Technology has made it practical to communicate and stay in touch with people worldwide. As the demand for software development outsourcing companies continues to increase, you’ll need to go international for your business demands. According to Statista, the software development outsourcing market was worth $92.5 billion in 2019.
There are several benefits to outsourcing IT, including cost-cutting, tapping skilled labor, concentrating on core business ideas, and so on. However, talent sourcing is challenging; therefore, demand for outsourcing companies has grown considerably. As a result, in 2022, the best countries to outsource software development must be monitored most carefully.
The worldwide IT services market has reached $1.2 trillion in 2021, with a CAGR of 9.8 percent from 2016 through 2021. By 2025, the worldwide IT outsourcing market will have a value of $397.6 billion. However, the question is, which countries can assist you with project development and make a profit? Here’s the solution to all of your software development outsourcing questions.
What is Outsourcing Software Development?
Outsourcing software development has grown in popularity worldwide as organizations recognize its advantages, such as lowering development expenses, increasing team expertise, and speeding product time to market. Software outsourcing is when a third-party firm is hired to assist with any software development process rather than performing it in-house.
Third-party contractors may perform all or just a portion of the project. Choosing the best outsourcing company necessitates sound business management. First, you must create a thorough project description that includes all essential infrastructure demands, technological stack specifications, team composition, and anticipated completion dates.
When you’ve figured out what you’re looking for, start looking for outsourcing locations to discover the best fit for your company’s needs.
What Should You Look For Before Choosing A Software Outsourcing Country?
The following are the most important factors to consider:
Talent Pool
A developer’s population of more than 100,000 individuals is a plus. Because there are so many skilled outsourcing developers, you have a greater range of alternatives to select from. Hiring will be more expensive because fewer options will be available with a smaller software developer pool.
However, don’t overlook the quality of the code. For instance, out of 300,000 developer applicants, 10,000 may develop at the required skill level. There isn’t much difference between 20k and 40k developer candidates from an outsourcing company’s perspective.
It all boils down to a bell curve distribution, with the lowest level of ability sitting at one extreme (excellent) and a large portion of the population in between (semi-experienced). If there are no suitable candidates, you may always pay more to elevate them from the semi-experienced category.
Hourly Rate Of Skilled Developers
How much do they charge per development hour when deciding on an offshoring location is a key element to consider. This rate varies across countries. You may discover a lot about it by searching for “average developer salary” or “hourly rate of any specific country” on the internet. The cost ranges from $20 to $60 per hour, depending on the categories.
When examining developing countries, remember to consider their cost of living, which impacts both labor costs and tax rates. Low-cost countries will have lower labor expenses, but they may also charge higher taxes.
Seniority level, training, and experience of outsourcing developers are among the most significant factors—tax structure, supply chain cost structure in that country, and other vital factors to consider.
When examining developing countries, remember to consider their cost of living, which impacts both labor costs and tax rates. Low-cost countries will have lower labor expenses, but they may also charge higher taxes.
Political Stability
The government and political structure of an international location might have long-term impacts on the success of your project. A country in turmoil is not suitable for business, and it is not advisable establishing your software outsourcing operations there.
Instability in a country’s political structure may also cause hidden expenditures, such as currency volatility, legal risk, and uncertainty about property rights and personal freedoms. For example, the 2011 Egyptian revolution resulted in an estimated loss of up to $450 billion for online businesses.
Culture Compatibility
When selecting a top software outsourcing company, it’s critical to feel comfortable with the culture. Communication styles and behaviors are frequently more varied than people assume, so if you’re used to a slower, more methodical tone of communication, an agency that prefers fast-paced business interactions may be too quick for you.
The secret is to determine which modes of communication are most effective for each software development company and how well those methods will work with your team. Before signing any dotted lines, consider how business is done at your potential partner’s firm and what internal and external communication methods are in place.
English Language Proficiency
The first guideline is to constantly deal with a software development company whose employees are fluent in English. Otherwise, they will be unable to interact with your team and grasp what you want them to accomplish. Remember, it’s about high-tech custom software development services with many technical terms and details.
Furthermore, suppose you and your software development company don’t share a common language, particularly when it comes to project management, development process, scheduling deadlines, and rates. In that case, you might run into difficulties later on. It might cause delays, which are never good for anybody involved.
However, ensure your outsourcing software companies can communicate in English before selecting one software development outsourcing company over another.
Time-Zone Differences
Your developer’s time zone must correspond to your time zone. You may disregard it if you think it’s not essential. Avoid a country with a time zone that differs significantly from your own. Many confusions and difficulties may arise while communicating with your international software development partner, potentially delaying future interactions between you two.
On the upside, most outsourcing countries do a fantastic job coping with the time difference. So it turns out that your choice of time zone isn’t quite as crucial after all. Remember that you must select a country with a time zone that does not overlap with significant business hours in the United States, United Kingdom, or Europe to avoid putting your developer under too much stress.
The Key Benefits Of Outsourcing Software Development?
