Software Development Outsourcing Industry in Trends

Nowadays one of the most common trends of companies around the world is to outsource the Software development team to partners or detached contractors, as it helps in speeding up the development process, ensures access to a variety of specialists with multiple expertise that one may not observe within the organization, and is usually quite affordable as well.

Outsourcing is increasingly becoming popular within the IT world due to its benefits which include cost-optimization and dynamicity. Outsourcing helps to eliminate the drawbacks and time-consuming traditional constraints pertaining to in-house software/solution development.

Why do businesses opt to outsource Software Development?

Let’s get one thing straight — cost-efficiency is no longer the primary focus, rather it’s the desperate need for quality specialists that drives the decision of outsourcing software development. Numerous facts also govern this decision, some of which are enlisted below:

Hunt for High Quality Talents

During the year of 2016, approximately 59% of enterprises decided to outsource their software development sections since it was observed to be a good option for cost-optimization. In 2019, this same number reduced to around 35% in order to account for product development. This reduction of around 24% clearly indicates the transfer of preferences from cost-optimization to high-quality assurance within outsourcing. Furthermore, 18% of the enterprises outsource their teams in order to obtain access to better quality talents that are not found within their own local job markets.

Segregating the right competencies

Professionals within the IT sector were more confident regarding the outsourcing of lower levels of business operations in 2019, than they were in the previous year. Around 34% of small and medium enterprises have already outsourced few of their corresponding operations teams with the objective of driving their revenue targets from major business proficiencies. A handful of companies build-up their businesses through development departments as a result of lack of capital investment. Alternatively, 37% of SME’s opt to outsource their product development and support teams as well.

Reorganizing the Operations teams

Approximately 24% of business professionals outsource their software development teams in order to further enhance their internal business operations teams. The overall objective is focused on improving efficiency and speed by minimizing the amount of human intervened tasks, redundant operations and bottlenecks. Many organizational process automation solutions are gaining popularity within the Business-to-customer phases since these efficient processes help businesses to drive revenue with better customer services and hence improve customer experience.

Opportunity for risk sharing and collaboration

With trends of business collaborations changing rapidly, enterprises will now adopt new norms of sharing responsibilities and risks with their service providers and partners. As a result, the traditional contractual protocols will be revisited and a more revenue-focused treaty will exist that will encourage stronger involvements of both sides.

Emerging destinations for Outsourced Software Development

The North American as well as the Western European mid-level companies are outsourcing their tech related jobs due to multiple issues related to — shortage of talents, cost and time intensive development processes, and the increasing competition within the market. In today’s market, China and India hold the position for the most popular IT and business process outsourcing countries for large enterprises. In the meantime, small and medium-sized companies tend to search for technical talents within the emerging IT outsourcing markets of Eastern Europe.

This gradual transfer from cost and quality-oriented perception to opting a technical outsourced partner has led to the emergence of the Eastern European technology-based talent market as well. Within this region, Ukraine, Poland, and Czech Republic are among the fastest emerging IT outsourcing locations with average rates of development service of $20 to $45 and Expert-level technical qualities.


The shift in organizational functionalities had already begun since the early years of this decade and in 2020, with the pandemic in effect, businesses will now have to focus rapid and dynamic organizational adoptions in order to sustain through tough days of overall success and meeting their business goals. Although the time is tough, innovative approaches are in place to further empower outsourced software development teams, and improve their job nature and flexibility.

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