Offshore development is dramatically changing the overall IT outsourcing and software development industry in many ways. Because it provides both accessibilities to a skilled workforce and the provision of high-quality services at a low cost. The reasons why it is becoming a trend between big corporations are strong and clear. So the next step is where to look and find a promising offshore development center that leverages your business.
Offshore development outsourcing is a contractual business of high-quality software production at offshore destinations. It is between a client and a vendor organization in which the client contracts out all or some parts of its software development activities to an abroad vendor. The client often comes from developed countries while the offshore vendors are low wages countries that provide agreed services with significant cost-saving.
What Makes an Offshore Development Center?
The new report by Gartner predicts that the current downturn due to Covid-19 will benefit offshore software outsourcing activities. Global economic uncertainty remains, but the outsourcing market could be the first to benefit as companies in Europe and the US seek to reduce costs. Many big firms have outsourced their software development projects to offshore countries for gaining better quality IT services at comparatively cheaper rates and in a shorter time period. So three factors qualify an offshore development center: cost, workforce, and quality.
Most of the clients view their IT offshore vendors as strategic partners that help to reduce their operating costs and increase their competitiveness. So a quality offshore development center has to deliver services at optimized cost as much as possible.
An offshore development center also has to prepare powerful resources that can support partners to focus on their core activities. This resource needs to be able to scale as the customer demands, as well as a wide range of technical expertise such as cloud computing, security, and DevOps to consult for the clients’ IT departments.
In-depth experience in IT Outsourcing is also critical for an offshore development center. It helps the center understand the market and gain the trust of customers. They already have world-class processes and technologies in their roles as major partners in the international market. The success in past projects promises the high quality of current and future projects.
Where to Look for An Offshore Development Partner?
According to Forrester Research, 65% of American and European firms (with 1,000 or more employees) currently benefit from offshore vendors for their software development; another 13% of firms intend to outsource next year. Whereas two years earlier only 45% of these firms were the users of offshore development centers for software applications. However significant IT outsourcing failure rates have also been reported. 36 out of 93 client companies did not intend to continue their relationships with offshore vendors. As a result, it is important to choose the most appropriate development center to establish a long-lasting partnership with your company.
From the above factors, some countries have actively changed their environment and policies to attract investors and create conditions for their IT Outsourcing corporations to grow. When you register at IT webinars, fairs or exhibitions, and offshore development centers, prioritize businesses from these countries.
Below are some of the best countries where you can easily find quality offshore offshore development:
Eastern Europe is taking the lead in offshore development and the best outsourcing vendor in the region is Ukraine. The nation has the potential to become the world tech powerhouse, standing 11th among the top offshore development countries in the world. IT outsourcing in Ukraine is the 2nd largest export services industry with nearly $5.7 billion in revenue generated in 2020 and expected revenue of $8.4 billion by 2025.
Software development is one of the most vital industries in the country, creating almost 10% of Hungary’s annual GDP. The Hungarian IT outsourcing sector’s main priority lies in the software development of anti-virus software and IT security services. For the past few years, many tech giants such as Lufthansa, and IBM have chosen to build partnerships with local Hungarian IT specialists.
Many R&D centers of global operation are located in Poland. The strong growth of Poland’s offshore development sales continuously thriving and is targeted to reach â‚¬14 billion in 2022. Poland has 295,300 IT industries, 20% of whom are employed in companies that offer software development services.
Nearly half of the top 500 international corporations have established collaboration with India, making it the 1st nation for offshore development centers according to Kearney. The country is favored for fluent English proficiency and has become a big exporter of information technology services, business outsourcing services, and software employees. Four of every 10 remote workers in software development and technology are based in India.
Besides India, other offshore development partners in Asia can be mentioned as Thailand. (Full article here).
The BPO industry in the Philippines specializes in customer service and front-end operations, mostly in the financial services and telecommunications sectors. The country’s software industry is valued at $7 billion and gains uninterrupted governmental support. Just recently, Amazon Web Service (AWS) opened its first customer service center in the Philippines, immediately establishing 300 new jobs in offshore development and anticipating up to 1,000 more by the end of 2020.
The country is a rising star because it has drawn significant interest among international developers, investors, and financiers as a fast-growing market. More than 500 MW offshore development projects in the pipeline in Vietnam are expected to come online before the current feed-in tariff deadline of November 2021.
Offshore development is prioritized as the government plans to build the “blue economy“ growing marine-based renewables to meet the demands of achieving energy security.
In the last decade, information technology has become a common and popular subject in Vietnamese schools. Education in software development, such as artificial intelligence, robot, and programming has been provided not only in public schools but also in a number of private schools and learning centers. Software development is even taught in elementary, along with Math and Literature. Vietnam’s IT Outsourcing businesses are dynamic, creative, and diverse with the available advantage of human resources.
This promises a competitive market in terms of price and quality for the customers. When it comes to IT labor, a software engineer in Vietnam earns only 50-60% of the salary of a similar-level engineer in India or Singapore, or 80% of those in Indonesia or Malaysia. Many of the TOP Fortune 500 customers have also converted and selected Vietnam as their manufacturing partner and offshore development centers such as Samsung, Honda, Toyota, or Panasonic.
Still have doubts?
Difficulty finding an off to transform your business is hard work. The article can give you some useful information to make it easier. If you would like further information, do not hesitate to contact our consulting team.
CMC Global is among the top 3 IT offshore development services providers in Vietnam. CMC Global is part of CMC Corporation, the second-largest ICT corporation in Vietnam with more than 26 years of establishment and development. We operate a large certified team of more than 1,500 developers, covering all tech stacks, and can supply you with the right team, regardless of size, at a very reasonable cost.