Top 5 Nations to Set Up Offshore Development Centers- 2022

Top 5 Nations to setup ODC

The growing popularity of remote operations in western countries has made offshore development centers a popular choice amongst companies in the US, Canada, UK, Japan, Australia, Newzealand, Middle East, and Europe. As more and more businesses plan to set up an offshore unit for their IT development, they face the same question ‘Where to set up an Offshore Development Center?”

This comprehensive guide will educate you on various factors to consider while assessing a location and the top 5 nations for setting up an ODC.

But before we move further, let us understand a few offshore development terminologies.

    • An offshore development company refers to a company that provides the service of setting up offshore development centers and teams.
    • An Offshore Team refers to the resources deployed in an ODC (Offshore Development Center) to work on your software development projects.
    • An ODC (Offshore Development Center) project refers to the software development project the offshore team is working on

Factors to consider while setting up an Offshore Development Center

IT Talent-pool

This is one of the most critical factors to consider before setting up an offshore development center. Though you may start your ODC with a small team, you need to scale your team to meet new demands as your business grows. So, it is vital to choose a nation with a large talent pool to support your future requirements. Pay close attention to the talent pool’s annual growth, i.e., the number of university graduates entering the market every year.Choosing a country with a massive resource pool across technology-stack is critical to the success of ODC. But having is a large pool is just a prerequisite. You would not only scale the team but also need to upgrade to new technologies to stay competitive in the market. So, it is also important to gauge the technological advancement in the nation.

Quality of work

Quality of work is an uncompromising factor in IT/software development as it affects critical factors like

    • performance and end-user experience
    • data security
    • resilience and future-readiness

Thus, choosing a nation and an ODC partner that follows the international standard of coding and software development is crucial.

Besides this, having a robust infrastructure is also critical for building a technology-enabled, secure, and agile offshore development center that can deliver high-quality business outcomes at scale.

Today, ODCs are not seen as an extension of your product engineering team but are being considered as the innovation hub for businesses. Thus, selecting a location with skilled resources, technology, and infrastructure for your offshore development center becomes essential.

Communication skills/language proficiency

It goes without saying that good communication skills amongst your offshore team are imperative to the success of your ODC. The project’s quality depends on the offshore team’s ability to comprehend a brief, understand the purpose of the work, and deliver the required output.

English is the universal language of the IT industry globally. It is the language used for communication as well as for software development. So, it is important to gauge English proficiency before setting up an offshore development center.

Cost-benefit

One of the biggest reasons offshore development centers become popular post-pandemic is their ability to deliver premium-quality work at a much lower cost of operations. Today, most businesses are looking to offshore their IT operations to fast-track digitization, upgrade to new technologies, and build a flexible and resilient business model while saving big.

But an assumption that ODC would help you save big, irrespective of where you set it up would be a big mistake. In fact, offshoring to countries with high cost-of-living like Canada, Germany, Singapore, or Australia, you may end up paying more.

So, to avail the true cost-benefit of an offshore development center, you must choose a location with

    • low cost-of-living
    • low cost of infrastructure
    • a large pool of talent across technologies to avoid demand and supply gap, leading to huge variations in resource costs

Government policies and Political Stability

Before setting up an offshore development center, it is important to analyze the geopolitical and legal environment.

It is important to understand

    • Government policies towards FDIs in various sector
    • Import and export policies
    • Employment and employee’s benefit policies
    • Taxation policies
    • Political stability

Political unrest or sudden war in a country may cause loss of connection with offshore team leading to unexpected downtime and delays in deliveries.

Work culture and ethics

Understanding the work culture and ethics is critical while managing a remote team. Ethics and working cultures are standards or values that are generally based on conscientiousness. Work ethics include preserving social skills being reliable and resourceful wherever needed in a work setting.

While offshoring, it is always advised to look for empathetic teams.

    • Choose teams that possess characteristics such as honesty and accountability.
    • Share a sense of responsibility towards work.
    • That are willing to provide support on Adhoc requirements of the project

Now that we understand the various factors for choosing an offshore development center location. Let us explore the top 5 destinations that score highly on these criteria.

Top 5 countries for setting up offshore development centers

India

Indian Developer Rates

When businesses consider offshoring, India is one of the first destinations that pop into one’s mind.  Over the last two decades, India’s IT sector has accelerated, giving neck-to-neck competition to the US.

