Owing to benefits that include cyber security, reduction in cost, and more focus on core activities, the IT outsourcing market is experiencing rapid adoption as opposed to its traditional alternatives.
Covid-19 Impact and Market Status
During the covid-19 pandemic, some industries like the pharmaceutical industry flourished while many others were negatively impacted. The economic condition of various countries had been adversely affected. The pandemic affected the behavior of customers globally. It adversely affected the IT Outsourcing market too while hitting the refining and petrochemical industries with a significant decline. The global disturbance in the overall supply chains affected these industries which are responsible for a major share of consumption of IT Outsourcing. Trade restrictions being imposed worldwide and a paucity of resources acted as a hindrance in the path of manufacturing operations and affected the market for nearly two years. The post-pandemic era witnessed a tremendous rise in the demand for ceramic-based products.
Application Type to Remain the Most Appealing Segment
Depending upon the type of service, it is expected of the application segment to acquire a position of dominance in the market during the forecast span. The growth in the market owes to the growth in demand o a type of infrastructure that supports the wireless form and assists in the optimization of the network. A lot of changes have taken place in various industries and their functioning in order to comply with the demand for automation. A replacement of old methods has taken place in a huge chunk of industries. After this segment, emerging technology has been seen to hold the second-largest share in the global IT outsourcing market.
Offshore Location Segment to Remain Atop
On the basis of location, the global IT outsourcing market is segmented into offshore and onshore locations. Amongst the two, the offshore segment leaves the onshore one behind. Various developing nations have adopted outsourcing, and it has provided cost benefits to the respective organization. The main driver for the growth of this segment is the availability of workforce and relevant talent. However, there is a risk of security that is involved.
BSFI to Ensure Revenue Maximization
In terms of the end-user industry, BFSI is the largest shareholder in the IT outsourcing market while media and telecommunications are the second. Demand for face masks, face shields, and others drives the growth of the packaging industry. With the help of outsourcing, banks can cut their expenses and divert their focus more the core tasks. During the anticipated period, the BFSI segment is anticipated to expand at a compound annual growth rate of 5%.
The Asia-Pacific region is anticipated to provide many investment avenues.
India is the most significant contributor in this region relative to other nations, with the Asia-Pacific region anticipated to have the biggest share in the worldwide IT outsourcing industry. The effectiveness of cost and the availability of talent and skills have played a major role in driving the growth of the IT outsourcing market in this region. China is also growing, though at a slow pace. North America remains the second largest contributor.
The need for virtual software by various companies which is essential for the functioning of the company as a whole has accentuated the need for IT outsourcing thus, improving the dependence on IT outsourcing.
Rapid end-use applications across industries such as finance and accounting, IT services, digital marketing, and the like are fostering remarkable progress in the global IT outsourcing market. IT outsourcing possesses the ability to produce applications that will be useful in the industry in the long run.
Advantages such as the efficiency of the organizations and the availability of labor at a low cost will also drive market growth in the forthcoming years. These factors are responsible for influencing the growth of the global IT outsourcing market, ensuring an overall market size of USD 1 trillion at a CAGR of 8.06% through the forecast span.
IT outsourcing can be defined as a technique that is used mainly for cost reduction with cloud migrations and options for cloud services. It means that the company will provide a part of its development software outside the internalized structure and control the procedures involved. IT outsourcing involves support and maintenance of infrastructure and software, application development, data management, etc.
This market is gradually gaining great significance as all the major targets of any project are met with great ease without the wastage of time or the provision of long and persistent training. It has been very crucial for cyber security. To ensure the reduction of cost, many players in the market have been focusing more on outsourcing their functions which helps in developing a better focus on the major activities.
However, due to the involvement of the new staff, the main organization tends to have less control over the activities. In case of a business being outsourced, there are chances that the secondary body will not perform the tasks on the same lines as they were being done earlier. There might be an adverse effect on the quality of work and the new staff hired could be less qualified which would hamper the quality of the service offered to a great extent. Despite these limitations, there are high chances for the growth of this market to speed up in the upcoming years due to the availability of a trained and qualified workforce.
The key players in the IT outsourcing market are Accenture PLC, IBM Corporation, WNS Global Services, Andela Inc, Infosys Limited, ATOS SE, Cognizant Technology Solutions Corporation, Wipro Limited, Tata Consultancy Services, DXC Technologies, and Specialist Computer Centres (SCC) among others. These players operate in the IT Outsourcing market and adopt various strategies including mergers and acquisitions to maintain their positions in the market.
Latest Innovations in the IT Outsourcing Market: a Snapshot
•In order to enhance management, monitoring features along with the control of the workspace software, SCC AVS went into a partnership with Utelogy in March 2021.
•WNS announced in February 2021 that they had implemented a unique intelligent automation solution in association with Automation Anywhere to give Virgin Atlantic the tools necessary to quickly and effectively handle the sudden increase in refund requests related to COVID-19 while upholding customer service standards.
IT Outsourcing Market Scope
|Forecast Unit||Value (USD)|
|Revenue forecast in 2028||USD 1 trillion|
|Growth Rate||CAGR of 8.06 % during 2021-2028|
|Segment Covered||Type, Location, End-Use, Regions|
|Regions Covered||North America, Europe, Asia Pacific, Middle East and Africa, South America|
|Key Players Profiled||Accenture PLC, IBM Corporation, WNS Global Services, Andela Inc, Infosys Limited, ATOS SE, Cognizant Technology Solutions Corporation, Wipro Limited, Tata Consultancy Services, DXC Technologies|
Key Segments of the IT Outsourcing Market
Type Overview, 2019-2029 (USD Trillion)
- Data center operations
- Emerging technology
- Network operations
- Help desk
Location Overview, 2019-2029 (USD Trillion)
End-Use Industry Overview, 2019-2029 (USD Trillion)
- Aerospace and defense
- Telecom and media
- Retail and ecommerce
Regional Overview, 2019-2029 (USD Trillion)
- Rest of Europe
- Rest of Asia Pacific
- Rest of South America
Middle East and South Africa