Updated January 8, 2025
In the next five years, the size of the IT outsourcing market is expected to jump to $851 billion from $652 billion today, according to Mordor Intelligence. It credits that growth to organizations' goals to leverage IT for digital transformation to gain a competitive edge, as well as streamlining business operations and securing data, among other factors.
The banking, financial services and insurance sector, it states, will be the largest end-user vertical, driven by the need for advanced cybersecurity, digital transformation, growing regulatory compliance, and innovative solutions to meet evolving customer expectations and industry trends.
Whatever sector your company is in, you can reach your goals with greater agility and speed by working more closely with your IT outsourcing (ITO) service provider. Outsourcing is not only about cost savings but about using technology to transform by automating and streamlining systems and processes, de-duplicating data and optimizing resource utilization.
Strengthening your relationship with your outsourcing partner can provide a better way for you to use technology as a cost and competitive advantage, supporting infrastructure modernization, operations modernization and application/system/process modernization.
Know what you need
Businesses don’t need to outsource their entire tech portfolio. Before you make any decisions about ITO, determine if there are pain points that may keep you from meeting your cost-savings objectives or increasing operational effectiveness.
Below are five possible areas to review to see if your organization will benefit from working with an ITO provider.
- Application rationalization. Take a close look at the applications currently in use. Are they all necessary? Which can be replaced, retired or consolidated? Consolidating apps reduces complexity and redundancy and lowers cost of ownership, but there may be hundreds of them in your application portfolio. Can you handle that job in-house?
- Data center consolidation. This is one of the most important components of modernization and one of the ways to gain the most benefit, too, promising reductions in operating costs and introducing new and more powerful equipment into your environment. It’s an enormous undertaking, though. Do you want to go it alone?
- XaaS. Is your organization taking advantage of software as a service (SaaS), platform as a service (PaaS), infrastructure as a service (IaaS) or desktop as a service (DaaS) solutions for applications and data, storage, backup, network installations and workplace management? Are you equipped to move to one or more of these platforms as quickly and efficiently as possible? If you don’t make the transition, are you missing opportunities to cut costs and build continuity?
- Security. Increasingly complex networks, continuous deployment and integration practices, and new types of endpoints all pose security challenges. So does the cybersecurity skills shortage — 67% of organizations said they had a shortage of cybersecurity staff in 2024, according to a (ISC)2 survey. If you’re operating under these conditions, are you finding it difficult to maintain end-to-end security of applications, data and infrastructure, access management and monitoring and modern identity?
- Automation. Intelligent automation underpins successful modernization efforts, especially for application management and IT delivery operations, and enables DevSecOps. But you need to build up a strong foundation, including artificial intelligence (AI) and analytics. Can an ITO provider streamline your efforts to take a data-driven approach to automation?
This is an optimal time to revisit how you can get more out of your relationship with your ITO partner, whether you are focused on dramatic cost savings or want to take full advantage of the opportunity to create a more dynamic, modern IT environment.
Learn more about DXC's expertise in IT outsourcing services.