Have you ever wondered why we hear more and more about IT outsourcing recently? This is because, in the past, large companies have been able to handle all of their IT needs by themselves. However, as technology has advanced and became more complex, it is virtually impossible for one company to manage everything on its own.
Not only that, the IT market is more global today. Some applications built in Europe can be used primarily in the US. This forces companies to serve their customers not just locally but on a global scale.
This is where outsourcing comes in. Outsourcing allows you to focus on your core competencies while leaving other tasks to a third party so that you can maintain the competitive edge needed in today’s marketplace.
However, like everything else in this world, outsourcing is no exception and it is constantly evolving and offering novel practices. In this blog post, we will discuss 6 major trends that are shaping up in 2022 and how they might affect your business.
What is IT outsourcing?
IT outsourcing refers to a practice where a business or a company hires an outside firm to perform IT functions for them. This is a common practice, as many companies do not have the resources or expertise in-house to handle certain IT needs.
This can be anything from simple tasks like planning or design mockups, to more complex tasks like programming and web development.
There are several reasons why companies outsource their IT functions, but the main ones are:
- To increase efficiency and effectiveness by bringing in specialized skills, expertise or technology that is not available internally;
- Reduce costs through flexibility and scalability – Hiring an outside company makes it easier to scale up (or down) when demand changes;
Of course, there are other reasons why companies turn to outsourcing, however, the ones mentioned above are the main drivers of this practice.
What are the outsourcing trends in 2022?
Now it’s time to answer the main question – what are the IT outsourcing trends in 2022? Without further ado, let’s dig into some of general predictions.
Increased focus on artificial intelligence
Artificial intelligence enables companies to make data-driven decisions and automate processes. AI can help businesses deliver the best possible services in less time with fewer errors and lower costs.
With companies spending more and more money to stay ahead of their competition, it is no surprise that they have started investing heavily in AI technology. As a result, global AI market revenue is expected to reach US $ 51.27 billion.
The increased focus on artificial intelligence and automation technology is a great opportunity for outsourcing providers.
It is expected that businesses will also start to rely more heavily on outside vendors with expertise in this field. Instead of developing their own tools and strategies for AI and AI-powered automation (which could take years), many companies will instead outsource this function to a third party.
The practice of remote work will become even more popular
With the onset of the pandemic, the practice of remote work has seen a great increase. Although there is much hopeful news about ending the pandemic, the practice of remote working does not appear to be going away anytime soon.
In fact, according to Gartner, 51% of global talent will be working remotely by the end of 2021.
The rise of remote work will contribute greatly to the growth of outsourcing. If companies were opposed to hiring a remote team abroad, now, having even internal employees work remotely, they are more likely to be interested and less reluctant to outsource certain functions to a third party at a lower cost.
This is great news for offshore companies, as it means more opportunities for growth and expansion.
Eastern Europe will claim more of the outsourcing market
Due to cheaper prices, high-quality tech education, and a wealth of talent, Eastern Europe is already a popular destination when it comes to IT outsourcing. However, the region is gaining more and more attention from companies around the world.
Eastern Europe enjoys highly dynamic IT communities. The talents of this region are employed in world-leading companies such as Google, Microsoft, Amazon, etc. In addition to this, with the huge increase in the success of the startup ecosystem, Eastern Europe not only secures its place in the top IT outsourcing destinations, but is likely to claim a larger market share in the coming years.
Cloud computing will grow even more
Since the introduction of cloud computing in 2006, this category has been growing at a rapid pace. In 2018 alone, companies invested approximately $ 175.8 billion in cloud computing infrastructure and services worldwide.
This trend is expected to continue over the next few years as well. The global market for cloud computing is expected to reach $ 482 billion by 2022, according to Statista.
As the world moves towards cloud computing, more and more companies will look for providers that offer on-demand services in this area. In line with this trend, it is expected to see increased demand from businesses across industries who are looking for cloud engineers and developers who are familiar with cloud infrastructure and its management.
Blockchain services will be more in demand
The blockchain is a distributed ledger where all transactions are recorded. This technology has been around for years, but it was Bitcoin that brought the idea to mainstream attention when this cryptocurrency became the first to use the blockchain as its underlying platform.
Since then, many other companies have started using similar platforms in order to offer their own services and products. Experts predict that this trend will only heat up over the next few years, as more and more businesses discover how they can incorporate blockchain technology into their own business.
When it comes to outsourcing providers, increase in demand for services related to the development of decentralized apps (dApps), software engineering for crypto projects or exchanges is expected.
Growing need for cybersecurity specialists
The popularity of cloud computing, mobile devices and IoT has brought a lot of new possibilities to the market. However, it has also exposed companies to unprecedented security threats that were unheard-of just a few years ago.
Hacking, cyberattacks and data breaches are now commonplace in today’s digital world. In fact, The number of connected IoT devices has increased by 9%, reaching a total of 12.3 billion worldwide.
This enormous number makes it difficult to protect these devices from hackers and creates an ever-growing need for cybersecurity professionals who can keep up with this fast-paced industry.
Looking into next year, it is expected for IT outsourcing providers to offer a wider range of services related to cybersecurity. A growing number of companies will be looking for software engineers, dApp developers and IT security experts who can help them stay one step ahead in this area.
As you can see, 2022 will be an interesting year full of new opportunities for both companies and outsourcing providers. Even more companies will look to outsourcing providers that can help them with AI, cloud computing, blockchain development, or cybersecurity.
As for IT outsourcing providers, they will have to prepare for an increased demand for engineers who are familiar with these emerging technologies. Otherwise, they risk losing out on new business opportunities to providers that can offer more flexible solutions.