Outsourcing software development is quite popular nowadays, especially during the global pandemic. Organizations use software outsourcing companies to provide technology solutions to relieve staff strain. However, if you’re looking for a reason to outsource, consider the following top arguments:
- Reduced expenses: This is the most significant incentive to engage with a leading software outsourcing company. Outsourcing avoids the need to invest in the technical skill and knowledge required to build custom software solutions. You may save money by outsourcing the task to a software development services firm.
- Business expansion and scalability: The most significant advantage of outsourcing software development is that you won’t have to worry about growing your staff if your projects need modifications. As a result, you won’t have to worry about recruiting and firing workers. It’s also ideal to require a few software experts or a full-fledged development team.
- Rapid access to an IT Talent Pool: It’s difficult to locate suitable candidates for all sorts of employment. Employees familiar with your company’s operations and have skills relevant to them will be the most likely to get hired. Outsourcing services allow clients to access high-end workstations tailored to their needs. Furthermore, because specialists and experts in the field carry out the service, you may trust it will be high quality.
- Tech expertise: With technology evolving rapidly, it’s becoming more and more common for entrepreneurs to engage specialized and qualified developers for their software development projects. While having a solid in-house development team is not always feasible for them to be experts in every field. They may be deficient in the skills required for your software development project. As a result, utilizing an outsourcing development company with considerable expertise will help you save time and money while also allowing you to devote your efforts to your core business activities.
- International standards compliance: To begin with, an IT outsourcing web development company that is reputable ensures that the produced software has high quality and security and solutions that adhere to international norms such as ISO 9001 and ISO 27001. Hence, many IT custom software development outsourcing companies comply with tight industry standards through the ISO certification process.
Top Outsource Software Development Countries With Reliable Reputation
There are numerous countries where you may outsource your software development. But how do you figure out which country is the best? Where can you find the most affordable quality-price ratio and professionals who are competent and experienced in what you need them to accomplish? The following are the best countries that you can choose to outsource to:
Best Country To Outsource In Asia
The Asian continent is home to many software development superpowers, with some countries ranking among the world’s top ten. Over one million persons are employed by around 200 software development companies in the continent.
Vietnam
Vietnam’s economy is the fastest-growing in Asia and the Pacific. The country’s transition from low-tech manufacturing to a service-oriented economy has transformed it from one of the world’s poorest nations to a vibrant tourist draw with a pleasant business climate.
Vietnam is one of just a few Asia countries that can outpace bigger rivals such as the Philippines, China, and India, with an average economic growth rate of 5.5 percent. Vietnam is establishing itself as a strong outsourcing powerhouse in Asia, in addition to being a rising star among the continent’s growing economies.
Vietnam is a young participant in the IT outsourcing industry, having just begun about 20 years ago. In 2020, ITC exports were projected to be worth $91.5 billion. The software industry alone was worth $5 billion in sales, placing Vietnam among the top ten software outsourcing economies worldwide.
Nonetheless, it is quickly becoming one of the best outsourcers. There are now 50,000 information technology enterprises in Vietnam. The country has made significant technological progress, and it is home to numerous giant corporations such as IBM, Intel, Samsung, Microsoft, and Nokia.
The growth of Vietnam has resulted in the nation being recognized as one of the top 50 digital nations, thanks to its rapid expansion, immense talent pool, incentive packages, and significant investments in education. Every year, around 40,000 well-educated ITC professionals graduate. There are government-backed incentives for IT workers.
India
Many software engineers and coders prefer to work in India, a common outsourcing destination. The country’s population is highly educated and semi-trained, with most young people flocking to IT professions.
Every year, the number of IT professionals in the country rises by more than 120,000. Also, it’s the second-largest English-speaking country globally, making communication a snap. Software development in India generally costs between $10 and $30 per hour, although a developer in the United States may charge between $50 and $60 per hour.
India stands out for having an ample supply of low-cost labor and its ability to deliver high-quality services at low costs.
Philippines
The Philippines is well-positioned to meet the demands of new enterprises, with more than 30,000 IT and technical graduates from top technical institutions across the country. The EF English Proficiency Index ranks the country as the second greatest English-speaking country in Asia, with 562 points.
The Philippines is focused on research and innovation, e-services development, digitalization, and broad STEM education. English is the mother tongue of about 37,000 people, and English as a second language is spoken by 92% of the population. Thus, the Philippines is one of the world’s most English-speaking nations, making it ideal for outsourcing development.
As a result of all the hard work, the Philippines now graduates over 81.5k IT professionals every year. The Philippines already has over 190,000 software engineers in BPO centers such as Manila, Cebu, Davao, and Bacolod. These cities have established a name for themselves as the best places for consulting services in healthcare and finance. Software engineers in the Philippines are known for their robotic process automation and AI solutions.
