6 IT outsourcing trends for 2020

IT outsourcing trends

More and more, businesses are outsourcing their software development and information technology (IT) needs. As this becomes an increasingly common phenomenon, the market is steadily expanding, with providers offering IT solutions all around the world.

In order to remain competitive, IT outsource companies must keep up to date with trends in the services they provide. Businesses who partner with them must remain up to date as well — this will help them understand what they should expect from and ask for in a partnership. With that in mind, here are key trends that will shape the 2020 IT outsourcing landscape.

1. Emphasis on quality over price

Cost savings are a given when you use this model, especially with offshore or nearshore IT outsourcing, which tends to be significantly cheaper than onshore options. However, in 2020, the price will be de-emphasized, with more focus on quality, relationships, and talent. Money will still play a role, but seeking out skilled IT professionals and software developers will be the main criteria in choosing an outsourcing partner.

This is because many businesses have realized that the cheapest option is not always the best. Often, paying a somewhat steeper fee will result in a higher-quality product.

2. Incorporation of new skills

The scope of IT has increased dramatically over the past few years. Today, IT outsourcing services must go beyond general technology maintenance. They’re often responsible for building systems for organizations from the ground up, as well as creating and implementing cybersecurity measures and new software. This will require professionals to learn new skills to remain competitive in 2020, from becoming versed in artificial intelligence (AI) to understanding blockchain.

3. Specialization growth

Specialization is key to surviving in any market but no more so than IT. This idea is two-fold: IT outsource services should find a specific niche within the tech world and focus on serving a particular industry or industries.

As we’ve discussed, there are many activities that fall under the umbrella of IT outsourcing services. Thriving in this world will mean finding an area of expertise. For example, a company might specialize in building robust cybersecurity systems.

An IT outsourcing company should also focus its efforts on a specific field to help them become the “go-to” people in that industry. If, for instance, they concentrate their efforts on gaming businesses, they can build a strong portfolio of work and gain referrals among gaming professionals and developers.

4. International market expansion and competition

As mentioned, IT is a rapidly-expanding industry, with many new players every day. Businesses have plenty of options across the globe. If you’re based in the United States, you can search for nearshore IT outsourcing partners in Latin America or offshore partners in places like Eastern Europe and Asia.

There are some key international players in the industry already — India, Ukraine, China, Poland, and Argentina, to name a few. In 2020, we may see other destinations crop up as viable alternatives to IT outsourcing services, particularly in Eastern Europe.

5. Emphasis on augmented reality (AR) and virtual reality (VR)

More and more, businesses are looking to incorporate AR and VR into their services. IT outsource companies will be increasingly responsible for developing solutions that allow these organizations to seemingly manipulate reality to provide their consumers with new experiences.

For example, retailers are already using AR to visualize how a product might look in their homes or “try on” shoes and clothes. Meanwhile, tourists can “experience” a destination by being transported prior to actually arriving.

In 2020, businesses will be relying on IT outsourcing companies to help them create exciting experiences to a greater extent through AR and VR.

6. Stronger security systems

Just 14% of small businesses believe their ability to prevent and address cyberattacks and weaknesses are sufficiently effective, according to research conducted by the Ponemon Institute. With new malware attacks, phishing schemes, and other threats arising every day, businesses need to focus on prevention and education about cybercrime. IT outsourcing services will continue to play a crucial role in helping organizations build and maintain strong cybersecurity systems in the coming year.

The future of IT is bright. This ever-expanding industry will see new possibilities in 2020, from focusing on different niches to emphasizing quality over price. For businesses that partner with IT outsource companies, this means greater dedication and expertise — as well as more and more options to choose from.

Image credit: IT outsourcing trends via Michael R Ross/Shutterstock