Offshore software development has become a valuable asset in the IT industry as it continues to grow at an alarming rate. Many companies are now outsourcing software development for cost and technological reasons. But, this is a natural move in the business world. Offshoring a wide variety of tasks in software development offers excellent benefits. Some of the tasks that you can outsource include software maintenance and support. The others include custom development, website development, and design and mobile application development.
These include overcoming the challenge of empowering and hiring skilled staff. It also ensures that you get software within the shortest time possible and in the best quality.
Thus, offshoring helps improve your time-to-market and also reduces development time.
What is Offshore Software Development?
This refers to an arrangement where an organization hires a team of dedicated developers in another country. In this case, the company opens a different office (known as an offshore development center) in the new location to take advantage of a large pool of talent and lower operating costs. The development team consists of remote employees on a permanent basis, just like in the in-house team.
For instance, many companies, including IT giants like Microsoft, Google, and Apple, established their R&D centers within ‘Silicon Valley of Asia,’ Bangalore. Establishing the R&D centers enables them to access a massive talent pool and lower operating costs. It also provides them with the ability to scale, which helps improve their technical expertise without any pressure or huge costs. Moreover, it also helps them increase their output.
What is the Difference between Onshore, Nearshore, and Offshore Software Development?
As the name suggests, offshore software development is usually found on the other side of an ocean. Offshore development teams are able to work virtually and remotely using the latest technology. The team enables you to develop a product at a portion of the cost involved in working with their onshore counterparts.
Some of the most popular offshoring destinations include Ukraine, China, India. It also includes countries in Southeast Asia such as the Philippines and Vietnam. Many organizations prefer looking for qualified developers through outsourcing rather than hiring in-house developers. Apart from offshore outsourcing, there are two other IT outsourcing options to consider. These include onshore and nearshore outsourcing.
But, to know the right shore outsourcing center, you need to understand their differences. So, what is the difference between nearshore, onshore and offshore outsourcing? Well, each IT outsourcing option comes with its pros and cons.
- Involves outsourcing software development in the same region or country. For instance, a company in New Jersey can find an outsourcing partner in California.
- No concerns about cultural differences or language barriers.
- Relatively expensive labor.
- Allows for an effective working relationship as the call center is potentially accessible.
- Similar time zones or closely aligned with the in-house team location.
- Limited access to a pool of talent.
- Refers to outsourcing in a neighboring country that is a few miles away. For example, a company in the US can outsource in Canada, Mexico, or Brazil.
- Insignificant cultural differences and language barriers.
- Less cost in hiring developers than onshore.
- It is more able to visit than offshore, which results in a more effective partnership.
- Reduced time zone differences, usually a few hours difference.
- Access to a wider pool of talent than onshore.
- This means outsourcing a dedicated development team from a country within a different time zone.
- Significant cultural differences and language barriers. Therefore, the offshore team might have a different working culture from what you are used to in your country.
- Lower operating than other IT outsourcing options.
- It may not be easy for the management team to visit an offshore production team. This may affect its effectiveness, especially if it fails to find the right outsourcing partner.
- Significant time difference, which may turn into a bottleneck.
- Excellent access to a global larger pool of talent. This enables you to get access to a dedicated team that can handle various IT services.
The Benefits of Offshoring Development
Choosing between hiring an offshore development partner and developing software in-house can be a task. Yet, given the number of benefits that it offers, offshoring software development seems to be the best decision for any business. Here we look at the key benefits of offshore software development:
1. Access to a large pool of talent
Offshoring software development allows a company to get access to a large pool of talent. This enables the organization to hire a dedicated and knowledgeable team of IT developers. The team includes developers with the right skill set. Moreover, the practice also ensures that you get a team with extensive experience in developing software applications that meet global quality and standards.
The demand for software developers in Western countries is incredibly high, so hiring engineers in these countries is expensive. For example, there are more than 250,000 unfilled software engineering jobs in the US alone at the moment. This is because there isn’t enough talent to help fill the gaps, and the number is increasing every year.
