Outsourcing is now a new norm. It has managed to reshape many global industries. As a result of this businesses are looking forward to influential strategies.

“Digitalization and globalization are rapidly evolving customer expectations and demand a shift in how leaders responsible for logistics approach outsourcing strategy,” says Courtney Rogerson, Senior Principal Analyst, Gartner.

Last year, the IT outsourcing industry was worth $92.5 billion that is 7 billion more than 2018.

The outsourcing market continues to grow at an unbelievable rate while penetrating new industries.

In 2020, companies will aim at implementing new technologies to engage users thereby optimizing internal processes.

Currently, there are 37% of companies that outsource a single process. 24% of companies outsource companies to boost efficiency and 18% say their goal is to receive expertise.

How to get IT Outsourcing Right this Year?

Outsourcing partners must keep up with the trends while delivering exceptional results.

No matter what the end goal is, it is important that you have a good outsourcing partner.

After all, this has to be a partnership and both the parties have to contribute by making the relationship a mutual benefit.

What did most companies expect from the outsourcing companies? Is the collaboration fruitful always?

What technology outsourcing trends should offshoring firms and businesses embrace?

Well, the outsourcing future is brim with a diverse range of opportunities, there is a lot that the new decade holds.

Overview of IT Outsourcing Market 2020

According to a Statista report, the market size of Information and Technology amounted to $66.52 billion.

By the end of 2021, it is expected to reach $413.7 billion. This clearly depicts that there will be a steep growth in the global IT outsourcing spending.

The National Outsourcing Association of India claims that 70% will be inclined towards outsourcing and 35% of companies are planning for the same right now.

So this means that IT outsourcing will rise in the upcoming years.

What Businesses is Will Increase Outsourcing this Year?

Cost-saving will remain the primary reason why companies will be moving towards outsourcing but the technical skill of a diverse pool will also be equally important.

IT outsourcing companies and businesses will be focusing more on outcomes. This will eventually result in the growth of strategic partnerships.

What are Future Trends in IT Outsourcing?

Stats and numbers can tell a lot about recent and future possibilities of the market giving businesses a valuable insight for planning.

Let’s take a look at the IT outsourcing trends

This is not another IT Outsourcing Trend 2020 guide or report full of statistics. But is a deep outlook on the experienced offshore companies.

Top IT Outsourcing Trends that will Shape 2020

1) Strategic Partnerships

Finding a reliable outsourcing development company is a challenging task.

Earlier, there was a trend where single projects, tasks used to be outsourced to multiple vendors because of their specializations.

But now companies focus on single-vendor outsourcing as it is difficult to manage different offshoring companies.

So, it will be their responsibility to find risks and thereby mitigate them associated with outsourcing.

Entrepreneurs will now be aiming at building partner relationships. Also, they will be taking into account how offshore companies will help to provide innovation in future projects.

The relationship between businesses and IT outsourcing agencies will become more trustworthy.

Moreover, owners will not be differentiating core and non-core tasks and will outsource all time-consuming tasks.

They will be covering any type of tass that results in fruitful outcomes or success.

2) More Flexible Outsourcing Firms

Nature, as well as the expectations of the offshore developers and companies, will change. Businesses want companies to become more flexible in different aspects.

Firstly, they expect the company to ramp things up and down as per requirement.

Offshore companies will now be restructuring their teams to become more agile in order to deliver results at a faster pace.

Secondly, startup or established companies owners will be willing to partner with companies that accept their business ethics and adapt the same quickly.

They will like it if the offshore companies will integrate into their company and feel a part of their current in-house team.

Third and last, modern companies are looking out for innovations. They expect the IT specialists residing in a different geographical location to utilize the latest technologies as per requirement.

Also that companies that are willing to invest in the upskilling the workforce if needed.

3) Changes in the Contract

Clients and outsourcing companies agree to the fact that it is easier to measure the outsourcing relationship’s success with the help of a desirable outcome.

The focus will be on quality results as per the contract requirements and expected performance levels.

Both parties agree on mutual understanding of risk-sharing as they bear the brunt of mishaps or myriad of benefits at the same time.

Outsourcing will become more of a collaborative practice. Also, procurement will play a key role in the contract.

So, any company that wants to work with a large scale company should give knowledge about procurement departments.

This will eventually result in a win-win situation.

4) Prioritization of Process over Price

Business and outsourcing companies will be focusing on results in 2020, with 89 % of companies believe this.

Earlier, the outsourcing relationships were only price-driven. This trend is now changing with time. The focus is being shifted in the development process.

It is bringing multiple companies together across the globe. Well, the outsourcing companies are shifting their focus to the working attitude and approach. They are emphasizing on the process and the developers involved.

5) Adoption of Agile Development

71% of companies have already adopted Agile for their business management and everyday operations.

Businesses have understood the value of flexible project management and now striving to utilize the practices in software development also.

Therefore companies look for experienced offshoring firms that follow well-established Agile practices and are willing to share their expertise with customers.

