The high costs of domestic developers and the employee scarcity drive American buyers to seek for foreign specialists. Check out our detailed report on offshore software development rates by country done by DICEUS offshore development team Ukraine.
How to delegate IT solution development to others?
The offshore software outsourcing meaning is quite a broad term having lots of definitions. This abstract notion describes dozens of processes aimed at creating IT products or solutions, management, maintenance, etc. Simply put, it’s all about hiring an external provider to execute some ICT tasks and perform business operation processes like angular.js outsourcing.
Offshoring should be differentiated from nearshore, the latter being a closer realization of outsourcing. Imagine, John from the USA hires a Canadian team of developers. That is called nearshore outsourcing. And if John hired employees in Ukraine, it would be considered that he used sources offshore.
The image below shows how on-, off-, and nearshore are differentiated. Now, when you’ve come to grips with the differences, let’s see what advantages are there in delegating IT-related activities to others. Note, that it’s you who determines the factors influencing your decision. There are millions of arguments pro and against leveraging the staff other than local employees but you should have your own thoughts on this issue. It’s obviously important to feel comfortable working with other people, no matter who they are, what country they reside in, and what payments they charge for their services.
What are the benefits of outsourcing software development?
Speaking about the pros of employing an external provider, we may start with a major advantage – the cost. Everyone who has ever used sources other than in-house knows that it could be much cheaper. The reduction of expenses is obtained mainly due to the distinct difference between the rates and salaries of staff.
The other thing that makes hiring foreigners attractive is expertise and quality. You buy services just as well or better than similar in your native country. Teams which work on challenging tasks day by day are professional. Obviously, dedicated groups have all needed software and hardware to complete the assignments that are usually related to up-to-date technologies. That is one more plus that adds value to using outsourcing.
Developing IT solutions for any type of business is risky as every project contains uncertain elements related to time, efforts, budgeting, technical issues, etc. Sharing risks with any offshore software development company you are able to get professional risks assessment, prioritizing, and management. Any custom software company knows how to identify and monitor risks as well as how to deal with problems ad hoc.
How are quotes created?
Managing offshore development teams, understanding how owners form the pricing may seem a daunting task. Usually, a buyer compares the prices based on a simple calculation. He blends the rates of 6-8 members of a Scrum team and calculates how much 12-month full-time employment of the team will cost.
Actually, a buyer may rest on such estimations in case he plans a long-lasting partnership. Real quotes can be also based on engagement models, qualification levels, and expertise.
World’s software outsourcing rates
Accelerance, an assessment company, has written a compelling report on offshore developer rates 2018. The fresh data is valuable and helpful for buyers from any part of the world. You may contrast the prices, analyze your own quotes, and assess the diversity among global regions. Take a closer look at the latest information.
Offshore software development rates by country to consider while selecting a partnership
It’s hard to identify top outsourcing countries in the world. The relevant information is often biased and turned by different providers to their advantage. Cost is a clincher in search for offshore developers that’s why we’ve picked up the most popular destinations.
Eastern Europe: Rates in Romania, Ukraine, Poland, Belarus
Europe attracts lots of foreign customers looking for cheap pricing. With reference to topsdev.org data, the median hourly programmers’ wage is almost the same. As of 2016, the highest cost was $25 whereas the lowest was $15.
The chart below shows that the highest costs are in Russia and Poland, the cheapest pricing for offshore developments are in Serbia and Macedonia.
European countries are deemed to offer high quality on the global IT market as compared to Asia.
The costs are still competitive though the salaries are constantly growing. Just compare and contrast the hourly rates of senior QA and software engineers in the USA, Ukraine, and Poland. As you see, Poland and Ukraine outsourcing rates are much lower than the American.
|Senior Software Developers, $||94,083||35,759||38,270|
|Senior Java Developers, $||97,178||41,525||43,614|
|QA Engineers, $||66,712||19,000||21,498|
7-12 hours is an average time difference between the USA and Eastern Europe. The difference in time between the USA and India makes 10-14 hours. So, developers from Europe will more likely communicate with an American customer on a daily basis.
Can’t choose an outsourcing partner? Check out these Pros of Choosing Ukraine for Outsource Projects
Asia offshore development rates: China, India, Japan
The wages of IT specialists in China, for example, are behind the wages in the advanced economies. A typical programmer makes up to $18,000 per year here. India is one of the top outsourcing countries in the world as 40% of jobs are inquired here thanks to the stingy costs. Developers hardly make $12,000 a year.
Japanese programmers earn around $40,000 though Japan is a nation of the newest technologies. That’s why a lot of tech engineers move to the US to earn more.
Generally, Asian programmers charge $15-25 on average. It’s quite an affordable rate but the only disadvantages are different culture and time zone that can lead to certain misunderstanding between a customer and an employee.
Latin America nearshore development prices: Brazil, Argentina, Chile, Mexico, Costa Rica
Brazil is well-placed as it is located in the nearest neighbor proximity to the USA. It has equal timezone as the North American countries. Brazilians earn 30-50 dollars hourly. Argentina is easy to reach from North America. The programmers here charge the same money per hour as Brazilians do. Chile is much more cheap for getting ICT related services. The rates vary from 15 to 25 dollars.
Costa Rica offers 25-50 dollars rates. Here IT specialists demonstrate a good command of written and communication English skills. In Mexico, buyers pay high – $35-55.
Africa offshore development rates: Kenya, Morocco, Nigeria, Egypt
African countries are diverse as the prices they ask for offshore software product development. The costs vary from less than $20 to $50 per hour. It’s difficult to find highly qualified developers in Africa that’s why Africa is good for nearshore sources using but not for offshore. Got the rates? We’ve prepared some tips for you!
Tips! Recruit a development team like an expert
Consider the total cost of engagement which is the overall expenses for outsourcing. Those are not only the allocated fixed or hourly payments but also some unexpected charges. You should also think of travel distances, communication, and management that can cost additional expenses. Such activities may add up to 30% on top of engagement cost.
Consider the things that affect the rates: location, team size, experience, tech stack, and duration of the engagement. It is well-known that the more developed a country is and the closer it is to the USA or Western Europe the bigger are the rates offered by IT specialists.
The newest stacks of specialists tend to ask for higher rates than the employees skilled at traditional technologies. It is a fact that seniors earn more than juniors.
Long-lasting projects development can cost less than a short-term one. It’s because a lot of providers offer affiliate programs and campaigns for their partners.
When it comes to selecting a particular partner, buyers think, first off, about cost-effective solutions. In the chase for low rates, customers forget of quality, the latter being more important than the costs. So, you should consider both the price and the quality of the provider you want to try.
DICEUS believes that the most successful partnerships are based on openness and strategic collaboration. We think that passion to reach the common goal is the engine of trusted relationships in business.
More tips on choosing the right outsourcing company.