In the wake of the global pandemic and the Russia-Ukraine conflict, businesses worldwide have grappled with the repercussions of these events. This underscores the inevitability of digital transformation for achieving business success, necessitating a concentrated effort to incorporate technology for establishing a robust digital presence. Shifting a business to an online marketplace requires time and dedication, and outsourcing emerges as a highly effective strategy for launching applications or websites.
The Information Technology (IT) sector stands out as the fastest growing industry, propelled by continuous technological advancements. Outsourcing plays a pivotal role in this growth, projected to surpass USD 525.2 billion by 2030, with an anticipated expansion at a Compound Annual Growth Rate (CAGR) of 9.4% from 2023 to 2030. These statistics unequivocally indicate that the demand for IT outsourcing is poised to remain substantial throughout the current decade. Additionally, several emerging trends are influencing the outsourcing market.
Before delving into these trends, let’s have a look at the concept and importance of software outsourcing in this article.
1. What is the Concept of IT Outsourcing and Why is it important?
The concept of IT outsourcing continues to expand, referring to a company delegating a portion of its software development and IT staffing services to external providers instead of relying solely on in-house staff. The primary objective behind outsourcing is to achieve cost savings and efficiently handle multiple projects. It entails transferring the responsibility for IT services to a partner, who becomes accountable for all aspects and the successful completion of specific projects.
Furthermore, outsourcing offers the opportunity to scrutinize and evaluate the entire process. Whether it’s obtaining IT-enabled processes, application development, infrastructure solutions, web development, etc., outsourcing proves to be an effective tool for businesses. By opting for IT staffing solutions through outsourcing, one can access services such as Software-as-a-Service (SaaS) solutions, mobile app development, website building, website design solutions, and other software development-related services.
In summary, outsourcing empowers businesses to efficiently manage various client projects with reduced costs and shorter turnaround times. Additionally, it allows companies to showcase a broad spectrum of expertise in services, fostering client loyalty.
2. Top IT Outsourcing Trends in 2024 & beyond
2.1. Artificial intelligence (AI)
Undoubtedly, artificial intelligence is reshaping the landscape and exerting a significant influence in the IT market. Over the years, AI technology has made substantial progress and has become pervasive, leading to the automation of tasks and their efficient completion in a time-saving manner. Recent instances of AI in application development include chatbots, virtual assistants, and more.
AI-powered tools are designed to automate repetitive tasks, enhancing productivity in various operations. They contribute to streamlining daily tasks, reducing time consumption at each stage of development. However, it is crucial to emphasize that the human touch remains essential. AI aids in eliminating irrelevant manual processes, allowing individuals to concentrate on the broader aspects of business strategy.
In the realm of ongoing IT outsourcing, AI emerges as a game-changer, offering solutions that complement existing outsourcing models. Businesses should prepare for new and rapid shifts as AI continues to play a transformative role in the industry.
As the migration to cloud computing continues to rise, there is a corresponding surge in the demand for cybersecurity. The outsourcing of cybersecurity professionals is experiencing a consistent upward trajectory in the market. With the progression of internet technology, the prevalence of cyber-attacks and malware has surpassed levels seen in the last decade.
Business priorities have pivoted towards cybersecurity, leading to a significant spike in its demand. Furthermore, there are expectations that cybersecurity service providers will be a top priority for businesses across various sectors.
2.3. Cloud Computing
As we enter 2024, the momentum of cloud computing continues to grow. Businesses today are increasingly embracing the cloud as a superior option for storing, accessing, and processing data, fueled by evolving outsourcing trends. Cloud computing offers numerous advantages, emphasizing accessibility and reliability.
Renowned for its data processing capabilities, cloud computing is steering businesses toward serverless computing models, enabling them to pay solely for actual processing time. Organizations are actively transitioning their applications and data to the cloud to capitalize on enhanced security and expanded storage capacity.
In essence, cloud computing proves to be cost-effective for businesses by diminishing the reliance on physical storage space and eliminating the need for extensive server rooms.
The Internet of Things (IoT) is a widely recognized concept, gaining increased attention, especially in connection with vehicles and other appliances. Tesla’s successful integration of IoT in their cars has generated considerable buzz in the market.
IoT serves as an efficient mechanism for communication and data exchange and is anticipated to be the dominant trend in the upcoming decade. This trend is creating new and promising opportunities for businesses looking to outsource IT services. The demand for IoT-based services has expanded significantly due to their substantial potential and connectivity to the internet. It is evident that the time is approaching when IoT will play a pivotal role in everything from app development to software solutions.
2.5. Blockchain Technology
Blockchain technology has surfaced alongside cryptocurrency mechanisms in the financial market, and its influence is extending to software development and IT outsourcing. Primarily, it empowers software developers to construct applications and secure data in a decentralized manner, prompting companies to explore outsourcing blockchain services with cloud storage.
The decentralized approach not only enhances data security but also unlocks value from data in the form of business intelligence (BI). As businesses increasingly prioritize outsourcing to leverage the effectiveness of blockchain, the technology is gaining visibility and consolidating its position in the global market.
The evolving trends are already setting the stage for significant impacts on future IT outsourcing and the overall market. As a business owner, it’s crucial to view this as a heads-up and devise innovative strategies for sustainability. Conducting in-depth market research and understanding the influencing factors are key considerations. This, in turn, facilitates the selection of the right IT staffing services outsourcing company.
With over a decade of experience, Kyanon Digital has consistently transformed challenges into new growth opportunities. As the preferred outsourcing company in Vietnam and Singapore, we have garnered expertise in various technology solutions. Our experts leave no stone unturned to stay abreast of industry developments. Feel free to reach out for any queries or further information!