    • English Proficiency
      • India has the second-largest English-speaking population in the world.
      • Ranks #48 in the world for English proficiency
    • Talent pool
      • 5 million software developers
      • Adds 200,000 IT graduates in a year to this population
      • 2.6 million stem graduates in a year
    • Technology
      • The forefront of tech innovation in AI, ML, Blockchain
      • 75% of global digital talent resides in India
    • Cost of Hiring Developers
      • $20 – $40 per hour
    • Government Policies and Political Stability
      • India is the world’s largest democracy
      • Politically stable environment and the
      • Favorable government policies towards FDI and the IT sector

Learn why hiring Indian developers is the key to successful offshoring.

China

China Developer Rates

China is another nation that has built a strong name in the offshoring industry. Today, China owns many of the fastest-growing IT companies.

    • English proficiency
      • Only 10 million of the 1.3 billion population speak English.
      • Ranks #49 in the world for English proficiency.
    • Talent Pool
      • Adds 4.7 million tech graduates every year
      • Technology
      • China ranked first in a “programming Olympics” by HackerRank
    • Cost of Hiring Developers
      • $35 – $40 per hour
    • Government policies
      • Government with communist ideologies
      • Lax enforcement on Intellectual Property (IP) laws

Poland

Poland Developers Rate

Despite being a small nation, Poland has the third most skilled programmers globally. Poland is the Research and development hub for global companies across industries.

    • English proficiency
      • 30% of the Polish population speaks English as their 2nd language.
      • Ranks #16 in the world for English proficiency
    • Talent Pool
      • 2,95,300 software developers
      • Adds 80,000 graduates every year
    • Technology
      • Ranks in top 5 nation for Java assessments other mainstream programming languages like Python, Shell, and Ruby
      • Tholons Globalization Index ranks Warsaw and Krakow in the top 50 cities for accelerated digital transformation.
    • Cost of Hiring Developers
      • $40 – $56 per hour
    • Government policies
      • Poland ranks 40th in the world in ease of doing business
      • Politically stable economy and government
      • Ranked 37 on WE Forum Global Competitiveness Report

Philippines

Philippines Developers

Apart from good command of the English language, Filipinos are known for their hard work and good work ethics. But the country faces turbulent weather conditions and tropical storms that can disrupt operations during summers.

    • English Proficiency
      • 92% of Filipinos speak English
      • Ranks #18 in the world for English proficiency
    • Talent Pool
      • 95000 technical experts
      • Adds 1,30,000 IT graduates every year
    • Technology
      • Manila is ranked as the second-best city for outsourcing in the world by the Tholons Globalization Index
      • The IT workers are all well-versed in Java, API development, .NET
      • Lacks expertise in complex projects
    • Cost of Hiring Developers
      • $4 – $10 per hour
    • Government policies
      • Ranks #95 in 190 economies in the ease of doing business
      • Favorable government policies
      • Ranks low in government stability
      • Numerous public holidays can cause delays in deliveries.

Ukraine

Ukraine Developers

Ukraine is a hotbed for IT outsourcing and ranks amongst the top 15 countries for offshore development. A strong focus on education has helped their tech industry to grow and flourish. 

    • English Proficiency
      • 80% of the IT employees within the country speak
      • Ranks #44 in the world for English proficiency
    • Talent Pool
      • 200000 technical experts
      • Adds 40,000 IT graduates every year
    • Technology
      • Ranked 11th by HackerRank for countries with best developers
      • Ranked 38th among the top 50 digital nations- 2020 Tholons Services Globalization Index.
      • Gartner’s list of top 30 countries for offshore services
      • Experts in Big Data & AI, mobile development, blockchain, and cryptocurrency projects.
    • Cost of Hiring Developers
      • $25 – $50 per hour
    • Government policies
      • Low taxation system
      • Active cooperation from main IT industry development organization
      • Politically unstable

Now that you have clarity on the top 5 locations for offshore development centers, it brings us to our next crucial step- Choosing the right offshore development company/partner.

Here is a checklist that will help you choose the right Offshore Development partner.

How Your Team in India(YTII) can help you set up an Offshore Development Center in India

Since 2008, Your Team in India has helped companies globally scale up their business by setting -up Offshore development centers in India. Your Team in India offers three models of ODCs:

    • Product Engineering
    • Build-To-Scale
    • Build-Operate-Transfer (BOT)

To help start-ups, SMEs, and large enterprises successfully hire offshore teams to speed up their software development projects and reduce time-to-market.

With YTII’s ODC models, you gain:

    • A dedicated team
    • Quick and transparent hiring
    • On-demand scaling
    • Quick resource replacement
    • Tech-support on ad-hoc demand
    • Extensive NDAs and complete KT
    • Support even after project completion
    • Full visibility of ongoing work
    • Well-defined SOPs and operation hierarchy

Ready to set up an offshore development center in India?  We are here to help! Book a one-on-one session with our expert here. You can also drop us an email at [email protected]

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