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The Future of IT Outsourcing: Top Trends to Look For in 2020

Elucidating how IT Outsourcing practices are changing over time.

The ever-increasing penetration of digitalization and globalization are demanding businesses around the world to shift to an outsourcing strategy approach for good reasons. Outsourcing business processes nowadays has become prevalent, providing businesses opportunities to perform their high-end functions like IT services, BPO and research services, with ease and at a rationale cost by outsourcing to reliable companies. This concept has made its way into every organization’s business strategy who seek to devote full effort in their key business operations and outsourcing the rest to specialized vendors.

A majority of companies typically outsource their IT services for many reasons, from operational flexibility and the need for new, specific skills to cost-saving. According to a report from, the global market for IT Outsourcing is predicted to grow at a CAGR of 2.6 percent from US$342.9 billion in 2020 to US$410.2 billion in 2027. Moreover, experts contemplate that the outsourcing market in the near future will reach new heights while penetrating new industries.

Here is a look at top IT Outsourcing trends to look for in 2020 and beyond.

Finding out a reliable outsourcing development company to outsource business processes is a challenging task. It is difficult to define how an organization will understand and perform once a service is outsourced. Despite this, more and more companies are outsourcing their business processes, especially IT services, as it is difficult to manage different offshoring functions. Large companies are significantly joining hands with startups and entrepreneurs to drive innovation in future projects.

Shift from Single Vendor Outsourcing to Multi-Vendor 

With increasing leaps and bounds to digital transformation by organizations, the IT outsourcing approach will see a tremendous uptake. Most companies that have outsourced their business processes now are looking to multi-vendor outsourcing, instead of relying on just a single vendor. This outsourcing approach in the IT industry will enable companies to outsource different aspects of their IT services to different companies in order to improve their revenue.

Rise of Co-Sourcing 

In this approach, a company hires an external team that acts as their internal team and works in collaboration. Both the internal and external teams work together, side-by-side to create value, as well as share the risks, face issues, and come up with quick solutions together. Co-Sourcing can help improve the IT outcome achieved from outsourcing. The team who work based on this approach vests their interests in co-creating new values to gain a competitive edge, and ensure the work is not hampered even during any turbulence.

Changes in the Contract

Most clients and outsourcing companies these days can easily measure the outsourcing relationships’ success through a desirable outcome. These relationships are now more standardized, and process and people are driven, more willingly than price-driven. According to the GSA UK, around 90 percent of respondents strongly have faith in that both parties will be signing outsourcing contracts focused on outcomes and value in 2020 and beyond. As outsourcing will become more of collaborative practice, both parties will agree on mutual understanding of risk-sharing as they bear the brunt of misfortunes or myriad of benefits at the same time.

Apart from these trends, cost pressures will drive  that are flexible in their Service Level Agreements (SLAs) and scope of delivery. Ever-increasing raw material, transportation and oil costs will make it imperative for companies to look at outsourcing to keep their operating costs low. Moreover, more high-end critical business functions will be outsourced in the following years, while outsourcing of low-end services will stabilize.

The post The Future of IT Outsourcing: Top Trends to Look For in 2020 appeared first on IndustryWired.

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