10 DEFINITELY, PROBABLY, MAYBE SOFTWARE DEVELOPMENT OUTSOURCING TRENDS FOR 2021
No well-intentioned blog would start the year without trend projections and so we present ours to you.
Most consumers use mobile as their default platform, globally. Mobile has surpassed desktops by a 50.88% to 46.39% market share, according to Stat Counter. Mobile-optimized websites are assumed and expected, and disappointed users will not give you a second chance if yours is not. There is absolutely nothing to indicate mobile growth will not continue.
WORK FROM HOME
While some believe the WFH trend peaked with Covid-19 in 2020, far more experts believe the opposite. Enterprise Research Technology projects WFH numbers to double this year, much of that due to increased productivity. There is also a cultural shift as more workers will demand, post-Pandemic, they have the option to work entirely or partly from home.
The projected (relatively) small increase of 5.5% in global IT services will be compounded by an increasing shortage of skilled workers to meet demand. US universities are not producing enough IT workers to meet demand the past few years and over two thirds of UK tech companies say they are facing a talent shortage. There are similar stories in other countries. The supply-demand imbalance will impact pricing.
While outsourcing was a child of seeking cost reduction, quality has gradually elevated itself to an equal sibling. Focusing more on quality in performance and partner relationships is a result of the skills shortage increasing rates, as well as taking a long term strategic view of integrating outsourcing resources more closely to internal teams. It is simply cheaper in the long run to pay for quality. The National Outsourcing Association claims quality rather than cost is the major factor in outsourcing considerations.
AI will come into its own in outsourcing as more companies use AI tools in development. While difficult to integrate into an internal system, AI is becoming a necessity for advanced or full automation (see next trend). By 2030, according to PwC, AI’s global economic impact will be $15 trillion or more. Companies will need to begin to engage or be in danger of slipping behind.
Pundits, futurists and analysts always, always think massive automation is just around the corner. It may be true with outsourcing. Driven by AI, automation will impact both native companies and outsourcing providers. Companies need to automate the business process as well as production while outsourcers need to offer AI and other skills to enable those. More automation but not necessarily less people in the chain.
Speaking of chains, Blockchain spending continues it bumpy but strong growth for 2021. Some project Blockchain spending to reach $16 annually by 2023. With more demand for Blockchain knowledge comes more competition and higher prices for professionals. And this is fueled by more mainstream companies trading in Bitcoin (an NFL player is receiving half of his $13 million annual salary in Bitcoin), powered by Blockchain. Growth may be exponential.
While India and China have been leaders as outsourcing providers, the trends in cost and quality threaten them. As quality providers, Philippines is being joined by Eastern and Central Europe providers while India, China and South America are declining. English proficiency is particularly common among developers in Philippines, and Europe.
This is truly a no brainer. There is a cyber-attack every 39 seconds according to the United Nations. Most recently we have seen massive attacks on the US government and companies. Almost half of IT companies are now engaging outside software security resources. As we grow increasingly dependent on digital models in all industries and businesses, the need to protect data is more imperative than ever.
Look to the Cloud. Gartner projects cloud infrastructure development will reach about $1 Trillion this year. Cost savings help drive this but it also presents challenges and opportunities in some other trend areas like security, privacy and AI. Cloud services are increasingly offering additional tools in the form of analytics, automation, data migration and others.
There you have it. Bank on all of the above trend projections…definitely, probably and maybe.
VP Sales and Marketing