Software outsourcing trends in 2021

As 2020 has determined more and more businesses to shift to a more digital way of working, the need for new types of software solutions grew exponentially. But the idea of hiring an experienced software developer was not easy to reach for most companies as they were still unsure how their business would survive in the remote work environment. In this context more than ever, outsourcing played a significant role in allowing businesses to take advantage of the ever-growing changes in technology without overspending. Hiring an external team gave companies access to world-class experts and saved them from the challenges of recruiting local developers.

According to a study conducted by McKinsey, “During the pandemic, consumers have moved dramatically toward online channels, and companies and industries have responded in turn. The survey results confirm the rapid shift toward interacting with customers through digital channels. They also show that rates of adoption are years ahead of where they were when previous surveys were conducted.”
As a result, IT outsourcing has been blooming during the past year, and not only that; it has been expanding to new areas. At this point, we want to take a step back, look at the entire ecosystem and predict some of the emerging IT outsourcing trends for 2021.


Long-term collaboration rather than one-time projects

In its early stages, software outsourcing was perceived by many as the go-to solution for a quick and cheap project. But hiring the working hands without building a trust-based relationship proved to be more costly in the long term.

  • There was no continuity for future improvements.
  • A one-time gig means less responsibility and less involvement from the developer.
  • There was no knowledge transfer between the service provider and the core team.

Therefore, we are now looking at the rise of relationship-focused collaboration models where good communication and involvement are expected from the outsourcing team. Let’s take a closer look at the benefits of the most popular collaboration model at the moment, the dedicated teams model:

  • There is continuity and knowledge transfer: the dedicated team builds up knowledge in the client’s industry vertical and transfers it to new team members.
  • Responsibility increases engagement: the outsourcing team shares the burden of the outcomes which keeps the team engaged and reinforces the idea that everyone is responsible for the quality of the work they deliver.
  • Access to knowledge and various technologies: As new technologies emerge, it’s difficult to keep up and employ developers with various skills. A software outsourcing company, on the other hand, has access to a large pool of technical skills.


Adaptability is key

A dedicated team is also a flexible extension of your own organization. You’ll have the flexibility to change the structure of the dedicated team, adding more software engineers, for example. Therefore, a team of developers can easily go from working full time to reducing the number of team members and hours based on the evolution of the project. They can also transition to a new project or to consulting on matters at hand (given reasonable notice to the outsourcing partner). It is harder and more time-consuming, for companies to get the same level of adaptability from their employees.

We listed out all the different collaboration models for software development outsourcing with benefits for each model in the article here. If you want to find out which model best suits your company or to get a better understanding of the market, make sure to read that.


The most in-demand tech skills for 2021

In a study conducted by Deloitte in 2020, around 90 percent of the participants saw cloud technology as one of the primary enablers in their outsourcing journey. Companies will be looking for partners who can assist with transferring entire infrastructures to the cloud and offer security services to block off any threats. “The worldwide public cloud computing market continues to grow and is expected to reach an estimated 397 billion US dollars in 2022. This encompasses business processes, platforms, infrastructure, software, management, security, and advertising services delivered by public cloud services.” - Statista 

When talking about storing massive amounts of data online, we can’t help but think about the specialized cybersecurity solutions companies will need to keep their information safe. 2020 brought a substantial increase in digital dependency, and along with that, the UN disarmament chief warned companies against the growing numbers of cyberattacks: “it is estimated that one such attack takes place every 39 seconds.” With new technologies, online storage, and remote work, new threats are emerging every day. Therefore, Cybersecurity is one of the growing IT trends that will not die out anytime soon. 

The pandemic and the financial anxiety that derived from it also convinced many companies to look into robotic process automation. 90% of the large global organizations predict they will integrate RPA in their daily processes by 2022. Automating business processes will give employees enough time to focus on complex tasks while recalibrating manual effort, decreasing human mistakes, and altogether reducing costs. 

“Global robotic process automation (RPA) software revenue is projected to reach $1.89 billion in 2021, an increase of 19.5% from 2020”, according to the latest forecast from Gartner. 


The most in-demand programming languages for 2021

Looking at the TIOBE Index and PYPL Index statistics of June 2021, Python is growing considerably in demand and popularity. While C, C#, Java, and JavaScript are still in the top 5, Python has seen a lot of interest in 2021. Looking at last year’s survey conducted by Stack Overflow, Python got the title of the most popular language programmers have not mastered yet but will learn in the future. JavaScript came in second place in the same survey. Therefore, if we make a short parallel to this year’s declared popularity indexes, we can see a definite trend in the rise in demand, searches, and use for Python and JavaScript in 2021. 

The motivation for outsourcing is gradually changing. Companies no longer focus solely on outsourcing nonessential activities at a low cost. They are instead shifting towards getting quality services from industry experts. As more and more of today’s working environment is online, outsourcing partners are no longer the “zoom people” who handle the nonessential activities that full-time employees don’t have the time or capabilities to complete. They are becoming partners to the core team of the company. They are the drivers that use their skills and expertise to optimize processes and push the company forward in the digital era.

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