IT Outsourcing Trends 2024: How to Stay Ahead of the Curve


IT outsourcing has grown from a trend to a key choice for global businesses in today's digital world. Amid rapid tech progress, outsourcing in software development now exceeds cost-cutting. It's now a key player in driving innovation and growth. It's about unlocking the doors to global talent, fostering agility, and embracing innovation.

The growth of IT outsourcing trends has been nothing short of remarkable. Understanding the trends has become essential for businesses to thrive as we enter a new tech era. So, here's a warm welcome to the future of commerce, energized by software development outsourcing trends. 

Unveiling the IT Outsourcing Market Landscape

IT outsourcing trends are significantly influencing the global business landscape. It's about accessing a global talent pool, enhancing agility, and fostering innovation.

A Glimpse into the IT Outsourcing Market of 2023

2023 marked a momentous milestone in the realm of IT outsourcing. The IT outsourcing market globally rose to $971.2 billion, up 22% from 2019. The digital revolution, increased use of enterprise apps, and remote work trends drove this growth. Also, as per Revenue Industry Share data from 2023, IT and telecoms formed 15.77% of the market.

Decoding the IT Outsourcing Landscape: Key Statistics for 2024

As we enter 2024, evolving IT outsourcing trends shape the global business landscape. In the digital age, businesses focus on trends in software development and tech outsourcing. It's like having an ace up your sleeve in the game of competitiveness.

Key statistics for 2024 reveal that about $512.60 billion will be spent on IT outsourcing, with this number rising to $777.80 billion by 2028. Of these figures, the offshore outsourcing component is estimated to be 43.46% and 45.24%, respectively.

Spotlight on Predominant IT Functions Outsourced in 2024

In 2024’s digital landscape, some IT roles stand out for outsourcing. Software development leads, driven by the need for special skills and global talent. AI-driven automation is shaping outsourcing’s future.

Investors put money into RPA and AI. These technologies transform many sectors fast. The rise in software development outsourcing indicates a high demand for experts. These include data scientists, big data analysts, and AI specialists.

IT support is another key function outsourced. About 32% of British B2B firms do this, the highest rate for any service. The trend stems from the need to focus internal teams on strategic tasks. Meanwhile, external experts manage routine support tasks.

Navigating the Future: IT Outsourcing Trends Shaping 2024

As we venture into IT outsourcing trends, we are evolving, with several key trends emerging to redefine the industry.

  1. Value over Price: Businesses increasingly recognize the value of outsourcing beyond cost savings. They leverage outsourcing to tap into global talent, foster innovation, and enhance agility.
  2. Multiple Providers: The era of single-provider outsourcing gives way to multi-sourcing, where businesses engage with several providers to leverage their unique strengths.
  3. New Outsourcing Areas: Traditional IT functions continue to be outsourced, but new areas are emerging, including big data, AI, and cybersecurity.
  4. Emerging Business Models: As-a-service models proliferate, offering businesses flexible and scalable services.
  5. Automation: Automation, mainly through AI, is transforming outsourcing. Investments in Robotic Process Automation (RPA) and AI are on the rise.
  6. Cloud-based Platforms: The shift to the cloud is accelerating, with businesses increasingly outsourcing their cloud computing needs.
  7. Adoption of Agile and DevOps Practices: Businesses embrace Agile and DevOps practices in their outsourcing engagements to enhance collaboration and speed delivery.

Understanding IT and software outsourcing trends is crucial for businesses in the digital era. It’s like knowing the rules of this competitive digital game. This knowledge lets them use global talent, save costs, and apply innovative outsourcing solutions.

Emerging Outsourcing Dynamics: 2024's Latest Trends

1. Harnessing AI and Machine Learning in Software Development

ML and AI are changing the software industry. They automate tasks, create insights, and improve user experience. But, adding AI and ML to software development is complex. It needs resources, skills, and time to design, put in place, and test AI and ML solutions.

One solution discovered in technology outsourcing trends is to outsource AI and ML development to experts. Outsourcing gives you global talent, cost savings, and faster market entry. You can use the skills of partners who have done similar projects. They have the tools to deliver quality results. But, outsourcing AI and ML needs careful collaboration and communication with partners. 

Best Practice:

  • Collaborate with outsourcing partners with proven AI and ML expertise.
  • Look for partners who have a portfolio of successful AI and ML projects, a team of qualified and certified AI and ML professionals, and a robust AI and ML development process.
  • Ensure they follow the best standards and practices for AI and ML development, such as data quality, privacy, security, testing, and documentation.

