Outsourcing started in the 1700s when manufacturers wanted to shift their business to another country and they hired laborers at a lower rate. In the modern era outsourcing software development play a major role in the IT industry. It has always turned out to be advantageous if you know what benefits it offers and whom to partner with. Around the world, there are numerous best countries to outsource software development. In this blog, we have highlighted the top 7 countries as per the leading qualities that they possess and the characteristics that make each of the outsourcing destinations special.

Table of Content

  1. Best Countries to Outsource Software Development
    1. India
    2. Vietnam
    3. Brazil
    4. Ukraine
    5. China
    6. Philippines
    7. Mexico
  2. What Makes a Country Good for Outsourcing?
  3. Outsourcing Software Development Pros and Cons
  4. Final Words

1. Best Countries to Outsource Software Development

The implementation of the best offshore software development has become a global trend and continues to gain momentum as enterprises now realize the advantages of going this path. In order to contract their services and fetch for a convenient software service provider to get their work done at a fraction of the cost.

Outsourcing has just opened up more and more opportunities for businesses to choose from the global companies with offices located anywhere in the world. When there are so many options then what restricts businesses from software development outsourcing. There are factors such as budget constraints, non-matching skill set, inadequate knowledge of technology. And lack of trust in the software development team, team located too far, and travel cost are some of the common reasons for a business to not choose software outsourcing.

In this blog we will be exploring multiple facades of outsourcing, what makes a country or a company an ideal destination for outsourcing. And lastly, all the positive and negative aspects of software outsourcing can be displayed to make the topic crystal clear for businesses of all sizes and verticals.

To start with let’s see which are the most popular destinations for outsourcing and what makes them being the most favorable ones. So, here we have curated a list of 8 countries that are the most preferred destinations for IT outsourcing.

Destination countries

1. India

According to research by Statista– India is still the leader in a global leader in IT outsourcing.

It has been many years now that the Indian outsourcing market is constantly evolving and offering cutting-edge business services. India owns a large outsourcing market with highly qualified software developers and a larger number of English speaking resources. So the Indian workforce is smart, reliable, and tech-savvy which makes most businesses outsource their essential business functions.

India is at the top, with an index of 7.07, according to outsourcing figures, followed by China and Malaysia, which have 6.31 and 6.11, respectively. It is worth remembering that when it comes to sheer financial appeal with lower development charges and inexpensive employees. The cost of IT outsourcing in India ranges from $12-$60 which may vary depending on the complexity.

India has its own characteristics of being one of the largest and popular destinations for software outsourcing and the reasons can be justified from the following perks that a list of Indian software engineers can offer.

  • Global talented Workforce
    Indian outsourcing market has a talented and skilled set of employees with high proficiency in English as well as technical and domain expertise.
  • Higher Infrastructural Excellence
    With a large variety of technical service offerings, India offers businesses higher infrastructural benefits with the operational efficiency and software they have.
  • Favorable Government Policies
    Cross-border trading is a convenient option for globalization and thus Indian government is quite liberal in terms of trading and development.
  • Proven Best Results
    As a favorable outsourcing destination. India is in this business for the past two decades and has helped businesses boost profitability and gain rapid success.
  • International Worthiness
    The quality of work and benchmarks achieved are no less compared to other countries. All the deliverables are developed using international standards and practices.

2. Vietnam

Rising as one of the leading countries for outsourcing software development services. Vietnam has been ranking high with its rapid growth and high-quality service offerings. Their advancement in this sector started some two decades ago but now they host some of the big and humongous IT service companies from the race.

The main inclination towards this side of companies is the reliance and support in cross-border trading that these companies offer. Neighboring to China geographically, this country has shown 90% of lower labor charges with quality benchmarks and updated infrastructure services. The locals have a good educational background and in the technical background, they are immensely sound with AI and AI-enabled services.

It is also another affordable IT destination that can be hired for hourly rates in the range of $15-$45 per hour as per the project requirements.

3. Brazil

Brazil has been nominated for high GDP growth in year 2020 was R$7.348 trillion, or US$1.363 trillion, according to the International Monetary Fund (IMF). In terms of GDP per capita, Brazil is the 83rd country in the world with a value of US$6,450 per inhabitant.

Brazil-one of the most favorable IT outsourcing countries for businesses to provide software development services. Additionally, it has been popular in offering all-inclusive software development services in almost all types of software development languages and technologies.

With over millions of English speakers, when it comes to recruiting a Brazilian developer to work on your app development project, connectivity is not a concern. The software development company with talented web development developers charge average hourly rates in the range of $20 – $50 an hour.

4. Ukraine

Ukraine proves to be the most promising and favorable destination among businesses who look for outsourcing and there are multiple reasons behind it. Best-in-class education and best tech infrastructure, talented software engineers, quality of work, value for money are some of the most vital reasons. So businesses consider Ukraine as one of the most favorable destinations for outsourcing.

Ukrainian software developers had an overall score of 88.7% across all HackerRank challenges, according to HackerRank statistical analysis. Other than that, the Ukrainian government focuses hard on the educational aspect. So they have a talented tech pool of IT professionals, they offer all types of cutting-edge services utilizing the technical expertise and largely speaking English speaking resources. Most of the large software development companies such as Intel and Microsoft are already investing in Ukraine outsource software development services. This also allows other small and midsize businesses to take benefits of their services that offer software project success with a wide spectrum of software development services.

