Top 10 IT Outsourcing Trends That Will Matter in 2021

How will the IT outsourcing landscape look like in 2021? What to expect as a result of the COVID-19 pandemic? What technologies will shape the global outsourcing market? In this article, we have singled out 10 trends in outsourcing software development that will matter in the unprecedented times of 2021.

Digital advancement continues to shape the pace of innovation as technology is evolving rapidly and the demand for custom software development rises every year. As a result, we see increasing interest in software development outsourcing from organizations. With its unforeseen challenges, the pandemic has been a critical input in reshaping the expected future of the whole technology industry. Despite, or perhaps because of the COVID-19, the percentage of their budget IT departments spend on outsourcing continued to rise from 12.7% in 2019 to 13.6% in 2020. It is due to the fact that the majority of businesses embraced the inevitability of digital transformation to stay competitive and viable. And outsourcing trends let companies revolutionize how they perceive the development and bring unrivaled opportunities to seize the global market. In this article, we have singled out ten IT outsourcing trends that will matter in 2021.

How IT Outsourcing Landscape Is Changing

1. A Growing Demand for Narrowly Specialized Software Companies

That’s why more and more businesses start looking for more specialized software development companies. Such experts specializing in some narrow sphere can bring maximum value into the project due to their deep knowledge of a particular technology or domain.

Trends in outsourcing come along with emerging technologies affecting particular industries like logistics and healthcare. They will be in high demand for outsourcing services needed for their digitalization using AI, Blockchain, VR, and other technologies. At UpsilonIT, we have a subject-matter expertise in logistics and medtech that we have built up over the years of software development. All the companies that come to us with their complex business challenges receive a unique software solution based on their domain and specific requirements.

2. A Greater Focus on Flexibility and Adaptability

First of all, businesses will expect that their software vendors will have the ability to ramp things up and down if they request. So outsourcers will need to be ready to restructure teams within the shortest time frame and be agile to deliver results faster.

Acceptance of a company’s business ethics and its adoption is another thing that will be for businesses. They are waiting for the offshore companies to integrate seamlessly into their company and become a part of their current in-house team.

Third and last, modern companies are looking out for innovations. How quickly software vendors react to the appearance of new technologies and upskill their personnel accordingly will affect the assessment of the vendor. In our Guide to Vendor Evaluation and Scoring in Software Outsourcing, we suggested a list of criteria that will help companies effectively evaluate their potential software development partner in accordance with the project requirements and, as a result, choose the most suitable one.

3. Building Better Collaborative and Strategic Partnerships

The difference between outsourcing core and non-core tasks will be less evident as vendor-customer relationships will be more reliable and trustworthy. Offshore teams will easily integrate into the client’s company and become a part of it. Thus, they will cover any tasks of varying degrees of importance necessary for the customer’s success.

4.Eastern Europe is Becoming a Leading IT Outsourcing Hub

Among the countries above, Belarus offers the most attractive conditions for IT outsourcing. The Belarusian IT sector comprises 60.5% of outsourcing companies and occupies 3rd place in its economy. The Belarusian IT sector has received governmental support as one of the top-priority economic sectors for future development. The establishment of the Belarusian Hi-Tech Park (HTP) in 2005 stimulated IT sector development and provided a unique business environment for IT companies, such as low tax regulation. That means that the process of outsourcing for foreign companies in Belarus has been simplified.

The country has a deep talent pool exceeding 77,000 programmers, and over 16,000 new specialists enter the sector every year after graduation from universities. So it allows specialists to learn and apply the latest technologies in their work with still moderate prices for their services.

5. An Emphasis on Quality over Quantity

Due to a shortage of people with the skills required for in-house development, InfoQ highlights that product quality is now a more important driver for outsourcing than cost reduction. Concentrating on high-quality and optimal results is the trend that will label outsourcing as profitable and efficient in 2021.

Technology Trends in IT Outsourcing

6. AI, Machine Learning, and Chatbots

Moreover, AI increases the quality of customer service in outsourcing. It creates unique customer journeys that assist clients in making wise decisions. Chatbots are effective guides when it comes to consulting on service purchases. As a result, companies will see an increase in productivity and customer service along with outstanding employment opportunities.

7. Cloud Computing & Cloud Platforms

Companies will turn to outsource for effective cloud platforms. They will actively partner with vendors who offer software cloud-based services or will help to transfer their existing infrastructure to the cloud. Along with the need for cloud computing, there is the need for security services to avoid all kinds of threats. By finding a trustworthy partner, companies will perform their tasks and have someone responsible for cloud security.

8. Robotics Process Automation

Companies can also supercharge their automation efforts by injecting RPA with cognitive technologies such as ML, speech recognition, and VR, automating higher-order tasks that in the past required the perceptual and judgment capabilities of humans.

9. Progressive Web Apps

PWA seems to be an ideal variant for businesses that don’t want to develop a mobile version of a website and Internet users that prefer mobile apps because of their convenience. Both sides will win from PWA because their development is much faster, and they have the same effect as a mobile application. That’s why many companies will seek outsourcing vendors to employ PWA to achieve their business goals and satisfy the rising demands of their clients.

10. Blockchain Technology

While the demand for the knowledge of blockchain technology is rising, the need for highly specialized professionals increases accordingly. However, adequate blockchain professionals are not available, especially when it comes to complex challenges like DApps or NFTs. Hence, businesses are looking to outsource their software development needs to companies that have blockchain experts.

Summing Up

We, at UpsilonIT, invest heavily in upskilling our employees to steer in the right direction with cutting-edge transformative solutions and data-driven insights. Our team is flexible and adaptable in terms of both innovation and cooperation. We easily integrate into our clients’ companies and become a part of the in-house team. And we do care to provide our clients with the best-fit solutions for each business challenge.

If you have a project idea on your company’s 2021 roadmap and you want to get the most out of innovations, we are ready to lend a helping head in adopting emerging technologies for your business. For more details, contact our business development specialists.

We help startups and small & medium businesses build software that matters.

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