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COVID-19 is a global humanitarian challenge of massive scale that threatens people, communities, and businesses that are scrambling to protect their employees, customers, supply chains, and financial results.
The business impact of COVID-19 could be more profound on the global demand for IT products and services including outsourced software development than the initial estimates while the pandemic continues to engulf countries like the US, inarguably the biggest outsourcer of IT products and services in the world.
Since extraordinary times call for extraordinary measures, much like every other industry the global IT outsourcing industry is too gearing up to ‘reinvent the wheel’ for negating the impact of COVID-19 and sustain business continuity.
Why Outsourcing Software Development could prove game-changing during COVID-19?
Technology firm NTT’s recently released ‘2020 Global Managed Services Report’, based on a survey of 1,250 executives across 29 countries, says that 45% companies will outsource more than insource over the next 18 months, with 57% citing security risks associated with managing IT in-house as a key challenge.
Since geographic dispersion is recognized among the most effective risk management strategies, Outsourcing IT Systems Development can help businesses ensure quality and build resilience against disruptions such as natural disasters and pandemics.
Adopting a distributed global services model and hiring offshore teams in the regions still cocooned from severe impact of COVID-19 can enable organizations across industries to diffuse enterprise risk.
Outsourcing has traditionally been a cost-driven and value-driven industry vertical, which shall remain to hold true and elementary even in the post-COVID-19 world.
While the average hourly rate for hiring a senior software developer in the US is around $60, a developer with similar experience and technical skills can be hired for $40 in Asia. Offshore software development rates in Asia’s tech hubs like India are even lower than the average price point offered by the IT vendors in Eastern Europe.
A prolonged economic downturn caused by COVD-19 has compelled companies to adopt stringent budget cuts leaving virtually no room for discretionary spending. This underscores the need for flexible and resilient business models. Companies can focus more on their core business activities by outsourcing their software projects.
However, in the new world vividly demarcated by the coronavirus pandemic, the perception around outsourcing companies would change from just ‘developers on hire’ to ‘strategic partners’ that can help grow business and enhance the brand reputation.
In recent times, product quality supersedes cost reduction as the primary driving factor for companies in outsourcing decision-making. Outsourcers lay more emphasis on improved cybersecurity and enhancing customer experience when it comes to outsourcing software development.
Hiring an offshore software development company also means that your own in-house team will need to spend less time on maintenance and support. With outsourcing, a remote team can easily provide software support services such as bug fixes and timely updates leading to drastic reduction in downtime thus preventing revenue loss.
Another common misconception around outsourcing is that it is more suited for large enterprises. However, this is a dangerous assumption to make for SMEs and start-ups, and more so in the prevalent scenario marred with COVID-19. Small businesses and start-ups foraying into outsourcing for the first time can leverage the benefits of incubating without bearing the cost of relocating their team.
In in current scenario, where maintaining a steady cash flow is crucial for the survival of a business, it makes perfect sense for start-ups and small businesses to consider the long-term economic viability of outsourcing.
Software Products, Services, and technologies expected to see spike in Outsourcing in the new world post-COVID-19
The adoption at massive scale of collaborative applications, cybersecurity solutions, Big Data, and AI post the outbreak of COVID-19 has handed offshore IT vendors with an opportunity to test waters by experimenting with new concepts in developing software solutions.
The COVID-19 pandemic has led to proliferation in the adoption of cloud, driven by the need of businesses to support their remote workforce. The global cloud market is expected to grow from $233 billion in 2019 to $295 billion by 2021, at a CAGR of 12.5%, as per a recent report from the market research company MarketsandMarkets.
The demand for cloud services would further snowball with increased adoption of digital payments, e-commerce, and OTT Streaming Services during the pandemic. At the same time, cybersecurity risks are also likely to rise due to more and more people working remotely pushing up the demand for cutting-edge cybersecurity solutions.
The coronavirus outbreak has rapidly spiked the demand for Digital Healthcare Solutions such as telemedicine-enabled home care, after lockdowns had to be imposed to manage the spread of the virus since asymptomatic carriers could be drivers of transmission.
As a protective shield for healthcare providers against coronavirus, cloud-based telemedicine software is expected to retain its sheen and relevance in the post-COVID-19 world.
Since the global telemedicine market is estimated to be worth over $34 billion, with North America accounting for almost 40% share, there is tremendous growth potential for offshore software development companies in this niche domain.
IT vendors must keep an eye for emerging trends in AI for disease detection and prevention to stay relevant by experimenting with solutions for social programs management, clinical trials, drug and disease information, and more.
In the COVID-19-imposed software landscape, Internet of Things (IoT) would go on to become the forefront technology for organizations to gain insights about their customers and how they engage with their products and services.
Market research firm IDC estimates that blockchain, as a decentralized public ledger, will make inroads into general business processes, with the global spending on blockchain to exceed $11.7 billion by 2022. Since companies like Facebook, Amazon, Microsoft, and IBM are already adopting blockchain technology at humongous scale, this trend is already visible.
As the Dust Settles!
The road to economic recovery might look fairly long for now, but a steady flow of software outsourcing business looks almost certain in the coming time from countries like the United States due to factors such as:
- Disruption in the local IT industry
- Slowdown in recruiting
- Tech talent gap
- Businesses grappling with cash-flow challenges
In a nutshell, after undergoing a sharp but brief slowdown, the world economy, in all likelihood, would quickly rebound to the pre-crisis level of activity to drive the demand for outsourced software development services from countries like India.
While the exact economic impact of the COVID-19 pandemic will become evidently clear in the following months, members of the C-suite community at the helm of affairs in the global software outsourcing industry must assume a more proactive role to tacitly convert this adversity into an opportunity.
How we can help businesses as an Outsourcing Partner?Providing uninterrupted services to clients while ‘working remotely’ is not a ‘contingency plan’ for us, but a mindset. It is imperative of our time to develop unique and innovative technology solutions through remote development teams to help your business navigate through the turbulent coronavirus seas.
Our globally distributed software development network comprising of certified developers assures you unwavering support services for risk-diversification in these unprecedented times. While the siloes will never cease to exist, we focus on the larger picture to ensure complete recovery and restoration of your business.
As your reliable strategic outsourcing partner, we’re constantly monitoring reports from the World Health Organization and local agencies to thwart any immediate threats to your business operations due to COVID-19. Talk to one of our outsourcing experts to know more about our outsourced software development services.