“The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.” Azim Premji

Information technology is a function that requires careful consideration for business success and scalability. If you are in any business other than IT, managing IT functions can also decrease your focus from your core business. This is the reason businesses choose to outsource their technology needs. Companies benefit from outsourcing since it allows for flexible staffing and gives them access to specialized talent. These advantages have led more businesses to outsource their operations, expanding the outsourcing industry. The need for IT outsourcing keeps increasing, and by 2025, it is predicted that the global market will be worth $397.6 billion.

Let us walk you through the impacts of technology outsourcing, its benefits, and the IT services that can be outsourced.

What is Technology Outsourcing?

Information technology outsourcing is a business approach where you hire outside service providers to manage your company’s IT-related tasks. IT functions include  software development, infrastructure solutions, technical customer service assistance, and data analytics. Most businesses outsource these jobs to cut costs, gain access to better personnel and improve efficiency.

Global Trends in Outsourcing

The global outsourcing market was worth $92.5 billion in 2019 before the pandemic, as stated by Statista. A Grand View Research poll also revealed that in April 2021, the BPO sector (Business Process Outsourcing) was worth $245.91 billion.

70% of businesses intend to boost their use of IT outsourcing soon, based on the GSA report. Additionally, 83% of service providers explain this in the opinion that the IT outsourcing market would expand significantly. The statistics undoubtedly show that the outsourcing market is always expanding. Companies opt to outsource services for various reasons, including cost-savings and access to the world’s greatest talent pools. Businesses put a lot of effort into keeping up with the most recent developments in outsourcing for quicker adaptation, better resource management, and increased production.

Let’s look at the outsourcing trends for 2022 that you need to be aware of.

The trend of Cloud Computing

Cloud-based technology is in greater demand within the outsourcing sector. Businesses view cloud services as a useful tool for outsourcing that helps to streamline the outsourced process. In 2022, cloud spending will increase by 21.7% to $482 billion, reports Gartner. Both small and large enterprises are moving their operations to the cloud to benefit from its processing power, flexibility, and adaptability. According to Statista, by 2022, 60% of all corporate data will be saved in the cloud. The cloud computing sector is flourishing due to pandemic-related disruptions and evolving technology. Given that the industry continues to gain from technology usage, predictions indicate that this trend will continue.

The rise in RPA and AI technologies

Robotic process automation (RPA) enables outsourcing businesses to manage robots for simple tasks and handle internal and external procedures. The need for RPA surged as businesses recognized they could save money by automating repetitive operations and reserving human engagement for only the most important ones. The RPA market was estimated to be valued at $1.57 billion in 2020 by 2021 Grand View Research and is expected to expand at a CAGR (Compound Annual Growth Rate) of 32.8% from 2021 to 2028. According to a GSA analysis, 83% of survey respondents believe that RPA will be the most promising technology in the following decade.

Strong Cybersecurity

Data security is a primary priority for outsourcing, frequently threatened by security issues. Intruders can gain access to internal data in some ways due to digital transformation. A McAfee survey from 2021 shows that 81% of businesses experienced cyberattacks during the Covid-19 pandemic. Cybersecurity concerns are among the top worries for enterprises. 64% of firms, as per Deloitte, intend to concentrate on security skills to counter security risks. Many organizations hire a managed service provider (MSP) that oversees a business operation, like data security. Companies are turning their cybersecurity to MSPs because they are more likely to have the expertise and modern solutions. As per Statista, the market for MSPs is predicted to rise to $274 billion by 2026 from its value of $152.02 billion in 2020.

Why it’s preferable to outsource

Companies are increasingly outsourcing software development for various reasons, including lower operating expenses, better management of the business environment, improved service quality, capacity problem solutions, access to intellectual capital, and many others. The worldwide IT outsourcing market’s entire contract value, including RPA solutions and software development, has risen to more than $30 billion. 70% of businesses anticipate that the use of automation and RPA solutions will grow in the future as a method of service delivery. More than $30 billion is expected to be spent overall in future corporate operations on AI and RPA.

Let us uncover the reasons why you should outsource your company needs.

Outsourcing reduces cost

It is unquestionably less expensive to hire an IT company to manage your business’s IT needs periodically than to hire an IT staff to work for you full-time. This is because hiring an IT team requires you to purchase all the necessary equipment for a functional IT department, pay for maintenance periodically, rent and maintain extra office space, and pay for employee benefits.

