Top 10 software development outsourcing trends for 2021: Everything you need to know

IT outsourcing is becoming increasingly popular and bringing significant changes to businesses around the world. According to a report by Gartner, global IT spending, which reached $3.8 trillion in 2019, will only increase in the coming years. The statistician estimates global outsourcing revenue at $92.5 billion in 2019 and predicts rapid growth in 2021.

 

These figures reflect the unlimited potential of new technologies. After all the recent innovations, most companies have already accepted the inevitability of digital transformation. Companies of all sizes are following the prevailing trends in software development outsourcing.

 

Outsourcing shapes global markets, changing the way companies think about their development, and bringing unique opportunities to exploit. That's why we've highlighted ten trends in software development outsourcing that are unprecedented in 2021. So get ready for all the hype that your business can take advantage of.

 

Software development outsourcing trends: what to expect in 2021

 

1| The rise of niche boutique software companies 

 

Opinions may vary: some say they prefer to work with a single outsourcing company. Others say they take advantage of multiple suppliers.

 

But the facts show that more and more companies need specialist firms. The reason for this trend is the rapidly developing technology sector. An in-house team can't keep up with all the emerging innovations every day and have all the necessary skills.

 

Companies are looking for outsourcing providers experienced in delivering maximum quality. Working with more than one supplier is not a problem as long as the desired results. However, suppose a large outsourcing company offers full-cycle software development with a diverse team of skilled professionals. In that case, it also has a severe advantage in being a good supplier that can build open solid relationships.

 

2| Customers are looking for a better experience with AI and IoT.

 

Online shopping has long since permeated our daily lives. Moreover, according to Forbes magazine, it has become the new norm with the COVID-19 epidemic, and even the over-65 age group says they are more likely to shop online than offline. The growing demand for online shopping leads businesses to invest more in improving the user experience (UX). Customers are 140% more likely to spend if they have a positive shopping experience.

 

AI and IoT solutions will improve e-commerce by providing a more personalized customer experience. AI chatbots are already replacing human interaction and providing customers with the advice and guidance they need.

 

The process of outsourcing software development

 

A Gartner report claims that 85% of customers order products or services without human interaction. 80% of customers prefer companies that offer a personalized customer experience over those that do not.

 

3| High demand for blockchain services

 

Global blockchain-related spending expects to reach $16 billion annually by 2023.

 

As such, it has become one of the key trends in IT outsourcing. From the development of smart contracts to the instant execution of micro-transactions, distributed ledger technology has been proving to increase security and transparency and provide innovative funding solutions for start-ups.

 

The growing demand for knowledgeable and competent blockchain services has created a need for experienced specialists. These days, there is still a shortage of blockchain specialists.

 

As a result, a wide range of industries, from financial institutions to private start-ups, are looking to outsource companies with teams of experienced blockchain specialists.

 

Faced with the growing need for blockchain talent and its scarcity, companies compete to hire the best talent on an equal footing.

 

4| The growing need to strengthen cybersecurity

 

Data has long been the most valuable resource. That is not news. But that is why its protection has never been as crucial as it is today.

 

With cybercrime on the rise, more and more companies are investing money and trying to comply with the GDPR (General Data Protection Regulation). The need of the hour is that all data is well protected.

 

Whether you're an IT company or a small family business with a website, owners need to ensure that their security concerns are addressed, their business data is protected, and they meet GDPR compliance standards, especially when government agencies become victims of cyberattacks. Will turn to outsourced cybersecurity services.

 

5| Growth of the global cloud computing market

 

Another prediction by several sources, including a report by Gartner, is that the demand for cloud computing will only increase. According to the forecast, global cloud shift spending will be close to $1 trillion.

 

With the increasing amount of data that needs to be stored, businesses will outsource for an effective cloud platform. With the need for cloud outsourcing services comes the demand for security services. The number of public cloud platforms for data storage is already growing.

6| The fintech, healthcare, and telecoms industries will be significantly digitized.

 

Trends in outsourcing go hand in hand with trends in technology affecting specific industries.

 

In particular, Fintech, Healthcare, and Telecom will have a high demand for outsourcing services required for digital transformation.

 

In Fintech, AI, blockchain, and Peer-to-Peer transactions will become the new norm. In addition, public and private healthcare organizations will require AI-based VR outsourcing services to expand the range of diagnostics.

 

Not to mention the impact that 5G networks will have on the telecoms industry, opening the door to unprecedented opportunities for large-scale connectivity with IoT networks.

 

7| Expansion of the IT outsourcing based in Eastern and Central Europe 

 

Until a few years ago, the demand for outsourcing services was primarily driven by the need to reduce costs, but by 2021, companies will be focusing on quality rather than low prices.

 

To achieve this, they will look to Eastern and Central Europe, rather than China and India, for their outsourcing environment.

 

Ukraine, Poland, and Belarus are already attractive locations for experienced offshore development teams to work with.

 

The growing development market in Eastern and Central Europe is due to the high quality of service, well-trained teams, and still moderate prices.

8| Explosive growth of the AR and VR market

 

By 2021, the AR market will increase to $133.78. As smartphones enter the global market, the demand for AR and VR solutions will increase.

 

Shopping experiences expects to be boosted by AR technology. The recent launch of Pokemon Go is a vivid example of the interactive character that AR can bring. These technologies will continue to enter markets such as tourism, e-learning, and manufacturing.

 

Although the market for AR and VR is still uncertain, companies are looking for outsourcing services to implement interactive elements to increase sales. Large companies such as Mercedes and Apple are already adopting these technologies.

9| The hype around robotic process automation

 

Lower operating costs, better coordination of work, fewer manual errors - these are just some of the benefits of RPA technology that are becoming more widespread.

 

In an ever-evolving digital environment, automating your business is paramount. Logistics management, payment processing, and more personalized experiences can all benefit from RPA technology.

 

Virtual assistants and robots are just the tips of the iceberg for facilitating simple and repetitive tasks performed by humans. That's why IT outsourcing companies are investing heavily in business automation and advanced analytics.

 

10| Growing interest in progressive web applications

 

The growing demand for a better user experience is driving the need for PWAs, which are app-like experiences on websites.

 

The first wave is Google's unfriendly attitude towards sites that do not have a mobile version. The second wave is customers themselves who do not welcome websites with UX problems. It is why companies are adopting PWAs and looking to outsource to meet their customers' growing demands.

 

Summary: Why is IT outsourcing growing so fast?

 

 

 

We did not misuse the word "team." One of the key trends in software development outsourcing is strategic partnerships with multiple vendors. Companies are short of talent and need to outsource to experts.

 

However, despite having established relationships with multiple outsourcing companies, these relationships have changed and continue to change.

 

As the demand for outsourcing increases, collaboration is becoming more open and interpersonal. In addition, companies are focusing more on value than on cost reduction.

 

As a result, collaboration with several suppliers specializing in a particular service is becoming more common.

 

In other words, to stay ahead of the curve and meet the quality requirements of 2020, companies will look to outsourcing partners to share the risk and co-create better value. At top software outsourcing companies in India, empower companies and their employees with cutting-edge transformative solutions and data-driven insights.