IT outsourcing as a function is becoming an increasingly popular option for many businesses worldwide.
Luckily, for those businesses that are considering outsourcing programming, the list of options is constantly growing, and full of interesting contenders.
All you have to do is to read this blog post and decide on the best choice out of your particular needs and business goals.
Why do businesses outsource?
Cutting costs are definitively one of the major benefits of outsourcing IT work. The advantages are many. We have asked entrepreneurs to tell us, which ones are the best for them.
The most important goal for a company involved with IT outsourcing:
Reduction in costs happens to be the most important goal of outsourcing with 87% of the companies selecting it.
- 82% of companies said greater scalability was their goal in IT outsourcing.
- 74% went with process standardization while
- 62% chose Access to better technology as their goal of IT outsourcing.
- 62% of the companies said that their goal with outsourcing was improving analytical abilities.
Cost reductions
The main reason is as we suggested, to cut costs. This is the basic reason for companies to grow their business for higher profits. The easiest to implement solutions for many companies. There are however many risks to be calculated, such as quality control.
Quality is not the same thing, everywhere.
Experts on call
Many smart companies hire students or experts for outsourcing practices; it depends on the type of work they have. When you hire local experts, the chances of the company surviving and thriving are higher, than if not doing so.
Flexibility
Small businesses rely on outsourcing teams for large orders. In order to manage the enormous quantities of work.
The US labour Bureau of statistics and data shows that: IT software development is among the most in demande current professions, and is above average earnings.
Source: Bls.gov
Outsourcing functions
According to Business Weekly, there are now outsourcing functions for pretty much anything you can imagine. An example would be: There is an outsourcing company that tests new hires with fake customers on the phone or fake business expertise; it may sound strange and unprofessional but business is business, as they say.
Language outsourcing example
Outsourcing is a proven model and helps businesses. The Multilanguage outsourcing job is a unique niche. The companies can outsource writing or translation work for peanuts.
IT Recruitment example
Next Job offers a proven IT recruitment service to help IT companies find, qualify, and hire the right developers for your business – that fits your company values, needs, goals, and team.
Read more about it here: IT recruitment
Outsourcing trends:
Outsourcing has by itself become a big industry that cuts across many different industries. Many new trends have emerged from this industry this year. Though the number of deals under this industry has increased in number, the margin of profit has shrunk for the players.
Companies say that prices of Indian BPO companies have increased, however, India still remains one of the top outsourcing destinations of the world.
This fact has emerged from the Tholons report that concerns itself with outsourcing.
The following are the interesting facts and information that comes out of this annual report.
Most important outsourcing areas
The areas of the economy where outsourcing dominated all through the year were IT, accounting, and finance.
This was revealed by a report from KPMG.
New factors in technology
IT Outsourcing and BPO are not stagnant when it comes to the influx and induction of new technologies. Many new technologies like cloud computing, no-touch interface, CYOD/BYOD, etc have affected the working and efficiency of many outsourcing companies of the world. Outsourcing companies know that they have to remain prepared and introduce new technologies to satisfy the requirements of their clients.
Leading market research company IDC feels that the rate of increase of the IT outsourcing market will show a temporary decline, but that it will reach a staggering figure of nearly $113 billion by 2019. Followed by a constant increase until 2024, as indicated by the data below.
The introduction of new technologies such as cloud is putting pressure on traditional IT outsourcing companies to make changes in their business models.
This was revealed by David Tapper, who is the VP of Outsourcing and IT services in IDC.
IT Outsourcing destinations:
Here’s our list list of top IT outsourcing regions and countries in 2020 and 2021.
1. Southeast Asia
In 2014, Tholons listed the Asia Pacific (APAC) region as the most densely populated by outsourcing service providers. According to this report, “the region’s balanced proposition, such things as – cost, scalability, quality, and business environment – allowed the APAC to not only maintain its position in the global supplier market but has likewise opened new, market opportunities for service providers”.
The regions host three of the most prominent IT outsourcing destinations of the world India (which has 6 cities in the top 100 of outsourcing destinations), The Philippines (number 8 destination in the world), and China, the runner up with 4 cities in top 15.
