IT Outsourcing in 2021 - eSource

What is Software Outsourcing?

In its simplest sense, Software Development Outsourcing describes an arrangement, in which an organization chooses to hire an external software development agency to effectively carry out all the tasks of a software development project, that could be done in-house instead. Software outsourcing is about the practice of a company handing over the control of a certain business process or project to a third-party vendor that is qualified and capable of handling the required business tasks.

In this type of outsourcing, a company hires a third-party service provider to handle their software development projects. These projects can range from developing custom software used by your company or developing commercial software for your customers.

Software Outsourcing services

In 2021, when it comes to outsourcing, typical services usually include web and mobile application development services, as well as other innovative and advanced technologies of Cloud computing, Robotic Process Automation, and Artificial Intelligence – which are cementing their places in the industry and expected to have a considerable impact going forward.

Also, many software outsourcing vendors offer a comprehensive portfolio of services that cater to customer companies, meeting a wide range of their particular business needs, at any stage of customers’ project as well as during the entire development cycle – from planning to development, delivery, and product release, software outsourcing vendor can offer the necessary expertise and resources to ensure overall project success for their customers.

With software outsourcing, services are delivered under the remote operation models, which enable customers companies to work with top IT talents all over the world who are dedicated to working on their projects.

The Advantages of Outsourcing

1. Reduced Expenses

You get to enjoy significant cost savings when you outsource to a country with lower production costs: a lower cost of living for employees, meaning lower salaries, as well as lower infrastructure and operational costs.

2. Access to Global Talent Pool

Outsourcing allows you to reach professionals that may be in short supply or unavailable locally.

3. Significant Time Savings

When you partner with an outsourcing vendor, you don’t have to advertise for, interview, select, and train new in-house employees, all of which can be very time-consuming. You can only improve the qualifications of your employees and give various materials.

4. Ability to Upscale Fast

You’ll be able to work with new clients and take on new projects without having to spend time on the processes described above.

5. Uninterrupted workflow

Your business will function round the clock thanks to the time difference between the in-house team and the outsourcing vendor’s team.

Reason for Outsourcing:

Lower cost

While some companies may hesitate outsourcing to different companies in countries outside, the lowered costs always win the case. For any business, the goal is always to maximize profit which can only be possible through reduced costs. IT outsourcing companies provide just the right amount of quality at a price lower than what the client company may have provided itself. That is the beauty of it. Lowered costs with the same quality. Why would any company not want to opt for such possibilities given how COVID-19 or excessive competition has pushed the profits down!

Time

Reduced costs can only be made possible by having a lesser number of employees too which can happen through outsourcing. If your company wants to develop software, you would not want to go through the whole process of hiring a whole team for it, training them and then making that software a reality. Just reach out to an IT Outsourcing Company, take a quote and let them work on it. They will handle everything and provide you services in the time period you want it to be done. Sometimes very urgently too.

Better skills

The team you hire for a project, may not be that skilled or may need training. Why do that and take the risk when you can take the same service at lowered costs from people who specialize in working on that certain type of project! Besides, through outsourcing, you will have access to new skill sets, ideas, software, databases and technologies. There is also less risk of issues within the project.

Focused attention

When you hire a third party to complete a project for you or work long-term to build your software or websites, you get more time and direction. If you are a company that focuses on providing market insights to several businesses, you do not have to focus on making software for it. In other words, you do not need to focus on something which is not a critical revenue driver of your firm. Thus, you are able to better focus on expanding and growing your core business product rather than focusing much on its processes.

However, while these are very important reasons that a company may have outsourced, it is also very true that for any company, lowered costs and greater profits will be the single most important motivation behind outsourcing to a company within or outside their home country. However, quality must be very closely monitored.

Statistics:

In this article, we have collected interesting statistic data, numbers, and facts. They will help you better comprehend what the IT outsourcing and offshore software development industry look like now and what waits for it in the nearest future.

1. With around 70% surveyed saying outsourcing was used as a cost-cutting tool, another 40% said outsourcing provided organizational flexibility to deal with the changes felt by the pandemic; remote work and fast-paced digitalization — Deloitte

2. 24% of small businesses that outsource at least some of their functions do so to increase efficiency. [Clutch]

3. The future direction of outsourcing facts and figures is mainly predicted with strong optimism. Grand View Research expects a compounded annual growth rate of 8% in the period between 2020 and 2027.

