Business Jun 17, 2021

IT Outsourcing Trends And IT Outsourcing Statistics in 2021

The IT outsourcing sphere continues to grow, expanding its popularity and causing additional changes in the global business sphere. For example, many restaurant chains added takeaway options, added online order possibilities, or even launched their own applications for food delivery. No doubt, 2020 was a hard year that introduced many challenges and difficulties for almost all the industries.  That year has proven that those who adapt faster will succeed and thrive on the market. 

IT corporations, facing a skyrocketing demand for digital services, were forced to change their workflow during the pandemic. Today, the IT outsourcing field keeps its growth and gains more popularity. It brings a lot of fundamental transformations to companies all over the world. According to McKinsey’s report, many companies have accelerated in the adoption of digital technologies, with almost 80% of the customer interaction going to a digital field.

With all the changes and innovations in the IT outsourcing sphere, several particular 2021 trends are worth special attention. Let’s inspect some outsourcing trends and IT outsourcing statistics in 2021. We hope some of them will be useful for you and your company to make working processes better and easier.

IT Outsourcing Software Development Statistics in 2021

Let’s look at the IT outsourcing statistics before checking the trend in outsourcing in detail.

The market of IT outsourcing continues to expand every year. As per the Gartner data, IT spending in the world was $3.8 trillion back in 2019, and it is most likely to grow even more in the future. Based on the data from Statista, the outsourcing market worthed $92.5 billion back in 2019. And finally, the application outsourcing revenue is predicted to be $108.7B in 2021.

Source: Statista

Statista also predicts the IT outsourcing market to show an annual revenue growth rate of 5.13% in 2021-2025, resulting in an overall market volume of $429.3B by 2025. And in a global context, most revenue will be generated in the US ($129B 2021). However, other parts of the world are starting to take the leading positions on the market.

The pandemic and the economic crisis of 2019-2020 greatly affected IT outsourcing trends as a progressive quantity of businesses is going to increase their use of IT outsourcing in 2021. Moreover, many companies that had never used IT outsourcing will use it in the following years. 

Statista surveys also show that more and more companies are improving their IT infrastructures to work remotely, and within the next 12-18 months, about 50% of businesses are said to do so.

TOP 5 IT Outsourcing Trends in 2021

With the global modifications in the economy and our everyday lives that recent events brought us, outsourcing trends 2021 will involve more diversification, agility, and mechanization. IT outsourcing trends in 2021 seem very encouraging, and the outsourcing industry overall might help other corporations deal with new problems caused by global changes. 

AI and IoT grow even more popularity in the IT-sphere, and neural networks are becoming more sophisticated. More businesses are motivating their teams to work remotely, and the leading international IT outsourcing centres are moving their local positions. We have highlighted five software development outsourcing trends that will get more and more relevant in 2021, and you are welcome to look at them.

AI, IoT, and Robotic Process Automation

Some may argue that artificial intelligence and automated processes might kill some of the IT vacancies, but others may say it will only give more Some may argue that artificial intelligence and automated processes might kill some IT vacancies, but others may say it will only give more opportunities to the market. Introducing AI and IoT technologies in the IT-sphere might be among the most critical software outsourcing trends in 2021.

Adding AI to your usual workflow can give you more free time than was spent on simpler but time-consuming routine tasks. It will also help stores sort and process orders automatically with enhanced precision and shorter periods. Moreover, AI and IoT have proven to give great results in marketing and especially in online stores. 80% of users will return to the stores with more personalized goods recommendations, and it is proven that they will spend 140% more if they have a user experience.

Working From Home

The COVID-19 changed all business branches’ work tasks, and the IT-sphere was not an exception. According to Global Workplace Analytics, by the end of 2021, 25-30% of the employees will be working from home. Upwork’s survey showed that 1 in 4 US citizens (26,7%) would prefer working from home, and this number differs drastically from the 2018 Pew Research Center survey where only 7% of the US employees were ready to work from their homes.

