Since the beginning of the Covid-19 pandemic, there has been a dramatic change in the global economy. One of the shifts has been the change to work from home and outsourcing.
In order to remain competitive, companies need to explore their outsourcing options. Software development is one of the fastest-growing types of outsourcing across multiple industries.
Software development outsourcing is a great way to cut costs. Companies can maintain sites without employing IT designers and project managers.
The software outsourcing market will continue to grow in future years.
The Shift in Outsourcing Relations
There are many benefits to software development outsourcing. These include cost reduction, access to a bigger talent pool, and rapid turnaround times.
Good, reliable software development companies are easier to access today than ever before. Many outsource all their software development projects, from entrepreneurial startups to long-term partnerships.
This growing industry has many advantages.
The Demand for Software Outsourcing Is on The Rise
There’s an ever-increasing demand for software outsourcing. Many domestic companies are finding it harder to find talented software developers.
This means that the demand for software outsourcing has increased. Many businesses are choosing to work with specialists from overseas and remote locations.
Outsourcing software development projects can free up company resources. It offers flexibility, mitigates risk and can improve the quality of the project.
The trend of software development outsourcing is due to a lack of professionals and skilled employees. With a shrinking talent pool, businesses must adjust their approach to software development projects.
Companies Seek Specialist Outsourcing Providers
Technology is always evolving and so the demand for specialized software is increasing. Software developers are therefore in increasing demand.
Companies seek developers who can help maximize the cost-benefit ratio of software development.
Small software development companies that specialize in outsourcing and remote work are increasing. They may work on maintenance projects or software and app development.
Often, companies narrow their focus and begin to specialize in niche markets. Although their costs will go up, so will the quality of their final product.
Many startup companies are outsourcing their software development. They want the highest quality at the smallest cost.
With a little effort, it’s possible to find the right software developer. This allows companies to achieve the desired results and gain the maximum benefits.
Growth of Cloud-based Services
Cloud-based technology has become the main technology companies use. Maintenance is easy, it is compliant with security regulations, and it is low-cost.
This results in faster data operations and the ability to mobilize. It’s estimated that the global Quantum Computing Market will be worth 8 billion dollars by 2027.
Many products are available for data storage and data analytics within cloud-based Solutions. Industries are including more AI and ML as cloud-based technology becomes more important.
Shortage of Skillful Software Engineers
There’s an alarming shortage of skilled software engineers. This is partially due to the negative impact of the coronavirus covid-19 pandemic.
But the real issue is a shortage of skilled and talented software engineers. Lack of experienced workers means that outsourcing software development will continue to grow.
Expanding IT Outsourcing Hub in Eastern and Central Europe
In recent years, companies have used fewer Asian-based software engineers. Instead, there’s been an increase in the use of Eastern European vendors and software development firms.
Outsourcing demand is greatly influenced by the need for new software. But since 2020 the need for remote and offshore workers has become more important.
Eastern European countries such as Ukraine, Poland, Serbia, and Belarus are especially appealing. They are home to experienced and talented offshore developers with excellent English skills.
These areas have replaced other outsource locations such as China and India. Eastern and Central Europe offer high-quality services with well-trained teams and reasonable prices.
Vendors Need to be Flexible
The nature of the IT outsourcing industry and its relations are changing. The expectations of clients are also changing.
This means that providers need to be more flexible in many aspects of the job.
Clients will expect vendors to adjust to their project and time frame needs. Providers should be prepared for adjustments and adapt to them quickly and smoothly.
This means that a provider would restructure teams fast and still deliver results in an efficient and agile way.
Clients are looking for an outsourcing team that can relate to the values and goals of their own team. They want an outsourcing provider that can integrate with the in-house team.
Overall, they want the company to be one big team working together well.
Most companies want to keep up with the latest outsourcing trends and innovations. They’ll be expecting the outsourcing team to be able and willing to use the latest technologies.
For a potential client, a good vendor or partner is one who invests in improving the skills of their staff.
Further Development of Artificial Intelligence and IoT
2020 was a data-driven year. Expectations are that 2021 will be AI-driven.
Companies will continue to see the development of artificial intelligence and the implementation of these technologies.
AI development cannot be ignored. As a key part of software development AI is expected to continue to grow beyond 2021.
Software development companies that provide tools for process automation and AI will be sought-after. Outsourcing service providers need to be able to automate processes.
The pandemic highlights the need for automation and artificial intelligence. It is evident by the significant increase in online sales.
Online shopping and delivery services are even more popular than before.
IBM, Samsung, and Microsoft continue to invest in AI startups trying to gain control.