5. China

Unquestionably, whenever you hear of outsourcing you will hear China. One of the strong inclinations towards China is because they have been growing as a leader in offering all types of innovative services. The largest number of software development services that China has set up makes them a game-changer in the world of technology.

The industry size and IT outsourcing market of successful software development services are estimated at more than 30,000 professionals. With outstanding abilities rated at one and two- states HackerRank Programming Olympics.

The top 5 reasons why businesses prefer China as one of the leading locations for outsourcing is because of the following 5 points.

  • Lower labor cost
  • High-end tech-related services
  • Faster delivery cycle
  • Highly-Efficient
  • Flexible and reliable services

6. Philippines

To meet the demands of growing industries, the Philippines has also experienced a quiet revolution that has reshaped the outsourcing software development market. The country is culturally close to most western nations, although the third-largest English-speaking nation in the world is also glorified.

A leading university in the Philippines conducted a study that proves the English literacy rate of 94% calculated from over 30000 graduates with incomparable technical Proficiency and academic skills.

The most common reason for businesses to outsource software development project to developing countries like the Philippines is:

  • Language Proficiency
  • Talented Resource Pool
  • In budget software development programs
  • Exceptional work ethics
  • Stronger Government Policies
  • Time zone difference is a bonus point

7. Mexico

One of the reasons for outsourcing services to Mexico is because it is nearer to the USA as well as Canada. This makes Mexico a nearshore location for offering outsourcing services to countries like them. Mexico is an English speaking country and is considered to have a great diversification for each type of industry. From the electronics market to production, manufacturing everything is offered in Mexico.

These are some of the reasons why businesses tap on Mexico as one of the top countries in North America. Their outsourcing companies and resources make them more competitive in terms of pricing and benefits.

  • Mexican Cost-effectiveness
    Companies operating in Mexico have access to modern infrastructure that is simpler and affordable.
  • Nearer Proximity and Demographics
    One of the main benefits of having the advantage of economies of scale is to have all types of industry nearby. And the ability to cater to them with our skillset.
  • High-qualified Talent Pool
    The country boasts a 93 percent literacy rate and it is the fact that Mexico’s software developer is cheap, its workers are also qualified.
  • Trade Free Agreements
    Mexico is one of the countries that is a strong exporter of goods around the globe. They offer a wide variety of trade-free IT services to countries partnered with them which has encouraged other countries as well to outsource.

So, these were the best countries for outsourcing that may fit your need for outsourcing. With this, we have discussed all the major points which make these countries the top software development outsourcing destination. Now we will be swiftly moving towards what qualities make an ideal software outsourcing country/company.

2. What Makes a Country Good for Outsourcing?

Certain businesses have specific factors that need stronger parameters for outsourcing to tech companies. The prime advantage of software outsourcing is to maintain optimal costs. Among others, besides the fact that handling outsourced software creation is simplified by cloud technologies. Amd project management tools, one can call the talent pool of experts, IT specialists, versatility, time-saving, accessibility.

Here we have gathered a few points that will make your choice a better choice for outsourcing. From this, you will be able to decide strategically as per the latest trends and future market dynamics. So Enlisted below are some of the important checkpoints that will make your chosen country the best one for outsourcing.

1. Formal Technical Education

Businesses may get multiple options for collaborating with high-skilled IT specialists but not all high-skilled resources are technically sound. Businesses must see whether the hired developers have a formal technical background or not. This will make the understanding of the concept extremely clear.

2. Different Geography and Time Zone

Outsourcing in other terms means globalization. Globalization offers everything from access to skilled resources, technical knowledge, infrastructure, and more. Also, offshore software development countries like India and the Philippines have larger timezones gaps compared to other countries. So these software development countries take advantage and deliver high-class software services.

3. English Language Proficiency of Software Developers

Now that we are technically advancing, it is quite evident that there are few changes that we surely need for our business. Like starting with communication. English is the most spoken international language and hence it is important to have English-speaking resources on board.

4. Complexity-related Experience of Project

Experienced IT companies can solve all types of complexities. So, when you contract to a third party software outsourcing company, Take into consideration their experience in the same technology, services, or platform.

5. Diversity in Tech Suitability

Some standard rules are adhered to everywhere, so businesses should know what diversified services each region follows. Depending on the demographic trends services must be sorted.

6. Difference in Culture

Cultural difference is one of the most prominent reasons that restrict business from outsourcing. Thus to have a long-term partnership with the country, it is good to adapt their culture and fill that gap between you and the software companies you outsource.

3. Outsourcing Software Development Projects Pros and Cons

There has been a constant hustle in the minds of businesses when they think about software development. Majorly they have two options- in-house or outsourced development of apps. IT services outsourcing is a perfect option for a company’s digital transformation or business process automation while reducing risks and saving budgets. Some of the most promising benefits of outsourcing include minimal workplace utilization, globalization, controlled cost and structured plan, flexible resources, improved quality, and reliability solutions.

Additionally, there are a few challenges that pull back most of the companies to outsource. Reasons can be non-transparency, communication barriers, unmatched business services, overpriced services, fear of data leakage, and other hidden costs involved.

4. Final Words

Through this blog, we tried to portray the significance of the outsourcing task for every business. Before jumping into the hunt for a trustworthy service provider, consider both these countries and their specifications. If the project is of critical importance, not only would you need technical expertise, but you would also need appropriate guidance.

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Itesh Sharma

Itesh Sharma is core member of Sales Department at TatvaSoft. He has got more than 6 years of experience in handling the task related to Customer Management and Project Management. Apart from his profession he also has keen interest in sharing the insight on different methodologies of software development.