THE FUTURE OF IT OUTSOURCING: 6 TRENDS FOR 2021

Outsourcing is growing the new standard, and it is transforming the entire global industry. As IT organizations evolve into more strategic and influential institutions, so does their need to partner with outsourcing providers. The digital and data revolution, automation and personalization, and many other global transformations change the way IT organizations work: both the type of services and the quality. That's why we've rounded up the hottest IT outsourcing trends you needed to consider in 2021.

1| Shortage and urgent need for advanced IT skills

With the massive increase in technology, IT companies are under pressure to stay competitive. From AI and cybersecurity to blockchain and cryptocurrencies, the uprising of new technologies is overwhelming. As a result, businesses are looking for cutting-edge capabilities to outsource them effectively.

The latest report from Gartner shows that IT spending expects to rise to $3.8 trillion in 2019, a 3.2% increase in the projected spending in 2018. The shortage of in-house engineers is becoming one of the main reasons for outsourcing. A survey shows that over 70% of UK tech employers expect a talent shortage in the next 12 months.

2| The hype around alternative outsourcing destinations

In the coming years, Eastern European countries will compete strongly with India and China. So far, the highest share of global outsourcing revenue has continued producing in the top spots. It will soon change as Poland, Ukraine, Romania, and Belarus become new hotspots.

The dynamics of the IT industry are constantly growing. It is already fertile ground for building an offshore development team. There are already more than 166,000 IT specialists in the country, and the trend is rising. According to a modern analysis by PwC, the business grew by 150% between 2011 and 2015. It has the potential to give $5.7 billion by 2020.

Ukrainian professionals combine moderate prices with mature workflows and high-quality results. Due to the security of remittances, cultural proximity, and a strong R&D base, Ukrainian IT companies choose as reliable and long-term partners for various IT development projects.

3| Increasing emphasis on cybersecurity and compliance

If there is one thing that all forecasters agree on, it is this. Public awareness of data security has increased dramatically in recent years. The demand is to encrypt all data sets entirely.

Cybercriminals are taking a new risk with sensitive data that is much higher than ever. They have shifted their attention to ransomware that threatens to release the victim's data or block access to it if a ransom is paid. One of the several disturbing trends is that of politically motivated nationwide cyber attacks. It is prompting governments to control access to Internet connections. For example, which came into force in 2018, requires all companies to protect the data they obtain regardless of location.

The recent survey results of 700 enterprise technology buyers conducted by Spiceworks testify to this cataclysmic shift in perspective. The survey shows that companies now consider employee security training to be the most practical solution for countering cybersecurity incidents, followed by breach detection systems. The report also predicts an increase in IT spending in 2019 due to heightened security concerns and companies' plans to implement security education for end-users.

As a result, innovative IT organizations implement a layered security approach using outsourced cybersecurity services to eliminate risk and protect business data, meet compliance standards and grow operations. According to a 2018 study by Computer Economics, the amount of outsourced security work has increased in the last year.

4| The rise of virtual/augmented reality designs

The global expanded presence market values at approximately $3.33 billion in 2015. It expects to reach about $133.78 billion in 2021, with a CAGR of just over 85.2% between 2016 and 2021. Now take VR. According to a news release from Greenlight Insights, which also predicts that global VR revenues will reach nearly $75 billion by 2021.

Recently, VR/AR technologies have been booming, especially in the mobile market. With the rise of PokemonGo, Apple's ARKit, mobile AR has been placed in the same category as headset-based AR devices like Google Glasses.

At the moment, the business is full of uncertainty. Nevertheless, the growth of AR/VR technologies over the years has been fantastic. Predictable tracking, measurement and rendering upgrades, 3D object recognition, improved gesture recognition, and more natural controls are all elements that companies will outsource to make the product more comfortable for the end-user.

In addition, AR/VR technologies are transforming the shopping experience. Most of the world's leading retailers, particularly in the US, have already started integrating interactive elements into their online stores to improve the shopping experience. It can apply across various industries, from clothing and jewelry accessories to toys and furniture.

In addition, AR/VR technologies can increase the sales impact by making it more tangible and realistic. For example, we recently developed a VR escape room kit to promote the TV series, Mr. Mercedes. Based on the famous novel by S. King, the game designs to put the user in a unique, intense atmosphere. AT&T later introduced this game to the public at San Diego Comic-Con 2018.

5| Automation through artificial intelligence

Automation is one of the key trends in IT outsourcing that will drive changes shortly. Massive investments will flow into robotic process automation (RPA) and artificial intelligence (AI). AI is evolving at a rapid pace.

The GSA report shows that 83% of respondents believe RPA will become more critical in the next decade. And 80% think the same about AI. There will be a burgeoning demand for professional data scientists, prominent data analysts, and AI experts.

The use of virtual agents and robots to streamline routine tasks will dominate all industries. 2019 will also be the year that AI assistants will evolve into powerful tools beyond intelligent speakers.

6 | The nature of IT outsourcing partnerships will change

In 2016, Deloitte found that 72% of business sector respondents had already outsourced IT functions, and more than a quarter planned to increase their use. The 2018 GSA survey found that 70% of companies surveyed would outsource more services in the coming years, And 35% of them plan to do so significantly. Against this backdrop, 84% of service providers expect the outsourcing sector to grow, and 37% believe it will dramatically increase.

However, there are also many strongly negative associations with outsourcing. Most companies are reluctant to disclose that they outsource their work publicly. However, it will be the only way for the business to continue to grow in the coming years, as no other channel offers the same cost-effectiveness. Thus, IT outsourcing service providers are coming out of the shadows and becoming strategic partners with strong, trusted relationships.

The outsourcing industry is becoming more collaborative and, at the same time, more competitive. Clients will primarily look for IT outsourcing providers that are customer-centric and evolve with new technologies. Companies will be eager not only to reduce costs but also to have a people and value-focused partner. As the GSA report states, they will contract with software development vendors as service integrators, sharing risk and responsibility.

It promises significant growth potential for both vendors and customers. But it also brings incredible business complexity. In the future, large companies will work with more specialized vendors. As ISG data shows, in 2008, 42% of the largest global companies in the Forbes G2000 outsourced IT to a single company. Today, that percentage has dropped to just 15%. 34% of organizations rate themselves as above average in maintaining multi-vendor environments.

If you view IT outsourcing for your business and would like to meet an experienced team contact top software outsourcing companies in India .