Companies worldwide need highly competent specialists that are ready to apply innovative technologies. Finding talents is challenging, so the demand for outsourcing has considerably increased. That’s why in 2021, the best countries to outsource software development are the ones to keep a close eye on.
By 2025, the IT outsourcing market will reach $397.6 Billion worldwide.
Spending on IT global services has grown up to $1.2 Trillion in 2021, with a growth of 9.8% from the previous year.
When aiming to optimize the development budget in 2021 and beyond, it is not even a question to outsource or not.
The right question is which countries can help to outsource your project development with profit?
Below you will find the answer to all questions about software development outsourcing.
What Does It Mean To Outsource Software Development?
Software Outsourcing is the practice of cooperating with a third-party company, i.e. outsourcing development agency, that manages the whole product software development process or certain tasks involved in software product development.
Why Choose Outsourcing Software Development?
In the outsourcing cooperation model, each entrepreneur can find something attractive for themselves. A.T Kearney’s surveys analyzed client engagements over the past five years using outsourcing business partners. The results show that outsourcing is beneficial for:
- Cost-effectiveness (35%)
- Skills and talents availability (25%)
- Business environment (25%)
- Digital resonance and speed (15%)
From 2020 software development cost rates have been growing since the COVID-19 pandemic and great competition on the market.
Software development companies that previously denied using outsourcing in the future have changed their minds.
The cost of offshore software development is the first motivation to choose outsourcing software development.
Over 70% of companies save their development cost using outsourcing.
Software development isn’t a cheap process. So every entrepreneur wants to spend less money and effort on their future product. Outsourcing allows entrepreneurs to choose the most favorable software rates category without reducing the value of tech expertise.
The price diversity of outsourcing depends on:
- standard of living in the country
- expertise of specialists
In such regions as Eastern and Central Europe, software development is a fast-growing industry with a strong competitive environment.
Worldwide companies have a lot of chances to find talent and rare experts at an affordable price cheaper than in the USA or Canada, where the devs cost rates are much higher.
Business Skills and Talents Availability
The second reason to externalize your software project is flexibility in finding the best outsourcing talents with advanced business skills.
46% of companies say outsourcing lets them access skill sets that aren’t available in-house.
It’s not that remote developers guarantee the company better expertise. But offshore development provides a much bigger pool of talents for companies.
When a company is looking for in-house devs, it is restricted not only by knowledge and expertise but also by location. And the circle of developers narrows down even more.
For example, many tech universities and quality courses with an extensive talent pool are in Eastern Europe. Devs with a high level of English want to reach professional heights. So, the dream of finding a qualified developers team is not a mystery anymore.
When outsourcing your software development project, the company has the whole world to choose from:
- any technology
- any industry expertise
- almost any business skills
The software business environment consists of:
- other factors that may be controlled by the outsourcing development agency.
The business environment can affect a company’s quality, speed, and scale.
Companies claim that the 15% effectiveness of their product was influenced by a favorable business environment and agility matter.
In Europe, for example, there is an active and modern business environment that can improve, solve complex problems and follow the trends of the 21st century. No wonder that such a location is ahead of the best countries to outsource software development around the whole world.
Digital Resonance and Speed
Digital resonance is a new factor influencing outsourcing activities around the globe. Worldwide businesses want to offshore because of automation solutions that provide the digital resonance, and rapid development of their projects.
Because of the outsourcing digital resonance, no need to recruit not only saves good money, but also a great deal of time.
Fast software development speed and the ability to go out in the market bypassing competitors was helpful for over 20% of companies.
In most cases, offshore agencies have all the recruiting done and only need to form a team according to the project requirements and quality of devs. All software companies need is to represent the idea, discuss the tech stack and form a scope of work.
Be that as it may, but outsourcing project speed in the modern software world is a critical factor.
10 Word Top Outsourcing Countries
The most popular locations among different countries for offshore software development worldwide are Central and Eastern Europe, India, China, and South America.
