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IT Outsourcing Market In 2020: Challenges And Solutions

Table of Contents

#1. IT Outsourcing in the Present Day
#2. IT Outsourcing Trends Overview
#3. IT Outsourcing in 2020 and Onward
#4. Final Thoughts

Companies have been outsourcing various IT operations for many reasons. Firstly, it allows for more operational flexibility and saves time. Secondly, it helps save costs and find specialists to do tasks that require specific skills. Of course, like anything else, IT outsourcing has its own trends that change over time.

2020 has been predicted to become the year of huge changes in the IT outsourcing market. You need to be ready for these new trends in order to continue outsourcing effectively. Here are some challenges and solutions related to outsourcing that you may encounter in 2020.

IT Outsourcing Market In 2020

IT Outsourcing in the Present Day

Before we get to the trends of the future, it is important to recognize the ones of the present. According to Statista’s list, 2017’s most outsourced IT functions were:
  1. Software, Web, or Mobile App Development.
  2. Software App Maintenance.
  3. Datacenters.
  4. IT Infrastructure.
  5. Helpdesks.
  6. Networks.
  7. Integrations.
  8. HR.
While these functions will be important in the near future, there are some changes expected nonetheless that will influence the overall trends in the IT outsourcing market.

IT Outsourcing Trends Overview

According to the research done by the National Outsourcing Association, the outsourcing market in 2020 and further will see such changes:
  1. Automation: This is a broad topic that includes everything from Artificial Intelligence to bots. The aim of all the robots skilled in executing IT tasks is virtual support that businesses need so much these days.
  2. Multiple Providers: It seems that clients will start choosing several companies to work on one project. It may reduce the efficiency of communication between the collaborators, but the quality of the end product might become better.
  3. Cloud-Based Platforms: It is predicted that there will be a dramatic increase in the number of storage and security projects in the IT sphere.
  4. Emerging Business Models: Because there will be several collaborators working on one project, these partners will share responsibility, and this will lead to contracts becoming outcome-based.
  5. Value Over Price: Price will lose its tremendous importance and value will be more crucial. The focus will shift from the lowest prices to the highest value.
  6. New Outsourcing Areas: Central and Eastern European IT developers will be chosen by companies for outsourcing tasks more often.
IT Outsourcing Market In 2020 Onward

IT Outsourcing in 2020 and Onward

Although the trends we will talk about are for 2020, they might remain true even after that. Here are the most interesting and important IT outsourcing trends to watch out for:
  1. Contracting: Contracting is becoming an essential attribute of any outsourced project especially when it comes to international digital marketing campaigns. Both buyers and providers will soon start signing outsourcing contracts that are focused on value and outcomes. Moreover, outsourcing providers will start working as systems integrators and sharing more risks with the clients.
  2. Delivery: With contracts being integrated into this industry so quickly, there will be some coinciding trends accompanying this phenomenon. Notice periods and the lengths of the contracts will become shorter. This is due to procurement being the main focus once again. Thanks to the outsourcing contracts being outcome-oriented, there will be more possibility of future collaboration depending on the results of the project. Sharing risks rather than not doing will be recognized as being more beneficial for and by buyers and partners.
  3. Motivations: The main motivators for outsourcing IT functions may become completely different. The main reason for IT outsourcing, of course, is the reduced costs. But businesses may also start outsourcing because it improves customer experience, helps discover new capabilities, and so much more. Besides, the more companies want to outsource, the bigger the market becomes.
  4. Transformation: Clients looking for IT outsourcing companies are usually pressed for time and expect high-quality end products within a very short period. It is crucial for providers to transform in order to meet their clients’ needs in the modern, unstable world. One of the biggest problems is that there is a lot of buyer dissatisfaction with them accusing providers of being afraid of innovations and not being flexible enough. This is why it is essential for the latter ones to take into account this factor and change in the right direction to remain competitive.
  5. Automation: While automation is already a big thing, it may take on even a bigger role in the near future. Intelligent automation of manual processes will gain popularity in the IT outsourcing market with such things as virtual agents and bots creating somewhat of a revolutionizing effect on the industry. Pay special attention to the newest advances in robotic process automation as well as AI. In addition to that, the demand for big data analysts and AI experts can increase dramatically too.
  6. Cloud Sourcing: Many businesses are now migrating to cloud, so the demand for cloud computing is only increasing. Such things as public cloud platforms for data storage will become a more important necessity while providers will need to start working with online data centers. However, cloud sourcing means increased safety risks, so security will become almost the number one priority for many companies. This is why security IT outsourcing will gain popularity.
  7. Collaboration and Competition: Lastly, outsourcing companies will ultimately become big service integrators thanks to the trends mentioned above. Partnering companies will need to have proper communication to ensure that the job is being done right. Sharing risks, opinions, and ideas will help deliver better products faster. The industry will definitely become more competitive so it is only normal that providers will need to find collaborators among themselves.
IT Outsourcing Market In 2020 Final Thoughts

Final Thoughts

All in all, it is critical for IT outsourcing companies to stay up-to-date with the latest trends and prepare for future ones. The market is consistently changing, and you will need to transform and evolve with it in order to meet your clients’ needs.

>In some cases, a whole new mentality will need to be adopted while in others the approach will have to be switched for a more customer-centric one. You want and need to create trust while keeping in touch with the latest technologies and benefiting from them.

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