Many colleges in Western countries are encouraging more people to take IT courses to meet the market demand. But, it will take time before these graduates become experts in the IT industry. With this in mind, companies are working on building offshore teams. They are also engaging developers from offshore countries such as Vietnam, Ukraine.
2. Offers the opportunity to Scale Quickly
Hiring new, skilled developers can be a huge investment, but it presents a great financial risk to any organization. If these skilled and expensive employees decide to quit early, you also get overburdened by work. Besides, you also get overburdened with work and eventually start losing your clients to competitors.
Establishing an offshore team can help avert this crisis as it provides a chance to work with developers with the right skill set. With offshore software development, the costs of recruiting dedicated experts and paying staff are lower. The reduced payroll allows the business to scale down between periods more easily than when working in-house teams.
Moreover, it also enables businesses to expand their offshore software development team much faster than a local team. For instance, the Scalers are able to bring many groups of developers to your team within a month. The engineers are vetted, tested and set to take up the challenge on delivering the desired results in your project.
3. Lower operation costs
One of the major reasons organizations opt for offshore software development is the lower cost of operation involved. For instance, say you build an offshore development team in Bangalore to support your in-house team in California. The salary of an average developer in your offshore development team is three to four times cheaper than their counterparts in the US.
So, the cost of operation of a business in Bangalore is 50 percent lower than running an in-house office. These include expenses on legal work, developer salaries, payroll, premises, and administrative staff.
4. Allows you to focus fully on your core functions
An offshore partner takes care of recruitment, administration, insurance, insurance, and many other tasks. This offers your business the ability to focus on the core business functions, which helps improve its performance and output. Offshoring also eliminates the challenge of scaling the company’s team.
Thus, offshore software development offers you enough time to focus on your core business. It also gives you ample time to grow your business. Besides, it also allows you to interact with potential clients without worrying about being unable to manage these activities.
5. Faster time-to-market
Hiring a dedicated team allows you to have adequate qualified people that work around the clock. This enables you to deliver quality software for each project from your clients. Offshoring ensures that your development products reach the market faster by getting the work to be done on time.
Working with an external team can also provide new insights that help enhance your business process. The new ideas allow you to leverage creativity and innovation in every stage of software development.
6. Business growth
Offshoring offers all companies access to a team with the same skills, which helps reduce the time required in software development while reducing costs. It enables businesses to free up time and leverage their core operations and strengths. This allows businesses to work towards achieving sustainable business growth.
How to Choose an Offshore Software Outsourcing
Choosing the right partner ensures you get the best quality results in software development. The ideal offshore software outsourcing company should provide great data protection. It should also offer security and apply the latest solutions and innovations.
The right offshore outsourcing company allows you to hire a team of dedicated offshore developers.
Thus, you should focus on partnering with a company dedicated to building reliable offshore teams for you. Working with offshore developers significantly helps in implementing your startup business plan. So, the practice of partnering with an offshore outsourcing company is rapidly growing in the software development industry.
Offshoring allows your business to outsource everyday workflows, focus on critical tasks, and reduce the cost of operation. It also provides new trends and approaches to help generate profit. Here we look at how to choose the right software development outsourcing company.
1. Define your goals for the project
The first step in choosing the ideal offshore software outsourcing company is understanding what you intend to achieve. In this case, prepare a written proposal that outlines your preferred project, specific goals, and growth. It should also launch a schedule on all the stages of the entire software development lifecycle. The written proposal should highlight anything that you consider relevant to your project.
Preparing a schedule with the relevant information about the project is essential when meeting offshore outsourcing companies. It ensures that you have a clear illustration of the skill set level, expectations in terms of experience, and other details affecting the project.
Moreover, it is also advisable to check one of the projects done by the offshore company to gauge their ability to handle your project. You should also consider their ability to deliver the desired results in your project. Evaluating the software development outsourcing company using the criteria enables you to get a suitable IT partner.
