Outsourcing to India in 2021: reasons for outsourcing and trends to watch
Why companies prefer Indian outsourcing
India tops many lists of the best software development outsourcing companies. While everyone has been talking about the cost benefits they get when they outsource development to India, there are many other reasons why companies prefer India. You can indeed ride the digital transformation wave and lead the technological evolution if you take assistance from India’s technology experts.
To take advantage of the time zone difference and work round the clock.
Companies in the US, Australia, Europe, UK, etc., can take advantage of India’s time zone difference. Four to eight hours can exploit time zone difference can be influenced to work round the clock. Can use the time overlap to discuss projects which mean that a project can complete faster. You have teams working around the clock on your development work.
To bring the development to the highest quality standard.
More quality standards are maintained when you outsource than when you develop in-house. And when you outsource to India, many quality guarantees need to be met before delivery. The ever-growing talent pool in India forces everyone to deliver excellent quality to stay relevant in any organization. Moreover, most IT companies in India have a quality tester besides a project manager and a delivery manager to ensure the quality of the code and the overall product before delivery. Indian IT companies keep startups, product companies, enterprises, and other companies returning for all their IT needs.
To find the best talent from around the world.
With limited reach, you can start appreciating the frogs in the well. As you expand your horizons, you will begin to spotting talent hiding in remote corners. Outsourcing software development to India means finding the best talent and using it to work on your product. You can find experts, experienced professionals, technology experts, and all the others needed to develop your product. You can have experts work on it from scratch or take over part of your project’s development process.
| Eliminate the communication barrier in the development
There is a misconception that outsourcing to India would mean a lot of communication challenges. However, India has the second-largest English-speaking population in the world. More than 125 million people in India speak English as a second language, and it is straightforward to exchange information in this language. Can communicate it skillfully without any effort. In India, IT employees are tested not only on their technical skills but also on their English language skills, so communicating with foreign clients is not a problem.
| To get the latest technologies
Application or software requires a lot of new-age technologies to build the best. But geographical constraints limit them in finding the right technology expert. With more than 3.1 million young people graduating from top IT colleges every year, there is no shortage of technology fanatics in India. Experts in all technologies and development frameworks can found to create a cutting-edge product. Be it the latest technology like blockchain, artificial intelligence, virtual reality, data science, machine learning, or any other advanced technology.
| Enjoying a government-friendly outsourcing relationship
The Indian government is embracing development and is keen on helping its businesses grow through outsourcing. The government has announced several laws and policies to make outsourcing easier and smoother for businesses. Be it the IT Act 2000, the Specific Relief Act 1963, the Indian Contract Act 1972, or the Foreign Exchange Regulations, many laws help to outsource. The Indian government announces many rules and regulations to encourage outsourcing to India and make India a preferred destination for outsourcing.
No country is as advanced and prosperous as India when it comes to software development. It has a young population eager to acquire all the skills and deliver the best. It has become a magnet for companies looking for a development partner, a technology partner, or an IT outsourcing company for any other tech need. And all this is not without reason. Here are some of the statistics and figures that prove India is better than the rest when it comes to software development outsourcing.
IN INDIA, the IT outsourcing industry expects to grow at a CAGR of 7.25% and reach INR 8,830 billion by 2025 from INR 5,649.47 billion in 2019.
- 82% of Indian outsourcing companies plan to increase their tech workforce in the coming years, according to the 2017 Asia Pacific Occupier Survey Report.
- The cost of outsourcing to India is low as compared to developed countries. You can get developers in India for an average of $25.
- In AT Kearney’s Global Services Location Index 2019, India ranks first in attractiveness for outsourcing.
- More than 40% of India’s workforce expects to upgrade their skills and become better assets in the development process by 2022.
- India tops the list of countries with the most ISO 9000 certified software companies and even hosts over 75% of the world’s CMM Level 5 certified companies.
India is second only to the US in the list of largest English-speaking countries, removing barriers to communication.
According to a sharp corner, India expects to overtake the United States and have the most software developers in the world by 2023.
Trends that will shape the outsourcing industry in 2021
Every year, there are a few new trends that shape the outsourcing industry. Those who plan to cut costs and get quality development services from experts are looking for top IT outsourcing companies in India, Malaysia, Poland, Ukraine, and other countries. However, one needs to be aware of all the upcoming and ongoing outsourcing trends to ensure a successful venture.
Trend No 1: Companies are increasing their outsourcing budgets
In 2021, companies looking for IT services will prioritize quality over quantity and prioritize process over price. As a result, companies are starting to increase their IT outsourcing budgets next year. National outsourcing associations’ 2020 reports showed that quality is a critical factor in any outsourcing decision. They are not afraid to increase their outsourcing budget.
Given the talent shortage in most countries due to the Coronavirus outbreak, more and more companies opt to outsource software development. Existing software developers have increased their hourly rates for growth. To attract the best talent, companies need to improve their outsourcing budgets.
Trend 2: Talent shortages are driving demand for outsourcing.
According to reports, IT outsourcing spending is expected to exceed one trillion, driven by the need to adapt to the latest technology. However, companies would lack the necessary in-house technical expertise. Pressure to remain competitive in the industry will force most companies to outsource their IT functions. Companies are looking for the best talent to develop products with such features as crypto-control, cyber-security, artificial intelligence, ML, or data processing.
The lack of technical know-how in their region leads to an increased demand for outsourcing IT services. They need cutting-edge skills, which they can easily find in outsourcing locations such as India. Such skilled software developers, however, are beginning to raise their hourly rates. Hence, the demand for new technology would also lead to an increased spending budget.
Trend No 3: COVID will increase digital spending by companies.
As mentioned earlier, companies are looking to increase their outsourcing budget. And not only because of growing competition or evolving technology. The coronavirus pandemic has forced companies to digitize their operations whether they are launching a digital product or making their digital products more secure, reliable, and scalable.
They focus on rapid transformation and making their work platforms web-based, meaning that they reduce their spending on legacy services and increase their digital spending.
“We’ve seen two years of digital transformation in two months.” ~Satya Nadela, CEO, Microsoft
Big names like Microsoft claimed that Coronavirus has led to a two-year digital transformation in just two months. More and more companies are increasing their digital spending to reach the future of technology. Most companies are currently transforming their business model to digital and are increasing their spending to remain competitive in the digital age.
Trend 4: The Asia Pacific is becoming a popular outsourcing destination.
Previously, until 2020, new competition in the outsourcing industry was sure to emerge. Countries like Ukraine, Romania, Poland, and Belarus were seen as strong contenders to take India, China, and other frontrunners on the outsourcing roster. But the pandemic slowed this transition. With quality outstripping price and other factors, companies try to refocus their attention on the big players in countries they have trusted in the past. Companies are moving to Asia-Pacific countries such as India, China, Malaysia, Thailand, Philippines, Vietnam, etc.
Given the outsourcing demand and the shift in budgets, it seems that more and more countries are turning their attention to Asia-Pacific countries.
In summary
The pandemic created a lot of fear for people involved in outsourcing. It changed the way people approached outsourcing and the way they hired people to do it. IT outsourcing utterly turned on its head after the pandemic. But with most companies scaling up and accelerating their digital transformation initiatives, Indian IT companies have won new business. Thus, it is confident that the Indian IT outsourcing industry will grow.
If you are considering outsourcing your IT operations, India is a prime destination for such services and if you need help or assistance you can contact top software outsourcing companies in India.
