Companies from different industries outsource their services for various reasons. They need better operational flexibility or just need new specialized skills or cost savings. During the pandemic, businesses have started investing more and more to digitize their products and services which led to the increased volume of outsourcing IT services. However, market trends are constantly changing. If you wonder what the IT outsourcing trends 2022 are, keep reading, we’ll present them all.
What are IT outsourcing services?
Let’s start with the basics and explain what IT outsourcing really is and what IT services can be outsourced. IT outsourcing is the use of external service providers to effectively deliver IT-enabled business processes or application services. Simply speaking, it’s when you hire an external company to handle your IT needs. Outsourcing companies can handle everything from the recrutment process outsourcing, software developement and finishing on Managed services.
Types of IT outsourcing:
- Offshore outsourcing involves sending software development-related work to a company in a foreign country which offers lower costs, tax savings, and political stability.
- Nearshore outsourcing involves sending software development-related work to a company within the same country or region. Under this partnership, a company may outsource services to a nearby country.
- Onshore or domestic outsourcing involves outsourcing software development services to an external service provider located in the same country to provide software development related work remotely or on-site. For example, a company based in New York might outsource its services to a provider in Texas.
Usually, companies outsource the following IT services: software development, web development, database development, mobile development, support and maintenance, technical support or help desk, infrastructure, networking and communications, disaster recovery, data storage, security, and telecommunications.
The main reasons why companies use outsourcing in IT
IT outsourcing has become one of the most popular services among small and medium enterprises. Why is that? When is it reasonable to outsource your IT?
- You lack in-house software developer or specific expertise – if you don’t want to hire full-time IT employees, IT outsourcing may be a good option. The tasks that the in-house team would handle in exchange for high salaries can instead be handled externally on a monthly subscription basis.
- You want to save money. IT outsourcing is a way to allocate resources to tackle daily needs of your company better.
- You want the best technologies – outsourced IT services use only the most high-end technologies on the market. Also, thanks to outsourcing, you get access to world-class capabilities. You get expert knowledge and experience that present employees may not offer.
6 IT outsourcing trends 2022
The IT outsourcing industry has been growing rapidly in the last few years. The market is fast-paced and affected by current IT trends. Let’s look at the most important IT outsourcing trends that you should know about!
Cloud
The COVID-19 pandemic compelled businesses to alter their processes as quickly as possible to enable their teams to work remotely. This trend is expected to remain an important business goal in 2022. Cloud computing is expected to be a powerful outsourcing tool that simplifies processes and business operations. It enables sharing of information, as well as being always online and available. Cloud computing allows companies to outsource important IT functions (particularly data storage, data management, as well as data protection). The cloud computing market has continued to grow, and the size of the market is estimated to reach $791.48 billion by 2028.
Artificial intelligence
By Artificial intelligence, we mean software that can perform tasks in a similar manner to human intelligence completing tasks. Not all companies are able to develop AI on their own, so it makes sense to outsource it to professionals. AI may turn out to be key to business integration, enabling industries to manage their processes conveniently.
When it comes to IT and IT trends 2022, businesses can use AI to:
- Gain better control of the data and relevant processes. Thus, companies can integrate various areas of business.
- Thanks to AI-powered chatbots, businesses can easily handle customer queries and complaints. This way human employees can focus on more complex tasks.
- Handle and mine large amounts of data to create an even better user experience.
Artificial intelligence is strongly connected with RPA (Robotic Process Automation). RPA is a way to automate internal and external processes, as well as manage robots to carry out simple tasks. The demand for RPA has been rapidly increasing, also among outsourcing companies.
Blockchain
When it comes to the outsourcing industry, blockchain services will definitely be in demand in 2022. If you still don’t know what blockchain really is, time to get familiar with this trend as it has already had a huge impact on software development and it seems this is just the beginning. A blockchain is a kind of distributed ledger that is designed to keep a trace of all transactions. It is mainly connected with cryptocurrency markets and finance software development. The technology is especially useful in the utilization of tools like decentralized applications or in enabling cryptocurrency payments for various services. In software development outsourcing, demand for blockchain services is expected to grow further, as more and more businesses learn how to integrate it into their operations.
Machine learning in IT trends 2022
The focus on machine learning and automation has become quite popular in the last few years. The trend is believed to be kept, also in the latest outsourcing trends. This is because machine learning can bring numerous positive changes to software development processes. First, it’s a great way to detect deviations from coding guidelines. Well-written software should meet functional and non-functional requirements and machine learning helps in ensuring that the team follows coding standards, mainly thanks to ML-powered tools to find common deviations. Also, it simplifies software development project management as it can help Project Managers navigate the project’s complexity (project forecasting, algorithms, risk identification). Finally, machine learning can make coding, code review, and testing much easier.
Cybersecurity
In the IT outsourcing industry, data security is one of the top priorities. For many IT companies, outsourcing may be risky, especially when they need to trust sensitive data with a third party. Nowadays, data is the most valuable resource, and assuring its security is crucial when you outsource some IT processes to an external partner. This year and in the coming ones, businesses are expected to require even more services from outsourcing companies that implement reliable security measures. A need for cybersecurity professionals and expertise will keep growing – a high-profile data breach is enough to put a company out of business for a while, after all. Cybersecurity is more critical than ever so IT outsourcing providers will be offering security as a service where they manage your security operations from end to end.
Remote work and building dedicated teams globally
The practice of remote working has become a standard in many businesses during the pandemic. Now, when the pandemic is over, it seems that remote work is here to stay for good. More and more companies look to dedicated team work remotely.. Traditional office-based positions have been replaced with flexible, remote global teams. Software development companies have restructured, and we have all realized the benefits of remote work and new opportunities. In IT outsourcing, remote working and building ‘global teams’ enable hiring the best talents from all parts of the globe, making remote outsourcing a smart and beneficial choice for many businesses.
What are the benefits of IT outsourcing?
Now, when we know the latest outsourcing trends, we should also explain how IT outsourcing may be beneficial for your business. Below you will find the most important pros to outsourcing your software development processes.
- You save money. Usually, the cost of finding and retaining IT staff can be prohibitive. When you go for outsourcing, you avoid the costs of retaining an in-house team and allocate more money towards expanding your business.
- Productivity boost. Once you delegate some parts of IT processes to an external partner, your team can focus on the more pressing day-to-day concerns of business. Your in-house productivity becomes far more efficient and streamlined. You can focus on your core strengths and leave IT tasks to qualified, off-site personnel.
- You gain access to a global talent pool. You can reach professionals that you may be in short supply or unavailable locally. You can easily connect with top talents from around the world to find a perfect match for your project. At the same time, you can make better use of your internal resources by delegating some of your business processes.
- Faster time-to-market. IT outsourcing means that you don’t have to pause the regular operations while waiting for implementations as tasks are performed instantly. Faster time-to-market is only one among time savings. Also, you don’t have to advertise, interview, and train new in-house employees.
- You can scale up fast. You don’t spend time on various processes so you can focus on working with new clients and taking on new projects.
Stay ahead of the trends with RiteNRG
As you can see, Software development outsourcing will keep growing in the next few years. Depending on your needs, there are many outsourcing models to choose from. If you are looking for professional support that will take over the software development areas of your business, you may consider hiring a dedicated team. At Rite NRG, we will help you discover how outsourcing can supercharge your business operations. Ready to schedule a free consultation call?
