Revealing IT Outsourcing Trends that Will Rule in 2023

“The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.”-Azim Premji.

The ever-changing world of business and technology necessitates that companies stay ahead of the curve with their business strategies, and IT outsourcing can be one way to achieve this.

it outsourcing trends

By outsourcing your IT infrastructure needs, you can save time and money while also ensuring that you stay on top of the latest developments in technology.

That’s why it’s important to stay informed on the future of outsourcing, so you can be sure your business will stay competitive and relevant. 

Wondering why IT outsourcing became so popular and curious about the latest IT outsourcing trends?

But before discussing that, here is something that will blow your mind!

As per the  IT outsourcing statistics, the ​revenue in IT outsourcing is projected to show a yearly growth rate (CAGR 2021-2026) of 8.93% from 2021. It will result in a market volume of US$551,956.3M by 2026. So, without wasting a minute, let us move to the most talked-about trends in IT outsourcing. IT Outsourcing revenue

Also Read: Types of IT Outsourcing Models: How to Choose the Best One?

11 Amazing IT Outsourcing Trends You Will Witness in 2023

Let’s explore the top IT outsourcing trends shaping your business in 2022 and beyond.

“Master your strengths; outsource your weaknesses.”

— Ryan Kahn, Founder of The Hired Group

1. Rise of E-commerce & Automation

Online shopping is expected to become more convenient with the technological transformation of online businesses. Many companies are now turning to automation to streamline their operations.

As a result, there is an increased demand in IT outsourcing services that have automated processes. 

One way is through chatbots, which can handle some basic customer service inquiries and even take orders via social media channels. Chatbots are also able to connect with other systems and track inventory levels and deals.

According to Statista, online shopping will reach 2.14 billion people worldwide by 2022. In the year 2019, about 14.1% of online retail is done online. 

By 2022, it is predicted that about 22% of all retail purchases will be made online.

Nasdaq predicts that about 95% of all retail purchases will be made online by 2024.

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2. Cloud Computing Will Become Even More Popular

Today, cloud computing is considered one of the major software development outsourcing trends, as it provides scalability and flexibility that organizations need to innovate faster and compete more effectively.

cloud computing

Companies are starting to outsource their cloud computing needs to third-party providers so they don’t have to worry about hardware and software updates. It’s less expensive and allows them to focus on what they do best – running the day-to-day operation.

Therefore, considering the sudden rise in the acceptance of this technology, it is estimated that by the end of 2022, the value of global cloud computing will reach 180 billion U.S. dollars. Also, SaaS application development alone is estimated to earn 113.1 billion dollars.

There is a 24% annual growth rate in the PaaS, SaaS, and IaaS markets. In the next two years, the global cloud computing market will rise up to 623.3 billion US dollars.

According to MarketsandMarkets, the cloud computing market is expected to grow from $ 148.8 billion in 2019 to $ 246.8 billion by 2023. This presents an excellent opportunity for outsourcing providers, as businesses are increasingly looking for ways to move their operations to the cloud.

Surely, the market for cloud computing services will continue to grow in the next few years, and companies will increasingly turn to outsource providers for help with this.

Also Read: Cloud Computing in Healthcare: How is it Impacting the Healthcare Industry?

3. 5G Network

The 5G wireless network is expected to create a lot of opportunities for businesses that want to outsource their IT needs. With more bandwidth and faster connection speeds, this could be a game changer in terms of how quickly companies can get help when they need it. 

5G enables companies to create powerful IoT systems to connect manufacturing, transportation, and other systems to improve efficiency.

The 5G industry will grow at a rate of 43.9% from 2021 to 2027 due to its success and widespread adoption.

Statista predicts that by 2022, China and North America will have the majority of 5G connections across the globe.

4. Blockchain Services Will Be In Demand

Blockchain revenue

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Blockchain technology is already disrupting the financial services industry. But in the coming years, it will have a similar effect on other sectors, including software development outsourcing. Blockchain allows developers to create applications that securely store data across decentralized computers.

This security is attractive for companies seeking to outsource IT functions or cloud storage. And due to its decentralized nature, blockchain makes it easier to derive value from data in the form of business intelligence (BI).

As more businesses realize this potential, we expect that demand for blockchain outsourcing will grow.

5. Outsourcing Providers Will Adopt Machine Learning Automation

Machine Learning Automation

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Among the other IT outsourcing trends to look forward to in 2022 is Machine Learning Automation. Machine learning is artificial intelligence (AI) type whereby computers learn without being explicitly programmed. This technology has a wide range of applications, including in the field of outsourcing. 

Machine learning can help outsourcing providers optimize their operations and improve the quality of services. It can also help them identify and respond to issues more quickly. Machine learning will play an increasingly important role in the IT outsourcing industry in the coming years.

Also Read: Automation in Software Development- A New Stream of Revolution

6. Businesses Will Look For Cybersecurity Specialists

As businesses move more and more of their operations to the cloud, the need for cybersecurity specialists will continue to grow. Outsourcing providers that can offer cybersecurity services will be in high demand.

