Where Should You be Outsourcing to?

June 18, 2021

As a company begins to grow, it is normal to start realizing that there are certain processes that one no longer has the time or the resources to perform. One of the most common processes to go through this is software development, which is why software outsourcing has recently become so popular. Software outsourcing is the process of ​​hiring a third party to ensure that all software development is carried out according to the company's expectations. Like any process involving a third party, globalization has allowed countries in Latin America, Asia, and Europe to participate in this and offer their software development services across several regions and countries.

Asia

For the longest time, software outsourcing in Asia has been very popular because of its low wage costs. This popularity has even made the city of Bangalore, India the capital of IT/Outsourcing and one of the main IT exporter in India and Asia. In addition to Bangalore, software outsourcing in the region continues to grow in China, Malaysia, Indonesia, Thailand, Sri Lanka, and Vietnam. Currently, China and India are the main technological centers in Asia as they have almost reached 5 million developers in each country. However, despite the great workforce and reputation, many clients have had experiences where the performance of the developers in this region resulted in unsatisfactory results. Here is where the cultural differences can be noticed the most. In Asia, it is part of their culture to see the client/employee relationship as a hierarchical relationship, which discourages developers from voicing their comments and important concerns that might affect the project's timeline or quality.

Europe

According to Deloitte's 2016 Global Outsourcing Survey, 65% of companies that outsource a service choose a European company for it. When it comes to software outsourcing, some of the most popular European countries include Belarus, Ukraine, and Poland. Like Asia, one of the main reasons why companies decide to outsource their software development to Europe is because of the cost issue. Although Europe has higher wages than Asia, it is still a fairly low cost compared to the other continents and sub-continents. In addition to being a cost-effective solution, Europe has numerous technical universities and a large working group of well-educated professionals who are not only fluent in most European languages but who also have access to the type of facilities that can guarantee an advantage over other regions. Fluency in most European languages ​​is exceedingly more favorable among European countries since European countries prefer nearshore development. Opting for nearshore development has many advantages, mainly that one can work with a company that is close to your own country, which facilitates the fluidity of the workflow, lowers cost, and makes it more convenient to work between different time zones.

Latin America

Due to the proximity of this region with Anglo-Saxon America, it is not surprising to mention that most technology companies in the United States choose to outsource their software development in Latin America. Although not a huge difference, the salary rate of software developers is higher than the rates in Asia and Europe. Even so, it is significantly lower than the rate in the United States, so although more expensive than Asia, outsourcing this service in Latin America still manages to reduce the overall cost of the development. Besides, Latin American countries have an almost insignificant time difference with the U.S. and they are geographically very convenient, too. In terms of productivity, this translates to reduced time between responses among team members, either virtually or through a physical meeting, if it even has to come to that.

Some additional benefits of choosing a Latin American company for software outsourcing: the popularity of English proficiency in the workforce, the quality of software development talent, and a culture that promotes the adoption of new technological trends at a reasonable price. The benefits of software development outsourcing for Latin America are not only reduced to geographical proximity with the U.S. and Canada. According to DedicatedTeams, some well-known brands that are looking to outsource software development for Latin America are Microsoft, Google, Amazon, IBM, Dell, Hewlett-Packard, Verizon, and Comcast. And outsourcing in Latin America is not only popular with technology companies, but other popular companies such as Disney, Netflix, and Discovery are also on this list, as well as brands such as FedEx and Unilever.