The IT services market is forecasted to grow at a CAGR of 8 percent and reach $570 billion by the end of 2023. The market is being impacted by COVID and saw a stagnation in 2020. Now, the market is gaining momentum, due to increased adoption of digital technologies and cloud initiatives by enterprises across the globe.
Segmentation Overview:
IT Services Outsourcing Market Outlook
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Regions, such as Western Europe, North America, and some parts of APAC, such as China, India, Australia, Singapore, have high market maturity, and parts of Latin America are expected to be the future growth-driving markets for IT services outsourcing.
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India has captured a majority of the global offshore market and is positioned to be the leader in IT offshoring
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Combination of skills, low cost, large labor force, quality service, and strong governmental support provide India an edge over other countries in the region
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Currently, the Philippines and Vietnam are fast growing regions in Asia
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Ukraine, Poland, Romania, Hungary, Belarus are major locations for near shore IT outsourcing in Europe.
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IT automation technologies is expected to drive the demand in North America, while in Europe, artificial intelligence and blockchain would be the key driver
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In both regions, BFSI is the earliest adopters of most emerging and automation technologies
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Adoption of digital technologies and cloud initiatives are the priority for many enterprises in Europe and North America.
COVID-19 Impact on IT Services Outsourcing
Due to increased demand for digital skills, IT service providers have started hiring more fresh graduates. However, there is a risk involved when onboarding them to critical projects
In addition, startups and mid-size service providers are on hiring spree focusing skills on demand with 4–7 years of experience, which are the major building blocks of the team with counteroffer hike up to 60–100 percent.
If enterprises planning for any digital transformation activities or IT niche services, such as Application Modernization, Cloud Enablement, Core Modernization, Digital Experience, Data Engineering, etc., prominent mid-sized service providers could be considered depending on service requirement. Since Tier 1 are facing major attrition and acquiring fresh graduates and onboarding them to critical project with minimal training.
IT Services Outsourcing Pricing Insights
It is recommended not to have more than three key IT service providers, as it would create relationship complexity and increase project cost
Buyers should have a vendor mix of large and mid-size service providers. Large service providers can bring best practices followed in the industry and to support mission-critical applications. Mid-size supplier can offer competitive price and can deliver specialized expertise.
IT Services Outsourcing Supply Outlook
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India has captured a majority of the global offshore market and is positioned to be the leader in IT offshoring.
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Combination of skills, low cost, large labor force, quality service, and strong governmental support provide India an edge over other countries in the region.
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Currently, the Philippines and Vietnam are fast growing regions in Asia.
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Ukraine, Poland, Romania, Hungary, Belarus are major locations for near shore IT outsourcing in Europe.
Supplier Intelligence
The category intelligence covers some of the key global and regional players such as Accenture, Cognizant Technology Solutions, IBM, Tata Consultancy Services, and Infosys among others.
Key global players have announced the reduction plant of carbon footprint. For instance, in 2020, HCL reduced per capita carbon footprint by 41 percent over the base year 2011.
IT Services Outsourcing Value Chain 