2. Ask for a proposal
Requesting for a proposal shows that your project is well-planned and organized. It also helps prepare project goals, services, details, project timeline, and technical specifications. Moreover, it also helps set up project goals, management team, and development. Once you have the proposal, you are likely to have all the required details in your project.
With the proposal ready, it is easier to determine project success possibilities and select a reliable team. Additionally, it enables you to find out the right person for each responsibility and review some submissions from software development vendors. A proposal document also helps you to monitor the whole implementation process in product development.
3. Prioritize long-term strategy and goals
Choosing the right offshore software development companies enables you to build a permanent team. It also enables you to build long-term business partnerships. This promotes business growth as the outsourcing companies focus on future planning.
Thus, the recruiter must hire the best-experienced developer team that is ready to focus on project development for the long term. The best practice in offshoring is hiring a completely independent and permanent team of remote developers. Usually, the right offshore outsourcing company should be fully strict with its principles. This helps develop the most skillful and effective team for their customers. It also ensures that you get to work with a great team member for an outstanding process.
4. Plan Your Budget
When hiring any team, budget is one of the key factors to consider as it can influence the fate of startups. Thus, it is advisable to take time and also be cautious when planning it. It is also important to first consider the amount available as your initial capital. Moreover, you must also identify areas within the entire process that save you money. Once you prepare your budget, look for investors to show your MVP beforehand.
5. Check Cost-effectiveness
Once you get all the details on the project, you should then focus on evaluating the project’s cost-effectiveness. With the clear discussion and specification from the schedule document, it would be possible to work out the exact cost. Moreover, you can also ask for a delivery timeline about Free Quote and the cost according to the company norms.
Many companies prefer to work with milestones of the whole amount where they give updates or deliveries in terms of the milestones. The software development process is safer and more convenient to work with milestone division than one slot payment. Most businesses will prefer milestone payment to ensure that they receive an update of any part of the process. The updates allow the customer to provide feedback making the company a great project handler.
6. Evaluate the skill set necessary for the project
You should evaluate the technology stack, identify expertise and the skills required in your project. Besides, you should also define the roles necessary for your projects. This includes evaluating whether you need business analysts, developers, PMs, and QAs.
7. Maintenance and Support after Delivery
The best offshore outsourcing partner provides maintenance and support. These services are of great importance while in the final stages of the project delivery and thereafter. But, it is advisable to make sure that your IT partner is able to offer the best maintenance, support and provide solutions to common issues.
When to Hire Offshore Developers
Offshore software development outsourcing offers an effective way to ensure you have your MVP or professional product built quickly. But, there are some factors that determine the best time to hire offshore developers.
1. When hiring is more cost-effective
Most companies hire developers when they find out that working with remote employees is more cost-effective. Yet, you must have enough money to pay the outsourcing company to work with them. Developing the best quality product can be costly. Luckily, in some situations, companies may agree to build your product for equity in your business.
But, some business owners have enough funding (TSB2) to finance software development projects. If you do not have adequate money, you should consider developing the software yourself or finding a cofounder. Besides, you can start generating income with an MVP first and then save to finance your outsourcing.
If you own a startup that can hire in-house developers, you should consider the financial flexibility that comes with outsourcing. Offshore software development outsourcing allows you to pay for development only rather than paying a team of developers throughout the year.
2. Do not have technical leadership on your team
If you are running an in-house team that lacks technical leadership, you need to consider hiring an offshore team with the technical knowledge. Offshoring offers the opportunity to work with a team with the right skill set and technology on software development. This allows them to make informed decisions at any stage in the entire process.
Most offshore software development companies will provide a project manager. This will help you manage the team of developers working on the project. These companies can also play the role of a CTO-as-a-service. This is by providing a technical liaison between all the parties involved in development. Thus, offshore project managers can translate your vision if you do not have technical leadership.
Technical advisors enable you to identify the knowledge and skills required in completing your project. This guidance comes in handy when looking for a technology partner that suits your business needs. Moreover, they can also help in communicating tasks and requirements to the development team and project manager in technical language.