- India
- Philippines
- China
In order to reduce their costs and delegate low-value tasks to offshore business partners. Despite the popularity of India, many other countries and regions are attracting the attention of international companies, wanting to outsource IT work. The advisory company Tholons annually publishes detailed reports, which provide quantitative and qualitative data about all the key outsourcing destinations throughout the world.
Southeast Asia remains the top destination for outsourcing though many other destinations have emerged in Eastern Europe and South America.
These regions, Asia, Eastern Europe and South America are the best in outsourcing. The reason is because they have invested and done well and improved in the fields of
- IT education
- Infrastructure
- Human capital
- Marketing
- Maintenance of high standards of work
Eastern Europe, including Bulgaria and Ukraine have emerged as some of the best hubs for outsourcing while Poland and Dublin in Europe are also doing extremly well in recent years.
2. Europe
Out of the 100 Top IT outsourcing destinations, almost 1/5th of the cities are located in Europe- a great step forward compared to a decade ago when the market was filled with Asian companies.
Eastern Europe in particular did more than well, with “the new technological hub called” Krakow(Poland) climbing to number 9 and overshadowing even top outsourcing destinations like Dublin (Ireland), headquarters to the outsourcing company Accenture.
Another Polish city, Wroclaw peaked 10 positions ahead, from 75th to 65th place.
Thanks to improved education, expert skills and exceptionally good IT and Internet infrastructure, a close location to Europe, Sofia (Bulgaria) gained momentum since 2016 and moved from position top 50 and moved to 33rd place.
In terms of origin, most of the European cities on Tholon’s list were situated in Russia, home of many large outsourcing service providers like Luxoft and Miratech.
- Bulgaria
- Poland
- Russia
- Dublin/Ireland
Based on labour costs alone, Bulgaria is ranked 12th in the study, behind Poland (10th) and ahead of Romania, (13th), Russia (17th) and Latvia (18th).
Another study, Tholons 2016 Top 100 Outsourcing Destinations, has ranked Bulgarian capital Sofia among the cities in Eastern Europe which are considered attractive for outsourcing software, according to ZDNet.
3. Central and South America
With 23 cities in the chart, Central and South America establishes itself as the second most important region in the world when it comes to outsourcing. This is further supported by 2013 KPMG study which states that in the period 2012-2019 there will be a compound annual growth rate (CAGR) for the BPO service market in Latin America at around 7.4% (compared to 5.3% in North America and the highest growth in the Asia Pacific (excluding Japan) at 8.1%. Out of all the listed countries, Costa Rica performs best, reaching rank 13 out of the world’s top 100, followed by traditionally popular outsourcing destinations like Brazil and Chile in Top 30. Costa Rica’s growth (largely due to ITO), along with the emerging new locations in the region (Peru, Colombia, Uruguay, and Guatemala) has been additionally boosted by aggressive marketing and promotion strategies, led by their respective country export promotion agencies.
- Brazil
- Chile
- Colombia
- Uruguay
- Guatemala
Conclusion:
Software outsourcing development has become an important branch of the IT industry. The job market increases considerably and requires new talented resources. Employers are looking for skilled workers who can deal with various technologies. They need to be ready for constant improvement and new business approaches. Western Europe and North America lack the shortage of workforces while rising IT costs. In recent years a lot of companies start to outsource software development all over the world. These services are offered at a high level and have a number of benefits. Your company will cooperate with the team of professionals handling numerous tasks while you also decrease your spendings. The great option is a software outsourcing development team that will work for your company on a regular basis. In this article, we provide you with criteria that will help to choose the most suitable destination and their representatives. You can find a short description of the top outsourcing countries in 2020. Those countries are developing ones, but they have a huge willingness to work and improve. They offer up-to-date technologies and efficient cooperative schemes.
If you decide to apply for software outsourcing development in Eastern Europe, you are welcome to contact us. Next Job is an offshore software development company with vast experience in this sphere. If you need any advice or have some questions, you are welcome to contact our team. You can send an email, fill in the form at our contact page or start the discussion right now in the chat widget.
