Custom offshore software development services: why, how, and where to outsource
N-iX
2022-05-11T20:07:32+00:00

Within an increasing shortage of local workforce, more and more global enterprises from North America and Western Europe are looking for talent abroad. Unlimited access to the global talent pool and cost efficiency have made offshoring software development services an ultimate way out of the sta...

Custom offshore software development services: why, how, and where to outsource

Within an increasing shortage of local workforce, more and more global enterprises from North America and Western Europe are looking for talent abroad. Unlimited access to the global talent pool and cost efficiency have made offshoring software development services an ultimate way out of the staffing crisis. According to Statista, 60% of IT enterprises already make the most of their development potential with the help of Eastern European or Asian software engineers.

But how to avoid potential pitfalls while hiring teams for custom offshore software development services abroad? And which offshoring locations to choose among the myriad of options worldwide? In our article, we will guide you through the best outsourcing destinations that can provide you with top-notch tech talent.

How can offshoring custom software development benefit your business?

Custom software development presupposes the implementation of solutions for specific users, functions, or organizations. As a result of custom engineering, you get unique software that fulfills your specific requirements. But why offshore custom software development rather than use internal resources for the software implementation? Check out the key points that will make you consider cooperation with a team from abroad:

  • Access to global talent. Hiring tech specialists across the globe can give you access to relevant expertise, unavailable in your country. According to the ABSL report, one of the most popular outsourcing destinations—Eastern Europe, boasts a talent pool of 1.1M tech specialists. More than 470,000 of them are involved in delivering solutions for foreign businesses.
  • Increased cost efficiency. Offshoring software development can benefit you in terms of saving costs. One of the greatest advantages of outsourcing is that it presupposes collaboration with vendors that have considerable engineering experience. The companies that have robust expertise in offshoring can help you implement best practices to optimize the development costs during all SDLC phases. Also, since your partner is responsible for office equipment and its maintenance, you won’t have to spend extra funds on equipment and its maintenance. Moreover, the offshoring firm will take responsibility for hiring specialists, so the staffing costs will be on their side, too. 
  • Quick project launch. Hiring whole development teams rather than staffing individual specialists will considerably reduce the project timeline in the initial phase. Moreover, mid- and large-size vendors provide clients with higher talent accessibility, and, therefore, allow to launch the development processes almost immediately.
  • Rich experience in end-to-end development. Offshoring companies deliver projects to clients from multiple business verticals. Therefore, they will be able to select the most suitable architecture design, choose the technology stack, create the project roadmap, and implement the solution that would match your particular needs.

Onshore and offshore software development

Related: Offshore software developers: All you need to know

How to make most of offshoring custom software development services: practical tips

  • Analyze the talent accessibility. The number of well-trained workforce greatly varies across the offshoring destinations. While choosing among the countries to offshore custom software development, pay attention to a talent pool size and a number of local IT companies. Considerable discrepancies between the figures may result in fierce competition for workforce in the local market. 
    Let’s illustrate the issue on the example of the US-based business that is willing to outsource software development services to Eastern Europe. The client can’t decide between Slovakia and Bulgaria in terms of outsourcing custom offshore software development services. According to the ABSL report, Bulgaria is home to more than 72,000 specialists, while the number of available workforce in Slovakia is only half as much. Therefore, in this case, hiring software developers in Bulgaria will help you save time on staffing and minimize the risks of staff turnover.
  • Assess your partner’s expertise in end-to-end custom development. Make sure that the vendor’s client portfolio includes custom solutions delivered from scratch. Opt for the companies that have robust experience across all SDLC phases: product discovery, project starter, the solution’s development and testing, release preparation, as well as the solution’s maintenance. 
    If possible, you might also give a small test project for your potential software engineering firm. A lot of offshoring IT vendors offer test solution development projects, that can help you make a decision about future full-scale collaboration.

    Phases of custom software development
  • Be specific in your technical requirements. When searching for a country to outsource software development, make a list of particular skills and technologies, you are looking for in your future team. The next step will be to look through international rankings such as SkillValue and Top Coder to analyze the average level of tech expertise in the country. Moreover, you can check out which countries have large communities of developers with relevant skillset.
    For instance, you are planning to outsource cloud solution development. In this case,   you might want to opt for countries like Poland or Ukraine. According to LinkedIn, these are the destinations with the biggest number of specialists well-versed in the AWS stack across all Eastern Europe. Only Poland is home to 15,000 engineers skilled in cloud solutions development while 14,000 AWS-trained professionals reside in Ukraine.
  • Make efforts to minimize the cultural gap. If you decided to offshore custom software development to a particular country, do not forget to research local mentality and patterns of business communication. To better understand your partner’s culture, you may refer to Hofstede’s report. It provides information on cultural compatibility aspects, namely the nation’s individualism, long-term orientation, and other features. After figuring out the starting points for both of the companies, you might conduct some cultural trainings for teams’ synchronization.
    One more aspect that can bring your teams closer is the knowledge of English. Therefore, when looking for a software development vendor, consult the EF EPI English Proficiency report or other related research. This will help you figure out the average level of language acquisition in the country.
  • Do your best to keep in touch with your team. Time zone differences between the distance countries can be smoothly tackled. Even a 7-hour gap can be painlessly mitigated since most of the countries have 8-hour working days. In order to be on the same page with your partner, you have to conduct regular meetings with your distributed teams. Daily stand-ups, brainstorming sessions, and team syncs will help you to quickly resolve blockers and discuss emerging issues in real time. 

