In the past decade, software development outsourcing has become increasingly popular, and for a very good reason. Outsourcing is an incredibly effective way of getting the software the company needs. Hiring third-party specialists or teams allows companies to save up on their in-house teams, free up time, reduce costs, and speed up the process. Outsourcing companies create projects for other companies for a living ― they usually have the expertise and can create software that satisfies the customer’s every need.
Software outsourcing companies exist all over the world. However, for a long time now, the top geographical locations have been the countries in Eastern Europe and Asia. In this article, we’ll focus on the Asian region.
Why is Asia a good region for software outsourcing?
The answer to this is simple. The cost of labor in Asia is lower than it is in the European countries, the US, and Australia. Yet, the quality of software development is often at its best. This makes outsourcing to Asian countries cost-effective: you get more done for less amount of money.
Additionally, because software outsourcing to Asia has become widespread, the number of available outsourcing companies has also increased significantly. It is now easy to find a development team with the necessary expertise to manage your project, no matter how complicated, unusual, or otherwise challenging it is.
What are the top countries in Asia for software outsourcing?
India
Unsurprisingly, India takes first place as the most popular country for software outsourcing. Low prices allow companies to develop large and complicated projects in India. Even if often enough Indian outsourcing companies don’t deliver in terms of quality, the sheer size and affordability of labor make the country an undisputable leader in the world of IT outsourcing. Popular India outsourcing companies include Trigent, BrainVire, Clarion Technologies, and many, many others.
China
The reasons companies outsource to China are similar: cheap labor and developer productivity. Besides, China is the fastest-growing economy in the world. According to AT Kearney, China ranks at a strong #7 place globally in digital resonance, which means that software outsourcing to China is safer in terms of cybersecurity.
The Chinese government has implemented favorable tax policies and subsidies in the IT sector and built more than 50 science and technology industry parks throughout the country. The government also encourages research in Artificial Intelligence, Robotics, and Deep Learning. Consequently, the most popular programming languages among Chinese developers are JavaScript, Java, Python, and others. Similar to developers from around the world, Node.js, AngularJS, and .NET Core are the three most preferred application frameworks and codebases in China.
The popular outsourcing companies in China include Neusoft Corporation, Beyondsoft Corporation, and Worksoft Creative Software Technology Ltd.
The Philippines
The Philippines has a long history of IT outsourcing. It has the education, infrastructure, low costs, and flexible workforce, all of which make the Philippines a suitable country for software outsourcing. Most importantly, the local people speak English ― English is an official language of the country, just like Phillipino. The Philippines are also familiar with the Western and Americal cultures, which is a serious advantage and is often the reason to choose the Philippines when considering outsourcing in Asia.
The Philippines is one of only three ASEAN countries with data protection laws. The Philippine Data Privacy Act of 2012 allows offshore companies to practice outsourcing safely.
The popular software outsourcing companies in the Philippines include Flatworld solutions, Arcanys, Chromedia, and others.
Vietnam
Vietnamese government invested a lot in IT development to make sure the country has competent engineers and successful IT companies. Additionally, the Vietnamese government has made significant investments in STEM education recently. International corporations including IBM, Microsoft, Nokia, and Intel, have also made investments in Vietnam, facilitating its development as a country for software outsourcing.
The most popular programming languages in Vietnam are Java, PHP,.NET, and a variety of other languages related to AI, machine learning, e-commerce, and so on.
In 2019, Vietnam’s software outsourcing sector ranked ninth among the world’s top outsourcing nations. Indeed, the country boasts plenty of world-famous outsourcing companies, such as JSLancer, KMS Technology, and Inapps.
What are the challenges of working with Asian software outsourcing companies?
Culture differences
There is no single Asian culture. Traditions, business practices, and cultural peculiarities differ from country to country. While you may see some common characteristics, every country and even every region is unique. Before diving in, make sure you research the specific region you’re interested in.
Yet, it doesn’t mean we can’t outline some of the most common differences. For example, being open and direct about major concerns may be considered rude in Asia. It’s better to aim to be as polite as humanly possible while criticizing the work. Punctuality has also been pointed out as an annoyance when working with Asian companies. In Asia, punctuality isn’t considered to be a virtue and your partners can easily be late for meetings. This doesn’t mean, however, that they have forgotten about you or don’t care about your product enough.
Language barrier
The language barrier is the most common complaint that you hear from Western businesses that decided to outsource their services to Asia. Indeed, some countries are much better than others ― we’ve talked about the Philippines where English is one of the national languages. Still, in most Asian countries, communication could be a real problem.
Lack of transparency
Outsourcing can make it difficult to estimate delivery times and assess the work being done. This is especially true if you have communication difficulties with people who’re doing the work. To avoid these issues, you can agree on a deal with the company. For example, Indian companies often invite their U.S. colleagues to see how they work and share information on everything from cost structure to what they pay employees.
Different time zones
While this might not seem incredibly significant, totally different time zones might make it hard to work and communicate. Most communication is likely to happen solemnly via email. You might never see your team via video chats due to the difference in time zones, working hours, and even national holidays that are likely to be completely unpredictable for you.
The best time to address this issue is during the write-up of the outsourcing agreement. Make sure you know what the conversations will look like and what will be your common approach for solving the issues.
Regulatory Issues
Regulatory issues and other legal issues might be confusing to European or American companies when entering the Asian market. Often, the problem is that the law is not established.
Make sure during due diligence that your partner’s business is licensed and legal. Check their business registration, labor laws, medical regulations, and other laws. Don’t avoid regulatory rules by dealing with partners’ friends or local connections. While this may work for some local businesses, foreign partners are usually held to a higher standard. It’s important to do everything legally and have all the documents to prove it. The local authorities mustn’t see you as a firm that is “taking advantage of” the Asian country and its people.
To sum up
There are many reasons to choose any of the Asia outsourcing countries described above: it’s close to impossible to get the same value for money in the EU or the US. It’s also important to remember that each Asian country has its strengths and something unique to offer. Yet, there will be some challenges while dealing with the outsourcing companies in Asia. Mostly, they are related to communication issues and the need to familiarize yourself with the laws and regulations of a different country. In most cases, the effort is worth the result. If you decide to work with outsourcing companies in Asia, don’t hesitate to contact Elinext. Elinext has offices in Vietnam and Hong Kong with teams that are experienced, English-speaking, and used to working with clients from all over the world.