As a result of all the hard work, the Philippines now graduates over 81.5K IT professionals every year. The Philippines already has over 190,000 software engineers in BPO centers such as Manila, Cebu, Davao, and Bacolod
China
China has some of the world’s best technology and IT services because it has one of the most advanced education systems. China is attracting increasing businesses to profit from its user interface, full-stack, mobile, commercial, and gaming software.
China has taken the lead in launching, teaching, assisting, and instructing its people on operating in information technology. China’s IT talent pool is enormous, with over 30,000 individuals with distinct skillsets costing between $20 and $50 per hour.
Thailand
A robust higher education system that enables individuals to develop their IT abilities boosts the industry. The government attempts to improve its English proficiency to entice foreign business owners.
With developers costing organizations ranging from $15 to $40 per hour, Thailand is one of the best countries for low-cost mobile applications, IT consulting, and software testing services.
Best Country To Outsource In Eastern Europe
Eastern European countries offer excellent communication abilities, quick communication times with low costs, and high-quality labor at reasonable prices. This area is home to a large pool of developers, many of whom have a technical university degree in the software development sector.
Ukraine
Ukraine has a pool of over 200,000 competent software engineers. In the coming years, the size of Ukraine’s IT community is expected to rise dramatically, with approximately 23,000 prospective IT specialists entering the profession each year.
More than 3k IT service companies specializing in e-commerce, finance, education, health care, and telecommunications operate out of the country’s tech clusters. They have a record of providing 87% high-quality software products, with 7% selling hardware and 6% offering customer service. The Clutch 1000 worldwide assessment includes 68 Ukrainian businesses among the top 1% of outsourcing vendors known.
Poland
Every year, 15,000 graduates from Poland’s 18 local technical colleges join the workforce as software engineers and other IT professionals, with 80,000 students pursuing degrees in IT and IT-related fields. Poland is a software development outsourcing partner for over 100 firms, with over 255 skilled IT professionals to deliver custom software solutions.
Poland’s talent pool is rich in Java, Python, and Ruby skills. As a result, it is one of the most inexpensive programming experts in Eastern Europe who are well-versed in software engineering technology. Hence, you may expect to pay a software professional between $40 and $60 per hour.
Romania
Another developing destination for IT outsourcing is Romania. There are 41 technical colleges in Romania, with around 5k IT degrees awarded each year. Romania has a significant presence in Central and Eastern Europe’s outsourced software development market.
Developers from this country are experienced in various software development tools and languages, including C, C++, .NET, Java, PHP, and Mobile. They work for the most prominent IT firms like Microsoft, Dell, and IBM. The cost of a professional engineer may vary from $25 to $50 per hour, depending on the needs and experience of the software engineer.
Hungary
Hungary is one of the best locations to locate strong software developers. Hungarian software developers are well-trained and experienced in Shell, C++, and Java database creation and programming.
Despite its modest size, the country’s information technology sector has grown dramatically in recent years. Compared to projects in the Western Hemisphere, labor costs are significantly lower. According to the survey research, Hungarian IT professionals charge an hourly fee of $20 to $55.
Best Country To Outsource In Latin America
Latin American countries have emerged as a popular choice for businesses looking to outsource. Nations in this region are a popular alternative for most North American countries due to their low cost, minimal cultural distinctions, and little time difference.
Brazil
The industry is valued at $19 billion in Brazil, with the IT sector accounting for up to 50% of that market and specializing in programming languages such as Java, Python, and SQL. Because there are over 6.8 million English speakers in Brazil, language barriers will not be an issue while employing a Brazilian developer to work on your software project.
The average developer’s hourly rate ranges from $20 to $55. Outsourcing software development to Brazil is an excellent option for North American IT companies. Many businesses from the United States and Canada chose Brazil as their primary information technology service provider due to close travel proximity, minor time zone difference, and cultural similarities.
Although employing Brazilian developers is more expensive than hiring in-house experts, outsourcing to Brazil is still less costly. It can save North American companies 40–60% on development costs. On the downside, some developers’ fees are higher than others, ranging from $25 to $80 per hour.
Argentina
Argentina is one of Latin America’s most highly educated countries, with free education available to its residents. They are also the region with the most significant English in Latin America. When these two elements are combined, it produces an effective communication workforce.
Over 70k IT professionals in the country and more than 1000 businesses engage in software development outsourcing. Around 100,000 IT experts are produced each year at colleges with knowledge in C, PHP, Java, JavaScript,.NET framework, and data science. Depending on the web developer’s expertise, hiring one in Argentina may cost anywhere from $30 to $60 per hour.
Conclusion: How The Best Countries To Outsource Software Development Services Can Improve Your Business
Choosing to outsource your software development project does not always imply giving up control. When you make wise selections, outsourcing introduces new knowledge, skills, and expertise to your business organization and greater earnings. If you focus on costs and establish clear expectations at all phases of dealing with remote professionals, you should have no trouble implementing outsourcing.
There’s a lot of space out there, whether you decide to develop your software project with your development team or outsource for help. Make the most of your project at a reasonable cost by connecting with a reputable outsourcing company.