This is one of the most common business process outsourcing trends in 2020. Why? The remote teams will be small and flexible and the core focus will be on business priorities than functional requirements.

Agile management practices are discussed with the clients so that they can be sustained on their own.

Business owners aim at partnering with the development teams that have experience in creating Agile processes from the scratch till the end with the management system.

6) Mobile-first development

Between 2017 to 2022, mobile users are predicted to increase 17 times. Mobile users now account for more than half of the online traffic and desktop traffic maybe soon a minority.

Companies are expected to abandon the desktop-first approach and begin digitalization by creating a mobile app and then making a web version later.

Apps like Uber and Snapchat have already betted on mobile solutions and have been in trend since they have adopted mobile solutions.

Business can’t be competitive without a responsive mobile version. Users find no difference between the desktop and mobile experience.

If you don’t have a responsive mobile app, it is the time to turn to the outsourcing partner that will help you get more speed with the outsourcing industry trends.

7) Diverse Range of Outsourcing Services

Outsourcing is primarily for small operational tasks. In 2020, this trend will evolve further as companies start to outsource their high-end critical processes.

Businesses that are outsourcing solutions work hard to offer more stability and security. Offshoring companies are becoming more reliable in providing critical functions that result in a competitive edge.

8) A Change is Needed

Companies in search of IT outsourcing firms are in constant flux as they are undergoing many changes. Well, expecting high-quality solutions and performance.

Many businesses feel they are not able to partner with flexible firms and are not getting cutting-edge solutions.

IT offshore companies are expected to adopt this trend and try to become customer-centric. This helps in staying competitive, win deals and obtain potential partners.

Outsourcing is a surefire way to enhance productivity and efficiency when it is done in a proper manner.

Invest time in finding the right outsourcing company. This way your decision is taken will produce real as well as measurable results.

9) Trending Tech Skills

According to Udemy, 2020 will have robust demand for Artificial intelligence and data science skills.

There will also be demand for web development frameworks, cloud computing inclusive of AWS, CompTIA & Docker.

Further, the report suggests that their company will upskill employees on robotic process automation tools, cybersecurity, and AWS cloud.

Emotional intelligence and design thinking also tops the list of the fastest-growing soft skills 2020.

So, outsourcing service providers should know how to integrate these technology trends in order to guarantee quality for clients.

10) Distinctiveness

With the help of Robotic Process Automation and Artificial Intelligence, offshore companies will be providing a unique solution that might not be present anywhere else.

This not only results in new possible opportunities but also motivates various other players to do something better. These trends will be evolving further and will transform the IT outsourcing industry for good.

11) Rise of New Outsourcing Destinations

The locations have the largest share of global outsourcing revenue. Today, India and China are the two countries that are leading as the best outsourcing destinations. IT industry India outsourcing 2019 will reach approximately $135-137 billion.

But continents like Europe in the near future will be giving a stiff competition to China and India. According to the Deloitte survey, 59% companies are already outsourcing services from India. The following is the complete graph.

India will continue to lead the IT outsourcing destination by handling many projects globally. The major reasons are:

Support by the Indian government: The Indian government provides fiscal benefits of the IT companies. Moreover, it has recognized IT as the top 12 champion service sector.

Indian companies have International standards: International Standards Organization (ISO 90000), Six Sigma Quality Certification and Total Quality Management are being followed.

An abundance of Developers: India is the second-largest country having mobile app developers.

Most hardworking employees: As per a survey, 69% have satisfaction in working for 6 days a wee . It is the right decision to invest in the developers of India in 2020. India will be emerging as one of the most flourishing IT outsourcing destinations for businesses across the globe.

12) Social Media will Become a Better Customer Service Channel

A Salesforce report depicted, 50% of customers expect that their queries should be resolved immediately.

In Facebook, companies or groups that respond to 90% of the messages within 15 minutes qualify for a ‘fast responder’ badge.

This mentality has shifted the focus of customer service on social media.

One of the global outsourcing trends will be experienced while recruiting professionals to provide greater support level across social media channels.

13) Moving towards an Experienced Economy

According to the Harvard Business Review, an experienced economy is where “a company intentionally uses services to indulge customers that create a memorable event.”

The IT outsourcing companies will have to range more than services. They will be giving clients experience and quality worth banking on.

This clearly means that aspects like storytelling, design, and aesthetics that were earlier not considered will now be on the forefront.

In addition to this, service design prioritizes due to the emotional factor making it a trendsetter.

Conclusion

In 2020, businesses will take help from development companies to access technology stack that is unavailable in the in-house team.

The outsourcing company will work on high-priority projects and not assist with mundane maintenance.

Although outsourcing started years ago but it has become more powerful and diverse now.

No matter what type of business you have, the modern outsourcing advancements can help in making your work more productive, efficient and lucrative

We believe that these predictions of the IT outsourcing trends 2020 will help companies to get a deeper understanding of outsourcing.

Digital transformation is now in trend and the market will rise more.

Businesses are looking for trusted outsourcing partners that aim at providing a wider variety of services.

They will prove to be suitable partners in terms of digital transformation in 2020.