3. Get rid of your team’s distraction from business development
For small and medium-sized businesses working with small in-house teams, business development is equally important. Thus, these small teams have to juggle different tasks. These tasks include software and business development, security, marketing, and customer support. This takes up large amounts of time spent on more important functions when these are not your priority.
Many offshore software development companies will address these concerns. But, focusing on business development when software development is not your area of specialization can still be difficult. Offshore software development outsourcing enables you to focus on the main concern and duties. Moreover, outsourcing software development also allows you to delegate tedious tasks. This creates enough time to focus on promoting your business.
4. When innovative software is not your core competency
If software development is not your company’s core competency, you can hire offshore developers with the right skill set. So, you can trust an offshore company to help in developing your software product. This will greatly depend on how important the product is to the success of your company.
Some businesses develop software as a platform that they can use to organize, showcase and sell their core competency. So, many businesses outsource software development and focus on things that make their business stand out in the market.
For instance, Uber rideshare is a company with an app that allows members to order rides with a push of a button. Yet, the company’s success was mainly due to having a high number of drivers rather than top-quality software. This explains why they felt more comfortable hiring developers to build their product.
Still, the company turned into an in-house team when they grew and felt the need to have more sophisticated features on the app. Outsourcing is not ideal for businesses that specialize in developing new, innovative solutions. This includes a proprietary database, a unique innovation in artificial intelligence, and a complex algorithm. No company will be willing to share its main competitive advantage with another company. This is extremely risky and a gamble that investors would not be willing to make.
Developing innovative software with an offshore team of developers may also pose a challenge of maintaining control of your product's intellectual property. In-house developers might also find it difficult to scale the product that was developed by an external organization.
5. When you need to attain flexibility
Software development companies enjoy great flexibility compared to other players in the technology industry. When software companies anticipate fluctuations in demand for developers, it is not wise to hire in-house engineers for the entire year. Instead, you should consider hiring offshore developers.
Offshoring helps a business scale as you can hire a large team of developers during peak periods and scale down when there is less work. Moreover, hiring developers allow you to work with a cohesive and experienced team.
6. When on a time crunch
Hiring offshore developers offers a great solution for anxious individuals developing a complete and professional software product. Some businesses achieve success by entering the market quickly. Having the best quality software product in time makes it easier for them to find customers and investors. However, it is advisable only to outsource after you and the customers validate the idea of your proposed product.
Offshore software companies can usually adjust their team sizes to manage shorter timelines. But, this would increase the hourly rate. Moreover, it is also easier to build a team of developers in offshoring due to the low costs involved in hiring them. Offshoring involves hiring an outsourcing partner that helps eliminate the time spent in recruiting and building team chemistry.
7. When it is your personal preference
Finally, you can hire offshore developers when your personal preference is on how you want to operate your business. Some business owners hire offshore developers due to the lower cost involved and the opportunity for access to a large pool of talent.
5 Steps to Take before Working with an Offshore Development Company
Working with an offshore development company involves managing a team of remote employees. This can be quite a challenge since you do not have direct contact with the team. Moreover, software development outsourcing comes with a number of challenges that make working with these companies quite difficult. This includes language barriers, cultural differences, lack of face-to-face communication, and different time zones.
However, working with an offshore development company does not have to be this way. Using the right approach and ensuring that there is efficient communication can help address these issues. Here we look at the 5 steps to take before working with an offshore development company:
1. Clearly communicate your expectations and vision
Once you choose the right offshore development company, the next step should be ensuring that you clearly communicate your expectations and vision. This ensures that the company prepares the offshore development team for the project. Failing to provide a clear vision is among the common setbacks to the completion of software projects. Usually, companies that fail to give a clear vision find themselves asking for their products to be rebuilt.
Moreover, when the expectations are set beforehand, it becomes easier for the team to achieve them. It also makes it easier for you to keep track of the entire development process. The team should clearly understand what you expect from them. It is also advisable to share the requirements for a future project.
