IT Services Outsourcing Industry Report by Regional Category Spend, Price Analysis, Key Demand, Price Indicators, and Best Buying Practices

The global IT services outsourcing market reached a value of about USD 462.8 billion in 2021. The industry is projected to grow at a CAGR of around 4% in the forecast period of 2022-2027 to reach a value of USD 585.58 billion by 2027.

The IT services outsourcing industry report comprehensively analyses the industry, including key segments, trends, drivers, restraints, the competitive landscape, and other essential market aspects. With the help of the digital revolution, organisations at a global level are now reliant on the accomplishment of inventive applications and expansions that IT could offer. Undoubtedly, IT has become an important viable edge for various organisations. North America is the highest category spender by region that is driving the demand for the IT services outsourcing industry.

Industry Definition and Segmentation

IT services outsourcing refers to a predetermined agreement through which IT service providers take total ownership and regulation over the client’s organisation set-up. Owing to the increasing importance of operational productivity and competitiveness there is a growing demand for outsourcing services to offshore companies. The global IT services outsourcing industry report comprises segments based on regions (Europe, North America, and the Asia Pacific).

The North American Region is Driving the Growth of the Industry

North America is holding the largest place in the global IT services outsourcing market. Since many technology-based firms are based in North America, the region has been witnessing greater revenue share because of the primary implementation of innovative technologies. Owing to the persistent countrywide augmentation in the IT sector and the rising utilisation of IT operations, business software, data center systems, and communication systems, the United States holds the highest share of profits in the region.

With the rising awareness as far as data security and customer-centricity in ventures specifically in the aerospace and defense and BFSI segments are concerned the requirement for IT services outsourcing is being propelled. The ever-growing demand for consultancy-related projects is also fueling the development of the market. The expanding demand for expertise in devising and restructuring IT approach, company structure planning consultative, portfolio consulting and safeguarding efficient and effortless digital makeover additionally boosts the industry progress. Fast advancements, presenting several advantages to diverse industries worldwide, will also encourage market development. Moreover, IT service outsourcing vendors are offering unique functioning and pricing standards to obtain a competitively upper hand over other companies. Subsequently, the introduction of cloud computing is further powering the growth of the market since it supports organisations to automate and improve their business functions and processes.

Nevertheless, the international market is facing a decrease in its expansion level owing to the escalating number of Global In-house Centers (GICs) being adopted by companies.

Best Procurement Practices

The global IT services outsourcing industry report by Procurement Resource gives an in-depth analysis of the best buying practices followed by IT services outsourcing providing and utilising regions across the globe, such as contract terms, engagement models, and buyer and supplier negotiation levers, among others.

Category Management Studies

Outsourcing supports the clients to create the right sourcing plans and tactics, choose the right IT service suppliers, construct the finest of contracts and agreements, and administering deals for sustainable and successful relationships with external vendors. Subsequently, IT services outsourcing means the utilisation of third-party vendors to efficiently deliver IT-based business processes and functions, application development, data center management, and organisation structure and software solutions for positive business results. This method supports the organisations to reduce costs and results in a higher competitive benefit. IT services outsourcing can be put into operation onshore, nearshore, and offshore.

Constant Migration to the Cloud and Implementation of Virtualised Infrastructure is Anticipated to Further Drive the IT Services Outsourcing Market

The movement toward cloud and implementing software has resulted in the outsourcing customers to switch resources from less valued assets to specialised employees while concentrating on more adaptable, tailorable, and advancement-friendly solutions. The main purpose for the companies moving towards outsourcing cloud-based IT services is cost optimisation. Moreover, multi-cloud approaches are hence, gaining impetus and permitting several providers to decrease concentration risk. Therefore, organisations specifically Small and Medium Businesses (SMBs), are essentially installing the Software as a Service (SaaS) model and the Infrastructure as a Service (IaaS) model, which has obligated the service providers to benefit from the cloud-based contributions.

The key zones in the industry are Europe, North America, and the Asia Pacific.

Key Industry Players Mentioned in the IT Services Outsourcing Industry Report

• Accenture Plc
• Cognizant Technology Solutions Corporation
• Infosys Limited
• IBM
• Tata Consultancy Services

Market Landscape

Due to the existence of multiple suppliers in the market offering IT services to the local and the global markets the IT services outsourcing market is extremely competitive. To maintain their position in the market and to hold their clients, organisations are creating advanced and new technologies to compete with other companies for their benefit thus strengthening the competitive challenge in the market. Both IT services providers and organisations using their services are constantly considering prospects to leverage their adaptations in contracting models. In addition, new projects are primarily dedicated to responsibility and risk probability sharing amongst the client and the IT vendor. This further intensifies the competitiveness in the already overloaded industry and makes it compulsory for the service providers to deliver value.

Key Initiatives by Companies

• In March 2022, an international leader in the generation-next digital services and consulting, Infosys, teamed up with Telenor Norway, which is Telenor’s completely owned Norwegian telecommunications operator, to alter its finance and supply chain functioning.
• In March 2022, there was a collaboration between Cognizant and Microsoft to provide a new digital health resolution to improve outside and distant patient observation for enhanced medical care. Cognizant is using healthcare mechanisms by combining remote patient intensive care and virtual health services, by the usage of products like smartwatches, blood pressure machines, and glucose checking meters to collect and share patient health-related data with providers.