High Demand for Blockchain Services
Blockchain services are in higher demand than ever before. They are expected to reach 16 billion dollars by 2023.
Global software development outsourcing trends in blockchain services will continue to grow. This is especially true regarding smart contracts and microtransactions.
Blockchain services can offer innovative money-raising solutions for startup software development companies. Many companies are seeking to work with outsource companies to develop blockchain products.
As a result, the demand for capable developers offering blockchain development services is increasing. However, there’s currently a shortage of blockchain professionals.
This has led to fierce competition to hire skilled blockchain professionals.
A Growing Need for Increased Cybersecurity
The need for cybersecurity cannot be overstated. Since the start of the covid-19 pandemic, most tech companies are working remotely.
It is challenging for domestic companies to find qualified staff to meet this need.
Outsourcing helps companies to fill the gap in their cybersecurity forces. They can access top-level cybersecurity software engineers.
Cybercrime causes a lot of damage and costs to the business sector and individuals.
However, it is more common for governments to be the target of cyberattacks. So governments have become the main cybersecurity investors.
This can make it difficult for private industry to fund and staff their own cybersecurity. This is true regarding large IT companies and small family businesses.
Due to security concerns regarding business data, client data, and compliance standards, businesses may need to hire cybersecurity experts.
Fintech, Healthcare, And Telecom Industries to Be Significantly Digitized
Industries such as Fintech, Healthcare, and Telecommunications continue to transform to Julie. Potential clients search for outsourcing services.
Their needs can be met by Eastern and Central European software development companies. These needs are expected to dominate healthcare institutions, both public and private.
Outsourcing healthcare IT is becoming an increasingly popular trend in software development, as it allows healthcare providers to access specialized expertise, reduce costs, and focus on delivering high-quality patient care.
Software development will broaden their horizons of diagnostics and patient care. These trends offer unprecedented growth opportunities for a software development company.
Which Programming Languages Will Be the Most Wanted?
Industry forecasts also predict that 2021 will bring a change to some technologies. Many experts predict an increase in Rust as a software development language.
Rust drew the attention of many tech giants including Microsoft and Intel. Many companies implement Rust technologies and their solutions.
Growth of AR and VR Markets
In the year 2021, the AR market is expected to increase. With smartphones becoming more common, the demand for VR and AR solutions is high.
Expect improvements to the online shopping experience with AR solutions. A great example of an AR experience is Pokemon Go.
This app was popular during the past couple of years with its AR interactive characters. Technologies like these will continue to be a part of online experiences and daily life.
AR and VR could be useful in e-learning, tourism, manufacturing, and many more.
The market for VR and AR is still quite uncertain. Many companies are looking for VR and AR solutions and outsourcing options to increase sales.
By using these interactive elements in apps, games, and websites, companies improve customer experience and increase sales. Some larger companies that are already implementing these technologies are Apple and Mercedes.
Robotic Process Automation
Business process automation has recently become more prominent in daily life. This is because of AI and its conjunction with robotic process automation or RPA.
Some of the advantages of RPA are:
- improved work coordination
- reducing operation costs
- less manual mistakes
In the ever-changing digital environment, business automation should be the number one priority. A few things that will benefit from RPA are:
- logistics management
- better-personalized experience
- payment processing
IT outsourcing companies are investing more time into augmented analytics and business automation.
Bots and virtual assistants can take on the burden of repetitive and menial tasks. For a deep understanding check out what a virtual assistant is and how to become a virtual assistant. This is just the tip of the iceberg!
Both Native Applications and The Development of Progressive Web Apps Are Constantly on Top
Many of the IT outsourcing trends mentioned above have been around a long time.
Progressive Web Apps is a newer IT outsourcing development. Although, its rapid takeover of the app market is astounding.
PWA is a website in nature, so it surpasses native applications in:
- cost of development
- SEO visibility
- cross-platform usage
- no-network performance
Native apps are mainly created for specific mobile platforms, such as Android or iOS. So it’s necessary to write the same app in two or more different programming languages.
For example, in general, iOS uses Swift and Objective-C languages. Android uses Java and Kotlin.
Developing an application for more than one mobile platform can require more than one outsourcing team. This is due to the need to develop an application for each platform.
This makes native applications the most commonly outsourced development projects. The growing number of smartphone users will increase the demand for native applications. Also impacting this is a native app’s advantage over that of a hybrid or web one.
Native applications are faster, have better support, built-in functions, clearer code structure, are more efficient, and contain a better-adapted user experience.
Tech companies and service providers will need to be more flexible to be able to adapt to new standards and regulations. 2021 is going to be full of new rules and regulations.
