Life after the Pandemic: IT Outsourcing Trends in 2020

COVID-19 brought the world down to its knees. However, the virus couldn’t shut down the whole planet (and in some cases it was because of technology). With the help of Work From Home initiatives, companies were able to maintain some normalcy and keep pushing forward.

While a national or global crisis usually stymied technological investments, the Coronavirus has had the opposite effect on some businesses. In fact, the pandemic accelerated digital transformation initiatives as organizations scrambled to adjust to the new norm.

Businesses who embrace digitization are well-placed to scale and boost revenue. According to KPMG, as much as 80% of revenue growth demands digital offerings and operations by 2022.

However, with the ongoing global tech talent shortage, it’ll be challenging to achieve unless companies get creative. However, the good news is that there are options.

One way to do this is to embrace IT outsourcing as a core part of your digital transformation and software development strategy. Done correctly, it can be a highly successful HR tool to access top tech talent nearshore and offshore.

Many companies were already outsourcing IT-related functions to third-party contractors before COVID-19 to reduce IT expenditure and accelerate time-to-market. By building robust dedicated teams, companies can now access to tech professionals while minimizing recruitment costs and project risks.

According to research conducted by software development and staff augmentation services provider, Intersog, here are the top five IT functions that’ll be outsourced in a post-pandemic world.

1. Custom Software Development

Companies that digitize their functions and processes demand custom software to optimize processes. In this scenario, businesses will be well-placed to identify new opportunities and engage in innovation.

Over the next six months, almost 50% of organizations are expected to delegate software development and integration to a trusted third-party provider. This approach will enable affordable access to software engineers to build new software or improve existing solutions. 

2. Enterprise Cybersecurity

Research suggests that almost 50% of small businesses are victims of a cyber attack. In this scenario, as much as 69% were forced offline while security teams scrambled to respond to the active security event.

According to Gartner, about 68% of business leaders feel their cybersecurity risks are escalating. As a result, it’ll drive the global spend on cybersecurity to $133.7 billion by 2022.

The following industries are key targets for cyber attacks:

• eCommerce
• Education
• Finance
• Healthcare
• Manufacturing

As cybersecurity becomes more proactive and sophisticated, organizations are expected to outsource a variety of security functions like network monitoring and penetration testing to fill the skills gap (cost-effectively).

3. Web Operations

Web operations are common across digitally transformed industries. As a result, you can expect it to have an increasing impact on the world of IT outsourcing.

Outsourcing of web-based projects includes the deployment, management, and maintenance of functions like:

• Corporate portals
• Customer Relationship Management (CRM) systems
• eCommerce solutions
• Software-as-a-Service (SaaS) applications

Research suggests that 67% of businesses that run large and mission-critical web projects will hire remote web developers and dedicated teams to support their web operations this year.

4. Automation and Artificial Intelligence (AI)

In a highly connected world, AI now plays a role in almost every aspect of life. In the middle of a crisis, smart algorithms are also working overtime to combat the spread of COVID-19.

The global automation and business intelligence market is forecasted to reach $29.48 billion by 2022 (growing at 11.1% CAGR). In 2020 and beyond, it’s safe to say that AI-powered automation will be the force that drives businesses forward. 

To transform traditional business operations into intelligent ones, at least 48% of organizations will outsource AI and automation functions to established partners. This approach boosts productivity while responding to the talent shortage effectively. 

5. User Interface (UI)/User Experience (UX) Design

Outsourcing and staff augmentation isn’t restricted to programming. As much as 63% of graphic designers in the United States are already freelancers, so you can expect at least some of these creative professionals to support businesses remotely.

However, outsourcing design functions won’t be limited to UI and UX specialists. You can also expect designers working on Augmented Reality and Virtual Reality projects to meet the demands of eCommerce, manufacturing, healthcare institutions, and more. 

As you can see from the above, the pandemic isn’t slowing down technological initiatives and innovations. The only hurdle is the tech talent shortage that’s resolved effectively through outsourcing. 

Companies that take an active and creative approach to resolve IT challenges now will be well-placed to thrive in a post-pandemic world.