Source: CleverRoad, Daxx, Sloboda Studio, Upwork, IT Work, Clutch
Eastern European Countries
What does Eastern Europe mean for outsourcing? According to A.T. Kearney’s report, the software development industry in East Europe stands for high-quality, reasonable prices, great communication culture, and convenient time zones.
Here at Sloboda Studio, we believe that the best offshore software development region is East Europe. What’s more – Ukraine is one of the best countries to outsource software development. This is not just a matter of words. The next facts are clear and point to the appropriateness of Ukraine.
- Affordable outsourcing prices. According to UpWork.com, Eastern European rates vary from $25 to $50/hour.
- Large talent pool. At the same time, local software developers often have a university technical degree: for example, in Ukraine alone, there are 16,000 technical graduates per annum.
- Different time zones with a few hours of overlap between Europe and America. Though this isn’t always a pitfall: with a head office somewhere in North America, you can wake up by the end of European day so your team can present you the completed work.
- Lack of company communication. Yes, it is much easier to communicate with the your-time-zone software team. However, with all those calls, video chats, and daily checks, your outsourcing collaboration can remain clear and up-to-date.
Same as Ukraine, Poland is located in Central Europe, but historically has been considered to be a part of “Eastern Europe”.
According to a recent report, Poland is a Ukraine competitor with more than 100 companies with 255 thousand software team specialists.
Last year’s Kearney Global Services Location Index research rated Poland as the twelfth most attractive outsourcing location. Poland offers a large pool of software developers and is budget-friendly at the same time.
- Prices: According to Clutch and Upwork, offshore software development rates in Poland vary between $25 and $100 per hour. The lowest quality cost rates like $25-50 can be found in smaller cities like Katowice. The highest ones are located in large tech outsourcing centers in Poland as Warsaw and Krakow.
- Popular programming languages: Java, SQL, Python, C++
- Top Tech Cities: Warsaw, Kraków, Wroclaw, Lodz
Ukraine is the largest all-European country and the 44th largest country in the world. Nearly 200,000 specialists in Ukraine serve thousands of companies as the demand for an information software technologies workforce is constantly growing on the global market.
Software development outsourcing in Ukraine is something that can benefit your company project.
In 2020, Ukraine demonstrated a 20% information technology growth, and the country is planning to triple the result by 2025.
- The information technology industry is growing by up to 30,000 specialists in Ukraine per year.
- The USSR historically gave Ukraine a strong engineering, physics, and maths base.
- After the fall of the USSR, these specialists started the first software development companies in Ukraine.
All these facts make Ukraine a great solution when you need to get great expertise at budget costs.
- Prices: According to Clutch, you can find budget hourly rates in Ukraine, where the rates are $25-100 per hour depending on your developers’ seniority. As for Upwork, the hourly rates for the agencies’ developers in Ukraine are generally $20-40.
- Popular programming languages: Ruby, Java, Python
- Top Tech Cities: Kyiv, Kharkiv, Dnipro, Lviv, Odessa
Many companies that try to offshore in Ukraine say that the country has a mix of three aspects for worldwide companies:
- World-class engineering talents with over 200,000 people in Ukraine on board
- Reasonably quality priced labor in comparison with the USA and Western Europe
- Great end software products such as Grammarly and Jooble in Ukraine
Want to outsource your software development?
The government significantly supports the software industry: about 90% of IT companies are mostly located in Minsk, uniting 30,000 tech specialists.
- Prices: According to Clutch, there are two leading price team groups in Belarus: $25-50 and $50-100 per hour depending on the agency. On Upwork, the rates vary from $20 to $60 per hour.
- Top Tech Cities: Minsk, Gomel, Mogilev, Vitebsk
Along with Ukraine, Romania became an attractive outsourcing place in 2021. Romania has an active information technology industry growth of 14.3%, which is expected to double by 2025. This quality growth is supported by a well-coordinated education system. This year we can see 7,500 new software developers graduated.
