource all time-consuming tasks.

This includes all types of tasks that lead to successful results or performance.

1. 2. More flexible outsourcing companies

Both the nature and the expectations of developers and offshore companies will change. Companies want to be more flexible in several respects.

First of all, they expect the company to be able to move up and down as needed.

Offshore companies will now restructure their teams to become more agile to produce results more quickly.

Second, owners of start-ups or established companies will be willing to work with companies that accept and adapt quickly to their business ethics.

They will appreciate that offshore companies integrate into their business and feel part of their existing internal team.

Finally, modern companies are looking for innovation. They expect IT specialists living in another geographical location to use the latest technology to meet their needs.

They also expect companies to be prepared to invest in the development of their staff as needed.

3.Contract changes

Customers and outsourcing companies agree that the desired outcome most easily measures the success of the outsourcing relationship.

The focus is on quality results that are in line with contractual requirements and expected performance levels.

Both parties agree to share the risks, as they simultaneously bear the burden of accidents or a wide range of benefits.

Outsourcing will become more of collaborative practice. Contracting will also play an essential role in the contract.

For example, any company that wants to partner with a large company should ensure that they have procurement services expertise.

This will sequentially result in a win-win situation for both parties.

1. 4. The priority of process over the price

In 2020, companies and subcontractors will focus on results. 89% of companies believe this.

Previously, only focused outsourcing relationships on price. This trend is changing over time. The focus is on the development process.

It brings together many companies around the world. Well, outsourcing companies focus on an attitude and approach to work. They focus on the process and the developers involved.

1. 5. Selection of Agile Development

71% of companies have already adopted Agile for their business and day-to-day operations.

Companies have realized Agile project management's value and are now striving to adopt this software development practice.

That's why companies are looking for experienced offshoring companies that follow established Agile practices and are prepared to share their experience with their customers.

This is one of the most common trends in business process outsourcing in 2020. Why is it happening? Remote partners will be small and flexible, and the focus will be on business professionals rather than functional requirements.

Agile management practices will be discussed with clients so that they can continue to work on their own.

Companies are looking to partner with development teams to create agile processes from start to finish with the management system.

1. 6. Mobile development first

Between 2017 and 2022, the number of mobile users is expected to increase 17-fold. Mobile users now account for more than half of internet traffic, and desktop traffic may soon become the minority.

Companies should move away from the desktop approach and start digitizing by creating a mobile app and a web version.

Apps such as Uber and Snapchat already rely on mobile solutions and have been in vogue since the advent of mobile.

Without a responsive mobile version, businesses cannot compete. Users can't distinguish between desktop and mobile.

If you don't have a mobile responsive app, then it's time to turn to an outsourcing partner who can help you keep up with the trends faster.

1. 7. Variety of outsourcing services.

Outsourcing is mostly about small operational tasks. By 2021, this trend will change even more because companies will start outsourcing their critical high-tech processes.

Outsourcing companies will work hard to provide more stability and security. Companies that outsource become more reliable and perform critical functions that give them a competitive advantage.

1. 8.There is a need for change.

Companies looking for IT outsourcing companies are always on the move as they go through many changes. They expect quality solutions and services.

Many companies are finding that they cannot partner with agile companies and get innovative solutions.

Offshore IT companies must embrace this trend and try to become customer-centric. This will help them stay competitive, win business, and attract potential partners.

Outsourcing is a sure way to increase productivity and efficiency while doing the job right.

Invest the time to find the right outsourcing company. This way, your solution will produce real, measurable results.

9.Trends in technical skills

According to Udemy, there will be a strong demand for artificial intelligence and data skills in 2021.

Web platforms, cloud computing, including AWS, CompTIA, and Docker, will also be in demand.

Besides, the report states that the company will build employee skills in robotic process automation tools, cybersecurity, and AWS cloud computing.

Emotional intelligence and design thinking also top the list of non-technical skills developed the most by 2021

Therefore, outsourcing providers need to know how to integrate these technological trends to ensure quality for clients.

1. 10.Inaccuracy.

With robotic process automation and artificial intelligence, offshore companies will offer a unique solution that may not be available elsewhere.

This not only provides new opportunities but also motivates some other players to do better. These trends will continue to evolve and will undoubtedly change the IT outsourcing industry.

1. The emergence of new outsourcing destinations

Local companies account for the majority of global outsourcing sales. Currently, India and China are the top two countries for outsourcing. India's IT outsourcing industry will reach about $135-137 billion in 2020.

However, continents like Europe will give tough competition to China and India shortly. According to a Deloitte survey, 59% of companies are already outsourcing services from India.

India will remain to be a top destination for IT outsourcing because of the large number of projects it handles globally. The main reasons are as follows.

Support from the Indian government: The Indian government provides tax incentives to IT companies. IT has also remained named one of the top 12 champions in the services industry.

Indian companies are held to international standards. They assist the International Organization for Standardization (ISO 90000), Six Sigma quality certification, and Total Quality Management.

The abundance of developers: India has the second-largest number of mobile app developers.

Most inflexible Workforce: According to a survey, 69% are satisfied with a six-day workweek. Investing in Indian developers in 2020 is the right decision. India will be one of the most prosperous IT outsourcing destinations for companies around the world.

1. Social media will be a better channel for customer service.

According to a report by Salesforce, 50% of customers expect their queries to be resolved immediately.

On Facebook, companies, and groups that reply to 90 percent of their messages within 15 minutes qualify for the "Quick Responder" badge.

This mindset has changed the center of consumer services to social media.

One of the notable trends in global outsourcing is to employ professionals who provide a higher level of support through social media channels.

1. Towards a Specialized Economy

According to the Harvard Business Review, a specialized economy is "a company's deliberate deployment of services to reach customers that create memorable events."

IT outsourcing companies provide more than just services. They need to provide their customers with an experience and quality that makes banking worthwhile, which means aspects that will come to the fore in the past, such as storytelling, design, and aesthetics.

It also means that service design will come to the forefront and trend away from emotional elements.

Conclusion

In 2021, companies will turn to development companies to access technology stacks that are not available within their teams.

Instead of helping with mundane maintenance tasks, outsourcers will be working on high-priority projects. Outsourcing started a few years ago, but now it has become even more powerful and diverse.

Regardless of your business's nature, modern outsourcing advancements can help you make your work more productive, efficient, and profitable.

We believe that predicting the IT outsourcing trends for 2021will help companies to understand outsourcing better. Digital transformation is a trend, and the market will continue to grow.

Companies are looking for a reliable outsourcing partner that offers a wide range of services.

I'm Olivia Cuthbert and I am a Sr. technical consultant and writer working for PixelCrayons. I am passionate about exploring and writing about innovation & technology and have been in this field for 4+ years.