Offshore teams don’t work as quickly as many onshore teams. Therefore, it is important to ensure that they have a solid understanding of your project’s expectations. Communicating your vision and expectations before getting started increases the chances of success.
2. Clearly define the schedule and scope of the project
Defining the schedule and scope of the project upfront helps the company to align your goals to match your expectations. It also allows the team to plan deliverables before the project starts. Additionally, it is also critical to clearly describe your desired results, identify critical responsibilities, job roles, and scheduled delivery dates. This will help you create a complete list of what to do at every stage of the process.
3. Allow your team of offshore developer team time for training
Most people assume that since developers are trained and well-educated, they should be ready to work on any project. However, it is important to understand that each team or developer is different. Many developers in developing countries have college-level education, but the training opportunities by their agencies may not match the standards in Western countries.
Thus, if your offshore team finds a situation that requires them to improve their skills in a particular area, allow them enough time. Doing this will require patience on your side, but it is important to ensure that you get your desired results. Allowing your team enough time ensures that they are well equipped with the necessary skills to complete the project.
4. Understand the perspective of your team
After communicating your vision and expectations, it is advisable to understand your offshore development team’s perspective. This applies even to any team project, including one that is handled by an onshore team. Understanding your team’s perspective allows you to know the people that you are working with.
Even a team in the same time zone or speaking the same language consists of developers with unique strengths and weaknesses. Therefore, it is important to understand them to take advantage of their strengths and find solutions to their shortcomings. Once you understand your team, developing and implementing an effective team becomes a reality.
However, when it comes to an offshore development team, you have to take this approach a step further. Instead of only understanding their strengths and weaknesses, you should know their existing cultural barriers and time zone differences. This will help you plan on how to communicate effectively when the project starts.
5. Set up a proper communication plan
One of the common challenges of working with an offshore development company is poor communication skills. Poor communication may result from cultural and language barriers as well as time zone differences. However, proper communication is a two-way street. This means that you have also to plan how to communicate to your team before getting started effectively.
You should work together with your team to develop the most effective and reliable method of communication. In most cases, companies go beyond using emails. For instance, tools like slack help send quick messages and schedule regular video chats and phone calls. They also offer the clearest and quickest communication opportunities.
Why Should You Consider Vietnam for Software Development?
Software development outsourcing is increasingly gaining popularity across the world. Many companies are adopting software outsourcing services for time-saving, cost savings, and other benefits. Many developing countries, including China, Ukraine, and India, have established themselves in this space. But, there are new entrants in the field. Vietnam is one of the many new countries making a name as a top destination for outsourcing services.
The country has seen strong investment from global tech companies and favorable government policies. With government support, Vietnam is now proving to be a rising star in providing a skilled technical workforce. So, why consider Vietnam for software development?
Why Choose Vietnam?
When you mention Vietnam as an excellent place to outsource software development, the question has to be why to choose Vietnam. For most people, Vietnam is a small, developing country that is little known for top innovations. However, the country has made great strides into becoming one of the top tech destinations, especially in the software outsourcing industry.
According to a report by A.T. Kearney (a top global management consulting firm founded in 1926), shows that Vietnam went from position six to position five in 2017. At the same time, the 2017 GSLI report revealed that the country jumped from position eleven to six in ranking.
Therefore, despite Vietnam being a small country, it is fast growing into one of the leading destinations for outsourcing software services. The country has proven itself by delivering high-quality and innovative technological solutions for several years. Some of the underlying factors in the growing reputation as software outsourcing hubs include:
High literacy levels
The country has a high population, but despite it being a small and developing country, the education levels are impressive. Every year, their college releases over 280,000 graduates into the job market. About 40,000 of these graduates have knowledge of ICT, making the tech industry the most preferred field of study.
Besides, the quality and standards of IT education in their schools have drastically improved to meet emerging demands. This means that the country can produce well-skilled and competent graduates with the right skill set for the tech market.
