Emerging IT Outsourcing Trends in 2023

While IT outsourcing offers numerous benefits, it also requires careful planning, vendor selection and management in order to ensure a successful partnership. 

From network management to data center operations, businesses of all sizes are increasingly outsourcing their IT services, following a trend with no signs of slowing down.

IT outsourcing is a business practice in which a company contracts out some or all of its information technology (IT) functions and services to external service providers.

According to research by Statista, the market revenue of IT outsourcing around the globe is expected to reach an impressive $460.10 billion by the end of 2023. 

In this article, Bocasay, our offshore IT agency based in Vietnam, provides an overview of the most prominent IT outsourcing trends of the year so far. Read on!

Top IT Outsourcing Trends for 2023

Internet of Things [ IoT ] 

The Internet of Things (IoT) is a network of interconnected physical objects. These include devices and machines embedded with sensors, software and connectivity capabilities that allow them to collect and exchange data. IoT enables these devices to communicate with each other and central systems, often via the internet. This connectivity and data exchange facilitate automation, real-time monitoring and decision-making, making IoT valuable across various industries and applications.

As IoT adoption grows, organizations require specialized expertise in developing, managing and securing IoT solutions. IoT projects often involve managing a large number of devices and handling massive volumes of data. IT outsourcing can provide scalability and flexibility by allowing organizations to quickly expand or contract their IT resources and infrastructure based on the evolving needs of their IoT initiatives. Outsourced providers can help manage the infrastructure required for IoT data processing and storage.

Artificial Intelligence [ AI ]

Artificial Intelligence (AI) is a field of computer science that focuses on the development of software and hardware systems capable of performing tasks that typically require human intelligence. These tasks include understanding natural language, recognizing patterns, solving complex problems, making decisions and learning from experience. 

Organizations will often outsource AI development and implementation to service providers with expertise in AI technologies. These providers can help develop custom AI solutions tailored to the specific needs of the organization, whether it’s for chatbots, predictive analytics, image recognition, or other AI-driven applications.

DevOps

DevOps is a set of practices and cultural philosophies that aim to enhance collaboration and communication between software development (Dev) and IT operations (Ops) teams within an organization. The primary goal of DevOps is to automate and streamline the software development and deployment processes, enabling faster and more reliable delivery of software applications and services. It involves the integration of people, processes and tools in order to achieve continuous integration, continuous delivery (CI/CD), and continuous monitoring.

Many IT outsourcing providers offer DevOps as a service, which means they assist organizations in adopting DevOps practices and implementing automation, CI/CD pipelines and infrastructure management. This can be particularly valuable for organizations looking to accelerate their development and release processes. Outsourcing DevOps tasks can be cost-effective, especially for smaller organizations that may find it expensive to maintain a dedicated in-house DevOps team and infrastructure.

Cloud Computing

Cloud computing is a technology paradigm that involves the delivery of various computing services, including storage, processing power, networking, databases, analytics, and software, over the internet. Instead of owning and managing physical servers and data centers, organizations can access and use these services on-demand from cloud service providers.

IT outsourcing providers can use cloud platforms to develop and test applications more efficiently. Cloud resources can be provisioned on-demand, making it easier to set up development and testing environments quickly. This approach can reduce project timelines and costs.

Robotic Process Automation [ RPA ] 

Robotic Process Automation (RPA) is a technology that uses software robots or “bots” to automate repetitive and rule-based tasks within business processes. These software robots are designed to mimic the actions of a human user interacting with computer systems, applications and data. RPA is typically used for tasks that involve data entry, data extraction, data validation and other routine, manual processes.

When outsourcing IT tasks or business processes, organizations can use RPA to complement the work of outsourced teams, improving efficiency and reducing costs. RPA bots perform tasks consistently and with a high degree of accuracy, reducing the risk of errors in outsourced processes. This can improve the quality of services provided by outsourcing partners.

Hybrid Work Models

Hybrid work models, often referred to as hybrid work arrangements or hybrid workplaces, represent a flexible approach to work that combines both remote or off-site work and in-person work at a physical office or other designated locations. These models have gained significant prominence, especially in response to the COVID-19 pandemic, which accelerated remote work adoption. Hybrid work models can take various forms, and their specifics can vary from one organization to another. 

IT outsourcing providers play a crucial role in enabling and supporting the technology infrastructure needed for remote work, including secure access to corporate systems, video conferencing tools, collaboration platforms and cybersecurity measures. In addition, IT outsourcing teams can also align their schedules with the embedded flexibility of hybrid work models , enabling them to work across different time zones or to accommodate client-specific work hours.

Business Benefits of IT Outsourcing

IT outsourcing offers several business benefits for organizations of all sizes and across various industries. Here are some of the key business benefits of IT outsourcing:

➤ Cost Savings: By outsourcing specific IT functions or processes, organizations can often lower labor, infrastructure, and operational costs.

➤ Focus on Core Competencies: Outsourcing non-core IT functions allows organizations to concentrate their resources and efforts on core business activities.

➤ Access to Specialized Skills and Expertise: Organizations can tap into outsourced talent pools to access specialized skills and knowledge that may not be readily available in-house.

➤ Scalability and Flexibility: IT outsourcing allows organizations to scale their IT capabilities up or down quickly in response to changing business needs.

➤ Faster Time-to-Market: Outsourcing providers often have well-established processes and best practices that can accelerate project timelines. 

➤ Risk Mitigation: Partnering with an IT outsourcing provider enables companies to mitigate certain risks and responsibilities, such as keeping up with technology advancements, managing compliance and security, as well as ensuring business continuity. 

➤ Access to Advanced Technology: Clients can benefit from access to cutting-edge technologies without incurring the full costs of acquisition and maintenance.

➤ Enhanced Quality and Service Levels: Many outsourcing contracts include service level agreements (SLAs) that define performance standards and expectations. 

➤ Global Reach: With an established global presence, outsourced IT partners enable organizations to access a diverse talent pool and to operate in multiple time zones, which can be advantageous for 24/7 operations.

➤ Cost Predictability: IT outsourcing contracts typically involve predictable costs, which can simplify budgeting and financial planning.

Do you need a partner capable of producing high quality IT development for your company? At Bocasay, our dedicated teams of developers provide cutting edge software solutions for companies around the world. Get in touch to find out how we can help with your next project.