Top destination for offshore custom software development: Eastern Europe 

Poland

One of the Eastern European countries with a large talent pool is Poland. The country’s engineering potential counts 330,000 developers. According to the ABSL report, over 148,000 Polish tech specialists are involved in custom offshore software development services. Their key industry expertise areas include agriculture, automotive, food production, and tourism.

Polish technology expertise is well-recognized in many international rankings. It appears third in the Skillvalue rating and takes seventh place in the Top Coder list. The country also takes the lead in terms of talent pool skilled in Python, PHP, and Java programming languages. The latter, for instance, comprises 81,000, which is more than Ukrainian and Bulgarian Java potentials combined. Moreover, Poland has the largest number of big data specialists in the area

Another Poland’s strong side is STEM education. The country has around 400 educational institutions, over 20 of which are offering CS-related programs. Moreover, international enterprises like UBS, Avanade, and P&G provide paid tech internships for the students.

Poland has around 950 IT enterprises, according to Clutch. Over 70 of them are mid-size firms and large development vendors that will be ready to launch your custom software development project immediately.

Keep reading: Offshore software development in Poland: All you need to know

Ukraine

Even in the critical times of war, Ukrainian software developers continue to deliver engineering services to their partners. According to the DOU survey, since February 24 (the start of the full-scale Russian aggression), around 90% of Ukrainian tech specialists have already returned to work. 

So, with a total talent pool of 200,000 skilled tech specialists, the country is still a go-to destination for offshore custom software development. As stated in the ABSL report, 167,000 Ukrainian developers are engaged in outsourcing engineering projects to other countries, mostly the US and Western Europe. Ukraine is home to tech specialists with multidimensional expertise that includes cloud implementation, DevOps, IoT, big data, and artificial intelligence. 

If to talk about talent pool, Ukraine takes the lead in many technologies. LinkedIn research shows that more than one-third of Ukrainian developers (81,000) have a solid knowledge of JavaScript—this is the biggest number in Eastern Europe. In terms of front-end development, Ukraine also leaves behind all the neighboring destinations: around 30,000 specialists with relevant expertise reside in the country. Apart from quantity, Ukraine boasts the high quality of the delivered custom offshore software development services: the country is positioned fifth in the Skillvalue, and the sixth in the Top Coder rankings.

The Ukrainian outsourcing market is thriving. According to the Global Startup Ecosystem report, Ukraine is a favorable place to launch a business, placed 34th among the world countries. As for today, Clutch lists 875 engineering companies that provide offshore custom software development. 56 of them are mid- and large-size IT vendors with more than 250 engineers on board. 

Romania

In terms of doing business, Romania is an alluring location. Ranked 28th in the AT Kearney’s report, the country makes a great choice for offshore custom software development. Among global market players that have already been outsourcing software development to Romania are IBM, Amazon, Oracle, and many others.

If we speak about the tech workforce, Romania is just a few steps behind Poland and Ukraine: its talent pool counts around 131,000 engineering specialists. Around 29,000 local developers are engaged in delivering custom offshore software development services to clients from automotive, construction, and mining business verticals. 

Since the development of Romania as the outsourcing hub is relatively recent, its education system is yet to be adapted to the market needs. However, as a result of the government efforts, the annual number of students graduating from STEM and CS programs has reached 6,700. Babes-Bolyai University, Polytechnic University of Bucharest, and the Technical University of Cluj Napoca appear on the Times 2022 rating as the best higher educational institutions to acquire engineering degrees. 

According to Clutch, there are 346 IT firms that offer custom offshore software development services in Romania. As of now, around 30 of them employ more than 250 tech specialists, and, therefore, allow to quickly scale your engineering projects.

Bulgaria

Ranked 17th in the AT Kearney report, this country is a hidden gem of Eastern Europe in terms of IT outsourcing. Bulgaria has a decent talent pool of over 72,000 engineering specialists residing in the country. Around 20,000 of them are engaged in offshore custom software development, including projects for market giants such as HP, Oracle, and CISCO. 

Tech experts from Bulgaria are highly ranked in the international skill evaluation lists. Taking the 12th position in the Skillvalue rating and the 14th in the Top Coder report, the country leaves behind Romania and Moldova. The most popular technology in Bulgaria is Java, with 16,000 engineers having a solid knowledge of the programming language. It is followed by C# and PHP: 12,000 and 11,000 tech specialists regularly apply these technologies in their projects.

