The pandemic has significantly influenced the IT market. A 2021 KPMG study of Technology innovation hubs reveals key changes in the IT sector based on the answers of 4,219 technology business leaders across 83 countries and various industries.
Key takeaways from the KPMG survey
Location isn’t a limit for business cooperation. COVID-19 has decreased the importance of face-to-face communication and made remote work more common than ever. Based on this transformation, new ways of collaboration are evolving, which may mean a mix of permanent and contract collaboration or a combination of offshore and nearshore IT outsourcing strategies.
Increased investment in technology. The use of technology across diverse industries surged because of the pandemic. 75 percent of survey respondents reported that they increased investment in IT after COVID-19 hit the global market.
Cybersecurity is of primary importance. 75 percent of survey respondents said that during the COVID-19 pandemic, instances of cybercrime have increased. Particularly, there has been a big jump in spear phishing and malware attacks.
Collaboration between people and technology. Survey respondents anticipate that the advance of robotics and AI will only create new ways for people and machines to collaborate. These technologies can improve overall business performance by enhancing human capabilities. This new trend creates a vast variety of needs that businesses may soon need to fulfill.
Increase in IT headcounts. As proof of the previous statement, 45 percent of respondents plan to grow their IT teams to proceed with technological growth. This means many business leaders believe that automation can’t replace the people skills that are necessary for their business. The healthcare domain is the most determined in this respect. Healthcare representatives expect an increase by 54 percent in the IT headcount in the next year or two.
Top outsourcing drivers among businesses
The above findings help us grasp the current changes in the IT sphere. Now, let’s have a look at the findings of the Deloitte Global Outsourcing Survey 2021 among 40 executives of Deloitte’s clients across the globe to figure out what drives organizations to opt for outsourcing.
Cost reduction. As a result of the COVID-19 pandemic and the associated recession, reducing costs is again the primary reason for outsourcing. In 2018, for instance, clients stated that speed to market was a more important outsourcing driver than reducing costs.
Cloud and RPA solutions. Since 2020, even more businesses have adopted cloud computing and robotic process automation (RPA) solutions. Thus, the need for such solutions intensified the interest in outsourcing. With RPA solutions being more widespread, AI technology is also gaining popularity.
Microservice software architecture. A software solution with a microservice architecture consists of several separate services instead of one. Such an architecture ensures much better software security and scalability. Learn how we ensured a microservice architecture for a delivery and logistics system. Cloud service providers that offer microservice architectures will soon outperform traditional IT services suppliers.
Shorter contracts and more flexibility. This is another growing trend in delivering ITO services that has been induced by COVID-19. Businesses are now more cautious when deciding on outsourcing destinations and companies. Today, it’s especially relevant to conclude short and flexible contracts. Plus, clients now expect more from software vendors than simply delivering software. They want to partner with vendors that understand their businesses and can offer timely solutions.
All of the above-mentioned changes in the IT sphere and IT outsourcing drivers logically result in a growing demand for ITO providers. According to the statistics from the HFS OneOffice Pulse Study, H1 2021, 60 percent of respondents (800 representatives of global enterprises) are planning to invest more in onshoring, while 57 percent plan to invest more in nearshoring. The popularity of offshoring is a bit lower, with 53 percent of respondents saying they are likely to increase spending for it.
Below are examples of digital transformation currently taking place in the healthcare and supply chain domains. These domains are rapidly evolving, and their representatives are among our most frequent clients.
Healthcare digital growth
The healthcare domain is opting for outsourcing services even more during the COVID-19 pandemic, as the adoption of new technologies is only increasing.
A recent report by Deloitte on the 2021 global healthcare outlook surveyed 1800 clinicians, nurses, and key stakeholders to find out whether the pandemic encouraged them to adopt new technologies. Deloitte researchers found that:
- 65 percent of respondents said their organization implemented new technologies to support clinicians
- 64 percent of respondents opted for technology to offer better virtual care for their patients
Another reason healthcare businesses are choosing outsourcing is a shortage of healthcare cybersecurity professionals, as cyber safety is especially critical for the healthcare industry.
Supply chain and logistics digital growth
Logistics businesses are also increasing their investments in ITO services, as digitization of the logistics industry is ratcheting up. As customers’ expectations and the demand for goods grow, the supply chain industry is striving to streamline its services.
Supply chain companies are gradually entering the Industry 5.0 era, which means getting the most not only from technology but from the people involved in the supply chain. Technologies such as augmented reality, 5G mobile, automated drones, and working exoskeletons will be getting more and more popular. All of them are meant to enhance collaboration between people and technology.
In the last section of this article, we’ll discuss Ukraine as a sweet spot in the current global ITO market.
What makes outsourcing to Ukraine popular?
Keeping in mind all the findings and reports we’ve discussed in this article, let’s figure out what makes Ukraine such a popular destination for ITO services.
#1 Nearshore location. Ukraine is a go-to ITO destination for European businesses since it’s in the same or a nearby time zone. For US businesses, Ukraine is also viable, as there are many more overlapping business hours compared to India, for instance. Additionally, the whole of Ukraine is situated within the same time zone.
#2 Rapid growth of the IT sector. The Ukrainian IT market is growing at an unprecedented rate. Currently, there are 756 IT services companies and 1489 tech product companies in Ukraine. Plus, there are now 212,548 IT specialists in Ukraine, and over the last year their number has increased by 16 percent. Annually, about 16,200 IT specialists graduate from Ukrainian universities, and this number is only expected to grow in the years to come.
#3 Cultural compatibility. Ukrainians have a European mindset and values. In 2014, the Ukrainian parliament (the Verkhovna Rada) signed an Association Agreement with the European Union. Since then, there have been lots of positive changes in the Ukrainian business environment. According to the 2020 World Bank Group report on doing business, Ukraine takes 64th place among 190 countries in the ranking, compared to 71st position in 2019 and 112th in 2014.
Yalantis is one of the top IT service providers in Ukraine, with a wide talent pool and a wide range of technical expertise. We offer custom technology solutions, diving deep into each client’s business case. Our honest and responsible approach helps us establish long-lasting relationships and win client loyalty.
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