Trends in Software Outsourcing for 2024: What to Expect

Software outsourcing has become a go-to choice for many small and larger companies as well. It's a popular practice that opens doors to many possibilities, talented specialists, and cost savings. In 2024, the field of IT outsourcing is quickly developing, with new trends popping up quite often.

The most significant trends in software outsourcing for 2024 will be covered in this article.

1. Need for Unique Expertise

In 2024, there's a growing need for specialized skills and expertise whether it's different programming languages, technologies, or frameworks. According to Statista, the IT Outsourcing market is expected to generate $541.10 billion in revenue in 2024. As technology evolves, so does the demand for expertise in areas like artificial intelligence, machine learning, cybersecurity, and blockchain. To stay competitive, outsourcing companies must also stay on top of these and invest in continuous learning and skill development. 

Companies working on AI projects, for instance—they're looking for engineers who can dive into data analysis and take on challenging algorithms. Meanwhile, companies that specialize in cybersecurity are on the lookout for experts to help come up with fresh strategies to safeguard sensitive information. With so much demand for this kind of talent, many companies are turning to nearshoring or offshoring partners instead of trying to hire everyone in-house.

Having the right people on your team can have a pretty big impact. They have the knowledge and abilities to complete the project more quickly and, more importantly, with better results. In addition, outsourcing gives you access to professionals around the world that might not be available locally or internally.

2. Prioritizing Cybersecurity

There's something new popping up in the tech world every day, so paying special attention to cybersecurity has never been more important. In 2024, businesses make security a top priority when it comes to software projects. Outsourcing companies improve their cybersecurity practices by using advanced encryption, doing regular security checks, and applying thorough data protection protocols.

Companies are on the lookout for outsourcing partners who excel in high-quality software development, and they also value candidates with a focus on software security. That's why a lot of offshore IT outsourcing providers have begun enhancing their cybersecurity services. You’ll often find services like vulnerability assessments, penetration testing, and 24/7 monitoring included in their packages to support businesses in staying secure.

This shift means that more and more companies realize the need for quality software development and increased cybersecurity, and they choose IT outsourcing partners with strong track records and certifications in that area.

New digital threats pop up daily, so companies need to stay vigilant. That's why they're constantly looking for new ways to protect sensitive data and stay ahead of cybercriminals.

3. Agile and DevOps Practices

Agile and DevOps are gaining traction in software outsourcing, helping teams work together more smoothly and improving collaboration.

Agile divides the project into smaller parts, which allows for adjustments and improvements based on feedback. This way, the outsourcing company can recommend the client potential changes or adjustments step-by-step as the project progresses. 

DevOps is about bringing together development and operations teams to work as a team and share responsibilities. This makes workflows better, helps automate tasks, and speeds up time from development to deployment.

Advantages of Agile and DevOps:

Improved teamwork: Teams spread across different locations can now collaborate more easily, thanks to better communication tools.   
Faster delivery: With automated processes in place and frequent updates, companies can release new features faster.   
Better Quality:  With regular testing and feedback, catching and fixing issues early is possible. 

Let's take as an example, a fintech company that teamed up with an outsourcing partner. Using Agile methods, the outsourcing partner could quickly improve the company's software based on user feedback, which resulted in an easy-to-use product. Meanwhile, let's imagine an e-commerce platform using DevOps to speed up the rollout of new features, resulting in a better user experience.  

4. Focus on Quality Assurance and Testing

In 2024, bug-free software is more important than ever. This is why many companies invest in Quality Assurance (QA) and testing to keep their software functional and without problems.

Most IT outsourcing companies use modern QA tools and automated testing to catch and fix any problems early. With automated testing, this process can be faster and more accurate, resulting in continuously tested software, so any issues can be quickly identified and resolved. Manual testing, however, is still important for several tasks. Outsourcing providers balance manual and automated testing, this way, they make sure nothing is missed. QA and testing are essential parts of providing bug-free software products. With good QA and testing practices applied, the software stays reliable, and performant, and users will have fewer issues. 

For example, let's say that a healthcare software company starts working with an offshore IT team that uses good QA tools. This helps them minimize bugs and makes their software more dependable, which, in healthcare is very important.    
Another example would be a financial services company that uses automated testing with its outsourcing team to get the new features launched faster and stay within the rules. 

5. Nearshore Outsourcing

Many businesses find outsourcing to nearby countries a safer option for many different reasons. This proximity comes with some benefits that make it an appealing option for many businesses.

One of the main advantages of nearshore outsourcing is being in a shared/similar time zone with your partner. When teams work in nearby countries, working hours overlap, and that results in better communication. Also, real-time communication makes it possible to solve problems quickly.

Let's not forget about cultural similarities. Collaboration is much easier when you work with a partner who shares a similar cultural background. You understand each other better and there's less room for misunderstandings.

On another note, if you ever decide to meet your outsourcing team in person, teaming up with a nearshore partner will make this much easier, as they are located a short travel distance away. In-person meetings make working relationships stronger and help build trust between outsourcing partners.

For instance, imagine a tech company in Germany deciding to subcontract to Romania instead of Asia. The decision isn’t just about cost—it makes communication a lot easier and aligns with the company’s working hours and cultural expectations. So, because of that, the partnership usually runs more smoothly, and projects often get finished quicker.

7. Cost Efficiency and ROI

Companies want to get the maximum value out of their software outsourcing investments. Instead of focusing on cutting costs, they want to make sure every dollar spent brings a good return.

Outsourcing service providers have flexible payment options available, so companies can choose the one that suits their needs and budgets best. Usually, these options include pay-as-you-go models, or performance-based pricing, where costs depend on the success of the project. 

Moreover, companies aim to get a high return on investment (ROI). They want to get the best value for their investment when it comes to outsourcing partners, so accessing specialized talent and faster development times are valued among many businesses. Carefully selecting an outsourcing company that matches your requirements and has the necessary know-how can contribute to a profitable return on your investment.

Imagine a company partnering with an outsourcing firm, but instead of a standard agreement, they choose a performance-based contract. With everyone aligned on clear goals, the project stays on course, and costs are kept under control.

Wrapping Up

With 2024 coming to an end, the software outsourcing industry is quickly developing. More companies are choosing nearshore outsourcing, and with the rise of AI and automation, the way they manage their operations is also transforming. Things are changing fast, so it’s essential to stay on top of trends like quality assurance, cost efficiency, and making the most of specialized skills.

If you want your business to stay ahead, keeping up with these changes can make a big difference. It's all about keeping up and making wise, informed decisions that allow businesses to thrive in this ever-changing landscape.