It can have its benefits for businesses, like spending less on office maintenance. However, the data protection of the company can be an issue. Most of all, the workers will be using their home networks, and not all of them are well-secured as a LAN of a company.

According to the Cisco report, 82% of the employees feel that cybersecurity is now extremely critical, and there are more and more growing concerns around remote data access and its security. 

Need For Cybersecurity

Based on the last IT outsourcing trend, a growing concern in cybersecurity is another hot topic for 2021. Based on the Cisco report, 85% of the companies said cybersecurity has become even more actual than pre-pandemic times. And 66% of the companies note that financing of cybersecurity will increase significantly. 

Computing technologies are prospering in recent years, and numerous businesses outsource all the processes related to that: migration, compliance, and maintenance. Gartner notes worldwide public cloud end-user spending to grow around 23% in 2021. And with these changes, we should admit that data has become one of the most valuable resources and making sure this data is secured is now a big trend in outsourcing. With increasing information breaching cases, most big companies invest in GDPR (General Data Protection Regulation).

Hackers are now even attacking governmental websites, stealing important and confidential data. With increasing cases of cyberattacks, all companies dealing with their customer’s data should outsource cybersecurity tools to minimize any risks of data leaks and meet the compliance standards of GDPR.

AI-Powered Chatbots

As we have mentioned before, using AI is becoming one of the major technology outsourcing trends in 2021. According to Chatbot Magazine, the USA, India, Germany, the UK, and Brazil are the top 5 chatbot-using countries. Business Insider predicted that 80% of companies would use chatbots in 2020, which will continue to be one of the relevant outsourcing trends 2021. 

Artificial intelligence was created to minimize human time and efforts in completing routine tasks. It has proven its potential, for instance, in chats with clients. Customers are most likely to purchase in an online store that has some kind of direct communication with the representatives, and AI-powered chatbots can facilitate the workflow of a support representative team. You can design the chatbot to help customers with the most frequently asked questions or concerns, and if the case is out of the bot’s control, it can easily notify its human “coworker” to join the conversation.

As per Opus Research, companies will invest around 4.5 billion dollars in chatbot technologies in 2021.

Eastern Europe is Becoming a Lead IT Outsourcing Hub

It’s not a secret that many companies outsource a part of their production to reduce the product cost and be more changeable. India was a leader in IT outsourcing in 2020, followed by the Philippines and the US. But in 2021, Eastern European countries are taking the lead. We can say that Ukraine and Poland will be leaders in the IT outsourcing market by the end of 2021, with its 23,000 specialists graduating each year from top technical Ukrainian Universities and 74,000 ICT students in Poland.  

According to Beetroot’s report, Ukraine will have a 20% growth in the IT service market sphere with over 200,000 highly professional tech specialists. Around 85% of these specialists have at least an intermediate English language level. As per the Statista report, the Polish It-outsourcing market will reach the revenue level of USD 2,311.7 million by 2021. Poles also have a high English Proficiency Index, which means they can easily cooperate with international corporations.

Outsourcing Journal has nominated Ukraine to be number one in digital, technology, and IT destination IT outsourcing Europe. According to Clutch, the top spheres of IT outsourcing in Ukraine in 2021 are e-commerce, enterprise, finance, education, and healthcare. According to Clutch, there are around 50,000 software companies in Poland, and more than 800 are custom software development tools.

Summing Up 2021 Trends

All in all, 2020 and 2021 have introduced many changes in existing outsourcing trends and brought new software outsourcing trends. We can see that the focus for IT outsourcing is shifting towards Eastern Europe, and people are discovering that remote working is a great alternative to offices. AI is slowly but steadily taking more and more space in IT development. Cybersecurity has become a major concern in 2021, and more companies are trying to invest in protecting sensitive data. 

The last times have shown all of us that only businesses that can change easily and can keep their progress. So keeping an eye on the current trend will help your business prosper.

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