2. The Sky's the Limit with Cloud Computing

Cloud computing delivers computing services over the internet. It’s like a virtual toolbox, always ready and updated. Cloud computing has many benefits. It scales with your business and adapts to your needs. It boosts productivity and is cost-effective. It’s a wise choice in the digital age.

Outsourcing cloud migration to experts is one solution. It lets you use their skills, experience, and tools. These providers have done many cloud migrations. They know the best practices and pitfalls. Outsourcing saves time, money, and effort. It avoids hiring, training, and managing an in-house team. But, careful planning and coordination with the provider are needed.

Best Practice:

  • Opt for a service provider with a robust track record in delivering cloud services. It's like choosing a seasoned guide for your digital journey.
  • Seek out a provider with a broad spectrum of cloud services, encompassing Platform as a Service, Infrastructure as a Service, Software as a Service, and cloud management and security services. 
  • Look for a provider with a proven methodology, tools, and frameworks for cloud migration, such as cloud assessment, design, implementation, testing, and optimization.

3. Securing the Future with Cybersecurity

Cybersecurity defends information systems, networks, and data from cyber-attacks. These attacks include hacking, ransomware, phishing, malware, denial of service, and data breaches. Cybersecurity is vital for software development. It guarantees the software’s confidentiality, integrity, availability, and data protection.

To overcome this challenge, outsource cybersecurity to specialized firms. Outsourcing can help you access the skills, experience, and technologies of firms that focus on cybersecurity and have the expertise to deal with various types of cyber attacks. Outsourcing can also help reduce cybersecurity incidents and risks, costs, and liabilities. 

Best Practice:

  • Engage with firms that stay up-to-date with the latest cybersecurity trends.
  • A comprehensive and holistic approach to cybersecurity covers threat detection, prevention, response, and recovery.
  • Has a strong cybersecurity culture, awareness, and training that communicates and collaborates with you regularly and transparently.

4. Sharpening the Focus on Core Competencies

Core competencies are a company’s unique abilities, talents, and resources. They give a competitive edge. It’s like having unique tools that set your business apart. For software development, they are crucial. They let the company create value, stand out, and meet customer needs.

To solve this challenge, outsource non-core tasks. Focus on what you do best. Outsourcing lets you delegate these tasks to expert service providers. They have the skills and efficiency to handle them. Outsourcing also frees up your resources. It lets you divide staff, space, and equipment into core tasks. 

Best Practice:

  • Outsource to reliable partners who can handle these tasks efficiently.
  • Has a reputation, experience, and specialization in the non-core functions you want to outsource.
  • Have a compatible culture, vision, and values with your company, and who communicate and cooperate with you effectively.

5. Breaking Boundaries with Platform Independent App Development

Platform-independent app development creates apps for various platforms. These include web, mobile, desktop, or wearable devices. It doesn’t need major code or design changes. It has many benefits. It reaches a wider audience and increases user engagement. It reduces development time and cost. It also improves app performance and quality.

Solve this challenge by outsourcing to skilled developers. They are experts in cross-platform development. Outsourcing gives you access to their talent, knowledge, and tools. It also saves time, money, and effort. You avoid training, hiring, and managing an in-house team. 

Best Practice:

  • Work with developers who understand the nuances of different platforms.
  • Have a portfolio of successful platform-independent apps, a team of qualified and certified developers, and a robust development process.
  • Use the latest tools and frameworks for cross-platform development, such as React Native, Flutter, Xamarin, or Ionic.

6. Riding the Wave of Managed Services

Managed services outsource IT infrastructure and services. These include servers, networks, databases, applications, security, backup, and support. A third-party provider handles them. Managed services have many benefits. They improve IT performance, reliability, and availability. They reduce IT costs and risks. They also enable IT innovation and transformation.

One way to overcome this challenge is to outsource IT management to professional service providers. Outsourcing can help you leverage service providers' skills, experience, and technologies with the capability and capacity to manage your IT infrastructure and services. Outsourcing can help you focus on your business functions and goals. At the same time, the service provider takes care of your IT needs and issues. 

Best Practice:

  • Choose providers who offer flexible and scalable solutions.
  • They can create services to align with your unique needs and preferences and dynamically adapt them as your IT requirements evolve. 
  • They can offer various solutions, such as cloud-based, on-premise, or hybrid, and integrate their services with your existing IT systems and processes.

7. Embracing the New Normal with Remote Work Solutions

Remote work offers many benefits, such as increasing employee satisfaction, productivity, and retention, reducing operational costs and environmental impact, and expanding the talent pool and market reach. 

Outsource the management of remote work solutions to overcome challenges. Outsourcing gives you access to expert service providers. They specialize in remote work solutions. They know the best practices and challenges. Outsourcing saves time, money, and effort. It avoids setting up, maintaining, and upgrading your remote work solutions.