IT industry has a big impact on Bulgarian education. The country’s engineering education potential spans 220 high schools that have included tech-related subjects in their programs. Among the most popular CS destinations for Bulgarian students are the Technical University of Sofia, Technical University of Varna, and 10+ other higher educational institutions located in the major IT hubs.

The country’s IT market relies greatly upon custom offshore software development services: in 2020, computer services exports for Bulgaria comprised over 1.3M$. Due to the favorable environment for operating business, the location is home to 170+ software development enterprises.

Number of mid- and large-size custom software development companies in selected Eastern European countries, by size

Trusted location for offshore custom software development: Asia

India

Ranked the first in both AT Kearney report and on the Tholons Global Innovation list, India has a reputation of the global leader in terms of offshore custom software development. Clutch lists over 3,400 firms that outsource engineering services for clients from the US, Canada, Australia, and the UK. Around 200 of them are mid- and large-size employing more than 250 tech professionals. However, the majority of local IT businesses are still startups that count less than 50 software developers.

As for the IT services quality, the country loses to Eastern European leaders (Poland and Ukraine), taking only the 10th position in the latest Top Coder report. The most popular programming languages in India are C++ and C, followed by Java and Python. This technical expertise is applied to deliver solutions for a variety of industries, with a focus on cloud computing, online retailing, e-commerce, healthcare, and automotive domains.

India has around 40 universities that offer CS and STEM courses with the Indian Institute of Technology, the National Institute of Technology, and the Indian Institute of Information being the most prominent education hubs. 

Common English knowledge is another thing to consider when outsourcing software development to India. Around 10% of the Indian population (125 M) speak the language fluently. In 2021 the EF English Proficiency Index is estimated as Moderate and is only going to advance in the future.

China

With around 590,000 tech professionals, China boasts the second largest talent pool in the region. The country also competes with India in terms of doing business: it gets a silver medal in the AT Kearney report.

China is home to over 160 engineering firms that offer custom offshore software development services, 45 of which are mid- and large-size. The country boasts the biggest number of large enterprises on our list: currently, there are around 5 enterprises that staff more than 10,000 employees. Due to a considerable talent number, such market giants can help their clients with team augmentation almost immediately. 

As for the level of expertise, China leaves behind many Eastern European as well as South American destinations. The country is ranked fourth in the 2022 Too Coder Report. The Chinese software developers mainly deliver projects for finance, electronics, and government domains.

The Philippines

Southeastern Asian countries are steadily gaining their reputation as attractive offshore custom software development destinations. The Philippines is one of the most prominent locations in the area with around 190,000 software developers involved in software development. According to the AT Kearney report, the country closes top 10 of the most favorable countries for IT outsourcing. 

As for 2022, Clutch lists around 200 software engineering vendors based in the Philippines, 20+ of them being large- and mid-size companies delivering projects for fintech, healthcare, e-commerce, and other business verticals.

One of the main advantages of offshoring custom software development in the Philippines is the high English proficiency among the local developers. The country is marked as a “high English proficiency” location in the EF EPI report proving that the Filipinos are fluent in both written and spoken language.

Number of mid- and large-size custom software development companies in Asian countries, by size

Learn more: Best offshore development countries in Eastern Europe and Asia

Why choose N-iX as your offshore engineering provider?

  • N-iX is a reliable Eastern European engineering vendor that has been on international markets for 20+ years.
  • Their expertise spans cloud development, data analytics and big data development, Internet of Things, artificial intelligence, and DevOps.
  • N-iX specialists can help their clients throughout all SDLC stages of custom solution development: from the product discovery phase through the engineering design and implementation, to the release preparation and maintenance.
  • The vendor employs over 1,700 skilled engineers that have solid expertise in delivering projects for agriculture, telecommunications, fintech, healthcare, and many more domains.
  • N-iX established long-term business relationships with global market players including Grainger, PrettyLittleThing, Gogo, Fluke, and Fortune 500 companies.
  • The company’s engineering teams adhere to the international cybersecurity standards, particularly, GDPR, ISO 27001:2013, PCI DSS, and ISO 9001:2015.
  • The vendor is well-recognized in the industry and appears on the top positions of Forbes, CRN, and IAOP rankings.

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By Marta Khort May 11, 2022

About N-iX

N-iX is an Eastern European software development service company that helps businesses across the globe expand their engineering capabilities and develop successful software products. Founded in 2002, N-iX has formed strategic partnerships with a variety of global industry leaders and Fortune 500 companies, including OpenText, Fluke Corporation, AVL, Lebara, Currencycloud, TuneIn, and many others. With more than 1,800 professionals, N-iX offers expert solutions in software engineering, cloud-native services, data analytics, embedded software, IoT, machine learning, and other tech domains covering a wide variety of sectors, including finance, manufacturing, telecom, supply chain, to name a few.

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