Outsourcing Software Development: Statistics X Facts
5th July of 2023

Despite the pandemic, some tech businesses even decided to increase their IT budgets, outsourcing statistics from 2020 show. Others collaborated with their offshore and nearshore IT outsourcing partners. The definition of outsourcing is hiring a person https://www.globalcloudteam.com/ who doesn’t work in your company to perform your company’s services. Outsourcing can link to various job positions, from IT to customer support. The year-over-year growth rate for the market between 2021 and 2024 is estimated at around 3 to 5%.

  • When it comes to business process outsourcing in the US alone, it accounts for approximately 85% of the total $92.5 billion that is spent on BPO services globally on average.
  • These hidden costs may fall under phone calls, additional consultations, meetings, and travel expenses.
  • An outsourcing vendor sets up a software development team to offer high-quality IT expertise that adds more value in this mode.
  • These risks can also weigh down small-sized businesses seeking to branch off into a new connection.
  • The two differences can become a huge drawback in the realization of your project.

It involves working with a team of remote IT engineers with specialist expertise and skills. Many businesses outsource to help reduce the cost of a software development team. The approach allows businesses to access a large pool of talented developers. This helps boost their tech skills range from Blockchain Consulting to UX design. Choosing to outsource software development helps businesses avoid time-consuming and costly tasks. These include recruiting, training, hiring, and integrating new workers into their business culture.

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Outsourcing provides flexibility since the company can hire people with the expertise they require anytime, rather than relying on limited specialty in-house employees. The assistance of outsourced teams helps companies build their solutions better, especially in the era of digitalization. This practice includes transferring business processes to providers outside the company. Business process outsourcing statistics suggest that India is the biggest market for offshoring that is often part of this practice. The country offers financial attractiveness, and available skills and talent. An outsourcing vendor sets up a software development team to offer high-quality IT expertise that adds more value in this mode.

software outsourcing statistics

It’s hard to tell whether sending jobs overseas has more pros or cons, but companies undoubtedly gain more profit because of it. The worldwide hospital outsourcing market size was $267.81 billion in 2019. Thanks to technological advancement and AI, hospital outsourcing is becoming more reliable. By 2026, outsourcing in this industry is supposed to reach $661.68 million.

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The annual growth rate of this revenue between 2023 and 2027 is projected to be around 4.39%. I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

The first wave was the unfriendliness from Google to the website with no mobile version. The second wave is the customers themselves who will not welcome a website with a negative UX. That is why businesses will be seeking outsourcing companies to employ PWA and satisfy the rising demands of their clients.

Software Outsourcing: Interesting Statistics, Predictions, Facts, and Key Players

This creates a huge gap between the demand and supply of software developers in the US. Throw in a couple of thousands of self-taught developers each year, and you still have dozens of thousands of jobs to fill. Opinions expressed on the pages of this website belong to the author and do not represent the views of companies whose products and services are being reviewed. Some of the biggest companies in the world, including Apple, Nike, Cisco Systems, Wal-Mart, and IBM, use outsourcing to improve their efficiency and quality. Two of the most influential countries in the world, the US and Canada, utilize outsourcing for their Government and Defense needs.

The total budget for the IT industry grew from 12.7% back in 2019 to 13.6% in the year 2020. Medium-sized tech businesses were the ones responsible for this massive outsourcing industry growth in IT. A study has found that up to 65% of businesses and companies are planning to continue outsourcing either at the same rate or at an increased rate in the upcoming couple of years. Outsourcing statistics show that the market value is set to hit $620 billion in approximately 10 years from now, indicating significant and continued growth for this industry. Just in 2015, the BPO sector generated an astonishing $22 billion in revenue. Outsourcing statistics show that up to 29% of businesses that have fewer than 50 employees outsource, compared to 66% of companies that have 50 or more employees.

Revenue of the other IT outsourcing industry worldwide 2019-2028

Software outsourcing involves hiring project-based teams, which makes it easier to budget. You only need to pay one-off project fees and other expenses on the required work. The IT Outsourcing market comprises revenues, revenue change, average spend per employee, and revenues of the outsourcing types. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by consumers (B2C), enterprises (B2B), and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

software outsourcing statistics

Apart from the higher revenue, Agility Masters are 4.1 times more likely to develop the right and homogenous strategy for the project and 2.3 times more likely to take risks. Also, they are 2.9 times more likely to have teams of experts proficient in the use of the latest tools and trends. Job outsourcing statistics tell us India and the Philippines have been the go-to choices for US call center agencies for years now, thanks to the affordable English-speaking it outsourcing trends workforce. However, the fact that the difference between salaries isn’t that big nowadays may affect US jobs lost to outsourcing and help reduce unemployment in the country. The expanding development market in Eastern and Central Europe is caused by high-quality services, well-trained teams, and still moderate prices. Still, the facts show that more and more businesses find themselves in need of narrow specialization companies.

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It is much harder to hire people on your own, it takes too much time, and it is too expensive. Additionally, if anything goes wrong, the failure cost would be much greater. Much of this growth will occur in Asia, namely in China, with the LATAM region following closely. For instance, there are approximately half a million developers in Brazil alone, an additional 240,000 in Mexico, and some 100,000 in Argentina. Add countries like Chile, Columbia, and other LATAM countries, and you have a solid million developers right at your doorstep. One of the bigger problems here is the time gap between the US and Asian countries.

software outsourcing statistics

Usually, companies outsource functions that do not fall under their area of specialization. This allows them to free more time and focus on their main business functions. The in-house IT team may not be able to drop their current responsibilities to handle a new project. Onboarding and hiring new employees may take months, which might be impossible as there are urgent matters to address. In 2023, the majority of the workforce has shifted to remote work due to the ongoing pandemic and the increasing popularity of flexible work arrangements. A recent survey conducted among remote workers revealed that 96% of them agree that work-life balance is crucial to their overall happiness at work.

US Outsourcing Statistics

Around 85% of these specialists have at least an intermediate English language level. As per the Statista report, the Polish It-outsourcing market will reach the revenue level of USD 2,311.7 million by 2021. Poles also have a high English Proficiency Index, which means they can easily cooperate with international corporations. As we have mentioned before, using AI is becoming one of the major technology outsourcing trends in 2021. According to Chatbot Magazine, the USA, India, Germany, the UK, and Brazil are the top 5 chatbot-using countries. Business Insider predicted that 80% of companies would use chatbots in 2020, which will continue to be one of the relevant outsourcing trends 2021.