In the next few years, we predict that the demand for cybersecurity services will continue to grow. Providers that can offer these services will be in high demand, and we expect to see more providers focusing on this area of specialization.

According to experts, data worth $630 million is stolen from social media platforms per year.

Data estimations from the HLB Cybersecurity Report:

  • During 2022, around 51% of companies plan to hire full-time cybersecurity employees.
  • As per the survey, 42% of people are satisfied with the network security services they receive.
  • More than 25% plan to cut their cybersecurity budgets.
  • Only 13% refused to change their cybersecurity budget.

Also Read: Python For CyberSecurity: Why Is It Better In 2022?

7. Focus On Artificial Intelligence Will Increase

AI technologies are getting more and more advanced with each passing year, which means they will be able to automate a lot more tasks than ever before. 

This includes offline applications, such as chatbots, and online applications, such as digital personal assistants.

Virtual customer assistants and chatbots are aspects of AI that are currently being used in customer service.

By 2022, 90% of customer interactions will be facilitated by AI-based chatbots. Around 60% of millennials tend to be satisfied with chatbot-assisted purchase processes.

As per Statista, here is the share of respondents who used AI in their businesses in the Asia Pacific in 2019, with a prediction for 2022, by type-

Increased Focus on Artificial Intelligence

Indeed, the demand for AI services will increase in the coming years, and outsourcing providers will offer these services alongside traditional IT solutions.

Steve Jobs told his biographer that he “never saw robots stealing human jobs. I saw them as tools to enable people, freeing them up from repetitive tasks and opening opportunities for exploration.”

Also Read: Artificial Intelligence(AI) in Cybersecurity: Future and Real Examples

8. Remote Work Will Become Normal

“The future we envision for work allows for infinite virtual workspaces that will unlock social and economic opportunities for people regardless of barriers like physical location…” – Andrew Bosworth, VP of Facebook Reality Labs.

Remote work is the practice of working from a location other than the office. It can be done permanently or temporarily and often involves using technology to communicate with coworkers and clients.

The popularity of remote work is increasing as more and more people discover its benefits. These include increased flexibility, improved productivity, and better work-life balance. 

Moreover, remote work has been one of the fast-evolving business process outsourcing trends since COVID-19 and will continue to grow in the coming years.

Undoubtedly, the number of people seeking remote work opportunities will continue to rise, and more employers will offer these roles. As a result, outsourcing providers will need to increase their staff levels to meet this growing demand.

9. Asia Will Remain the Preferred IT Outsourcing Market

Countries like India, China, and the Philippines are home to some of the world’s most talented and cost-effective outsourcing professionals. As more businesses outsource their information technology requirements, these countries and a few others will keep adding new talents to their teams. 

There are several reasons why this region is popular among companies looking for talented IT professionals:

  • The cost of labor is much lower than in developed countries such as the United States and the United Kingdom.
  • The quality of labor is high, thanks to the region’s well-educated population.
  • The infrastructure is well-developed, making it easy to do business there.

Eastern Europe is another region that’s gaining popularity for outsourcing providers in the coming years.

Also Read: Best Countries for Offshore Software Development Services in 2022: A Quick Overview

10. The Internet of Things Will Create New Opportunities for Outsourcing

One report from Statista displaying the number of IoT-connected devices globally from 2019 to 2030 (in billions)-

New opportunities for outsourcing

The Internet of Things (IoT) refers to devices such as cars, appliances, and even clothing being connected to the internet. This allows them to communicate with each other and exchange data.

The IoT is predicted to be one of the biggest technology trends of the next decade, and it is already creating new opportunities for businesses to outsource their IT requirements. For example, providers can now outsource the management of entire IoT ecosystems or individual components such as data analytics and security.

We predict that the IoT will continue to grow in popularity and that outsourcing providers will capitalize on this by offering more services related to it. This will include everything from system integration to app development.

Also Read: What are Pros and Cons of Internet of Things(IoT)?

11. The Use of Robotics Will Increase in the Outsourcing Industry

Implementation of robotics in businesses is a cost-effective way to replace human labor. The increasing automation of data entry and transcription tasks will leave humans with more time to work on value-added tasks like strategy development, relationship building, and decision-making.

The use of robotics is on the rise in many industries. In particular, in the outsourcing industry, it has been predicted that robotic process automation (RPA) will continue to grow at an explosive rate. RPA is a type of software that can execute tasks and jobs typically done by humans. RPA can answer customer queries more quickly with fewer errors than humans and can also handle repetitive tasks like invoice processing or data entry.

Well, that is all about the future of IT outsourcing. However, to reap the maximum benefits of these IT outsourcing trends, you need a trusted, expert, and experienced outsourcing IT partner.

Some Crucial Tips for Choosing the Right IT Outsourcing Company

If you are thinking about how to choose the best one? Do not worry! 

