Outsourcing: increased digital transformation raises IT-solutions demand
“COVID-19 crisis may create opportunities for software development.” That’s the main takeaway from one of our latest studies for CBI on Outsourcing.
The COVID-19 crisis has affected the European outsourcing market. Still, developments are promising for software development providers. The pandemic has emphasized the importance of digital transformation, stimulating demand for IT-solutions. Many companies do not have the in-house knowledge and skills to develop these tools. We thus expect the need for reliable outsourcing partners to increase.
Lockdown highlights the need for software development services
On a global scale, COVID-19 has disrupted business. Outsourcing providers have also been affected. During the pandemic, CBI published a study on how to respond to COVID-19 in the IT and Business Process Outsourcing sector (ITO/BPO). The study showed clients canceling non-essential activities. Clients also moved their outsourced tasks back in-house. Some even put their software development projects on hold. During a recent webinar, 60% of participants from developing countries said that their business was negatively affected by the crisis. Still, a promising 10% reported a positive effect.
When recovery begins, demand for software development services is expected to increase. The pandemic has emphasized the benefits of IT-solutions, both for internal business processes and for engaging with clients. Companies are now more aware that pandemics can happen again. They are aware of the effect this would have on their business. Still, hiring extra staff to develop software is generally not possible, especially after a crisis like this.
Businesses are starting to realize that IT outsourcing can make them more flexible and stronger in difficult times. This is, of course, only the case if outsourcing is done properly. In a survey among British companies not currently using ITO, 37% said they would consider outsourcing IT and development as a result of COVID-19. Remote working is blurring the distinction between in-house, nearshore, and offshore teams. This could create opportunities for software developers from developing countries.
Increased digital transformation requires software solutions
The new circumstances and challenges caused by COVID-19 have created opportunities for software development services. If you are already active in the European market, with a good network and marketing presence, you may benefit from these developments. The situation is unpredictable. This means it will be more difficult for new businesses to enter the European market.
Businesses that are increasing their digital transformation efforts will provide the most opportunities for developers. Companies are moving into the cloud quicker and need tailor-made solutions to do so. As working from home is becoming widely accepted, staff needs remote access to their files and programs. Retailers need webshops and apps now that their customers have become used to online shopping. Agricultural companies need apps to make their supply chain transparent and communicate with their farmers. And these are only a few examples.
All these software solutions require developers with high-level skills and knowledge. Developers also need to have a lot of experience and deliver solutions quickly. Information security and quality are extremely important. If you can provide these, there could be good opportunities for you in the European software development market.
This article has been written by Globally Cool on behalf of CBI for the CBI Outsourcing (ITO and BPO) series of Market Intelligence studies.
Marieke de Haan