Experts predict that this number will rise in the future. These figures are not surprising since outsourcing software is both affordable and highly skilled. It can be difficult and confusing to find the right partner for your business, given the increasing demand for outsourcing. It can be difficult to know where to start, especially when it comes down to choosing the right partner. This is why we'll be discussing what it outsourcing is and where the best place to source software development. Let's start with
What is IT Outsourcing?
IT outsourcing refers to the practice of outsourcing IT tasks to an outside company. Because most companies don't have the resources or talent to perform these tasks, this practice is becoming increasingly popular. This can be anything from simple tasks like designing or planning, to more complex tasks like web development.
Businesses may choose to outsource their custom software development for a variety of reasons.
For increased efficiency and effectiveness, it is a good idea to hire specialized skills or technology that are not readily available at work.
Outsourcing reduces development costs through flexibility and scalability.
There are many other reasons, however, that companies choose to outsource their software development.
Software Outsourcing Market Statistics
To better understand the advantages and pitfalls of outsourcing, let's take a look at the market overview for IT outsourcing. The IT outsourcing market has been growing rapidly for more than a decade. The COVID-19 pandemic only worked as a catalyst to outsourcing. According to AppDynamics' survey, 85% have made changes in their technology priorities due to the COVID-19 pandemic. Companies have had to reprioritize business tasks in order to find efficient and quick solutions.
Why do companies choose to outsource software development services? We have already discussed the main reason for outsourcing software development services. To work with an in-house staff requires resources, costs of hiring and expertise. Software outsourcing allows you to only pay for the work you do and not for the services that you use. Outsourcing does not have a fixed price. You can also choose from different pricing options depending upon the location. You can also outsource labour-intensive tasks to service providers to allow you to concentrate on your core business processes.
Outsourcing Trends to Watch Out in 2022
Statista reported that in 2019, the global outsourcing market was worth $92.5 million before the pandemic. Grand View Research also revealed that the BPO (Business Processing Sector) was valued $245.91 million in April 2021.
Without a plan or strategy, outsourcing can prove to be a waste of money for your business. You need to keep up with the latest trends in outsourcing. These are the top outsourcing trends to help you.
You need to know the current outsourcing trends in order to develop a winning strategy. These are the top outsourcing trends to help you make informed outsourcing decisions for 2022 and beyond.
Prioritizing Quality
High-quality services are a key focus for companies today.
High-quality service is what organisations are now focusing on. To do this, they will need to have both talented employees and advanced technology. This can however be costly in many countries.
Companies are more inclined to outsource business tasks like software development, recruiting, payroll management, and so on.
Outsourcing allows companies to offer customized solutions to clients. Outsourcing service providers have the time, skills and resources to customize solutions better than an in-house staff.
Robotic Process Automation (RPA)
Robotic Process Automation (RPA), was adopted by most BPO companies last year. It allows businesses to automate their work processes, allowing them more flexibility and profit. Automation can reduce the chance of making mistakes or errors in business processes. Robotic Process Automation records and stores tasks performed by humans to make them automated.
Companies will be more likely to adopt RPA in 2022 and beyond and fully implement it into their business processes. RPA is a way to improve the outsourcing situation by increasing repetitive tasks and allowing companies to concentrate on their core business tasks.
Growing Demand for Specialization
Companies are finding it difficult to keep up with the rapid advancements in science and technology. Every day new technologies and trends are introduced to the market. It doesn't matter how professional an organization is, chances of touching all the buttons are slim.
Thanks to technological innovations, businesses no longer have to search for the best outsourcing companies to help them run their business. Just a click away is the list of outsourcing companies. Just type the query into Google search and you will find thousands of solutions. In 2022, experts who can maximize the profit of projects they are assigned will be in greater demand.
Security
Security threats increase as technology advances with new innovations. Cyberattacks have been on the rise since the outbreak of the pandemic. Since the COVID-19 pandemic, cybercrime has risen 600%. It is therefore more important than ever for companies to ensure that data and other information are secure from all threats.
Cybersecurity will be a top priority for outsourcing in 2022. Companies that provide BPO services have begun to use multi-level security measures to protect their data. It is important to stay current with security patches in order to keep up with the ever-changing cybersecurity landscape. Outsourcing partners should be able to provide top-notch security and resource management for businesses.
Ability to Use Progressive Web Apps (PWAs)
PWAs are gaining popularity because users expect a great user experience. It is a combination of web and mobile apps. Medium described it as a mix of mobile applications and regular websites.
Most businesses prefer this method of communication because it's easier to use for customers. This eliminates the need to download and install the application on the customer's computer.
