Businesses outsource their IT development because they expect it to help them achieve their desired result at a lower expense, and that is true. Outsourcing IT development done correctly will bring about tons of benefits.
However, proper IT outsourcing implementation requires you to answer any tough questions, and one of them is the where question; where to outsource? For many UK businesses, Eastern Europe and Latin America are the first options to come to their mind, but are these first options truly the best choice?
Competition in the IT outsourcing industry is fierce; there are rising new players coming in and relentless at challenging dominant established ones, and they’re doing so by building up better competitive advantages.
Asia is among those new players. The outsourcing IT development in Asia (also known as offshore development) has been booming in the last decade thanks to its many strong members, such as India and Vietnam, who have never stopped improving to satisfy the toughest global clients. So, what has been enabling Asia to race against other strong players in this market, may you be wondering?
The following 8 benefits offered by Asia are the reason why it has become an IT outsourcing hotspot.
8 Ways Asia Is Benefiting Its IT Outsourcing Clients
1. Asia provides an enormous young talent pool.
Asia has a higher population than that of Europe and America. For example, Vietnamese IT outsourcing service providers have access to more than 400,000 IT engineers, and Indian vendors can tap into a pool of nearly 900,000 IT engineers in their respective countries. This sheer number of engineers gives Asia a huge advantage in the IT market because this is a very labor-intensive industry.
Asiaâ€™s population is also younger than that of Europe and America. This is another demographic factor that gives Asia an edge over those Western destinations because long working hours are often necessary to fulfill laborious IT projects. Young people are definitely better at enduring this than older people.
2. The cost of IT development in Asia is lower.
Most of Asia is still made up of developing countries, which means levels of salaries in Asian countries are lower than in their Western counterparts. Lower salaries allow Asian vendors to give you a better price for your project.
Going to Asia, you can get a price rate that is up to 20-30% lower than in Western IT outsourcing destinations for the same type of service.
3. Its lower cost doesnâ€™t mean Asia compromises its quality.
If Asia had compromised its quality to give a better price, it would already fail the race with its competition, but, in fact, it isnâ€™t!
Thereâ€™s a common misassociation that Asia is able to offer lower prices because it produces lower-quality output, but the reality is that Asiaâ€™s lower price is directly associated with its lower standards of living, not with any lower quality of output.
Asian countries, such as India and Vietnam, have regularly made a list next to the top countries with the best developers in the world. The growing inflow of IT development projects from the most difficult global clients such as Samsung, Microsoft, or IBM into Asia is indisputable evidence for how well itâ€™s serving its clients.
4. Asiaâ€™s different time zone allows for round-the-clock productivity.
The time-zone difference between Asian IT outsourcing hubs and Western clients makes it possible for the round-the-clock workflow.
When youâ€™re resting, Asian workers are in their business hours working on your project. When theyâ€™re resting, you get back to work and continue the workflow. The productivity is maximized!
5. Asiaâ€™s talent pool provides a wide range of skillsets.
Outsourcing to Asia, you will get access to whatever technical skillset you may need. Asian technology institutions always stay updated with the newest technologies for their education, and Asian workers always stay updated with the newest technologies to deliver better and faster output.
With millions of IT engineers in Asia, you can rest assured that you will be able to get access to the right skillset for your IT project no matter whether your need is frontend, backend, database, mobile or full-stack development.
6. Communication is no longer a barrier.
Communication used to be a barrier between Asia and English-speaking clients, but itâ€™s not anymore. There are now 3 times more English speakers in India than in America, and in many hotspots for IT outsourcing, such as Vietnam, English is taught in most schools as the primary second language.
Asian IT service providers have understood that they will need to eliminate this communication barrier if theyâ€™re going to attract outsourcing clients from the lucrative Western market, which is why most of them make English fluency a must-have in their job requirements.
Asian workers understand this reality, too, so they pick up the English language at school to be able to join the well-paying IT industry.
7. Asian IT Vendors provide very flexible services.
Whether youâ€™re looking for a project-based IT development vendor or trying to set up an offshore development center, Asian IT service providers can always tailor their service to your needs.
