Outsourcing software development has significantly increased its share in the industry, with the value of the global market reaching $937.67 billion in 2027. Why the surge? Simple: As a large number of enterprises, irrespective of the sphere of activities they belong to, resort to software as their integral part, designing it by themselves becomes out of the question since they lack the resources and expertise.
Here is where offshore software development companies get involved. These firms provide a source of expert programmers who will help materialize your creative software concepts. If your need is for a competent and reliable outsourcing partner, this article reviews the best countries that are well-known for the abundance of their developer skills.
What is offshore software development?
Offshore software development implies software work done by projects in other countries. These days, multitasking is a standard practice in businesses. It can save them both cost and time. One benefit of outsourcing is that, even if you don’t have skilled workers to handle every task, you can outsource coding, website design, app development, and custom software production to international staff. This considerably helps cut down on software development time and consequently allows the early entrance of the product into the market.
Top Countries for Offshore Software Development
Every country has its outsourcing scene, so it is necessary to do your research to find out about a credible software outsourcing company that meets your requirements.
- India: A powerhouse with a vast talent pool and competitive pricing
The gaming Industry in India has the second biggest population on earth after China, it has a huge number of STEM graduates which are about 2.6 million in the science, technology, engineering, and mathematics sectors. Many organizations in the world come to India for outsourcing their IT projects because of cost-effectiveness. Moreover, a software developer costs around $6 per hour in India, whereas in the U.S. it is $33-$40. Therefore, India is chosen most of the time as an offshore destination.
Well-known coding languages in India are Java, C++, and Python which are used extensively by tech developers in tech hubs located in cities like Bangalore, Chennai, Mumbai, and Kolkata.
- China: Strong in innovation and large-scale development project.
China has been recognized as having one of the best software programmer pools in the globe nowadays. In the case of custom software development needs, China is a good place to explore.
In China, there are plenty of software companies that have grown out of different industrial ecosystems and are consequently very experienced and knowledgeable. Lastly, the price of software development in China is normally lower than in other markets. With surveys done in 2021, one finds that approximately 68% of the outsourced work comes to China. Additionally, I would like to inform you that the average salary of a software developer in China is about $35,538 per annum, while that of the US is about $108,978. This is the main reason that China is exercised worldwide as a preferred site for software development outsourcing.
- Poland: Known for high-quality developers and proximity to the Western market
Software outsourcing in Poland is a good choice. It represents a strong workforce and affiliations to the WTO, EU, NATO, and UN, becoming a guarantee for secure data handling. Poland is listed 12th by the Kearney Global Services Location Index. Poland can offer plenty of software developers and this is a competitive labor rate.
The hourly rates differ, starting from 50-60 USD per hour in small cities (for example, Katowice) to 120 USD per hour in bigger cities. Python, Java, SQL, and C++ are among the most widely used programming languages, and places such as Warsaw, Krakow, Wroclaw, and Lodz are the technology hubs in Poland. High-quality outsourcing in Poland should be one of the main criteria.
- Ukraine: Offers a skilled workforce and cost advantages
Eastern Europe, notably Ukraine, is rising as a leader in outsourcing software development. With over 15,000 registered software outsourcing companies, Ukraine collaborates closely with Western businesses.
It's known for its expertise in various projects like mathematics and security. The IT sector achieved a better 20% growth in 2020, expected to triple by 2025.
A manpower of 30000 new entrants to the IT industry is equipped by Ukraine engineers and mathematicians with a strong basis from the time of the USSR. This broadens with the necessary new skills Ukraine's nascent software development companies soon came into existence after the USSR's crash.
Ukraine has a reputation for high-quality expertise annual rates which typically start from $25 to $100 per hour. One can notice that Ruby, Java, and Python are the most used languages in software development, and these places as Kyiv, Kharkiv, Dnipro, Lviv, and Odessa are the ones to be considered as tech hubs throughout Ukraine.
- Philippines: attracts people with English proficiency and cultural alignment
One of the reasons why the Philippines is a great country for software development is that it can offer relatively low costs and competitiveness in the market in addition to the background of software. Reports indicate that software development has been counted among the key forces driving the emergence of technology in the country. For example, numerous Filipinos with considerable experience working in companies of foreign origin are skilled and thus, sought after in cases of outsourcing.
Every year, we have about 40,000 tech and engineering graduates who are very knowledgeable in languages like Java, API development, .NET, and so on.
When the subject is about the prices they can cover a range of $25-$49 per hour according to Clutch, and on Upwork, rates normally fall between $15-$35 per hour.
In the Philippines, PHP, ASP.NET, Ruby on Rails, and ASP.NET Core are some of the popular programming languages used. The main tech city is Manila.
Importance of choosing the right country for outsourcing
When you decide to outsource, the other important thing is to identify the best outsourcing destination for your product or service. As the price is the most important point of the purchase, the other aspects should be carefully considered before you make a decision.
Data security and privacy
Ensuring that the security and privacy of the business information that is sensitive is the main concern for any company that is taking outsourcing into serious consideration. In the past few years when confidential information and trade secrets were stolen in Chinese cases, data protection became more and more important. It's essential to understand the data protection practices and network security policies of potential outsourcing locations. Choose a country with robust data security and privacy policies in place to mitigate risks.
