How do you select the right partner for software development outsourcing? Where do you look for qualified vendors? There are more outsourcing providers to choose from than ever before. To make choosing a software partner even more challenging, the number of countries with capable companies has grown dramatically.
Accelerance is continually engaged in assessing the global landscape of outsourcing. We make regular visits to regions and personally meet with new and prospective software development outsourcing companies.
Let’s look at some key regions across the globe that companies often consider for outsourcing, including software development and their corresponding best countries for software outsourcing.
Best Countries for Software Outsourcing
North America (US and Canada)
This region is one of the world’s largest technology hubs. Software developers in North America have access to well-respected universities and colleges and the talent pool is deep. This region is also headquarters to many companies who are global leaders in technology.
Despite these advantages, the huge demand for developers has caused a shortage. Because of the incessant demand for talent and the high cost of living, software professionals are some of the top earners in the U.S. and Canadian economies.
- U.S. – programmers have the obvious advantages of familiarity with U.S. laws and regulations, cultural match, English language skills, and travel proximity. These advantages are offset by a significant labor shortage, high local competition for talent, and premium rates for outsourcing services.
- Canada – generally has all the advantages and disadvantages of U.S. outsourcing providers. However, with the possible exception of the Ontario region (i.e. Toronto), U.S. companies often underestimate the difficulty in traveling to and from many areas in Canada. Culturally, Canada has a reputation of a more “laid back” style that concerns some U.S. customers.
This region has been a major provider of outsourcing services for many years. IT outsourcing and software development play an important role in the economy of many countries in Asia. In this region, the outsourcing industry attracts highly skilled individuals that have been educated at the top global universities and colleges. Accelerance recently visited Sri Lanka and we're very excited about the capabilities we found there.
Check out our recent visit to Sri Lanka here.
Asia vendors provide relatively low cost, a deep talent pool, and a solid reputation for software outsourcing. Historically, Asia outsourcing meant VERY low-cost rates, but internal labor pressures and external competition is beginning to change that.
Download the 2018 Guide to Software Outsourcing in Southeast Asia
- India and China - are home to the most well-established service providers. Many of the outsourcing firms are well-known giants in the industry. You’re likely to find top-level talent but may have to make sacrifices on cost or dependability due to adverse work conditions. A growing middle class comprised of IT professionals, are commanding increasingly higher salaries which is creating rate pressures and higher turnover in some outsourcing companies.
- Philippines and Vietnam – have similarly skilled and educated talent as India and China, but at reduced rates. We see employees in this region express a higher degree of job satisfaction, which leads to more stable software outsourcing providers.
- Sri Lanka – is a well-developed country with a good pool of technical talent. It’s cheaper to do business in Sri Lanka than in India, with 15 and 20 percent lower rates.
Check out our trip to Latin America here.
Software outsourcing in Latin America has grown tremendously, especially in countries like Mexico, Argentina, Colombia, and Peru. Based on our research, we believe Bolivia, Uruguay, and Venezuela are also worthy of consideration for outsourcing partnerships. Because of their proximity to North American clients, these software outsourcing companies in this region can compete favorably with service providers in other regions such as Asia. Universities in Latin America have robust IT programs and yield enough programmers to easily honor software outsourcing commitments. Costs are higher than other regions, but remain a bargain compared to hiring in-house.
This region also has unique, appealing advantages for U.S. customers. These advantages include a workday overlap (ie. time zone compatibility) a workforce with good English language skills, and a cultural affinity. Travel proximity to U.S. locations is also very favorable.
- Mexico - has very close proximity, but still struggles with reliable infrastructure. Most Mexico businesses are very “pro-US” and motivated to establish relationships.
- Uruguay – is one of the most affluent countries and well developed countries in Latin America. Their programmers have solid development experience with standard web, desktop and mobile applications.
- Venezuela - has political woes which created an interesting situation: a highly skilled and educated workforce is under-employed and underutilized.
Eastern Europe offers rich educational programs focused on engineering and the sciences. As a result, this region boasts a significant number of highly skilled professionals in the software development field, but at a far lower cost than Western Europe and North American competitors. All countries in the area have solid expertise in data, algorithms and embedded systems. The pool of talent demonstrates high technical ability, good English language skills, and cultural affinity…all at a comparatively low cost.
- Poland, Hungary, Bulgaria, Romania and the Balkans have the most established outsourcing capabilities in the region. Several outsourcing providers deliver services in conjunction with a US-based liaison.
- Ukraine, Belarus and Armenia are lower cost areas but have lagged behind their neighbors in providing competitive global outsourcing services.