How can they do so? Itâ€™s simple. They have a dedicated team for every single stage in the IT development process, so if you just want to outsource a portion of your IT development, e.g. the testing stage, they still have an established unit to handle that for you.
8. You will get access to a pool of committed and hard-working engineers.
Asians are well-known for working hard and staying committed, so you will be less likely to experience missed deadlines or delayed projects. These qualities donâ€™t exist for no reason, but because of the Asian culture.
In Asia, family members have a very close relationship with one another, and many people work to provide for not just themselves, but their entire families. This is commonly what motivates Asian engineers to work hard and stay committed to fulfilling their projects; only so they will have the money to care for their families.
5 best countries for Outsourcing IT Development in Asia
Now that you have understood what advantages Asia has that are giving it an edge over its competition, letâ€™s explore the Asian countries that provide the best IT outsourcing services.
Vietnam has been rising to be a powerhouse in the global IT outsourcing market in recent years. It currently has around 400,000 IT engineers working in thousands of IT organizations, and over 50,000 IT engineering graduates coming out every year.
Try some simple searches on Google, and you will find that Vietnam has landed its name on pretty much all lists of the best IT outsourcing countries in Asia.
Today many global high-tech giants, such as Samsung, Google, LG Electronics, are relying on Vietnam to fulfill their IT projects. In an interview with Reuter, Neill Fraser, an IT specialist from Google, said after having visited local schools in Vietnam, â€œVietnam has the highest-performing computer science students Iâ€™ve ever encounteredâ€.
The fact that Outsourcing IT development in Vietnam has many benefits, from competitive pricing to highly skilled engineers, is the reason why itâ€™s been able to attract large flows of global customers.
While Vietnam is a rising star, India has been a seasoned veteran in the IT outsourcing industry. India is always in the top five countries that have the most STEM graduates in the world with more than 3 million of such engineers, and around 120,000 more joining its IT talent pool every year.
With its massive number of IT engineers, India is often the go-to destination for gigantic IT projects that require thousands of personnel.
Along with India, China is another veteran that has the capacity to handle gigantic IT projects thanks to its massive population. Really, when it comes to the ability to handle industrial-size production, what country has the population to overtake China and India?
China can offer some of the best IT services and talents thanks to the focus of its educational system, which is on Maths and Science. One downside about China is its level of salaries has been increasing significantly in recent years due to its increased standards of living, so the cost of IT development here can be relatively higher than in other Asian hubs.
4. The Philippines
The Philippines has its own advantages in Outsourcing IT Development. The Filippino lifestyle has a nice blend of Western culture to it because of Americaâ€™s past colonization. Due to this cultural mix, the Philippines is now among the countries with the largest number of English speakers. These qualities alone can already facilitate the collaboration between Filippino vendors and their Western clients.
However, apart from its high frequency of climate hazards, The Philippines is enduring an on-going political instability that results in mass protests, which is scaring off a lot of clients.
Thailand is another country with a decent IT talent pool; around 100,000 engineers. It also shares the same cost advantage with its Asian fellows, and the range of technical IT skillsets you can get is also as diverse.
Nevertheless, one bottleneck that has been keeping IT projects from flowing into Thailand is its political instability, which causes massive protests every now and then. Another disadvantage that makes Thailand less competitive is its level of English proficiency; the country, with a low proficiency score of 47.6, ranked 74 out of 100 countries on the English Proficiency Index in 2019. This means communication can be a big challenge for clients outsourcing IT development to Thailand.
With the high levels of expense and effort that can be involved in Outsourcing IT development, itâ€™s important to get the â€œWhere to outsource?â€ question right so you can achieve your desired outcome at the lowest possible cost.
I hope that this article has helped explain to you why Asia can be a strong candidate for your consideration list, and if Vietnam happens to be among the countries youâ€™re interested in, fill out the contact box below and, we, CMC Global – the second largest IT outsourcing vendor in Vietnam – will be in touch shortly to help you navigate the Vietnamese market!