According to Gartner’s forecast, IT spending across the globe is expected to reach $3.76 trillion in 2019, which is 3.2% higher than 2018. A major part of this spending is going to comprise of software development.
With the growing advancement of technology and reliance on sophisticated software, businesses are more than ever willing to invest in bespoke software development for smoother operations.
In such an environment where firms continue to look for opportunities to get the right software that fulfills their business requirements, we look at the countries in Asia that are best suited for your software development needs:
When it comes to software development outsourcing, it’s impossible to talk about Asia without talking about China.
It is believed that China has some of the fastest expanding IT firms offering great services at low cost. The environment of competitiveness that prevails in the country is an important factor that attracts foreign firms to outsource to the country.
China is one of the biggest players in Asia that has emerged in the area of outsourcing services, with its IT sector growing at a fast pace. A study says that in 2017, China had over 35,000 tech firms and 6 million people have been associated with the software industry.
Despite being one of the best considerations for software development outsourcing, one major drawback has been China’s inability to address the intellectual property issues which may become problematic for those looking for innovative technology for their software. After all, no one wants their distinguished product to get copied elsewhere!
Fluency in English is something that Chinese people continue to struggle with. That’s why western countries may at times find it difficult to reach out to China. How can you work together for a common goal if the communication is not free-flowing?
Nevertheless, China is an important offshore country for software services. According to Computer Weekly, investment in technology parks and telecommunication infrastructure have paved the way for outsourcers to pay attention to China’s determination as an outsourcing destination.
Malaysia has begun to emerge as one of the key players in the Asia-pacific region for software outsourcing. Companies like HP, DELL, and HSBC have been working with Malaysia for their software development needs in the recent past.
UK-based Liverpool & Sefton Chambers of Commerce has highlighted the following features that “make Malaysia attractive for high-end software development:”
- Large talent pool with a broad base of IT competences and senior resources
- Good English and communication skills
- Ability to attract IT resources from other countries – creating international teams
- Resource centers that can be used to service the Asian market
In 2017, A.T. Kearney Global Services Location Index (earlier known as Offshore Location Attractiveness Index) placed Malaysia in third position – a spot that Malaysia has held since 2004 due to its consistency. Moreover, the country’s ICT-related expansion as part of its growth plan makes it a valuable destination for offshore software services.
Such factors have stimulated an increase in the number of software firms. However, this increase has created an imbalance in supply and demand for the number of qualified software developers. This is a challenge that Malaysia is having to deal with in order to maintain its position among the most sought-after software development outsourcing countries.
3) The Philippines
The literacy rate of The Philippines is 96.3% which makes it a big attraction as an outsourcing destination. Since English is the official language of the country, 76% of people are adequately familiar with it. According to a survey, Filipinos have emerged as world’s best people in business English.
Filipinos are also believed to have a cultural connection with the west. Besides, it offers low-cost labour which is an added advantage for the country.
In 2016, the capital of the Philippines, Manila, was second globally among outsourcing cities. The country’s IT-related spending is estimated to surpass $7 billion by 2022.
Meanwhile, Filipino youth is expected to contribute about 72% of the global workforce by 2025. This youth is passionate enough and willing to change the world. The IT industry, which as we’ve already described is on the rise, is indeed one of the fields to bring a major sea change. According to Oliver Segovia who is an entrepreneur in the Philippines:
“Filipino workers are proving themselves to be valuable partners in the growing tech industry.”
One factor that is highly significant in business is the temperament of the service provider. In this case, Filipinos take the lead. It is believed that “the patience, perseverance, and warmth of the Filipino outsourcing workers are legendary.”
Even though the software industry of the Philippines is not comparable with India’s in terms of size, nonetheless the country’s tech firms are more than capable of competing with many global IT firms.
For a long time, enhancement of IT industry has been a priority of the Indian government; the results of which are apparent today. India has become one of the best choices for offshore software development services, and is a highly cost-effective outsourcing option.
In 2017, India entered the World Bank’s top 100 countries for ease of doing business, a key driver for foreign firms looking to offshore their IT requirements.
India’s NASSCOM has projected that the country’s “$167 billion IT services industry is expected to grow 7-9 % in the next financial year”, a major component of this is software export revenues.
Being the world’s largest democracy, India has a huge workforce and the software industry is a major job creation sector for the country.
Although inexpensive software development remains to be India’s biggest advantage, some questions about the quality of service have been raised. Such a problem might often have surfaced due to the need for the country’s developers to upgrade their technological skills, which at times, may not be on par with the expectations of western investors.
India’s added advantage of focusing on IT laws and data theft prevention, along with fluent English-speaking skills of its working class, make it a considerable option for many outsourcers.
An article in The New York Times discusses the possibility of Pakistan becoming the “next software hub”. It says that the country stands in third place (after the USA and India), among the freelancers who have been engaged in IT-related outsourced assignments. The top countries hiring these services are the UK, USA and Australia.
Pakistan’s commitment to give a boost to its IT industry is well demonstrated by the fact that it has recently initiated DigiSkills program which aims to train around 1 million young people “to streamline excellence in technology, innovation, and professionalism, focusing on building a workforce for the future driven by the 4th Industrial Revolution.”
Moreover, there are some 15 software technology parks in the main cities of Pakistan. Nine of these parks are located in Lahore, making the city Pakistan’s IT hub. Rezaid’s Lahore office is also located in the same city.
According to Accelerance, a global authority that helps companies find the right places to outsource software development:
“Our team of software travelers is interested in innovation and finding the absolute best software providers in the world, regardless of location. And with Pakistan, we hit the jackpot.”
Pakistan has the third largest English-speaking population in the world, giving it an innate sense for doing business with western based organisations. Its technology sector is rapidly evolving driven by a burgeoning youth sector; almost one third of its population is between the ages of 15 and 29 years old. Pakistan is in a development phase of growth and technology businesses there recognise the need for delivering quality services at affordable prices.
There are no hard and fast rules for selecting a particular country for your software development requirements.
While I have highlighted main aspects that make these five countries significant options for outsourcing, the final choice depends on your business preferences.
Nevertheless, your offshore firm should be able to deliver as per your expectations in terms of quality, pricing, communication and a congenial relationship, while ensuring reliable after-sale services as well.
Choosing those software companies that have a local presence in the client country offers local accountability and reduces cultural biases, ultimately leading to a win-win situation for both the outsourcer and the outsourcing firm.