Software Outsourcing Trends for 2019

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The demand for software outsourcing has steadily increased over the past decade as businesses have become more digital. More companies are choosing to outsource their software development needs to specialist teams with specific expertise.

In 2019, we expect to see companies choosing their outsourcing providers based on quality rather than cost reduction. We predict that outsourcing teams will start to be seen as business partners as companies start working with multiple specialist providers. We also expect to see an increase in demand for cloud outsourcing.

Let’s look at these software outsourcing trends in more detail:

 

Software Outsourcing Will Continue to Increase

As the software development skills gap continues, companies will find it increasingly difficult to hire specialist developers. We predict that in 2019, companies will increasingly turn to software outsourcing for projects that require specialist skills.

According to the Global Outsourcing Association’s (GSA) report Outsourcing in 2020, 70% of buyers plan to outsource more, with 35% planning to do so significantly.

A recent report published by market research company Forrester, states that employers that fail to attract digital talent will end up paying 20% more in salaries for in-demand skills like data science, cybersecurity and high-end software development. As a result, we expect to see companies outsourcing software development for quality control and cost-effectiveness.

 

A Focus on Quality Over Cost

Traditionally, cost-saving has been the principal driving force behind software development outsourcing. However, in 2019, we expect to see companies focusing more on the quality of the services being provided.

According to GSA’s report, cost-savings are less of a priority for buyers and sellers with improved customer experience, business expansion and improved security forming the basis of outsourcing decisions.  

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Although cost-effectiveness will always play a part in nearshore outsourcing, this alone won’t be the deciding factor. We expect companies to be more focused on the ‘human’ side of the outsourcing relationship and more concerned with the process and the outcome.

In 2019, companies will come to expect high-quality software development above all else, which in turn, will reduce project risks and add value to a company’s offerings.

 

Outsourcing Providers Will be Seen as Business Partners

This year, we expect offshore software development to become indispensable to those that rely on its expertise. In today’s ever-evolving digital landscape, businesses need to continue to grow and innovate to stay ahead of their competitors. We predict that software development providers will play an increasingly important role in helping ambitious companies achieve their goals.

We expect to see more companies placing their outsourcing providers at the forefront of their business models and viewing them as business partners rather than service providers.

As cost reduction starts to take a back seat in software outsourcing, the focus will shift to the relationship between people, processes and outcomes. Companies will be more focused on the value that outsourcing can achieve, which will change its wider perception in the business landscape.

 

Companies Will Seek Specialist Outsourcing Partners

As technology progresses, so does the need for specialist software development. As Artificial Intelligence (AI), the Internet of Things and blockchain technology begin to make inroads into the wider business landscape, the demand for specialist software development will increase.

This need for specialist knowledge will lead to companies seeking out outsourcing partners that can deliver specialized expertise. In some cases, we’d expect companies to lean on several outsourcing providers at the same time to meet specific requirements. We predict that more software development companies will start to narrow their specializations, focusing on specific industries or technologies.

Outsourcing companies that do have the skills to provide a full service will have a competitive edge and stand out from the crowd. For example, BairesDev assists leading Hispanic media company Univision with software development for all their corporate and public applications, including over 50 sites. Our ability to deliver a full service enables us to be a one-stop-shop for our clients.

 

An Increase in Demand for Cloud Outsourcing

As more businesses move to the cloud, demand for cloud outsourcing will increase. According to CIO Magazine, cloud services now account for one-third of IT outsourcing. We’d expect this trend result in an overall improvement in cloud outsourcing services.

According to a press release published by global research firm Gartner, the ‘cloud shift’ will affect more than $1 trillion in IT spending by 2020 with application software and its infrastructures accounting for 47% of spending.

As more companies embrace the cloud, cybersecurity will also feature high on their priorities. We’d expect to see more software developers start to integrate security into products to reduce threats.

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In summary, here are our predicted software outsourcing trends for 2019:

  • The software development skills gap will remain, as will the demand for software outsourcing

  • We expect to see businesses focus on the quality of software development rather than cost reduction

  • Software outsourcing providers will be viewed as business partners and those that provide a full service will be in high-demand

  • We expect to see an increase in demand for cloud outsourcing and security

 

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