4. IT outsourcing statistics show it’s one of the industries most affected by outsourcing business processes. 57% of organizations believe outsourcing allows them to completely focus on their core business activities. [Deloitte Global Outsourcing Survey]

5. For the last five years, the IT sector has grown immensely, generating billions of dollars in revenue. It’s projected to reach a market volume of US$429,291.7 million by 2025. The US will generate the biggest revenue ever in 2021 – US$129,609 million. [Statista]

6. The IT & business services sopending in the travel, hospitality and logistics industry is forecast to decrease by around 39.5 percent in 2021 due to impact of the coronavirus pandemic. This is the highest projected decrease in spending across all industries in that year. [Statista]

7. Outsourcing creates massive employment across several developing nations like India, the Philippines, Ukraine, China, Poland, etc. At least 300,000 jobs are outsourced from the US to these countries on an annual basis. [Smallbizgenius]

8. 37% of small businesses currently outsource at least one of their business processes. However, it is businesses with more than 50 employees are 66% more likely to outsource their business processes. [Clutch]

9. The IT & business services sopending in the travel, hospitality and logistics industry is forecast to decrease by around 39.5 percent in 2021 due to impact of the coronavirus pandemic. This is the highest projected decrease in spending across all industries in that year. [Statista]

10. Despite, or perhaps because of the COVID-19 pandemic, the percentage of their budget IT departments spend on outsourcing continued to rise from 12.7% in 2019 to 13.6% in 2020.

The most in-demand tech skills for 2021

In a study conducted by Deloitte in 2020, around 90 percent of the participants saw cloud technology as one of the primary enablers in their outsourcing journey. Companies will be looking for partners who can assist with transferring entire infrastructures to the cloud and offer security services to block off any threats. “The worldwide public cloud computing market continues to grow and is expected to reach an estimated 397 billion US dollars in 2022. This encompasses business processes, platforms, infrastructure, software, management, security, and advertising services delivered by public cloud services.” – Statista.

When talking about storing massive amounts of data online, we can’t help but think about the specialized cybersecurity solutions companies will need to keep their information safe. 2020 brought a substantial increase in digital dependency, and along with that, the UN disarmament chief warned companies against the growing numbers of cyberattacks: “it is estimated that one such attack takes place every 39 seconds.” With new technologies, online storage, and remote work, new threats are emerging every day. Therefore, Cybersecurity is one of the growing IT trends that will not die out anytime soon.

The pandemic and the financial anxiety that derived from it also convinced many companies to look into robotic process automation. 90% of the large global organizations predict they will integrate RPA in their daily processes by 2022. Automating business processes will give employees enough time to focus on complex tasks while recalibrating manual effort, decreasing human mistakes, and altogether reducing costs.

“Global robotic process automation (RPA) software revenue is projected to reach $1.89 billion in 2021, an increase of 19.5% from 2020”, according to the latest forecast from Gartner.

The most in-demand programming languages for 2021

Looking at the TIOBE Index and PYPL Index statistics of June 2021, Python is growing considerably in demand and popularity. While C, C#, Java, and JavaScript are still in the top 5, Python has seen a lot of interest in 2021. Looking at last year’s survey conducted by Stack Overflow, Python got the title of the most popular language programmers have not mastered yet but will learn in the future. JavaScript came in second place in the same survey. Therefore, if we make a short parallel to this year’s declared popularity indexes, we can see a definite trend in the rise in demand, searches, and use for Python and JavaScript in 2021.

Why Choose eSource Software?

At eSource Software, we have many years of successfully completing and delivering software development projects to clients across the globe.

eSource Software is among the leading software outsourcing companies in Malaysia providing quality software outsourcing services, catering to clients across the globe, for projects of any size and scope.

Get in touch today to learn more about our services!

Contact us:
eSource Software, 17-01, Kapitan Square, Buckingham Street, 10200 George Town, Penang, Malaysia.

Call : (006) 012-4377440
Email : esourcetechnology@gmail.com
Website : www.esource-malaysia.com

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IT Outsourcing in 2021 – eSource