India is one of the most demanded countries in the field of IT outsourcing. This is primarily due to:
- low prices for developer services: after all, India is a third-world country respective rates and prices;
- the breadth of services provided: the average annual growth rate of IT enterprises has been steadily going over 7% in recent years;
- flexibility: focused on the international market more than on the local environment, Indians try to adapt their software development approaches to remote interaction.
However, buying into these seemingly advantageous factors often leads product owners to profit and reputation losses. Let’s figure out why outsource to India in the first place and why it’s mostly better to steer clear of this outsourcing location.
What do experts say about India’s IT outsourcing growth?
Let’s start with an expert opinion: what about the IT industry in India as a whole?
The dawn of Indian IT dates back to the distant 1986. It was that year that the global Software Exports, Software Development and Training Policy program was launched. Thanks to this initiative, the local software development industry began to make up an impressive part of the national budget.
At the same time, in the local market, IT services were not so in demand. That’s why the main focus of local developers was aimed at providing services to foreign customers. Indeed, why spend energy and money on the import of physical goods, limited to the boundaries of one territory, if you can sell intellectual property in the form of software (to both local and US customers)?
Through this development model of local labor sectors, Indian software developers have created one of the largest and fastest growing IT communities in the world. Thus, offshore developments of Indians amounted to more than 200-240 billion US dollars throughout 2019-2020 alone. And these are obvious prerequisites for considering India a serious player in the field of global IT outsourcing.
Top 4 trends in the Indian IT sector
Now let’s find out which four technologies can be considered the most trending in India in t2020 and which of them can be implemented by your contractors as part of outsourcing engineering to India.
Hyper automation is one of the top four IT industry trends in India. It is commonly based on artificial intelligence, machine learning, IoT, and RPA technologies. The main goal of hyper automation is to maximize the performance of systems, reduce the likelihood of human-factor errors and, of course, ensure that work processes are carried out independently of human resources. Typically, hyper automation is used in manufacturing and production sectors.
AI-powered solutions are increasingly becoming available to ordinary citizens, and smart home systems are no exception. Thus, today, many IT companies in India are developing turnkey smart system solutions. Typically, such systems are composed of IoT-based devices, thereby achieving a machine-to-machine communication model without the need for human intervention.
Voice search is one of the latest speech recognition technologies that translates user speech requests into text form, which is then sent to a standard database search system. The applications most explicitly associated with this term are based on the use of speech recognition and speech synthesis systems.
Such solutions increase the level of user UX by expanding the range of capabilities of smart assistants.
Alternative data storages
Lastly, the latest trend in Indian IT is the search for more advanced storage solutions. Currently, Indian developers are working on the concept of software-defined storage (SDS), as well as on the construction of scalable intelligent data centers.
India outsourcing statistics
In December 2019, the Financial Times published an article on Indian outsourcers highlighting the fact that they constitute the bulk of the global IT outsourcing community, and that this niche in India is now doomed to failure.
On the one hand, well-known companies such as TCS, Infosys and Wipro, which provide software engineering services for outsourcing, helped the country to join global distribution chains back in the 2000s. However, the next financial crisis that happened in 2008-2010 significantly reduced the volume of orders coming from abroad.
This, in turn, led to increased internal competition between Indian companies, forcing them to further reduce the already low rates. And this is a serious disadvantage to the quality of the work performed.
As a result, even though in 2019 India was still ahead of other countries in terms of the number of outsourced specialists by a large margin, the level of services provided, without reaching its peak, turned out to be even lower. From there on out, the established opinion about Indian IT arose – “cheap and bad”.
Outsourcing to India – Pros and cons
Now, let’s objectively assess the main benefits and disadvantages of IT outsourcing in India.
What are the pros of software outsourcing in India?
So, why do companies outsource to India? Here are the main pros of Indian outsourcing.
As we mentioned before, India, due to tough internal competition, is forced to maintain consistently low prices for the services provided. You can safely find freelancers for website development who will ask for no more than 15 bucks per hour of work.
Larger labor pool
Obviously, with the well-established trends in the local employer environment, more and more Indians strive to conquer IT professions. For this reason, some foreign customers going for IT outsourcing to India are guided precisely by this factor – after all, there really is someone to choose from.
Get access to different services
Surely, a large number of the Indian population indirectly affects the total number of developers specializing in various niches. We have mentioned above that you can find even the specialists whose profile covers even such complex concepts as artificial intelligence, hyper automation , IoT, and alternative digital data storage.
Top 4 challenges of India IT outsourcing
Now, for the cons of India IT outsourcing.
Lack of experience
Despite the fact that now in India there are a lot of valuable personnel who understand their area of competence at the proper level, a good share of local specialists are still rookies that have completed several months of IT developer courses.
That’s why when outsourcing software development to India, you will have to be more careful with developers whose age has exceeded the thirty-year milestone: after all, it is probably they who don’t have anything more on their hands than a beautiful diploma after a six-month course completed in the late nineties.
Also, many Indians lack creativity. This factor is fundamentally important for customers looking for custom developers. The fact is that relying on ultra-low rates, clients hope for high quality work performed. Nevertheless, in practice, it turns out that the Indians simply copy and paste solutions created by someone earlier, making minimal changes to them.
