To predict what the future will hold for IT outsourcing, we should look closely into the last couple of years. They have been heavily impacted by the pandemic and strict measures that have been imposed on companies to restrict the spread of the virus could not but influence the current state of business affairs.
This article sheds some light on causes that are heavily influencing the IT market today and the reason why, for instance, outsourcing in Ukraine, Poland, Egypt, and other countries is becoming a vital option for many companies.
How the Pandemic Has Changed the IT Market
Many people are probably sick and tired of reading about how the Covid-19 has changed the technological and business landscapes. Unfortunately, there is no escaping it. Although it caused a major disruption in many fields, it also had some positive changes. For instance, it was that major push that made businesses around the globe pivot and finally establish their presence online.
A major disruption caused by the pandemic in the digital era made companies look for practical ways to effectively run their business online. That is why many firms have turned not only to out-of-the-box SaaS applications but to software development agencies to help them create solutions that would meet their specific business needs and goals.
In one of the first reports on the impact of Covid on the IT industry in 2020, PwC wrote that remote work, online education, and social distancing would create demand for products and services delivered by the tech industry. As we can see, this forecast has turned out to be absolutely accurate.
The Future of IT Outsourcing
Now, we can surely say that the information technology sphere did not lose after all in the pandemic world. On the contrary, it will have some changes, and not negative ones, on outsourcing in general. Here are a few things that the future has for IT outsourcing in store.
Alternative Outsourcing Markets
Many companies have successfully figured out that operating remotely might be very beneficial for the business. For instance, there is no need to pay for office rent, electricity bills, and lunch for employees, while they can work from home without losing their efficiency and productivity. It means that hiring in-house workers is no longer necessary. That is why many organizations are considering outsourcing to more cost-effective countries.
Many world-known corporations choose Ukraine and Poland as well as Romania and Lithuania to locate their research & development centers there and open permanent offices. The reason behind these outsourcing destinations is that the hourly rates are much lower than, for example, in the United States, the United Kingdom, or Western Europe in general.
For instance, the hourly rate of a Ukrainian JavaScript developer is $33, a US JaveScript engineer’s hourly rate is $66.
Another reason why firms prefer these countries for outsourcing is that they are culturally very similar to the Western world, have convenient locations with major airline hubs, and their software engineers have a good command of the English language. What is more, favorable economic and technological landscapes form a sound basis for the flourishing of the tech market in those countries.
However, Central, Eastern, and Northern European countries are not the only preferable places for outsourcing. Surprisingly, Egypt is in the race. While the country has few developers, the rates are quite low — lower than in Europe.
The location of Egypt is also very attractive — it is situated in Africa and it is quite easy to get there from the old continent, Asia or the Middle East.
Focus On Cybersecurity
More and more companies are going to outsource projects related to cybersecurity. Why cybersecurity? The answer is the same old Covid. Now, when many people are working remotely from their devices, be it a mobile phone, laptop, or PC, it has become increasingly harder for companies to secure their corporate data.
According to another report by Accenture, in 2021 there were on average at least 270 attacks on a company, which is 30% higher than in 2020, and the security investment continues to rise.
Hence, many businesses are getting in touch with outsourcing companies to help them create cybersecurity applications that will run on employees’ devices and secure data from data breaches, leakages, ransomware, phishing, etc.
The Widespread Usage of VR & AR Technology
Virtual and augmented reality apps are becoming a hot trend at the moment and it seems that in the near future they will be no less popular. For instance, with such games as Pokemon Go people can keep social distancing but at the same time have a whale of a time outdoors catching pokemon creatures with the help of their mobile phone.
VR technology is not lagging behind either. By means of a special helmet or headset and a VR application, many educational institutions can provide an outstanding learning experience. For instance, the user can virtually visit a lot of countries and even travel through time and space, not to mention an exciting journey inside the human body.
Fierce Competition
The more firms look for impeccable software development services, the fiercer the competition among software service providers is. Many companies will have to extend their range of services by adding new ones. Thus, skills in cybersecurity, artificial intelligence. data science, blockchain, virtual & augmented reality as well as mobile, web, SaaS, and cloud development will become an integral part of a company’s expertise.
But the fierce competition is not a bad thing as it will promote software development agencies to fight tooth and nail over clients and provide outstanding services.
Even though the last couple of years were quite disrupting due to the pandemic, the nearest future for information technology outsourcing looks bright and promising. We’ll see the rise of VR & AR technology, a greater focus on cybersecurity, fierce competition among various software development providers who’ll be expanding their services, and increased outsourcing to countries in Central, Northern, and Eastern Europe, as well as Egypt.