Vietnam’s young population
Vietnam has one of the youngest populations in the world. About 70 percent of the country’s population falls between the ages of 15 and 35 years. This means that almost half of its population can work. The tech industry has managed to absorb the country’s workforce. This is mainly due to the industry’s accommodating nature and being highly flexible.
With the fast-growing skilled workforce, the country’s software industry provides a competitive pricing model. This pricing model helps lower the cost of outsourcing software services. The costs of outsourcing software services are 30 percent lower than in India. Thus, most giant tech companies are shifting from the saturated Indian market to Vietnam. The allure of outsourcing in Vietnam is becoming irresistible due to affordability and assurance in quality.
Conversance with the latest tech solutions
As mentioned above, Vietnam has high standards of IT education. This means that the country is able to offer a workforce that understands the latest technologies. Vietnam’s software industry has great knowledge and skills on Blockchain and Machine learning. It is also conversant with Cloud Computing, the Internet of Things, and other technologies.
Additionally, the majority of the graduates in the workforce have key technical skills that are applicable on the global stage. This means that software developers from the country are flexible, deployable, and dependable for any project in this field.
Investment in IT education
Vietnam is investing in an excellent education foundation in engineering, science, math and technology (STEM) skills. . With high-quality IT education, the country is now a promising destination for software outsourcing and technology advancement. The education foundation has brought all stakeholders on the board in support of talent development. These include software companies, educators, and Vietnam organizations.
For instance, universities are now offering courses and majors in the field of information technology. Many Vietnam companies cooperate with learning institutions to develop adequate training facilities for software developers. This helps software developers improve their technical skills to match the market demands. Besides, most famous universities also invest in the country, which is important in transforming it into the next Silicon Valley.
New investment opportunities
Vietnam provides one of the best investment opportunities. The country attracts lots of global tech companies, especially those with an interest in software development. Some of the giant tech companies in Vietnam include IBM, Sony, Intel, and Apple. Many companies from Japan have also tapped into the plentiful benefits available in Vietnam. These include Business Process Outsourcing and IT outsourcing.
The investments by foreign companies help the country improve its technical skills. It also gives it a chance to get the international experience required in providing professional services.
Common Challenges in the Vietnam Outsourcing Market
One of the obvious challenges, especially for Western companies looking to hire Vietnam’s software outsourcing company, is the time-zone differences. But, with proper planning and arrangement, this challenge is easy to overcome. For instance, if you are in the UK or US, you can prepare your task in the afternoon and share it with the team before leaving office. The developer can then work on the task during your night time and send the completed task the next day in the morning. Many outsourcing companies also provide some key personnel to work with you during the day, which is their night time.
Vietnam has one of the highest English skill indexes in the region, but still, it is not high enough yet. But, the main problem is confidence and pronunciation in communication. This makes language a significant challenge, especially if the customer communicates in English.
Fortunately, the country’s education system has heavily invested in improving English. This is likely to boost the Vietnamese skill levels and make Vietnam a top English-speaking country. Some of the measures put in place to boost proficiency levels include:
- English is a requirement for graduate students
- It is a compulsory subject in Vietnam
- Language training centers are available for all students
- Many courses, websites, and applications are built with Vietnamese people in mind
- Learning institutions, including schools, universities, and training centers, offer bilingual programs
Hiring an Offshore Software Development Center: Some Critical Factors
Acquiring an OSDC (offshore software development Center) is usually expensive and may need some form of security. Thus, it is important to make sure that the offshore center has all the necessary requirements to develop the product on budget and on time. You should ensure this before hiring the OSDC to handle your development needs and software design.
When looking for an offshore center to handle your project, you are likely to find hundreds of them. But, choosing the right outsourcing partner can prove to be quite a challenge. The following critical factors will help you find the right OSDC for your project needs.
Capacity to deliver on your project
The first factor to consider when hiring an OSDC is whether the IT service provider can deliver on your project needs. Remember, outsourcing aims at finding a team with the right skill set for your job. Make sure that the competency of the provider lies in software development. This will help you select a service provider that is focused on the core skill in your project.