Skill sets
The numbers of graduates each year from different outsourcing destination hubs vary, though with their areas of expertise. To illustrate, India is one of the countries with the ultimate talent in software programs, which makes it a preferable country for the IT service provision sector. China is the leader in manufacturing, while the Philippines does a great job mastering the English language.
Currency exchange rates
Knowing the exchange rate will help you choose a good country to outsource. The exchange rates’ volatility is likely to have a profound effect on the cost of service outsourcing. Take into account various markets and when currency exchanges are changing over time before you make a judgment.
Government support
A local government presents an important component for the success of an offshoring plan. Look for locations that offer government backing, for example, employment regulatory systems, tax reliefs, and public infrastructure development. The government can be relied on to provide an environment that will ensure the success of outsourcing services.
Criteria for Selecting an Offshore Development Country
Concerning the selection of the country for outsourcing software development, there has not been a single undesirable country. However, to benefit from outsourcing, it's important to consider a few key factors:
Cost-effectiveness: It is not easy to run a team with high and advanced ICT knowledge inside. Outsourcing gives you that the cloud can take care of IT infrastructure or hiring and training employees.
Talent pool and technical expertise: Know the exact field of technologies or experience required for your project.
Time zone considerations: If time zone differences matter to your business, choose a country closer to your time zone. Ideally, aim for a maximum difference of 1-3 hours. However, modern management systems can help mitigate any inconveniences related to time zones.
Language and cultural compatibility: Cultural gaps can contribute to problems of misunderstanding and communication. It's a crucial aspect of finding a person who's on the same page as you to avoid the occurrence of disagreements.
Check your English proficiency: To run outsourcing effectively, communication is the most important. As language is the primary method of communication, ensure the service provider has a sufficient level of English to mutually understand one other
Political and economic stability: Consider whether the outsourcing partner shares similar values to your company. This can contribute to a more harmonious and successful collaboration.
The Rise of Offshore Development
The outsourcing trend towards offshore centers is on the rise, and many companies are turning to these places as their preferred option for their software development needs.
Global trends in software development outsourcing
By 2024, the services of outsourcing software development will be growing popular. Here are the top five trends you need to know about:
Cloud software development
Companies of all sizes use cloud services to optimize their efforts in terms of time and money. In 2024, cloud-based apps have emerged as a popular method for business app development.
Software and data security services
Data security is a vital concern for most businesses, yet only a few organizations in the field have an adequate level of expertise. Many organizations outsource software security services to protect their applications from cyber-attacks. This helps save costs and ensures that applications meet industry standards.
Agile and DevOps development
These two methodologies are known as Agile and DevOps and they provide developers with flexibility in developing and order deployment that leads to improved efficiency and speed. Business entities are a choice to hire external organizations that are deploying modified frameworks of these models to deliver required functions in time.
Artificial intelligence and machine learning development
AI and machine learning are changing the marketing and customer support landscapes through continual innovation. The increasing AI and ML outsourcing is enabling many firms to embed this technology into their systems. These measures help rapid workflow, decrease costs, and identify fraud.
Software maintenance and support
When an app is developed it needs support and regular maintenance to secure it and improve its performance and stability. A lot of companies prefer externalizing these services in 2024 to have a pool of experts who provide dedicated services but at the lowest cost.
Key benefits of offshore development
In-house development vs. outsourcing is one of the hardest decisions to make. But there are many benefits to offshoring software development that make it appealing
Access to talent: Outsourcing offshore means you'll be able to tap into a bigger number of experienced software developers who will work for you. They feel the challenges are familiar and have experience working on international teams.
Faster time-to-market: Having a staff that will work committedly will help you get the work done faster and so you will enter the market sooner. External experts can help uncover new approaches for you to apply to your processes, thereby breaking the routine and stimulating innovation and creativity. The experts will help you to get new insights.
Focus on core business: Offshore outsourcing makes you free from the burden of managing the whole process of software development which enables you to pay attention to the core business strategy. This means less stress and more time for important business activities.
Business growth: Offshore development allows companies of all sizes to access skilled labor, reducing costs and development time. With more time and resources, you can focus on growing your business sustainably.
Challenges faced by companies when outsourcing
Lack of experience with outsourcing
If you're new to outsourcing, understanding the process and managing collaboration can be daunting. Partnering with an experienced vendor who can guide you through the process is essential. Look for a flexible partner who integrates seamlessly with your processes and leverages their expertise for better results.
Cultural differences
Cultural nuances can lead to misunderstandings. Choose a vendor like Visual Craft, with extensive experience in working with diverse cultures and a corporate culture focused on openness, communication, and accountability.
Knowledge transfer challenges
Prevent knowledge transfer issues by maintaining thorough project documentation. At Visual Craft, we emphasize meticulous documentation using tools like Wikis, user stories, and test cases to ensure smooth knowledge transfer.
Conclusion
When it comes to outsourcing software development, there isn't one perfect solution for everyone. The right country and company depend on factors like your project type, budget, and timeline. Picking the right offshore software development company is just as important as choosing the country. If you choose the wrong one, it could end up costing you more money than hiring local developers.