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Achieving your bottom line quickly is not an easy task for any business; however, outsourcing can be of great help if you are looking for inexpensive ways to attain your goals. Outsourcing can work in your favor only if you do it in the right manner. In short, you have to find the right outsourcing partner and talents and use the latest technologies in the most cost-effective manner.
In this data-driven world, making major business decisions without doing adequate research can be a very big mistake. Don’t go by that gut-feeling only; instead back up your choice for outsourcing vendors through logic and facts that are supported by relevant data.
Outsourcing is all about contracting third party companies or entities to perform various tasks for your business. Companies resort to outsourcing mainly to reduce operational expenses; however, there are also many enterprises that choose to outsource business projects to meet various strategic goals.
Latest Data and Statistics on Outsourcing
It is important to have a fair idea about the latest data and statistics about the outsourcing industry before you make critical decisions for your company. The latest facts and figures given below should be able to guide you in making sound decisions about outsourcing work to a third party.
Top Reasons to Outsource
According to a report of Deloitte in 2016, the most common reasons why businesses plan to outsource are:
- 59% – Cost Cutting
- 57% – Lets you focus on core tasks
- 47% – Solves capacity issues
- 31% – Improves service quality
- 28% – Offers access to best talent and knowledge
- 17% – Manages business environment
- 17% – Boosts organizational transformation
Global Outsourcing Industry
Here is the status of global outsourcing industry between 2016 and 2018.
- According to Statista, the global market size of outsourced services in the 2018 was $85.6 billion.
- 65% of the outsourcing companies in 2017 would probably continue to outsource work in 2019. (Outsourcing Insight)
- 37% of businesses are planning to outsource more application development work. (IT Outsourcing Statistics 2017/2018)
- In the United States, approximately 84.2% of all outsourcing deals originated. United Kingdom is next at 5.2%, and Spain and Australia were key outsourcing markets. (KPMG, 2017)
- Ukraine has the highest number of IT professionals within Central and Eastern Europe. By 2020, its workforce may grow over 200,000. (Ukraine Digital News)
- Below are scores of top outsourced countries based on financial attractiveness, skilled manpower, availability of talent, and congenial business environment. (AT Kearney, 2017)
- 7.07: India
- 6.31: China
- 6.11: Malaysia
- 5.99: Indonesia
- 5.93: Brazil
- 5.92: Vietnam
- 5.87: Philippines
- 5.86: Thailand
- 5.76: Chile
- 5.73: Colombia
Top IT and Data Outsourcing Trends for 2019
It is important to know that the demand for IT talent on contract will continue to rise as numerous organizations are taking advantage of outsourcing IT tasks instead of going for in-house specialists. Here are few IT outsourcing trends for 2019 that will help you in making informed decisions about your business in terms of outsourcing IT projects:
1. Reduced Focus on Reducing Costs
Outsourcing development projects has always been about cost cutting. However, this is not the only factor that will make businesses decide to select an offshore software development partner. Relationship between a particular client and an offshore software developer will be based on quality work rather than price-oriented.
IT outsourcing vendors will act as partners and risks of the outsourced project would be shared by both the parties. Focusing on value-added services for the client would be the prime responsibility of the outsourced professional.
2. Multiple, Specialized Outsourcing Partners
Most companies may not have the luxury of having a fully equipped IT team to run their operations. In such a scenario, enterprises with opt for IT services from multiple outsourcing vendors. Businesses will aim to form partnerships with offshore vendors who are specialized in specific areas. This also means that IT outsourcing will be mostly about specialized services in the next few years.
Outsourcing companies will have a wide variety of talented workforce that can offer quality services under one roof. This will help them to beat and competition and stand out from the rest.
3. Emergence of Alternative IT Outsourcing Countries
According to the 2017 Statista report, India and China are major IT outsourcing hubs that made about $150 billion in IT exports. However, both these countries will have to compete with new emerging IT outsourcing destinations like Ukraine, Poland, Romania and Belarus. Ukraine is turning out to be a major IT base as the number of software developers is increasing incessantly.
4. New Contract Models
Contract model between IT service providers and clients will change to ensure that IT outsourcing is more value-driven and interpersonal. The new forms of contract will be based on the results or outcomes of the projects. The delivery time or notice periods will get shorter as there would be competition amongst the service providers.
5. Outsourcing of Core Business Tasks
As per a Global Industry Analytics, the global BPO market will reach a whopping $220 billion by the year 2020. Clients will outsource core business tasks to trustworthy service providers apart from non-core tasks. IT outsourcing vendors will be responsible for the outcomes and they will act as project partners to ensure successful integration of the IT solutions for the clients.
The Bottom Line
The statistics and industry trends mentioned above should hopefully help you in deciding various strategies to outsource your business tasks. Numerous companies have benefited after getting into the outsourcing bandwagon. You just need to be a little cautious while hiring the services of an offshore vendor.
2019 looks quite promising all kinds of businesses and outsourcing agencies. If the outsourcing trends continue for a few more years, there would be a massive change in the way outsourcing is generally viewed at. The trust and transparency built among enterprises and their outsourcing partners will help both the parties in growing their own businesses. So, look for outsourcing partners who can offer quality services that make them have an edge over others.