Why and What Do Companies Outsource? The State of Software Development Outsourcing for 2019

October 11, 2018 White Papers

The way the world works has changed.
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Not too long ago, companies that were looking to hire highly-skilled tech talent were limited to candidates that lived within a certain mile radius of an office location. In high-tech hubs like Silicon Valley and New York City, the talent was easier to find, but more expensive to hire. In smaller cities, these types of programmers were few and far between.

Today, an organization can hire the exact person or team they need for a specific project and it doesn’t matter if that person or team is located halfway around the world. Thanks to modern technology and the internet, access to technical experts is easier and more affordable than ever before.

Outsourcing has stepped up to meet the maturing needs of the tech industry and is now revolutionizing the way business is done in just about all sectors. In the last year, Deloitte reported that 31% of all IT services were outsourced and Statista confirms that the global outsourcing industrygenerated 88.9 billion U.S. dollars in revenue.

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

  1. Why do companies outsource?
  2. What do they outsource?
  3. Which industries are doing the most outsourcing?
  4. What role does automation have in outsourcing?
  5. What are the trends to watch for 2019?

Summary

Just in the last year, Deloitte reported that 31% of all IT services were outsourced and Statista confirms that the global outsourcing industrygenerated 88.9 billion U.S. dollars in revenue.

Outsourcing Growth

Why Do Companies Outsource?

The two main reasons that organizations decide to outsource are to reduce costs and to have the ability to focus on core business goals and planning. But the research shows a shift in industry thinking. Outsourcing is not just about saving money anymore. It’s seen as a critical tool in innovation.

What companies outsource

The primary industries for outsourcing are Consumer & Industrial Products, Financial Services, Life Sciences & Healthcare, and Technology, Media & Telecomm. There has also been a growing increase in outsourcing from industries such as Real Estate, Facilities Management and Procurement.

Automation is having a huge impact on outsourcing. Just as the way we work is changing thanks to outsourcing, the outsourcing landscape itself is changing thanks to automation. While several outsourced positions will be eliminated, there will be many more high-skilled, higher-paying jobs created as a result.

What are the top outsourcing trends for 2019?

Read the full report to find out.

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