Software outsourcing trends in 2018

A report has found outsourcing leads the way in which firms across the globe conduct their businesses.

According to a study by RSK Business Solutions, regulatory updates, immigration law and government policies have had a large impact on the way businesses outsource.

Moreover, outsourcing contracts hit an all-time high last year at US$88.9billion. The study found that the US represents the largest market involved, with the UK coming second over having 80% of all outsourcing contracts commissioned across European nations.
“Over the last few years, we have seen a consistent increase in the demand for software services both in the US and UK,” says Praveen Joshi, Managing Director of RSK Business Solutions, in light of the company’s study.

Outsourcing destinations

“Currently the skill gap is widening due to a shortage of development resources as the direct impact of Brexit in the UK and recent changes to immigration policies regarding H1B visa in the US. This is leading businesses to look at other options, such as offshore software development.”
India represents one of the most inexpensive outsourcing destinations, followed by Malaysia, the Philippines and Vietnam.

Both the UK and the US have a strong relationship with India. The UK is the largest G20 investor in India. The country invests more in the UK than Europe entirely.
Furthermore, spending on IT services is estimated to amount to US$1003billion worldwide by the end of this year. According to the global services company Arvato, the value of IT outsourcing has witnessed a 63% increase year-on-year (YoY) to £22.63billion.

Data security

Data security is another consideration for the future of the IT outsourcing landscape across the globe. Ongoing developments around data security will continue to remain a prime concern for both businesses and individuals.

The European GDPR also shows how globalisation has affected the outsourcing market. Businesses must ensure they review current outsourcing arrangements to determine the ‘risk-gap’.
Arvato also found that outsourcing contracts worth £3.91billion were signed in the first half of 2016. Interesting, this was before the Brexit-vote date which represented a 19% YoY rise.
Written by Leah Alger

Source: http://www.softwaretestingnews.co.uk/software-outsourcing-trends-in-2018/