Which Countries To Outsource Software Development To In 2024?
There are many countries that make amazing outsourcing destinations in 2024, but we’ve narrowed down the search to help you outsource software development services by shortlisting three countries this 2024.
Philippines
Since the early 2000s, the Philippines has provided IT education. And following in the footsteps of call center outsourcing in the 1990s, IT boomed around 2010s, which pushed local schools to double down on IT education to match the growing demand for IT professionals globally. This kickstarted the growth of Philippine IT-BPO industry, making IT services, one of its biggest outsourced services to the US, Australia, and European markets.
At present, revenue of the Philippine IT services sector market is set to reach US$2.26bn in 2024, growing annually at 9.76% from 2024 to 2029. This is higher than the global growth rate of 5.76%, making the Philippines one of the top IT outsourcing destinations globally.
Among the IT outsourcing services available in the Philippines, the most popular are software development, followed by customer & IT support and back-office support & data management. What draws companies to outsource IT services to the Philippines are its cost-effective solutions, large pool of skilled workers, as well as its cultural affinity with Western countries.
Competitive Costs
A developing country in South-East Asia, the Philippines has one of the most competitive labor costs globally, with rates that are lower by up to 70% than those in the US, Australia, and Europe.
While the average cost of hiring a software developer is US$55.40/hr (US), US$58.65/hr (AU), and US$93.00/hr (UK). The cost to outsource the same to the Philippines is around US$30/hr, inclusive already of resources and tools, government mandated benefits, on top of the salary. This cost difference compounds significantly, attracting many Western companies to work with Philippine IT outsourcing companies.
Skilled Developers
With its large, highly educated population, the latest reports suggest that there are over 190,000 skilled developers in the Philippines. This large pool of talent is a great way for companies to access specialized skills, such as knowledge of coding languages like Javasript, Python, CSS, and more.
Cultural Compatibility
Another reason to work with Philippine software developers is the Philippines’ excellent English. Given its background as a former US colony, the Philippines’ medium of instruction has been English for decades. This is reflected in most Filipinos’ ability to speak English and communicate well with people from English-speaking countries like the US, Australia, and the UK. Not to mention, Filipinos’ English accent is generally considered more neutral than other English-speaking Asian countries, which can aid in communication and collaboration.
India
A global IT outsourcing powerhouse, India has been developing its IT and software development services since the 1980s, which gives it a head start over its competitors. This advantage allowed it to dominate the market, especially as the Indian government liberalized the economy in the 1990s, leading to its IT boom.
This policy attracted many global companies to build their offshore IT and software development operations in the country, particularly in cities like Bangalore, Hyderabad, and Pune.
Today, India holds a significant chunk of the world’s IT outsourcing market, with its highly qualified skilled manpower, English proficiency, as well as their solid reputation in the industry.
Skilled Developers
As India has the largest population in the world in 2023, along with it being known globally for its IT services, it’s no surprise it has millions of developers that can be tapped by foreign companies looking to outsource software development. With such an overwhelming number, there’s no shortage of skills when it comes to development. Most coding languages needed can be found in a skilled Indian software developer.
English Proficiency
The British ruled India for over 200 years, ensuring wide-spread English adoption. This equipped Indian developers with the communication skills needed to collaborate with global companies for offshore projects.
Reputation in Information Technology
With India’s strong reputation in technological services, its IT outsourcing industry is on a continuous rise and is unlikely to slow down anytime soon. And with the growing demand of tech professionals globally, India is likely to produce more professionals like software developers with world-class skills. This makes many global companies trust Indian software developers and want to offshore to India.
Poland
Since the 2000s, Poland began its outsourcing sector, revolving around service like IT, which it’s widely known for today. As a European nation with relatively lower labor costs than neighboring countries like the UK, Spain, and Sweden, Poland easily became a strategic location for European outsourcing.
As global outsourcing companies built offshore centers in cities like Kraków, Warsaw, Wrocław, and Poznań, Poland became known for its IT outsourcing, particularly their talented software developers.
This is reflected in their steadily growing IT outsourcing industry and with IT outsourcing accounting for 8% of the country’s GDP. This progress has made outsourcing software development to Poland very attractive, with primary drivers being cost savings, strategic location, and its skilled workforce.
Lower Costs
Rates in Poland are 20-30% lower than those in the US and Western Europe, making it a great option for reducing overhead costs in software development.
Geographical Proximity
Unlike other top outsourcing destinations for software development, Poland is located in Central Europe, much closer to countries with that outsource a lot of development work like the US, UK, and other European nations. This makes Poland not only an outsourcing destination, but a top nearshore destination, with minimal time zone difference.
Skilled Developer
There are hundreds of thousands Polish developers, top in the CEE. This is a good indication of the country’s extensive variety in terms of skill and specializations, making it an attractive location for tapping into emerging technologies.
Reasons To Outsource Software Development
As seen in the top 3 countries for software development outsourcing, the main reasons to outsource include cost savings, large pool of skilled developers, as well as easy of communication and/or collaboration brought about by language and cultural similarities as well as geographical position.
Cost Efficiency
In the wake of a global pandemic that shook the world, there are major risks in global economy in 2024.These create uncertainty which urges companies to seek solutions that help them stay agile in the face of unpredictable market changes. And with rising costs and highly competitive job market, many developed nations choose to outsource to save money and improve efficiency in their businesses. This strategy lends them a competitive advantage, not only by providing more flexibility and scalability, but also by giving them access into new markets.
Specialized Skills
Another reason to outsource software development is due to the nature of the work requiring specialized skills. It takes six months to a year on average to develop a deeper understanding of a programming language, and it takes even longer to learn how to resourcefully implement solutions using a specific coding language. This increases the demand for software developers, especially with the rapidly advancing technological landscape of 2024. With companies needing to go digital, many require custom and robust yet user-friendly software. And with the rising cost of labor, it becomes more attractive to outsource such specialized skills to countries with large pool of skilled developers like the Philippines, India, and Poland.
Communication & Collaboration
The nature of outsourcing entails working in different locations. This poses a threat to communication and collaboration, both of which are vital to the success and quick turnaround of development projects. Given this challenge, it’s imperative that companies work with software developers who have the ability to communicate and collaborate as seamlessly as possible. Such applies to both language and cultural affinity, as well as time zone similarities.
With both the Philippines and India having large populations of English speakers, their software developers are able to work well with countries from English-speaking nations, as long as they adjust their shifts to align with the time zone of their clients. Meanwhile, Poland is a European country, with language, culture, and time zone similarities to European nations that make it a very attractive location to outsource software development.
Outsource Software Development Today
Whatever your reason may be for outsourcing, it’s important to work with a reputable outsourcing agency with highly skilled software developers to ensure the success of your project.
At KDCI Outsourcing, we’ve supported multiple global brands from across the world, providing them with skilled and vetted software developers who are proficient in various programming languages like JS, CSS, and Python to ensure the smooth execution of work and the delivery of high-quality software.
Interested to learn more about software development & IT outsourcing? Contact us today!
