Rising IT spends by companies is fuelled by their interests in emerging technology fields such as Artificial Intelligence, Cloud Computing, Machine Learning, IoT, etc. The point is not all companies are able to make significant success in implementing them in their business.
This can be due to a shortage of needed skills, own staff bound by other priorities, or others. So, if not in-house they switch to outsource their software development projects for driving innovation.
According to Global Advisory Firm, Gartner, IT spending is expected to rebound this year and reach 3.9 trillion US $ with Software Development Market expected to gain a 10.5% increase. Most CIO’s in the past must have faced dicey situations in deciding, whether they should outsource software development or build the software in-house following the traditional way of recruiting and onboarding of highly skilled software engineers.
It is the beginning of 2020 and each business is already undergoing the churning of evaluating their business processes. Business owners have always leveraged IT services or software/application development services for their greater business goals. The common underlying reason for them is gaining a competitive advantage. Even if you have the needed competences within your company, you still would agree to the fact that
Reasons which incline CIO’s decision on Outsourcing SW Development
Before we decide on why Outsource Software Development and why not make it In-house, let us think of the reasons which most CIO’s consider or may prioritize for Enterprise Software Development.
- Emerging Technologies that Business Owners Need to be aware of
Technology, especially Software is the main driver that cause disruptions in global business. As long as online spending will continue to increase each business owner will try to have a certain share of global customers or market, by using technology. From ancient times we have been observing how global business is evolving in parallel with technology. From barter system to now digital currency like bitcoin, Litecoin, everything is changing at a rapid pace.
It makes difficult for some business owners to keep pace with the changing trends in technology, in particular concerning Software. Artificial Intelligence, Machine Learning, Cognitive Response, Automation etc are those emerging technology fields which the world is facing now. Business should work in close sync with current technologies and trends that evolves from continuous research and data on customer experience.
- The Rising Skill Gaps in Emerging Software Technologies
The more technology becomes advance, the less there will be resources available for doing those jobs. This skill gap rises and deepens with time until there are enough skilled professionals to take up the new jobs. Vigorous training is required each time technology undergoes transformation or up-gradation. Just like our mobile phones, the software updates make the previous software versions redundant, similarly, the skills of today may be redundant or outdated after a few years already. Hence it becomes difficult for organizations to find the right talent for them locally.
Fig. 1: B2B Marketplace acts as a bridge between industries and skill set for Software Service Providers
A rise in emerging technologies such as Artificial Intelligence is creating an impact on the job market of IT employees in both positive and negative ways. The one having the desired skills and expertise will have a higher demand and chance of getting better opportunities than others who lack.
This causes a steep rise in the salaries of skilled IT employees making the others less desirable to get a job. We have already discussed, how automation will affect Software development markets in the future in the article “Will Automation fully takeover Software Development in Future?”.
- Data to play a pivotal role to build new services using emerging technologies
Previously, new services based on new technology were a driver for business. Nowadays, collecting and understanding data from multiple sources is a key driver for business growth as well as business transformation. We know that data is increasing and replicating like spiders every year. Hence, almost every emerging technology especially Machine Learning, Internet of Things, Big Data, etc are based on data-driven decision making.
Devices, Appliances, Robots and everything will be in a connected world controlled and operated by complex data. The way in which data analytics helps emerging technologies is quite impeccable. With this said, the most common issue which businesses will face is the handling of complex data and ensuring the security of their confidential data. Hence skills in Cybersecurity is another booming space in emerging technologies.
Fig. 2: Internet of Things is one major driver for new, data driven services, again building on Software (Source: pixabay)
- Rise of Automation fuels demand for new technology skills in Software Engineers
With the rise in automation globally, there is a great demand for SW developers with IT automation skills. Growth of online business and tech Start-ups adds to the growing demand for new IT skills.
Having your business online through a website, online merchandise catalog or by a mobile application is just the beginning of Digital Transformation. Hence companies focus on omnichannel markets and to accomplish them they need skilled IT employees who can deliver great software/applications to make a difference.
- Complete Digital Transformation either by Outsourcing SW or build it In-house
business owners need a strong software development team that can deliver customized software solutions or mobile apps suiting their requirements. As Global Businesses are poised to increase their IT spending in 2020 this will have a lot of dependency on reliable and trustworthy software outsourcing companies.
As it is predicted by Gartner the year 2020 will be the rebounding year for IT spending and is expected to reach 3.9 trillion US $, the underlying question which is brewing is whether we should go for outsourcing software/application development at offshore location or hire a team internally on-site for software development functions to deliver the same project. A report from New Horizon clearly marks the growing gap in IT skills gap for future.
Fig. 3: Software/Application Development skills were the most in demand skills in 2019 that companies were lacking (Source: New Horizon)
Questions checklist for every CIO for solving skill shortage in Emerging Technologies
Few brainstorming questions to should be discussed or debated within an organization for best decisions in overcoming challenges in IT world:
- Is Software/Application development a challenging factor for Business growth, if yes how to overcome this in short time efficiently?
- Are Artificial Intelligence skills a rare talent in the existing IT team and lack of experience seems to worsen it?
- You find it hard to manage your IT vendors? You find it difficult to select Software Outsourcing Tools to manage these outsourced projects?
- You face challenges with respect to transparency, automation & governance of your outsourced projects? If yes, whom to approach for help?
- Do you see challenges in deciding which part of SW Development you should Outsource? If yes, will an online Outsourcing Advisory tool help in your case?
The above questions highlight all the major scenarios which CIOs, CTOs & IT managers face or are facing from time to time. pliXos (a German-headquartered Software Sourcing Advisory firm with own SaaS tools) addresses all the contingencies of software outsourcing and makes it a complete success for global customers.
Whether it is finding a fitting SW service provider in budget, strategizing IT sourcing, managing tenders or full governance we take full responsibility for an outsourced IT project and make it a grand success with our expertise and globally accepted software-as-a-service tools.
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