2022 is another proof that we live in times of changes, challenges, and continuous development. Just imagine how many obstacles businesses have faced these past couple of years! The pandemic, the Russian invasion of Ukraine. What’s next?
Nevertheless, each crisis brings new opportunities for the strongest market players, who willingly surf up, creating fierce competition. Following a PwC survey, 60% of executives say digital transformation is their most critical growth driver in 2022. Meanwhile, this process requires significant investment and effort to achieve strategic goals. So, businesses are looking for approaches capable of accelerating this journey. One of them is IT outsourcing, which became a magic wand helping companies roll out new services and offers times faster.
This year we were witnesses to an unexpected global shift in this field. So, what will the next year bring to businesses regarding IT outsourcing? Scroll down to explore core software outsourcing trends & predictions that might allow you to delegate the development projects easily in 2023.
Top 5 IT Outsourcing Industry Trends for 2023 You Should Know About
1. IT Outsourcing is gaining momentum
The race for leadership makes companies feel a lack of resources and talents to cope with a continuously growing workflow. This way, businesses often demand third-party support to avoid employee burnout and backlog.
Following the recent Commit report, outsourcing for software development at startups is expected to increase by a shocking 70% between 2022 and 2023. Meanwhile, mid-sized businesses and enterprises require software development support to boost ROI and supercharge customer experience on a tight schedule. Max Nirenberg, CRO and Managing Director for North America at Commit USA, is convinced that smart IT outsourcing will soon become a must. The scale of development is mushrooming, so there’s no room for regression: each company will do its best to deliver more value by spending fewer resources.
Business leaders believe remote teams help boost productivity and speed up Time-to-Market owing to their versatile expertise and well-designed management processes. The following year will be fruitful for promising partnerships, and the IT outsourcing market will remain an appropriate field for investment.
2. More effort for data protection
The pressure from the government regarding proper data protection is growing yearly. Despite all efforts of states to simplify compliance procedures for businesses, this issue remains an obstacle to the digital transformation journey.
The variety of regulations and risk of significant penalties make companies carefully process information and implement technologies like 5G or IoT, avoiding data leaks. Earlier, business leaders even strove to create large in-house IT departments to leave confidential data inside a company. However, that approach was not always reasonable. Fortunately, IT outsourcing service providers became a sort of Mythbusters by implementing detailed data protection policies and acting in compliance with CCPA, GDPR, and other international and local acts. So, now they are allies for businesses striving to build highly-secured ecosystems.
Technologies will always be an engine of the entire business progress. Therefore, in 2023, businesses should think about hiring IT outsourcing teams to keep an eye on data security and build robust solutions to ensure it.
3. IT outsourcing in Eastern Europe: new reality
The Russian-Ukrainian war changed conditions in the Eastern European IT outsourcing market. It led to two crucial shifts affecting its development and operation in 2023.
First of all, most consumers who cooperated with Russian and Belorussian software development providers started looking for new reliable partners in other countries, like Ukraine, Poland, Bulgaria, etc. It seems that such a trend will stay with us, at least for a few years. So, Eastern European suppliers have already changed their strategies to boost offerings for new potential customers.
On the other side, businesses working with Ukrainian vendors were surprised that force-majeure conditions are just a section in a contract for local developers. In most companies, the war didn’t affect overall productivity. Following IT Ukraine Association and Sayenko Kharenko law firm research, none of the surveyed IT companies performed a complete relocation abroad. It means that Ukrainian vendors are staying on-site, demonstrating their maturity and flexibility in the face of unexpected events. Consequently, in 2023, a high credit might strengthen the IT outsourcing industry in Ukraine.
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4. Dynamic cooperation strategies are demanded
The war showed that a stable long-time partnership doesn’t provide confidence in future fruitful business relations. Companies are still striving for permanent software development support. But in 2023, the approaches to terms of cooperation might change. Customers want to move forward empowered by flexible cooperation strategies to save investment and avoid downtime. Most likely, they will prefer a time & material payment method to a fixed price one, pay more attention to project budgeting and terms for deliverables.
One more way for businesses here is to involve several IT outsourcing service providers simultaneously. This option is reasonable for two or more software development projects. But still, broad cooperation provides a customer with comprehensive expertise and creates a backup plan just in case. For vendors, it means sharing best practices and experiences to use this knowledge in further commercial activities.
5. Businesses expect even more values
Did you notice how providers approach customers through additional services and values? In recent years, vendors have helped customers design solutions, promote them, integrate them with the existing ecosystem components, guide business leaders on the following milestones of digital transformation, etc.
The IT outsourcing market has its peculiarities, one of which is to bring more tech and non-tech values. This all-in-one approach allows customers to cover primary business needs with one vendor. It means that the scope of such values promises to grow during the following year.
Who knows, IT outsourcing service providers will probably transform their business models to become counsels, analysts, developers, and marketers in one box for their clients.
Jacinda Ardern, the Prime Minister of New Zealand, once admitted, “After years of talking about the digital transformation, COVID-19 accelerated our progress by years.” Crisis conditions made companies come from bold ideas to actions by leaps and bones. But all tech initiatives need relevant support. The IDAP team will help you design robust and user-friendly apps to make your strategic goals closer.