In Romania, there is the first high-tech software unicorn UiPath and lots of offices of global software companies such as Microsoft, IBM, HP, Oracle, Intel, as well as Luxoft, and Amazon.
- Prices: $25-49 cost rate according to Clutch and Upwork.
- Top Tech Cities: Cluj-Napoca, Iasi, Bucharest, Sibiu
According to A.T. Kearney’s 2017 Global Services Location Index report, Asian countries are among the top 10 outsourcing countries in the world that have completed work including India, China, and Taiwan.
With up to 200 software companies and around one million employees, the Asian region is great for outsourcing software projects.
- A huge pool of software developers (India is on top) and the lowest market prices.
- Currency exchange rate. The Indian rupee has devalued against the American dollar over the past few years. Such a tendency is great for company vendors who make it easy to sign team contracts for several years.
- Lack of security. India lacks state breach notification work and team requirements, data protection and privacy legislation, such as health insurance.
Nowadays, India is considered one of the best countries to outsource software development in the world. India’s population is equivalent to 17.7% of the total world population. No wonder, it is one of the biggest outsourcing software development locations for many companies. According to the latest research, the software industry in India is growing by 60% every year.
The software development market in India has grown by more than 30% over the last thirty years. Now it is exporting its software services to up to 100 countries. According to the Software Sector Analysis Report, developers from India are technical graduates of high quality. The software market in India is 5 times cheaper than, for example, North American countries.
- Prices: Hourly rates are about $25 according to Clutch in India. On Upwork, the hourly rates for web development companies in India are generally $10-15 cost rate per hour.
- Popular programming languages: Java, C++, Python
- Top Tech Cities: Bangalore, Chennai, Mumbai, Kolkata
Along with India, China is the top-ranked offshoring companies destination. It has budget-friendly prices and qualified software developers with good English.
- Prices: On average, software developers in China charge up to $50 per hour.
- Popular programming languages: Python, Algorithm and Functional Development
- Top Tech Cities: Beijing, Shanghai, Shenzhen
Together with India, Taiwan is among Asia’s most promising outsourcing countries in 2021. Considered one of the four Asian Tigers, Taiwan is also positioned as one of the top 50 super cities for digital innovation, enterprise success, and team outsourcing solutions.
- Prices: $25-49 according to Clutch and Upwork.
- Popular programming languages: Java, PHP, Ruby on Rails, ASP.NET Core
- Top Tech Cities: Taipei
The Philippines is great because of its costs, market competitiveness, and good software background. According to the Philippines IT Market report, software development in the Philippines has become one of the more established sub-sectors of the country’s information technologies industry.
- Prices: $25-49 according to Clutch. On Upwork, average hourly rates vary from $15 to $35 cost per hour.
- Popular programming languages: PHP, ASP.NET, Ruby on Rails, ASP.NET Core
- Top Tech Cities: Manila
As an A.T. Kearney Global Services Location Index study, Latin America is top 5 of the best countries to outsource software development due to its destination. In general, Latin destinations are often chosen by North American countries because of
- relatively low rates
- minor cultural differences (good English, too)
- convenient working team schedules
- For US vendors, Latin America means small time zone differences, so it is possible for team companies to work in real-time;
- Lower rates than in most developed countries, including Germany, Norway, Sweden, the UK, and North America: according to UpWork, Latin America’s agencies rate hourly from $25 to $100.
- Lower cultural gap with North America and Europe compared to Asia.
- Great workday mismatches with European Countries.
- Higher prices compared to usual outsourcing software development rates
Argentina often ranks as one of the most educated countries in Latin America. The country takes 21st place in the QS Higher Education System Strength Rankings. Add the highest level of English in Latin America, which is a big perk when choosing a country to offshore.
Argentina has only two hours of time difference with the USA and about five with Europe. Moreover, this location is only 4 hours away from Silicon Valley by plane. It is a great strategic location for software development and startup projects evaluation. No wonder that there are a lot of IT Outsourcing Companies in Argentina.
