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Settling the Debate: In-house vs Outsourcing Software Development A Statistical Overview

AI will be an integral part of the business landscape in 2023, and it’s an exciting time for anyone interested in the power of technology. Then we’ll check out tech trends we expect to be important in IT outsourcing. The IT outsourcing market has witnessed intense competition in the Asia-Pacific region, with India and China dominating the need for a long time. However, Malaysia has been steadily emerging as a lucrative market destination and is considered an emerging challenger across Southeast Asia. The unemployment rate is steadily approaching 2%, highlighting the talent shortage.

software outsourcing statistics

Who knows — if things fall into place, your company could be one of the biggest trends in 2023. No list describing future tech trends would be complete without discussing AI. It’s one of the most-talked-about topics pretty much anywhere today, and for good reason. You need evidence and you’ve come to the right place – our ultimate list of outsourcing statistics for 2023. MicroCreatives A creative design agency powered by MicroSourcing, for your graphic design, content writing, motion graphics and WordPress development projects.


They ask a Belarus-based company to provide them with an iOS developer. Looming recessions are creating a sense of uncertainty for midmarket technology companies. As a result, businesses that never considered outsourcing some or all of their software development efforts are doing so https://globalcloudteam.com/ now to support their go-to-market strategies. Software development outsourcing is an emerging hot trend because it enables companies to speed up product innovation and cut costs, especially in uncertain times. We predict 2023 will be the tipping point when this trend takes root.

  • The process requires a lot of collaboration but results in efficient projects.
  • India is the top global outsourcing provider, followed by China, Malaysia, Indonesia, and Brazil.
  • Zion Market Research expects the cybersecurity market to be worth $181.77 billion in 2021.
  • Outsourcing proves to be a resilient activity amidst the global pandemic challenge, based on Deloitte’s 2020 Global Outsourcing Survey.
  • That’s a 65% increase over its 2016 market value of $106.46 billion.
  • Around24% of small companiessay they outsource to increase efficiency levels.

However, if a company does not know where and how to look for a reliable outsourcing product supplier, it may receive security risks and unstable communication. Outsourcing development is the right business model for companies that dream of quickly finding excellent experts for different technologies at an affordable price. Businesses should know the actual rates of experts, check the conformity of price and quality. Before starting work with an outsourcing software company, draw up an NDA with a lawyer and cover every little aspect of confidential software obligations. This agreement will be a safety net that will provide trust for both parties. 78% of global businesses feel optimistic about their outsourcing relationship.

IT Outsourcing Market Size

The truth is, low costs India has to offer is actually harming them and jeopardizing their whole industry. More and more offshore software development companies keep on offering services they cannot meet and keep on making other companies from all over the world lose time and money. U.S. outsourcing statistics suggest that outsourcing in the financial services market will continue to rise by almost 7.5% annually. Big banks and other financial institutions will become increasingly reliant on external service providers, which presents many benefits but also poses new risks to the industry.

The tech talent shortage is the major long-lasting trend that has been fueling the IT outsourcing sector for the last decade. Consequently, tech businesses have been growing more confident about hiring dedicated developers and gettingmanaged services. Software development outsourcing is a godsend for startups and small businesses which can’t afford to hire an IT department on a permanent basis.

Why go for software outsourcing?

This can help to ensure a higher level of quality assurance and better customer satisfaction. Deciding between in-house and outsourcing software development comes down to what is best for your business. Depending on the size and complexity of your project, in-house software development can be more costly than outsourcing. Outsourcing providers often offer lower costs due to fewer overhead costs, meaning you could get a quality product at a fraction of the price. There are several factors up for consideration before making your final decision.

software outsourcing statistics

Get ready to see this innovation in ERP, logistics, and payment management. It’s not a surprise that outsourcing, like any other service, has weaknesses. Slow response times and security risks might be those things that scare you from outsourcing your project to a third party.

Trend #5. Outsourcing Core Business Services

Her expertise covers everything from artificial intelligence to email marketing software and extended reality devices. When she’s not writing, Rebekah spends most of her time reading, exploring the great outdoors, and gaming. Outsourcing offers a valuable way for businesses of all sizes to access the crucial talents they need in an ever-changing business environment. Outsourcing is becoming increasingly popular in the post-pandemic era, particularly as companies grow more comfortable with the idea of working with professionals in a flexible cloud-based environment.

software outsourcing statistics

Its low living costs and first-class education system are just the beginning. Scale Fast Reap the benefits of big-business infrastructure and proven best-practices without all the usual hassle and expenditure. Increase Quality & Efficiency When your offshore team cares about the outcomes of their work, they’ll work harder and commit to continuous improvement. Get in contact today, and have your offshore team up and running in as little as 6 weeks. This is extremely interesting, especially when you consider an study made by theHuffPostabout Indian Outsourcing, and how the death of this industry was pretty much set to happen since 2008.

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This means that for a large number of businesses, the main motivation for this move is not to lower costs by cutting jobs, but to be more competitive and increase innovation. In 2019, the global outsourcing market was worth $92.5 billion, growing by just over 8% from 2018. The success rate of outsourcing is high, with approximately three-quarters of outsourcing operations outsourcing trends being successful. A recent study found that 78% of businesses that outsource report a positive attitude toward their outsourcing partners, indicating a high level of satisfaction with the results. Up to 37% of small businesses outsource for at least one of their business processes. Around24% of small companiessay they outsource to increase efficiency levels.



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