EYES ON ASIA: Refocusing on the world's top market for low-cost, quality software outsourcing
May 18, 2022 |
Asia has come a long way since it pioneered the outsourcing industry almost four decades ago. More recently, companies looking for software development outsourcing partners have shifted their attention elsewhere.
Now, as we cautiously emerge from the COVID-19 crisis, smart CTOs can get a jump on the market by putting South and Southeast Asia back at the top of their list.
Evolving economic dynamics are making the case for Asia. The worst of the pandemic may be behind us, but there are warning signs for how the US business recovery is progressing – namely, rising inflation and corporate belt-tightening. Budget cuts, rising developer rates and record tech-talent shortages mean many businesses are scrambling to get software applications built. With the conflict in Ukraine disrupting Eastern Europe, pressure has shifted to Latin America to fill the tech-sourcing gap.
All these conditions are creating a perfect storm for offshoring. To future-proof software resourcing, Accelerance is advising our clients to look seriously again at Asia, where US-quality engineering skills can be found for 30-70% less than you’d expect to pay in other markets.
Asia has a lot to offer. Nowhere in the world has a more mature IT outsourcing sector or a deeper talent pool. Asia’s business and IT sector have proved remarkably resilient, despite the global economic upheaval of the past two years:
Asia-Pacific is the world’s fastest-growing and largest IT outsourcing market, according to a recent report by international market analyst Mordor Intelligence.
The International Monetary Fund predicts the region’s economy will grow by 6% in 2022, outperforming the global average.
Asia has been recognized for its rapid strides in closing the innovation gap with North America and Europe.
Accelerance has long-standing relationships with software development partners in Asia. Our team members regularly visit the region, giving us timely, direct insight into the region’s offshoring situation.
We’re also active in regional business development initiatives, such as our 2018 Memorandum of Understanding that I signed to support the “Digital Bangladesh” vision. We pledged to promote the country’s software development outsourcing firms in our certified global developer network.
Our 2022 Asia Guide reflects our inside perspective. It profiles nine established and emerging destinations, collating international data and expert insights to assess each country's potential for offshore partnerships including key economic indicators, technology sector strength from specific areas of expertise to the pipeline of talent available, business climate, political stability, digital innovation maturity and Western business practices fit.
The guide covers trends and rates in the destination’s two key regions: South Asia and Southeast Asia.
Upping the Game in South Asia
The outsourcing industry traces its origins to South Asia. New regions such as Latin America and Europe have risen to make significant inroads with US companies. But in recent years, South Asian companies have been making a concerted effort to increase their ability to serve Western companies. As a result, the quality of service and level of sophistication available for software development firms in South Asia has seen a dramatic upswing.
Growth in the internet economy has also exceeded expectations in Southeast Asia, which is entering a new era of digital innovation. In 2021, e-commerce surged to a record $174 billion. A rapidly expanding technology sector is driving a rise in both start-ups and entrepreneurial initiatives across the region, with The Philippines and Vietnam leading the way.
Our guide provides an in-depth assessment of outsourcing readiness for these Southeast Asian countries: Malaysia, Thailand, The Philippines and Vietnam.
Benefits of Outsourcing to Asia
Beyond the favorable developer rates that Asia is known for, it offers distinct benefits to US companies:
There’s a ready supply of software outsourcing talent across established and emerging software applications. India alone produces more than 20 million new STEM graduates every year. That’s a solution to beat the ongoing tech talent shortage in the US.
The difference in time zones, while challenging, can be used to advantage with a “follow the sun” model, adding hours to the workday through continuous, round-the-clock deployment. You’ll also find teams willing to set a flexible schedule that provides the work schedule overlap you need.
English is widely spoken in professional circles, and historical ties with the West, back to British colonization, make for compatible business relationships.
This well-established offshoring region offers the talent pool, the fast scalability, the skilled resources and, increasingly, the white-glove customer service that US companies expect.
However, potential communication hurdles and the challenge of finding a partner with the right level of expertise mean it’s important to get advice from our experienced consultants at Accelerance before in order to ensure that you find both the perfect-fit location and software development partner.
Outsourcing your software development to Asia also will require transferring knowledge and accountability, so there’s no loss of continuity or quality. That’s a management process we can help you with, too.
Accelerance has traveled extensively in South Asia and Southeast Asia to meet prospective partners and also to introduce clients to their new offshore development team. On-site vetting is an essential part of the certification process for all the personally verified partners in our Accelerance Global Network, so you can rely on our informed recommendation until you’re able to visit your software provider in person.
We can connect you to a world of IT talent in Asia and beyond. Our global network of certified partners draws from the top 1% of software development and systems integration firms in more than 30 countries, and our consulting services provide guidance throughout your outsourcing engagement. From partner selection through delivery, we’ve got you covered.
As CEO, Andy leads and advocates for the globalization and collaboration of great software teams with companies in search of talent, innovation and a globally-distributed extension of their engineering function and culture. Andy founded the ground-breaking nearshore software development services company, Isthmus Costa Rica. He began his global software services career as a division manager at Cognizant during their early formative years.
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