- Prices: $25-100 hourly cost rates for web development according to Clutch. The average Upwork rates in Argentina are $25-55 per hour.
- Popular programming languages: Java, Python, SQL, Distributed systems development
- Cities: Buenos Aires
According to the Panorama and Trends 2018 report, Brazil ranks 9th in the world for software and services, and its software market is worth almost $19 billion. At the same time, Brazilian information technologies outsourcing takes up to 50% of the Latin American software market.
- Prices: $25-50 hourly cost rates for web development according to Clutch. On Upwork, the average price varies from $25 to $60 for an hour of web software development.
- Popular programming languages: Java, Python, SQL
- Cities: Rio de Janeiro, Porto Alegre, Curitiba, Blumenau and Londrina
How To Choose a Country to Outsource?
There is no wrong country to subcontract. There is no bad choice for outsourcing, too. To get benefits from the best countries to outsource software development, it’s vital to learn the following:
•Know What You Are Looking For
Knowing the necessary tech stack or the needed expertise will help narrow down your search.
Companies can check out niche-specific work ratings on Clutch or other rating platforms. Some companies prefer using Google for the specific expertise in a chosen popular location. Note that different countries may have expertise in particular software technologies.
• Draw Attention to Time Zones
If the time difference is significant for the company, choose the closer countries. The golden rule for time-related businesses is a max 1-3 hours work difference.
If the time difference isn’t an issue and the company knows how to manage the offshore team right, you are free to consider any geographic options.
But the truth is nowadays most software companies prefer to focus on expertise more than on work time zones. Today modern management systems can minimize possible work inconveniences.
Outsource your software development to Ukrainian talents
• Consider Сultural Differences
There is no wrong country mentality for offshore software development. Sometimes people just don’t match, and cultural differences have to be considered.
Cultural differences can manifest themselves in:
- communication between countries (English accent can be a significant problem)
- unwillingness to find the right work solutions to complex problems.
Therefore, it is important to find a close-minded partner for outsourcing.
Checking English Level
The team communication process is vital for outsourcing. Companies will have to negotiate, look for ways to solve problems. Constant productive team communication is the key to company success.
When choosing an outsourcing country, it’s crucial to look at the English level of outsourcing software service providers.
Often, a lack of English understanding becomes the cause of work disagreements and team disputes. Find the supplier with whom team communication is easy and constructive using English.
Finding Similar Business Values
Business values are the basic principles of behavior and relationships between the work parties on which their interaction and success depend.
Few people pay attention to the similarity of values when it comes to profitable cooperation. Worldwide companies also want to receive great cost savings. However, this small but significant nuance can play a trick.
When choosing an outsourcing team, make sure that the business project values match.
We are proud to tell that Sloboda Studio is a leading offshore development company with numerous verified clients’ reviews.
We are recognized as top of the best countries to outsource software development by such authoritative rating platforms as Clutch and GoodFirms.
The world has globalized, which means that now businesses have the opportunity to find qualified experts in any corner of the world.
Finding talents among local specialists can be pricey and time-consuming. To achieve harmony in the hiring process, it’s crucial to know the best countries to outsource software development. Eastern Europe is ranked among the top countries for outsourcing since it has average developers’ rates and provides companies with experienced engineering teams with advanced English.
Frequently Asked Questions
There is no right answer to this question anywhere. However, when choosing an outsourcing partner, focus on:
- business environment
- education and expertise in the country
- developers rates
- suitable time zones
- knowledge of English
- cultural and business values
All these factors make Eastern Europe the central place of outsourcing with such leaders as Poland, Ukraine, Belarus, and Romania.
According to the 2021 Reports: India, the Philippines, the USA, Ukraine, and Poland are the leading outsourcing countries worldwide.
Of course, this is a common practice among modern businesses, which want to find the best specialists at acceptable rates, quality, and English.
Outsourcing is used by both startups and medium-sized businesses, as well as giant corporations like Alibaba, Skype, Slack, Google, TransferWise, WhatsApp.