4 best countries to outsource software development

We have already described the differences between outsourcing and outstaffing, how to find the best contractor, and shared some tips about this process. Now it is time to discuss which countries are the best to outsource your software development.

At some point, every business owner has to decide whether to develop software in-house or outsource it. And it doesn’t matter if it is a large company or a small family business. Let’s start with the basics: what is outsourcing?

It is the common business practice of hiring a party outside a company to conduct the full cycle of product development: from the business analysis, estimations, status meetings, and ending with the product testing. Delegating some company functions is better for the majority of businesses as it

• Reduces operating costs
• Gives access to a larger talent pool
• Allows picking the most efficient contractor
• Allows you to concentrate on core processes
• Makes it possible to hire a development team or separate specialists
• Produces fewer risks

Let’s be honest, it has become an almost essential process in recent years. Only in the past decade, the global outsourcing industry earned 88.9 billion U.S. dollars in revenue. This tendency is about to expand even further.

To solve a specific business need it makes no sense to recruit and train a staff of developers. The strengths of external development are the ability to quickly attract specialists of the desired industry and the ability to optimize costs. When working with outsourcing, you pay only for the hours of work of specialists, and not cover expenses for setting up a workplace, holidays, etc.

A successful software development outsourcing relationship includes understanding, developing, and presenting the mission of the project. As well as the culture of problem-solving, implementation of long-term solutions, attracting resources such as fresh views, knowledge, and experience.

If in the past, outsourcing was mostly about saving costs, now it became clear that companies are delegating not just non-essential activities but those that demand high-quality performance.

What makes a country good for outsourcing?

When choosing a country for software development outsourcing, the following measurable criteria should be considered:

Highly developed market

It is one of the essential factors before making the final decision. It depends, whether the infrastructure in the particular country is focused on the software, has experienced companies, and can compete in the software outsourcing market worldwide

Educational infrastructure

The access to universities and colleges, the rising number of IT schools, and specialized courses gradually grow the talent pool and the number of potential specialists in different information technology-related fields. According to a survey, approximately 75% of 47,744 respondents among professional developers worldwide graduated with a bachelor’s degree or higher.

Skills Diversity

According to Statista, there were 23,9 million software developers in the world in 2019 and the numbers are expected to grow to reach 28,7 million software engineers by 2024. More and more countries are making efforts to become leading outsourcing destinations by growing talent pools of software service delivery.

We believe in the power of communication. Don’t underestimate the discovery phase. Ask the potential vendor about services they may cover (ex. Android, iOS, Ruby, etc.), ideas they can implement, successful case studies, etc. It will help you understand what to expect from your collaboration and final product.

Governance and regulation

Before choosing a contractor it is important to check pro-IT policy in the country. Whether or not the government supports its software development outsourcing potential.

The ability to communicate in the preferred language

You have to check if the country you are considering communicates effectively in your preferred language. It’s essential for outsourcing developers around the world to speak English.

Location

The last but not least factor to consider when choosing a suitable country for outsourcing is the time difference. Decide how high the priority of your project is and if communication delay is acceptable? Or do you prefer real-time communication with employees? If you are ready to get up early or stay up late for meetings, feel free to hire the team from another part of the world.

All these factors create a balance between price, quality, and time.
Once you’ve figured out what your company’s business needs are, you can start looking for a professional team. Let us take a look at our top outsourcing countries:

India

This country is one of the key players in the industry. India has been on the top software development outsourcing lists for a while. After launching Startup India in 2016 to secure their branding and attract talents, in 2019 alone, the country established over 1300 startups, 7 of which became unicorns within the year. India has announced new bills impacting data protection, privacy, cross-border data flows, and data localization. It introduced the Information Technology Intermediary Guidelines Rules 2018, Personal Data Protection Bill, National Cybersecurity Strategy 2020, National Digital Communication Policy, National Policy on Software Products 2019 as its intention to develop the digital economy.

Leading Sub-Sectors: Internet of things (IoT), data analytics, cloud computing, artificial intelligence (AI) for public services, blockchain, augmented reality (AR), etc.

According to PayScale, the average hourly rate for a software developer in India is $18–40/hour, annual salary – $ 11,139.

Before deciding to outsource your product development here, it’s worth thinking about cultural differences. There are a huge number of companies in the Asian market, providing excellent service to their clients. But it’s important to be ready for slight language barriers and different prospects on some issues.

Ukraine

Eastern European countries are always included among the top software outsourcing destinations due to the high level of professionalism, affordable rates for service, and similar mentality to the Western market.

Ukraine’s growing role as an information technology leader is growing rapidly. Judging by statistics, the tech industry here grew by 20% and exported $5 billion in 2020. As a matter of fact, a lot of Ukrainian developers are involved in providing offshore services.

The support from the government and access to higher education has made the local industry flourish. More than 20 cities have created IT-clusters. The largest are located in Lviv, Kyiv, and Kharkiv.
As a result of the reforms, Ukraine has been named Europe’s top outsourcing and software development destination, according to a report conducted by The Global Sourcing Association.

Leading Sub-Sectors: IT Staff Augmentation, Web Development, Custom Software Development, Cloud Consulting & SI, Mobile Web Development, etc.

According to PayScale, the average hourly rate for a software developer in Ukraine is $25–50.

Israel

The country is considered an important player in the digital world with a market that has increased by almost 400% in the last decade. There are more than 6,700 startups, 14 times the concentration of startups proportionately in Europe. Also, this year marked the increase in Artificial Intelligence (AI) related startup companies. The AI sector now accounts for 17% of all the startups in Israel. With complete support from their government, the local businesses have been growing continuously and expanding their outreach to more countries.

Leading Sub-Sectors: Software, Telecommunication, Artificial Intelligence (AI).

According to PayScale, the average hourly rate for a software developer in Israel is $25–50.

Brazil

The country has become a strong competitor in the outsourcing industry. According to the International Data Corporation, the Brazilian Information Technology sector grew by 4.9% in 2020 and is expected to expand at 5.8%. This growth rate has been maintained due to this country’s highly skilled workforce tech expertise.

Local law creates a friendly environment for business and foreign investment. Authorities made focus on the development of educational infrastructure: technology centers, undergraduate and graduate programs throughout the country.

Leading Sub-Sectors: Artificial Intelligence (AI), Cybersecurity, Internet of Things (IoT)  , and Public Cloud.

According to PayScale, the average rate for a software developer in Brazil ranges from $6,009.26 to $33,054.78.

To Sum Up

Outsourcing has been the first choice of most companies in the last few years, and it will remain this way for the upcoming years as well. Before making up your mind about the best outsourcing partner it’s necessary to specify your business needs and make a little investigation about the best countries. There are plenty of locations to outsource your software development requirements, don’t waste time, hire a dedicated team, and enjoy pleasant results.