It’s important to carefully negotiate contract clauses, along with back-end processes and regulations. It’s also important to keep in mind the costs of implementation and the costs that could be presupposed.
As of 1 January 2021, the UK is no longer part of the EU. This means that it is no longer a part of the EU customs union nor its single market.
Global Outsourcing Trends Forecast
The global economy has changed since the start of the covid-19 pandemic. The shift to work from home has created an irreversible change to the global workforce.
As industries adapt to this trend, outsourcing will continue to grow. Software development is a key industry that will continue to grow in outsourcing.
Outsourcing makes a skilled workforce attainable for many more companies. It enables companies to keep a competitive edge.
Software development is an indispensable part of business, from small start-ups to mega-corporations. One of the best ways to keep ahead of the trends in this arena is by outsourcing software development.
Outsourcing software development will continue to be essential for all types of IT. From web and app design to site maintenance and artificial intelligence.
FAQs about software development outsourcing trends
1. What are the current trends in software development outsourcing?
A rise in the demand for cloud-native software development, the use of agile approaches, and the adoption of DevOps principles are some of the current trends in software development outsourcing. Another trend is the move away from outsourcing and toward nearshoring and onshoring, which enables closer proximity and simpler communication.
2. How does outsourcing software development benefit companies?
Software development outsourcing can help businesses save money, gain access to more specialized expertise, expedite project completion, and be more flexible.
By enabling businesses to concentrate on their core strengths while outsourcing non-essential activities, it can also help them stay competitive.
3. What are the risks involved in outsourcing software development?
Communication problems, cultural differences, a lack of control over the development process, and potential quality problems are some of the dangers associated with outsourcing software development. Data security breaches, intellectual property theft, and trouble managing vendor relationships are additional dangers.
4. What are the popular destinations for software development outsourcing?
Poland, Ukraine, China, India, and other popular outsourcing locations for software development. These nations provide a sizable pool of knowledgeable developers, aggressive pricing, and advantageous time zone variations.
5. How do you manage communication and collaboration when outsourcing software development?
Establishing clear communication routes, giving frequent updates, and using project management tools that encourage cooperation are all necessary to effectively manage communication and collaboration while outsourcing software development.
Effective communication can also be facilitated by forging close bonds with outsourcing partners and establishing a common understanding of project objectives.
6. What are the best practices for choosing an outsourcing software development partner?
The best methods for selecting a partner for outsourcing software development include doing extensive research, assessing possible partners based on their experience and expertise, checking references and qualifications, and assessing their communication and cultural fit.
It is also crucial to take into account elements like cost, project management skills, and intellectual property protection.
7. How do you ensure the quality of the software developed by an outsourcing partner?
It’s crucial to define precise quality standards and criteria, carry out regular code reviews, and make sure that testing and quality assurance procedures are in place in order to guarantee the quality of software generated by an outsourcing partner.
Making a good impression on the outsourcing partner and giving them feedback frequently can also help to guarantee that the finished work fulfills quality standards.
8. What is the typical pricing model for outsourcing software development projects?
Either a fixed price or a time and materials model is the common pricing structure for projects that involve outsourcing the creation of software.
When project needs are clearly established, a fixed pricing model is employed, which enables a predetermined cost for the entire project.
When needs are less clear, the time and materials model is utilized, and the project is charged according to the number of hours performed and the cost of the materials used.
9. How do cultural differences impact software development outsourcing?
Software development outsourcing can be impacted by cultural differences by influencing project timeliness, quality, communication, and collaboration.
Misunderstandings and miscommunications can result from differences in work styles, communication conventions, and business processes. Differences in culture can also affect how deadlines are seen and how much attention to detail is put into the production process.
10. What are the emerging technologies driving the software development outsourcing industry?
Blockchain, cloud computing, the Internet of Things, artificial intelligence, and machine learning are some of the emerging technologies influencing the software development outsourcing sector.
These technologies are promoting innovation and enhancing software development efficiency, enabling outsourcing companies to offer their clients more sophisticated and cutting-edge software solutions.
If you enjoyed reading this article on software development outsourcing trends you should check out this one about financial software development companies.
We also wrote about a few related subjects like business pivot examples, financial projections for startups, startup consultants, startup advice, startup press kit examples, nearshoring, Berlin startups, types of investors, share options, IT outsourcing failures, London startups, gifting shares, best startup books and risk management process.
- What Is A Project Management Framework? (Must Read) - October 15, 2023
- What is an IT Project Manager and What Do They Do? - October 11, 2023
- How To Hire A Web Developer For Your In-House Team - October 1, 2023