And sometimes, this copying is so obvious that the end user of the created product notices it. This is a firm guarantee of the product’s complete lack of competitiveness.
If you are a US-based customer, this is an especially felt disadvantage. The fact is that the difference in time zones between India and the United States is approximately 12 hours, which is incredibly inconvenient for both a business client and contractors, even with advanced messengers that already significantly increase the convenience of communication by providing remote interaction.
Yet another pitfall is a common concept practiced by Indian developers called “blended rate”. This means that when you conclude a contract, you will be told that the team consists of developers of different levels of qualification. The total project budget will be formed taking into account the arithmetic average of the total amount of their rates per man-hour.
In practice, it comes down to this: about half of the Super Junior level specialists are hired into the team (these are those who have just entered the developer’s position, and whose experience doesn’t exceed six months). If you are very lucky, the team will have, at most, one Middle (and hardly Senior) specialist who will be able to pull the project together to the point where the customer won’t be too horrified.
Completing our top outsourcing to India problems are communication issues. The fact is that not all programmers who provide their services for outsource to India mean the word “yes” as a promise to do something.
When you are promised to complete a project by the end of the month, it may not mean that this will happen. For Indians, the word “yes” can mean that your request was heard, and not that all promises and your proposals will be implemented by the time you need.
On top of that, Indians cannot boast of a good organization of work processes, so some clients have to repeat the same requirements from one call to another.
Sometimes, such lack of responsibility forces you to postpone the release date of the project for many months, and this is unacceptable in the conditions of the fierce software development market.
Are Indian programmers overrated?
Can we say that despite the initial attractiveness of the services of Indian IT specialists, their real value is exceeded many times? Let’s return to the consideration of the above outsourcing to India pros and cons.
In fact, if you have good recommendations from the outside, in theory, you can be lucky to find really good specialists, and even save money. On the other hand, given that the minimum cost of a project rarely turns out to be below several tens of thousands of dollars, such risks are not at all justified. That’s why it would be much more rational to try to find specialists who can guarantee you a much more predictable result – for instance, developers from Ukraine.
The point is that the concepts of a good US developer and a good Indian developer are very different. We mentioned above that you can easily get pseudo-specialists with some courses completed in the late nineties (at best) or self-proclaimed “professionals” that went through a virtual self-study guide.
Moreover, if you don’t know anything about software development at all, it won’t be easy for you to communicate with your contractors found for software outsourcing to India. The fact is that the vast majority of them, as a rule, follow clear client instructions. Therefore, it will be an overwhelming task for many of them to offer something that could somehow optimize the structure of the solution being created, or, moreover, create it from scratch, translating your non-professional tips.
Also, potentially, when programming outsourcing to India, you can easily suffer deadline failures. Indians love to answer literally everything with consent (in the culture of local speech, it is simply not acceptable to say “no” to people). So it’s always best to add a couple of weeks or several months to the primary deadline just in case (depending on the complexity of the task at hand).
And of course, don’t forget about the notorious copy-and-paste that is abused by many web developers in India. Before entering into such dubious cooperation, just imagine that a few months after the release of a web application or website, you will find something similar on the Internet, only several times better.
On the other hand, you can go the other way and contact one of the Indian companies with an international name. For instance, NetGains or QBurst. However, be prepared to handle rates comparable to those of their American counterparts.
In any case, all things considered, think twice before going for outsourcing in India.
The organization of software outsourcing to India
Have you decided to save some money and contact Indian developers? In this case, in order to properly organize the search for contractors, you need to start by considering the sites where such developers roam.
There are many different outsourcing India sites that help clients and freelancers to find each other. In the English-speaking segment, the largest is Upwork.
Also, search Google for personal freelance sites fitting your topic. Providers with a personal website are obviously focused on building strong business relationships. However, searching through personal sites and chats has one significant drawback: you have no leverage over the performers if they mess up or delay.
To make things easier for you, we have compiled for you a list of sites that act as a kind of guarantors of the quality of the services provided by the developers.
How to hire the right Indian programmers?
If you do decide to take the perceived risks and hire indian programmers, we recommend these five popular English-language websites for finding software companies in India:
They boast a good, intuitive structure, as well as a large number of constantly updated advertisements.
By the way, there are also specialized sites for freelancers in India, like:
The India outsourcing option for the laziest is recruiting agencies. Here is a great list of the most popular recruiting agencies in India to help you find turnkey developers.
As you can see, outsourcing to India looks attractive only at first glance. However, in reality, this industry is not yet perfect enough to entrust its specialists with serious, large-scale projects. That’s why it is much more rational to turn to more proven developers who offer, one might say, the ideal value for money – we are talking about developers from Eastern Europe.
In particular, we are talking about developers from Ukraine – a country where in 2019 alone the capitalization of the IT services market amounted to $4.17 billion. At the same time, Ukrainian specialists do their job well, not neglecting quality in favor of reducing the cost of their labor.
If you are interested in developing a truly high-quality software solution yet don’t want to overpay, contact us! We will select the best offshoring specialists in the right niche for your project so that you get a competitive, scalable, and reliable product in the long run.