PWAs are a great option, as they allow you to offer efficient services which is one of the best outsourcing benefits. Because it involves web development, this would be a great innovation in software development services.
Cloud Services Are Becoming Popular
The cloud has become an indispensable tool. Vendors that provide cloud-based services to businesses or help them migrate their existing infrastructure into the cloud are becoming more popular. Businesses used to be wary about moving to the cloud because of skyrocketing initial costs. This is no longer the case. Modern organizations are finally realizing the many benefits of outsourcing cloud-based IT services.
Flexible workforce and Composable Apps
In the last two years, work habits and patterns have changed dramatically. While employees' reactions to working remotely (WFH), are varied, everyone wants the flexibility and freedom of WFH. Flexible working can be a deal-breaker in many cases, especially if the skill is highly sought after and cloud-based. We will see more contracts that allow for such flexibility.
Businesses want software that can be modified quickly, safely, and efficiently, just like employees. Composable architecture allows for such flexibility and can add new features or sets of features up to 80% faster than traditional architecture.
Top Outsourcing Destinations in 2022
Now that you have learned more about the top destinations for software outsourcing, let us now look at which country is best. Based on +550 technical assessments and the most recent Skill Value report, Poland, Ukraine, Belarus and China are the 5 top countries for outsourcing software.
Poland
Poland is a cultural choice for those who are American or from Western European countries. Many Poles work for Western companies. Global giants like Google and Facebook have their headquarters in Poland.
Moreover, Poles are proficient in English and rank 16th worldwide according to the EF English Proficiency Index.
What about the skills? According to Hacker Rank's Programming Olympics results, the Poles are 3rd best programmers in the world. They were also 1st among Java developers and 2nd among Python developers. These are the two most popular backend languages hiring managers seek out in a candidate.
What are the disadvantages to working with an outsourcing company based in Poland? Polish developers earn more than most other countries in this list. According to Glassdoor the average salary for a Polish software developer in a given year is $30,500. They are however much lower than the Western developers' salaries.
Ukraine
Another popular destination for IT outsourcing is Ukraine. There are many benefits to working with Ukrainian companies. The average annual salary for a software developer in Ukraine is about $12,800. The programming skills of Ukrainians, however, are lower than those in Poland, which is at the top of our list. They rank only 11th in HackerRank. They are also less proficient in English than the rest of the world, ranking them 44th.
What about the work culture? It will be easier for Western customers to communicate with Ukrainian teams than they would from India or China. But, Ukraine is likely to be more distant than Poland due to its economic and geographic factors.
Belarus
Belarus is another popular destination for outsourcing. The country's IT sector has seen a boom over the past decade, and it is expected that its share of Belarus' GDP will grow to 7.5% by 2025. The country is a great place to hire software developers, with over 55,700 IT professionals.
Although Belarus is known for offering high-quality software outsourcing solutions, its developers aren't as skilled as those from other countries like Poland and Ukraine. The EF EPI placed Belarus 40th in terms of English proficiency.
Glassdoor estimates that the average annual income of Belarusian developers is $31,500 per year.
Belarusian law is a potential disadvantage for companies looking to enter the Belarusian market. Despite the fact that the government has made several laws to encourage foreign investment, it is difficult to do business in Belarus due to the complex legal system and the unstable political environment.
China
The HackerRank: China has announced the winners of its programming skills ranking. This country will have the top data structures, mathematics and functional programming specialists.
Working with China also has the added benefit of saving money. Chinese developers make around $37,500 annually.
What about the cons? China is very different from American or European standards. Communication problems are a real risk. The fact that many people may not be able to communicate in English adds to the problem. China currently ranks 38 in the global ranking of countries or regions based on English skills. Their English proficiency was also described as "weak" in the EF English Proficiency Index, two years ago.
China is home to many qualified professionals. However, communication issues can pose a problem and negatively impact your comfort and project outcome.
Hungary
Hungarians ranked 4th among the most highly-skilled programmers worldwide. Hungarians are a popular destination for outsourcing due to their low programming rates (according Glassdoor, it is about $25,000/year) and proximity to Western European countries. They are also ranked 14th in the world for English-speaking countries.
What are the down sides? Hungarian is a small market. This means that it can be difficult to find the right people to build your entire IT team. This can be particularly problematic if you're looking for specialists in niche areas.
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The Key Takeaway
IT outsourcing has many benefits. Companies like Amazon, Google, and WhatsApp have been using this method for years. There are many countries that you can outsource safely, economically, and get high-quality products. You will succeed by choosing a partner who has strong technical expertise, industry experience, and cultural proximity.
