Outsourcing Trends 2023: Leobit Predictions
Global digitization progress has affected all industries, without exception. In recent decades, the technological landscape has significantly transformed, which provides wide opportunities for outsourcing vendors. Those of them who respond quickly to changes become successful.
According to Grand View Research, the global outsourcing market was valued at $245.9 billion in 2021 and is expected to grow at a CAGR of 9.1% from 2022 to 2030. Tech outsourcing has new trends for 2023, which will concern both innovative adoptions and new forms of cooperation. So let’s discuss it in more detail.
Tech Talent Shortage and Outsourcing as a Solution
The cost of tech specialists, especially engineers, services is constantly increasing due to the rapid digital transformation and the constant need for developers. Finding a high-level specialist at a fair cost in the USA is challenging because great competition forces entrepreneurs to digitize and regularly implement new technological solutions.
According to the US Bureau of Labor Statistics, from 2022 to 2030, the need for software developers will increase by 22%, with an average career growth rate of 4%. The same statistics show that by 2026 the number of technical engineers in the USA will be about 1.2 million, but about half a million will have already left the labor market by then.
The lack of specialists leads to pressure on the budgets. And the only profitable solution in his case is outsourcing. In Eastern Europe, for example, the number of engineers isn’t yet critically small, so their services cost less. Also, it’s much easier to find rare specialists (hiring Flutter developers, for example). In addition, outsourcing offers a better chance of finding a high-class specialist to cover specific needs.
AI and ML-Based Technologies
Artificial intelligence and machine learning technologies are explosive in the industry; they support apps of various types and purposes. Such solutions improve performance, help create unique protection systems and even optimize the interface.
AI assistants in customer service, especially in fintech and e-commerce, deserve special attention. Evaluating customer behavior is indispensable for building personalized service templates. It also helps predict market changes and trends and make better business decisions.
Therefore, in 2023, more and more customers will turn to IT companies to implement AI and ML-based solutions. And outsourcing such services will be very popular, as it’s easier to hire a dedicated development team with the necessary experience.
Special Attention to Data Protection and Security Systems
According to Statista, there were approximately 52 million data breaches during the second quarter of 2022. This is more than half less than in the previous quarter, thanks to implementing solutions based on AI, ML, blockchain and new authentication systems. However, cybercriminals are developing their methods in step with tech progress, so the issue of cybersecurity will be more relevant than ever.
Why is tech outsourcing the solution to the security problem? There are several reasons.
- IT outsourcing companies have a coordinated mechanism for countering cybercrime and have enough assets, including human resources, to respond quickly to threats.
- Vendors can conduct independent security audits fast and efficiently and transform their services to new requirements.
- Reliable outsourcing partners have a whole team of specialists who have been around the block in regulatory compliance (CCPA, GDPR and other international and local acts).
Protection against data leakage is critical when adopting IoT-type technologies, where the risks are very high. Therefore, in 2023, tech outsourcing will provide high-quality data security control services and create reliable solutions to ensure it.
Flexible Cooperation
Flexibility is a key trend in the tech industry; this applies to everything from flexible UI\UX design to scalable application architecture. Business relationships in 2023 will also require flexibility.
Adaptive strategies of cooperation, where the vendor is able to respond to dynamic challenges, and transform accordingly to the rapid market changes and client business needs, are a must. Special attention will be paid to investments and ways of saving them, choosing agile development methodologies, and finding best practices for permanent maintenance.
Cloud Computing
Lots of businesses have a severe need to get new opportunities to scale and upgrade products. Cloud computing is a quick solution to support changes in the work environment and implement automation and remote access.
Outsourcing partners have shown their effectiveness in updating legacy software, migrating systems to cloud environments, and supporting cloud infrastructure. Therefore, in 2023, many companies will outsource operating systems migration to optimize costs and obtain better results.
Wrapping Up
The outsourcing market is dynamic. It’s changing rapidly, but the need for third-party providers’ services is only growing. In 2023, it is worth paying attention to several main trends at once, namely compensation for tech talent shortage due to outsourcing, the search for more flexible ways of cooperation, and the implementation of AI and ML-based technologies.
It is also worth considering the possibilities of cloud computing to optimize remote work and better allocation of resources. Another important trend is unique security systems and data protection measures. This area requires an additional expense, and outsourcing vendors can provide quality cybersecurity services at an optimal cost.
In general, tech outsourcing has a rapid development pace and many positive changes are expected in 2023. It’s not just a dynamic industry; it is adaptive, client-oriented and flexible. Therefore, we believe that more companies will decide to outsource software development.