To ensure you make the best choice possible, focus on the following crucial tips for choosing the right IT outsourcing company.

  • Always eliminate outsourcing IT companies that don’t have a track record of successful projects and delivery timelines. This is the first and foremost factor you should consider when choosing an IT outsourcing company. An important part of the process is researching the software development company you’re thinking about hiring and looking into their references. It can be a great way to find out how long they have been in business and what kind of projects they have worked on in the past.
  • Since we are talking about future trends, choose an outsourcing company that is keen on exploring and adopting new technologies. This will give you the confidence that your project is in safe hands and delivered as per your expectations.
  • Make sure that the outsourcing company has a good understanding of your business processes and requirements. You can do this by checking their experience in your specific domain or industry.
  • Look for companies with the required resources, technologies, and workforce to deliver your project as per your expectations. You can look at their skilled staff strength or their cutting-edge infrastructure as critical factors that will help them cost-effectively meet your requirements.
  • Always choose a company with a proven track record of successfully managing multiple projects of various sizes and complexities.  Cost is one of the most important considerations when choosing an outsourced IT company. Make sure you have a clear idea of what your budget is and that the company you’re considering can offer a package within it.
  • Check if the outsourcing company has a process to measure its success rate and customer satisfaction levels through regular benchmarking studies or other similar means. Well, this may sound stupid, but you would be surprised to know that many companies out there are just looking to make money at the cost of their customer’s satisfaction and long-term success.
  • Lastly, trust your gut feeling while making the decision. If you feel comfortable with a particular outsourcing company and have a good rapport with its representatives, there is no harm in choosing them. However, if you have second thoughts, it would be better to look for other options.

Final Thoughts

IT outsourcing will continue to evolve in the coming years, with new trends emerging as the industry continues to progress.

Outsourced IT services have proven to be a cost-effective and reliable way for companies to get their infrastructure up and running without the hassle of managing it themselves.

No matter what industry you’re in, it’s important to stay up-to-date on the latest trends and technologies.

Updating your business strategy with the latest trends will allow you to take advantage of new opportunities while mitigating any potential risks. 

Also, you can hire experts to get the best and most advanced IT outsourcing services by following the tips we have discussed above. Are you still juggling with questions? Mention them in the comment section below!

Also Read: IT Outsourcing in Covid Environment

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Frequently Asked Questions

1. What are the benefits of IT outsourcing?

There are several compelling reasons why businesses should consider outsourcing their IT needs. Here are five of the most important benefits:

  • Cost savings. Outsourcing your IT department can save you a lot of money in the long run. When you contract with an IT services firm, you only pay for the services you need, which can be a fraction of the cost of hiring and maintaining an in-house IT staff.
  • Expertise and experience. By outsourcing your IT needs, you gain access to the expertise and experience of a team of specialists who can help you with everything from network security to data backup and recovery.
  • Increased efficiency. An external IT services team can handle the day-to-day upkeep and operations that can take up a lot of your time, leaving you free to concentrate on your business.
  • Scalability and flexibility. Outsourcing allows you to scale up or down as needed without having to bring any new people onto staff – all you need is access to the experienced IT providers that you’re already paying for.
  • Peace of mind. With a dedicated team to handle everything from network security and daily backups, you can have peace of mind. Your most critical business functions are being handled professionally by experienced people who don’t have other jobs on the side. There’s also no need to invest in redundant, stifling systems and procedures that aren’t flexible enough to handle your changing needs.

2. Is IT outsourcing right for my business?

It depends on your business requirements and the outsourcing company’s ability to meet them. However, in general, IT outsourcing is a good option for businesses looking for cost savings, improved efficiency, and increased scale.

3. What should I consider while choosing an IT outsourcing company?

Some of the crucial factors you should consider while choosing an IT outsourcing company include experience, domain knowledge, skills, cost-effectiveness, and customer satisfaction levels.

4. How can I find the best IT outsourcing company?

The best way to find a good IT outsourcing company is by asking friends or business acquaintances for recommendations. However, if you have no such contacts at your disposal, you can look for companies online and compare their features and pricing.

5. What are the recent trends in IT outsourcing?

The recent IT outsourcing trends are: 

  • Cloud Computing becoming even more popular
  • More demand for Blockchain services
  • More focus on Machine Learning Automation by outsourcing providers
  • Growing need for cybersecurity specialists
  • Increased focus on Artificial Intelligence
  • Remote work becoming more popular
  • Eastern Europe will be the hub of the outsourcing market
  • Increased use of robotics in the outsourcing industry
  • New opportunities in the outsourcing industry with IoT

2 thoughts on “Revealing IT Outsourcing Trends that Will Rule in 2023

  1. Thank you for sharing the awesome article with us. that’s very useful. Provides much-needed knowledge.

  2. “Definitely, outsourcing is surpassing the conventional work culture.
    Keep sharing valuable content.”

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