Around one-third of organizations will spend more money on IT outsourcing over the next 18 months, while 48 percent plant to hire more contractors, according to IT staffing agency Bluewolf's recent report, entitled "2012-2013 State of IT Outsourcing." The reasons for the upshift: Companies are eager to dig into piping-hot technologies like cloud, big data, and mobile but can't find sufficiently skilled IT workers to fill related job openings. Couple that talent shortfall with the ever-present need for speed to market, and the need for outsourcing becomes a bit clearer, though perhaps still tough to stomach for unemployed or underemployed IT pros in the United States.
If there's any consolation, it may be that companies are no longer as gung-ho about enlisting offshore talent to fill their IT outsourcing needs, according to Bluewolf. This is because CIOs who were dazzled by the prospect of cheaply recruiting IT talent that China, India, and Eastern Europe have seen "mixed results," according to Bluewolf, leading them to reevaluate which services and functions they ship overseas.
Although IT pros in the United States might not have to worry quite as much about losing work to their foreign counterparts, they may be feeling greater competitive pressure from the cloud. "Cloud as a delivery model -- which can be implemented in weeks, modified on the fly, and abandoned just as quickly -- is gaining momentum," according to the report. "Businesses are leveraging the cloud to outsource applications (Salesforce, Google Apps, Eloqua), data storage, and even the management of entire data centers to third-party providers."
Broken down by IT service type, 73 percent of companies said they are outsourcing at least some application-related functions, from application development to hosting. In monetary terms, they're spending around 48 cents per outsourcing dollar. Meanwhile, 62 percent of organizations are outsourcing infrastructure-related functions, from full-scale data center operations to networking to IT security. Spending-wise, companies are spending 35 percent of the IT outsourcing dollars on infrastructure services.
Application development is the most frequently outsourced IT function, according to Bluewolf, representing 46 percent of all outsourced app-related functions. Twenty-six percent of those app dev functions are handled offshore. The top outsourced app-dev jobs are for software developer (for all languages), Salesforce.com developers, and quality assurance analysts.
Further, 30 percent of survey respondents said they plan to outsource more app dev duties over the next 12 to 18 months. "As applications become more process-centric, the development community needs to have skill sets around specific business processes as well as industry expertise," the report cautioned.
Web and mobile development, too, are hot spots for outsourcing: 39 percent of all outsourced app dev tasks are for the Web or mobile devices. Companies plan to increase outsourcing here by 27 percent over the next to 18 months, but interestingly, only 4 percent of these jobs are going overseas.
"As organizations continue to integrate Web and mobile strategies into their marketing and e-commerce efforts, CEOs and CIOs are re-evaluating the best ways to manage demand. Some choose to keep Web and mobile development within IT and leverage an elastic workforce mix, others reorganize these functions under marketing or sales because of revenue potential," according to Bluewolf.