25.04.2019 / 16:59
Trends transforming IT outsourcing: what changes should we expect?
Companies use IT outsourcing to reduce costs, get quality results and focus on their businesses goals. Software application development and maintenance are the most outsourced IT services at the moment. Around 63% of global CTOs outsource or offshore IT services.
How outsourcing will develop in the nearest future and what may affect it?
More focused and competitive services
Ever-growing popularity of outsourcing can lead to more narrowly targeted and competitive services. Increase in the number of outsourcing companies make them improve services’ quality. Contracts will be more likely based on outcomes rather than outputs. It is also expected that outsourcing will become more collaborative sharing risks between providers and clients. Thus, 69% of survey respondents think that outsourcing companies will be contracted as systems integrators sharing more risk with their clients.
Use of AI
Artificial Intelligence and Machine Learning are transforming traditional outsourcing to a digital one. Automation of tasks will necessarily reshape management and production processes. 83% of respondents believe robotic process automation (RPA) will have significant impact in the next 10 years. It may give price flexibility both for providers and for their clients as it increases efficiency and saves time. Agility, processing and analyzing capabilities make AI a powerful management tool. Ability to deal with comprehend information can help AI make judgement-based decisions and structure data. AI-driven technologies may also improve security of data predicting and identifying security breaches.
Today standard agreements are being revised and replaced by software-enabled cloud services arrangements. It means that services will be considered on a more commoditized basis. This way processing of legal provisions will be faster. However, there will be new risks connected with migration of operations and data into the cloud. Common AI use can also impact on agreements and their terms as it will replace several job positions. Companies are going to become less price-focused that will pave the way for flexible custom agreements with custom scope of work.
New outsourcing destinations
Outsourcing will become even more global competing India and Ukraine. It is expected that Eastern Europe will catch up other service providers making outsourcing ubiquitous. Such countries like Poland, Romania, Belarus and other will become the hottest outsourcing destinations. In Belarus there are over 1000 companies providing IT services. Great educational background and accumulated experience make cooperation with belarusian developers profitable. The number of freelancers is continuously rising because of flexible schedule and free choice of technologies and projects. Things like double pricing overnight or no need in social package may lead to freelance boom. It will make price setting flexible but there will be no quality guarantees. Freelancers, in turn, will get opportunity to be independent IT providers and earn more.
Despite possible changes in IT outsourcing, we think that it will continue to grow rapidly and transform our daily life. If you need a reliable outsourcing partner, we are always ready to create custom Web, Mobile or Enterprise software solutions for your business.