The software industry has taken over the world. According to a recent report by technology research firm, Gartner, global IT spending is estimated to touch $3.9 trillion in 2020. More and more MNCs are focusing on building cutting-edge technological solutions to solve real-world problems, and this digital transformation would be costly if the software development service is not outsourced.
Why do companies outsource? For starters, it saves on capital expenditure investments and operational costs. Secondly, it allows companies to focus on their core competencies and allocate resources on what they’re good at. Moreover, it eliminates geographical constraints and gives companies access to a broader talent pool. For these reasons, outsourcing in the software industry is fast becoming the norm; as per a Deloitte Global Outsourcing Survey, nearly three out of four companies opt for it instead of building in-house software solutions.
Popular outsourcing destinations
Several countries can fulfill your software development outsourcing needs. You need to evaluate if they are a good fit in terms of culture and time zone differences. You also need to ensure that they are cost-effective without compromising on quality work. Here are the top three software development outsourcing destinations in the world:
- Latin America – Brazil, Mexico, Argentina, Chile
- Eastern Europe (1 million+ developers) – Poland, Ukraine, Romania, Czech Republic
- Asia (4 million developers) – India, China, the Philippines
India leads the charts with 2.75 million high-quality developers, followed by China and the Philippines with around 600,000 and 200,000, respectively. India is the undisputed king when it comes to the software sourcing industry with a global market share of 56% in 2015, according to ZDNet. Buoyed by this abundance of human resources, the Indian software industry is now targeting $350 billion in revenue by the year 2025.
Let us now have a detailed look at why India is such an attractive destination for software development outsourcing:
Value for money
A Quartz report claims that 46% of startups fail because they burn all their cash. By outsourcing, you save money on multiple cost heads – salary, benefits, office rent, recruitment fees etc. It’s cheaper to develop software in India compared to anywhere else in the world; the hourly rates start from a meager $20. This was possible because of the lower standard of living and an enormous supply of top-notch design and development professionals. It can also be attributed to blended development – categorizing developers based on their skills and experience. Say a Java project requires four developers. A software development company in India might assign two senior backend developers, a junior frontend developer and a software development intern on the project. Thus, optimizing on cost without compromising on the quality of the project output. This cost reduction allows companies to gain a competitive advantage by achieving economies of scale.
Large talent pool
Just the sheer number of developers makes India unmatchable in terms of easy access to a comprehensive yet dynamic talent pool. Education-wise, India boasts a large fraction of developers who have both a Bachelor’s and a Master’s degree. Approximately 3 million fresh graduates are added to the workforce every year, out of which the indigenous IT industry employs around 200,000. This leaves a considerable number of technically competent developers free and ready to tackle any outsourcing challenge with utmost dedication. India also benefits from demographic dividends here, with almost 95% of the developers aged 18-35. Not just development, sometimes, entire project management functions are outsourced to India, end-to-end. Any custom software development company in India has onboard a diverse team of skilled UI/UX designers, developers, QA testers, and project managers to handle any level of project complexity and scale.
Zero communication barriers
The Internet has dissolved geographical boundaries and brought the world closer. Information can travel from one end of the world to the other in a split second. Fast, effective communication is the biggest challenge in outsourcing. Language barriers can be a massive deal-breaker as companies can’t afford for things to get lost in translation. And since English is the de facto global language, conversational proficiency in English is a vital prerequisite. The EF English Proficiency Index ranks India a respectable third in Asia. The fact that India is home to 125 million English speakers makes it a no-brainer as an outsourcing destination as compared to other countries like China, where people lack even basic English skills.
High return on investment
Come for the price, stay for high quality and top-notch designs – the mantra of Indian software development companies which lures organisations to outsource to India. Not only do they deliver projects on time, but they also offer comprehensive maintenance and technical support, ensuring the project does not hit any snags even after it is launched in the real world. India houses the highest number of ISO-certified organisations, a hallmark of quality. This high quality-to-price ratio generates outsized ROI for companies.
India’s geographical location allows companies to run operations 24/7. A company in the US, Europe, or even Australia can hand off project deliverables to their Indian counterparts after their 8-hour shift is over, and sleep soundly in the knowledge that the tasks would be accomplished efficiently by the time they wake up. Round-the-clock operations mean increased speed and lower turnaround times. And in a cut-throat market where being nimble is everything, working at a lightning pace because of outsourcing is an impenetrable business moat.
This is just the tip of the iceberg. There are many other reasons why hiring an offshore development team in India is a wise choice. But we hope this blog has shed enough light for you to make an informed decision.