Report: 40% of CEOs Plan to Increase Their Outsourcing Investments in 2026

Amid increasing competition within the global technology market, the software development industry is witnessing a qualitative shift in its outsourcing patterns, transforming from temporary solutions into strategic tools for growth and enhanced operational efficiency.

According to a report issued by “Deloitte,” nearly 40% of CEOs plan to increase their investments in external outsourcing services over the next year.

This reflects a growing recognition of the importance of these models in creating long-term added value for companies.

The report reviews the fundamental differences between three main software development models: Onshore (domestic outsourcing), Nearshore (outsourcing to a neighboring country), and Offshore (outsourcing to a distant country), in addition to the IT Staff Augmentation model, which allows companies to add temporary external expertise to their internal teams without the need for permanent hiring.

The Staff Augmentation model is considered one of the most flexible outsourcing methods, where companies enlist external developers or technical experts to work side-by-side with their internal teams.

This model enables companies to quickly bridge skill gaps and expand production capacity without incurring the costs of permanent employment or dealing with long waiting periods associated with hiring processes.

The external staff remain administratively managed by the service provider, yet they integrate fully into the client’s work environment, utilizing their tools and operational methodology, thereby ensuring seamless integration into the product development lifecycle.

The report highlights that Staff Augmentation provides companies with multiple strategic advantages, most notably a significant reduction in operational costs.

Companies do not bear the costs of insurance, office space, training, and other benefits that typically accompany permanent employment; instead, they pay only for the agreed-upon work hours or completion milestones.

This model also grants companies high flexibility in managing their human resources, allowing them to scale up the number of engineers and programmers during peak times, such as a new product launch, and then scale down the numbers when the need decreases without resorting to layoffs.

These models also enable access to rare and specialized skills, particularly in fields such as Artificial Intelligence or Cybersecurity, where experts are often difficult to find locally.

This approach helps companies accelerate their production cycle by relying on ready networks of pre-trained talents, enabling them to start new projects within weeks instead of months, and significantly reducing time-to-market.

The report anticipates that companies, especially startups, will increasingly adopt a flexible mix of the three models—Onshore, Nearshore, and Offshore—according to the nature and timeline of each project.

Industry experts believe that external staff augmentation will not remain a temporary option; rather, it will become a fundamental component of global technological expansion strategies, especially given the accelerating pace of digital transformation and the rising demand for rapid innovation.

The report concludes that the key to success in this shift lies not only in reducing operational expenditure but also in building smart partnerships with service providers, which allows for the exchange of knowledge and expertise, and enhances companies’ competitive edge in a digital environment that changes at an unprecedented pace.