Check our new article with our picks for the trends that will impact information technology outsourcing industry in 2018. Talent shortage, blockchain, big data and more.
What has already happened with IT outsourcing trends in 2017 and what is yet to come? Let’s see together what IT Outsourcing Trends will be on top in 2017. We’ve witnessed a growth of IT outsourcing challenges this past year, as well as enterprise systems and production workloads hitting the cloud, with security being at the top of the agenda.
What does 2017 bring? For starters, a lack of certainty. Industry experts anticipate several shifts in the business and IT process services areas.
We anticipate seeing maturation in robotic process automation (RPA), cloud computing, and cognitive capabilities. Meanwhile, entities like the business models and call centers based only on labor arbitrage will be phased out. Keep reading to learn what outsourcing trends our experts see on the horizon for 2017.
PREVALENCE OF A DEDICATED DEVELOPMENT TEAM MODEL
IT outsourcing is getting more customized. Over time, most software outsourcing businesses have established dedicated teams for their clients, giving them total management regulation over staff and the jobs they’re working on. Outsourcers focus on recruiting the proper employees, designating them to workplaces with all the necessary technical resources, and producing the relevant conditions to accomplish specific results for each company. It is the responsibility of the outsourcer to locate individuals who are capable of corresponding with the necessities, objectives, and company cultures of a customer. This lets the client employ a group in a country that is less costly, which bypasses the expense of office rentals.
This model is generally applicable for long-term projects, where upcoming necessities aren’t established and might have a regularly changing scope, or when startups must be adaptable in iterating their initial product, although this scenario isn’t common. Half of the startups end up expanding their initial offering, modifying them for something new. This is going to be main change among IT outsourcing trends in 2017.
CLOUD-BASED SYSTEM POPULARITY
For the software outsourcing market, the next innovation will be cloud technology, with more companies transitioning into the cloud this year. This will allow IT outsourcing companies to provide improved and innovative services, and handle upcoming data requirements of substantial sizes for enhanced impact and agility of business processes. Cloud computing is growing in popularity – software comes with potential risks, while hardware can be just as risky. A platform that offers services and abilities to tap large new markets tilts the scale. We think it’ll take several more years before SaaS and similar cloud models relative to the IT market’s overall size becomes mainstream.
SECURITY REMAINS AT THE FOREFRONT
Data security and information will remain a significant problem throughout the year. Traction for enhanced threat intelligence, security automation, and security analytics solutions will still be robust as enterprises create organic strategies to bypass business risks. Dynamically supported cloud-based workloads and as-a-service models to scale security capabilities will gain momentum as well. Vendors will become partners with politicians, regulators, and companies seeking solutions.
SOCIAL RESPONSIBILITY WILL BE AMONG IT OUTSOURCING TRENDS
Every big company will be concerned with social responsibility. No longer just an IT trend, social responsibility means offering the greatest value while bypassing attrition from human resources. That said, social responsibility also involves sensitivity to the social and natural atmosphere we’re in. As such, it will also be one of the 2017’s IT outsourcing trends and has already been taken on by software development organizations.
DEPARTURE FROM THE FIXED PRICE MODEL
A year ago, the largest IT organizations in the world, which included Accenture, IBM, and HP, had their outsourcing contracts renewed, establishing a trend that still forms 2017’s global software outsourcing market. 59% of enterprises continue to succumb to inexpensive hourly rates of developers (ranging from $20 per person in Asia to $45 per person in the Baltic area) and opt for waterfall tactics with regards to software development. Big-picture thinkers seek out skilled groups that can work under such frameworks and participate in a regular part of product development (which includes research, brainstorming, and validation of concepts). For instance, consider the “Internet of Things”. While the market will go as high as $ 1.13 billion in 2017, it is mainly influenced by startups no older than 3 years. Small businesses generally don’t have many resources, the experience, or R&D facilities to produce Proof of Concepts and prepare thorough requirements for IT projects. Therefore, Fixed Price is not an option (at times, the price of analyzing requirements takes up almost 30% of the whole development budget). Rather, many businesses opt for the Material and Time method or employ a Dedicated Development Team to cover the time staff spend on their projects, engage in the development of product, and make regular modifications to the scope.
EASTERN EUROPE STANDS TALL AS A DESTINATION FOR THE IT OUTSOURCING
Many software developers have begun looking at the Ukraine, Poland, Belarus, and Romania. Most large corporations in Europe have also begun outsourcing IT projects to this area. These IT outsourcing trends continue to increase, as more countries understand the advantages of working with Eastern Europe. Keep in mind the increasing shortage of skilled workers in key American, European, and Israeli markets. Quick and adaptable access to IT professionals allows businesses to remain competitive.
The engineering education level in the former Soviet Union countries is substantially high, as it hosts many technical universities.
The difference in time zones between Eastern European countries and major European markets doesn’t exceed a couple of hours, as opposed to almost a 6-hour difference with India. Because of minimized distances, it’s also simpler to have face-to-face meetings when required.
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