The only savior that helped any industry or business to survive the 2020-2021 pandemic was IT (Information Technology). It came in many forms such as Software as a Service, Cloud-based applications, Automation, Artificial Intelligence to name a few. So as a logical deduction let us understand IT and software outsourcing trends in 2022. The news on that will emerge and the existing one that will continue.
1. Why is it important to understand IT and software outsourcing trends in 2022?Across industries, all the major predictions that were proposed in 2019 went for a ride due to the pandemic, the major ones to be affected were the ones that were more human process-oriented than IT/automation oriented. Remarkably, for the IT industry, the pandemic catalyzed the predictions, which means the trends that were proposed in 2025 became a reality in 2021 itself. Also, the shortage of semiconductor chips and acute supply chain. Hence, IT became a future-proofing mechanism for various industries, with the need to adapt upcoming software technologies and the future of IT became more exciting. Gartner predicts that trends in 2022 will drive significant disruption and opportunity over the next five to 10 years.
2. Top Trends
Top 5 IT & software outsourcing trends in 2022The top 5 trends we have identified that are relevant to the Southeast Asian economy, in no particular order are:
- Flexible workforces and composable applications
- Automation, RPA & Hyper Automation
- Greater focus on industry specialization
- Cloud adoption in mobile apps development
- Enhanced emphasis on Cybersecurity & Privacy
- The flexibility both to allow the workforce to operate from anywhere and to scale upland down the operations depending on short-term demand
- Reduction in overhead & operational costs. Increasing efficiency (even while working from home)
- Improved service quality and keep growing the business
- Greater focus on business core competencies
- Improved security (to counter the side-effects of working out of office networks).
2.1. Flexible workforce and Composable ApplicationsThe work patterns and habits have undergone a dramatic shift in the past 2 years. Employees’ responses to working from home (WFH) are mixed but everyone wants to retain the flexibility of WFH. In many cases where the skill is in demand and is cloud-based, flexible working can also emerge as a deal-breaker. Hence, we will see an increasing number of contracts accommodating clauses that will allow such flexibility. Similar to the employee, businesses also want to use software that is flexible to support fast, safe, and efficient changes. The composable application architecture approach allows such adaptability and can add a new feature or set of features 80% faster than regular architecture.
2.2. Robotics Process Automation (RPA)/AI-driven AutomationRobotic Process Automation deals with adding intelligence to the software (BOTSs) so that we can automate repetitive processes. Statista predicts that the RPA market will grow to about USD 8 billion from the current USD 2 billion in the next five years and to a whopping USD 13.5 by 2030. The pandemic has proven that a process that is less human-driven is more resilient. With the waves of lockdown and restrictions still around, we cannot blame businesses demanding such automation. Gartner also has shown that hyper-automation improves the quality of work, speeds up business processes, and enables faster decision-making.
Robotic process automation
2.3. Industry SpecializationWith more and more industries and sectors adopting IT, automation, and Cloud-based apps, the need for a specialized workforce or software that are more focused on specific industries will rise. Although many software is fundamentally the same, because of the perception of the end-users and industry-specific language that is easy to understand, software that incorporates the changes and enters the market early gains a huge advantage over late entrants. With remote working, training sessions also have become either remote or recorded, hence the closer software is to the industry standard jargon, the more familiar is the end-user, leading to more adoption. It also helps if the training videos and material are customizable to one or more native languages. We have often seen this trend in adoption in the CRM markets. The SaaS applications that are more popular among certain businesses in industries command a major market share.
2.4. Cloud adoption with mobile appsWhen flexible working becomes the new normal, employees will demand more than one way to connect and finish tasks. It is important for software outsourcing companies to develop seamlessly integrated applications that can enable them to work from various devices over a single login. Many businesses are using Cloud applications but many of these applications are quite heavy and can be accessed only through desktop applications (not even desktop browsers) and functionality provided in their mobile apps is quite limited. This approach of desktop-first hampers productivity and delayed decision making. While cloud technology forms the backbone of this convenience, your software development partner must be well versed with developing native apps for laptops (Windows, Mac), browser-based apps, and mobile apps (Android, OS) to make sure your employees do not face any issues while working from anywhere. The goal is to make software so seamless that it doesn’t matter who used it from which device, the process should never get delayed.
Cloud adoption with mobile apps
2.5. Enhanced emphasis on Cybersecurity & PrivacySecurity is the fundamental requirement of all the above trends. Any application should be end-to-end secure. From the authentication mechanisms being used for logging in to the end-user to encrypting and storing data backups to counter a ransomware attack, the application must be robust and resilient. The use of Multifactor Authentication (MFA) is one such simple example that the industry is demanding for in every application (even if it is non-critical). It has become almost an industry practice to build applications that are secured by design, and even the moderately critical applications are to be built on zero-trust security architecture. Soon, many governments will start passing legislation making security inclusions mandatory for almost every type of sourcing to the government.
Enhanced emphasis on Cybersecurity & Privacy