Global talent is at your fingertips.

Resources may be few in your country of origin, but they may be readily available elsewhere. Companies may locate resources and qualified personnel worldwide thanks to global IT outsourcing. Offshore outsourcing allows you to connect with qualified professionals who are expensive locally. Hiring freelancers can be a better choice if you want to hire individual talent. There are specialized outsourcing platforms like Upwork, Fiverr, and Freelancer, where you can find programmers and other IT specialists. However, hiring a company is a better solution if you want to outsource a project.

Risk management

Each business venture involves some amount of risk. Markets, competitors, governmental policies, economic situations, and technologies undergo rapid change. With their in-depth industry knowledge, particularly in security and compliance, outsourcing providers handle and manage a large portion of this risk on your behalf. They are significantly better at avoiding risk in their fields of expertise.

Outsourcing challenges and their solutions

Outsourcing undoubtedly provides many business benefits but also comes with some challenges. Here are some of the most frequent outsourcing problems that businesses today are experiencing:

Expectation Management

Although adding an outsource service provider is intended to aid your business in improving a function, this isn’t always the case. It takes time for both parties to become accustomed to one another and decide how to collaborate most effectively. Expect a learning curve and a few difficulties along the way to get past this obstacle. When establishing business objectives, consider expectation management and include it in your timeline.

Choosing the right service provider

The foundation upon which the entire outsourcing process is based is choosing the correct service provider. If there is still a flaw in the selection process, clouds of resentment and unkept promises will eventually overcast the contract. To avoid this, the vendor should be chosen carefully, following the demands of the company and the required output. Before entering into a long-term deal, going for a test run is a good idea. Carefully design a business agreement for the successful projection of your business. Check out this quick guide on outsourcing agreements.

Uncertain Cost Estimate

Although we did claim that outsourcing will help you save a significant amount of money, it could backfire if it is not carefully planned. And without identifying specific requirements, dates, and resources, you cannot estimate expenses. Cost overruns can happen due to underestimating the work, not spending enough time on requirement gathering, or hiring someone without a domain or appropriate technical knowledge. To prevent this, establish clear project requirements. If you need assistance identifying the precise set of needs for the project, look for an experienced company or independent contractor. Explain your budget constraints to the vendor to avoid future misunderstandings.

Poor Knowledge Transfer

Poor knowledge transfer contributes to two issues with outsourcing: the first is from your perspective, and the second is from the vendor’s side. You may encounter unsatisfactory outcomes when dealing with project results after the vendor relationship has been terminated. You might come across some features that are unclear to you if they do not maintain clear documentation. However, if the vendor acquires a running project from you without a clear knowledge transfer process, they can fall short of your expectations. To overcome this, keep precise and extensive documentation. Create a thorough knowledge transfer plan that includes the features, technology, and code logic.

Why you should consider Genetech Solutions

Selecting the right outsourcing partner can be challenging and requires thorough consideration, research, and strategy. With over 17 years of experience, Genetech has proven to be a team with a mission and a defined value system. When we onboard a client, we become their partner, and their goal of expanding their business becomes our goal. From business application development to mobile and AI-driven apps, our team has expertise in building solutions that work and thrive in real-life.

One of our main services is to help companies with cybersecurity and disaster recovery plans. We help you with business continuity and prevent loss of productivity, revenue, and data for your business. We have a team of expert product and project managers who are helping global tech entrepreneurs launch world-class products that millions use and love. 

With 500+ happy clients and a retention rate of 90%, we have mastered the art of building long-term and fulfilling relationships with our clients all over the globe.


There is no denying that outsourcing is rapidly expanding and has a favorable impact on local and global economic growth. It is essential for firms that want to expand their business across many countries. Outsourcing not only improves operational efficiency but also enables business flexibility.

Want assistance in handling your technology needs? A knowledgeable team is waiting for you. Drop us a message right away!

Lareb is a Content and Marketing Specialist with expertise in creating content for diverse marketing channels. From blogs to press releases and social media to email copy, her focus is on creating engaging and customer-centric narratives. With a knack for conversion-optimized writing and a passion for connecting with readers, Lareb's approach is both data-driven and story-centered. Beyond the screen, you'll find her sipping cold brews and fearlessly exploring restaurants and movies solo. Lareb is a deep thinker who loves pondering life and soaking up new learnings.


Lareb Khalid