Expert knowledge | January 30, 2020
Main trends in IT outsourcing in 2020
At the beginning of each year we all try to make predictions for the upcoming months. It is impossible to predict the future – but certain forecasts can be made. We have been operating on the market for almost two decades now, witnessing several changes in that time, which has made us attentive observers of the industry. What are the trends that can shape the outsourcing industry? What might be the reasons for outsourcing IT services in 2020? Read the article to find out!
Top trends in IT outsourcing in 2020
Wider range of outsourcing services
A survey conducted by Deloitte last year on cyber transformation and cyber risks proved that “many organizations need a little bit of help in a lot of places”. Operating in the outsourcing industry, it is hard not to agree with that statement, especially taking the increasing number of quickly developing tech solutions into consideration. There is a wider range of disruptive, developing technologies offered by outsourcing companies, and most of the tech solutions complement each other. Artificial Intelligence and Machine Learning, IoT and the cloud – these are some of the most recognizable “star couples”. Outsourcing companies respond to market needs here, providing a more extensive range of digital transformation services and reshaping their offer accordingly.
When deciding on outsourcing services, businesses should not overlook the importance of political and economic stability of the countries which they outsource services to, either in the offshoring or nearshoring model. According to Gartner, geopolitical tensions are causing doubts in terms of service delivery stoppages or potential issues. As per company predictions, 65% of bigger businesses will have multisourcing strategies implemented by the end of 2023, meaning IT specialists located in multiple countries. As per CBI research, political stability is a highly relevant aspect in terms of choosing a country for nearshoring and offshoring.
Strategic planning here should include:
- the identification of potential risks,
- failsafe contingency plans,
- ISO 27001 certification.
Multicultural outsourcing is a measure that might not only minimize the risk of service delivery disruption. The hidden value we get here is a cultural and knowledge exchange between IT partners. We believe that European geopolitical stability will foster the development of outsourcing services in 2020 in this part of the world.
In the end, it is innovation that drives everything about the business. As part of the Digital Europe Program, the European Commission has proposed to invest 9.2 billion euro for 2021-2027 to facilitate digitalization in European countries. The aim of the funding is to boost the development of emerging technologies and foster the development of digital skills. As we know, the talent shortage in ICT is a major topic of discussion, and companies willingly outsource to innovate. Is it possible to innovate without the cloud nowadays? Or without implementing intelligent AI-based solutions or smart IoT devices? The outsourcing sector has been responding to these questions for the last couple of years and we predict that this trend will still be strong in 2020.
More emphasis on partnerships
Recent years have shown that outsourcing is increasingly perceived as a way of gaining access to an inaccessible skillset. We can summarize this approach in one sentence, which is not far from a universal truth: the real value is people, not money. It looks as though companies nowadays are simply more development-oriented than driven by cutting costs, hence the emphasis on the value of professional skills. Outsourcing companies ensure access to talents, and teams are built in such a way as to ensure smooth cooperation. As observed in our own teams, the boundary between clients’ employees and our specialists often disappears. Agile solutions are often used here since they facilitate the exchange of ideas and improve communication – including in dispersed teams. Based on our observations, we believe that a business partnership is an added value of outsourcing that may increase in importance in 2020 and beyond.
We believe that our predictions of the top outsourcing trends in 2020 will help many businesses to deepen their understanding of outsourcing. The digital transformation is picking up speed and the market is not slowing down. Companies seeking a trusted partner should consider focusing on multicultural providers delivering a wider variety of services. They are likely to be a suitable partner in terms of digital transformation in 2020.