Best Practice:

  • Partner with providers who have robust remote work platforms.
  • Look for providers with a comprehensive and integrated platform covering all aspects of remote work, such as communication, collaboration, project management, document sharing, file storage, and video conferencing.
  • Look for providers with a reliable and secure platform that ensures the protection and availability of your data and applications and who offer technical support and training for your remote workers.

Anticipating the Future Landscape of IT Outsourcing

IT outsourcing is not new, but it constantly evolves to meet businesses' and customers' changing needs and expectations. In the future, we can expect to see more IT outsourcing trends that reflect the growing demand for innovation, agility, quality, and security in the tech world. Some of these technology outsourcing trends include:

  • Cloud-based Outsourcing

Many businesses are moving IT infrastructure and applications to the cloud. The cloud offers scalability, flexibility, and cost-efficiency. Cloud-based outsourcing lets companies access IT services and solutions anywhere, anytime, on any device. They can use the expertise and resources of cloud service providers. These providers offer better performance, reliability, and security than in-house IT teams.

  • Software Outsourcing

Software development is a crucial IT function that often requires special skills, tools, and methods. These can be rare or costly to obtain locally. By tapping into global talent, businesses can deliver high-quality software products and solutions more efficiently and cost-effectively than with in-house developers. This approach not only keeps companies competitive but also ensures they benefit from the latest frameworks, technologies, and industry best practices, without explicitly mentioning outsourcing.

  • Technology Outsourcing

Technology outsourcing covers software development and other IT functions. These include data analytics, AI, machine learning, blockchain, and the Internet of Things. It lets businesses use emerging and disruptive technologies. These can change their operations, products, and services. It also helps companies overcome technology adoption challenges. These include lack of expertise, infrastructure, and security.

How Saigon Technology Can Be Your Trusted Partner

Sagon Technology is more than an IT outsourcing company. We are a team of skilled software engineers, designers, and project managers. We aim to create top-tier software solutions. These meet your business needs and exceed your expectations. It’s like having a digital artisan team dedicated to your success. We have over 12 years of IT industry experience. We’ve worked with clients from e-commerce, fintech, healthcare, education, and more. We’ve completed over +800 projects. These range from web and mobile applications to cloud and AI services.

We are committed to building lasting, beneficial partnerships with clients. These are based on trust, transparency, and teamwork. We keep regular communication and provide quick feedback and help. We ensure the quality and safety of our deliverables. It’s like having a trusted partner in your digital journey.

Final Thoughts

One thing is clear as we end our look at IT outsourcing trends. This practice, while not new, keeps evolving. It responds to the changing needs of the global market. In this changing landscape, technology keeps advancing and becoming more accessible. Outsourcing offers many benefits for both clients and providers.

This promising realm also has challenges and risks. These include cultural differences, communication issues, and security concerns. They highlight the need for strong collaboration frameworks. Clear expectations, shared goals, and open communication are key to successful outsourcing.

Several trends will shape the future of IT outsourcing. The rise of cloud computing and AI promises smarter, more efficient solutions. A move towards nearshore and onshore outsourcing promotes closer collaboration and trust.

In short, outsourcing offers both opportunities and challenges. Clients and providers can navigate this field by staying updated on trends and following best practices. They can unlock the full potential of their partnerships and achieve their business goals.

Popular Questions and Insights

1. How do companies practice the three most common outsourcing types?

Outsourcing is hiring external service providers to perform certain tasks or functions for a company. There are many types of outsourcing, but the three most common ones are:

  • Professional outsourcing outsources specialized services like accounting, legal, marketing, or IT. It saves costs, reduces overhead, accesses global talent, and simplifies employment handling.
  • IT outsourcing, a subset of professional outsourcing, outsources IT functions like infrastructure, software development, cloud computing, or cybersecurity. It enhances IT system efficiency, innovation, scalability, and security.
  • Business process outsourcing (BPO) outsources non-core processes like customer service, data entry, payroll, or human resources. It optimizes operations, boosts customer satisfaction, increases productivity, and lowers operational costs.

2. What are the technology predictions for 2024?

Technology is constantly transforming the world in various ways. Some of the technology trends that are expected to shape 2024 are:

  • Generative AI: It’s an AI that creates new content. It boosts creativity and problem-solving in fields like entertainment and healthcare.
  • Sustainable technology: It’s tech that reduces our environmental impact. It helps companies be socially responsible, improve their image, and save money.
  • Quantum computing: It uses quantum physics to process data. It provides fast and accurate solutions to complex problems that classical computers can’t handle.
Content Manager

Thanh (Bruce) Pham CEO of Saigon Technology

A Member of Forbes Technology Council

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