Outsourcing is now the hottest trend in the world of information technology. Companies choose to outsource the development services because of reasonable pricing and a wider pool of tech talents available. And, as more and more businesses today prefer outsourcing software development, it’s not a surprise that this trend is constantly changing and evolving. In this article, we are going to share the key IT outsourcing trends for the upcoming year.
Trend #1: Change of the key outsourcing destinations
India and the Philippines still remain the leading destinations to deliver the outsourced IT services. However, now the Eastern European countries such as Poland, Ukraine, Romania, etc. are gradually catching up with the Asian countries. For example, Poland is now featured in the Top 5 of the Top Coder Statistics, together with China, Japan, the Russian Federation, and the United States. Besides, Poland is ranked #3 in the average score of the HackerRank challenges whereas Ukraine is in the Top 20, leaving India and the Philippines far behind. It’s also worth mentioning that the software developer population in East European countries is rapidly growing. For example, each year around 15,000 IT talents graduate from Polish and Ukrainian technology universities.
Trend #2: More than one vendor
Previously, it was common to outsource the software development services only to a single vendor. However, the current trend is shifting towards having several vendors available. It is more reliable to partner with a vendor specializing in a narrow technology stack because those who claim to be full-stack vendors typically deliver the work of average quality. However, if the project requires several technology stacks, it would be safer and more reliable for the client to collaborate with several vendors. The latest Global Outsourcing Survey by Deloitte shows that 34% of companies are now rating themselves above average regarding the work with multiple vendors.
Trend #3: Tech talent hiring platforms
It is still common for the clients to cooperate with local companies that specialize in building offshore development centers. Here’s how it works. A local company hires a team from their internal talent pool and “attaches” this team to the client’s project. As a result, the client collaborates with the same company throughout the project and communicates with the developers not directly but via a project manager. This is a more “traditional” way of outsourcing whereas the tech talent hiring platforms offer a different approach. The clients browse the developers’ profiles at the platform, choose the ones that fit the project requirements, interview them, and form a team. Such platforms differ from freelance portals in a way that the developers are not self-employed – they work at local web dev shops. The client signs a contract with one or several such web shops. Unlike in traditional IT outsourcing, the client can communicate with the developers directly and scale the team if necessary. Examples of such platforms are YouTeam , Andela, Pilot.co, etc.
Having started in the 1980s, the IT outsourcing trends have been constantly changing and evolving. Today, heading into 2019, outsourced software development is still rapidly growing, with the following trends predicted:
- Top outsource destinations are very likely to shift from Asia to Eastern Europe.
- The clients are more likely to choose more than one vendor for outsourcing.
- The clients would take advantage of tech talent hiring platforms.
Anton Mishchenko is CEO and Co-founder at YouTeam, Y Combinator-backed marketplace connecting top product companies and tech startups with the best software engineers and development shops around the world. Anton’s area of expertise includes tech entrepreneurship and startups, business management, digital marketing, business development, product development, music & media industries.