Cost is important when deciding to hire any outsourcing service. Thus, before choosing a provider, ensure that you find out about their charges first. It is also advisable to ask different service providers to share their quotations for your projects. This will help select the one that offers quality services at a reasonable price. Additionally, you should also check all the components listed to confirm that the costs are factored in their quotation.
Before assigning your task to an offshore software development center, you should ensure that the vendor has enough experience in the field. This is because some software products may require them to follow industry-specific requirements or standards. Thus, ensure that your preferred provider has the requisite in developing and designing similar products.
Operational and financial stability of the vendors
It is important to choose a financially and operationally stable vendor since most projects are short to mid-term ventures. Hiring a vendor with uncertain or questionable operational or financial stability will risk your business’s long-term success.
The other critical factor to consider when hiring the OSDC is the overall reputation of the service provider. In this case, it is advisable to ask for referrals from the potential vendor. You should also pay great attention to the reviews from past clients. A vendor with a good reputation will have no issue with delivering the project according to your agreement.
Usually, most vendors transfer the rights of ownership of the software product to you, while others only allow you to co-own it. This depends on the agreement that you will have with the service provider about the product when the project is complete. Thus, it is important to understand the available options in each offshore software development center.
Offshore Software Development Rates by Country
Many new countries are emerging as top destinations in outsourcing software development. Some of the leading countries in the provision of software outsourcing services include India, Vietnam, Poland, Ukraine, China, Rusia, Brazil, and some African countries. Below are the offshore software development rates by country:
Vietnam is among the top destinations in outsourcing software services. The country has low wages, a technical workforce, and better language proficiency skills. NeoIT, a California-based consultancy firm, ranked Ho Chi Minh City as the city with great outsourcing potential in 2006. This is mainly due to the large labor pool and reliable infrastructure.
Vietnam offshore outsourcing rates: US$20-40/hour
But, the rate per hour for top-quality engineers ranges between $18 and $22 for the top. The country is emerging as a new market and an investment destination. Investors incur 30 percent to 40 percent less expenses compared to China.
In 2017, the country’s software outsourcing industry was listed among the top 10 outsourcing destinations in the world.
The country is the top offshore software development provider due to its good education system. Ukraine’s college produces over 36,000 IT experts per year. With the high number of qualified developers, the country is considered a hub for tech start-ups.
Ukraine offshore software development rates: US$30-$50/hour (depending on the city)
The rate is attractive to most companies, especially if you compare it with the US and Canadian rates ($100).
China is another country that offers low operating costs and an experienced workforce. These factors favor software testing. Offshore developers in the country offer software services at $30 to $60 /hour. But, the language barrier is quite a challenge for most companies seeking outsourcing services.
India is one of the most populous nations on earth. The country rides on this factor to offer affordable software development services. The offshore development rates range from $25 to $50/ hour. Yet, the low cost comes at a cost due to low levels of technical skills among the population.
With the close proximity to Western markets like the US and Canada, the country is emerging as a giant in this field. The country is in a similar time-zone with the US. But, like other Latin American countries, it has strict labor laws and provides moderate skills. The hourly rates range between $30 and $50. Language may also be an issue.
Russia and Belarus
Like Ukraine, Belarus and Russia have great education systems, working cultural integration, and required infrastructure. The hourly rates are also close to that of Ukraine and most of the countries in Eastern Europe.
Countries like Kenya, Egypt, and Morocco are also emerging as potential offshore software destinations. These countries offer software outsourcing services at an hourly rate of around $20. But, South Africa and Nigeria rank higher in offshore software development ratings by country. This is because they provide more skilled services at an hourly rate of about $50.
Offshore software development is gaining popularity globally at an alarming rate. For long China and India have been the leading software outsourcing destinations. But, new countries are now making a remarkable entry into this field. These include Vietnam, the Philippines, Brazil, Poland, and some African countries. Most companies in these countries have built great reputations in offering skilled IT services at affordable costs.