The Who, What, Why, and How of Outsourcing in 2020

September 30, 2020 White Papers

If you have implemented outsourcing previously, or are planning to begin soon, and you’re concerned about whether outsourced IT solutions are actually reliable and profitable – lay your fears to rest. By reaching out to custom software development companies, you can eliminate the need of developing IT infrastructure yourself. This method has totally revolutionized how modern businesses operate, and it brings a whole host of benefits to your business model. However, the outsourcing industry is a constantly changing and developing beast. Read on to learn about the current state and trends of outsourcing, and how we predict it will develop over the next year.

Modern-Day Outsourcing

Over the last few decades, outsourcing has become a key component of business management. The industry’s US market size in 2020 is $132.9 billion. Experts even predict that the overall outsourcing market size will be over $400 billion by 2027. While IT outsourcing is expected to reach almost $98 billion by 2024.

The growth in the outsourcing industry definitely makes sense. Businesses are realizing that they can partner with dedicated IT development teams and get high-quality services for cheap. This is permanently changing the infrastructure of businesses, and we predict this trend will continue to grow drastically over the next few years.

In this paper, we’ll answer the following questions as they relate to outsourcing:

  1. Why do companies outsource?
  2. How do they outsource?
  3. What kind of projects were ruling the industry in 2020?
  4. What are the outsourcing trends to watch for 2021?

Why Do Companies Outsource

So, what exactly is accounting for this exponential growth in outsourcing? Why has it become so popular in IT? Some benefits of incorporating outsourcing into your business model include:

1. Cost Reduction

By outsourcing software development and other IT solutions, businesses are able to cut many forms of costs – not just IT expenses, but also hiring, general, and administrative costs. Those areas can add up to 4 – 5 times as much as standard IT costs. In a study carried out by MIT Sloan, companies that spend $96 million on IT outsourcing enjoyed $121 million in cost-savings across other, non-IT areas.

2. Focus on Core Business

If you have tasks on your plate that don’t align with your skills, outsourcing them can help you reclaim your time and focus on your core competencies – such as superior marketing, inbound logistics, production, and distribution. What’s more, dedicated IT development teams are experts in their field, giving you timely, high-quality solutions for cheap. This is an excellent way to cut out hiring costs and spend that money elsewhere in your business.

Tech Outsourcing Trends in 2020

We have been keeping a close eye on outsourcing trends over the last few months. Here are some commonly outsourced IT projects that we’ve noticed are ruling the industry:

Deep Learning and AI Technologies

Many businesses in major industries can gain a significant advantage over their competitors by integrating neural network technologies in data processing solutions. You can gain valuable insights based on the history of your relationships with your clients – and then use those insights to predict upcoming trends. Your business can use the latest AI technologies in the form of chatbots and virtual assistants. In any scenario, trying to put together a team of specialists in these fields will be challenging. It makes much more sense to form a contract with a dedicated software development team that is already focused on these technologies.


There is an almost constant rate of cybersecurity attacks over the web – every 39 seconds, on average. Paying for a highly qualified team of onsite security engineers is very expensive, and it makes no sense for most businesses. On the other hand, hiring only one specialist at the cheapest rate is worthless. Contacting dedicated teams who are focused specifically on cybersecurity is the way to go. You’ll get top of the line security, audits, and necessary protection mechanisms for an affordable price.

What are the top outsourcing trends for 2021?

Read the full report to find out.

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