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Cost-Savings Benefits when Offshoring software development

offshore software development rates nearshore software development

Cost-Savings Benefits when Offshoring software development

Our goal with this article is to help you make your business grow using offshoring software development. Firstly we can agree that offshore development is the same as outsourcing, and the central part focuses on getting the best offshore software development rates.

In this context, you’re sending your software development to be done by people located in another country far from your business. Some software business managers could see ‘offshoring’ as a risky maneuver, but reality says that more software development companies trust this modality year after year.

Some of the reasons some businesses recourse to outsourcing are the lack of human resources or lack of needed qualification level within their own company. So, businesses with this need to search for a trustful third-party offshore development company with reasonable offshore software development rates that can help them. 

Most software development’s outsource tasks are mobile and web app application development, data management, blockchain, or AI development. By outsourcing, you don’t need to hire and train new staff, and at the same time, you can be sure to get the best quality software delivered to you at the accorded rates and terms.

You can trust the effectiveness of these long-standing practices adopted by many of the world’s largest and prominent corporations. Due to the digital transformation, many worldwide companies are motivated to offshore their software development needs. 

Below you can read why offshore development companies have become an essential part of the global economy.

How Can Offshore Software Development Help Your Business?

In accordance with this article from Skelia there are many reasons why software companies hire offshore developers, considering the speed at which the digital industry is expanding. 

Companies that want to stand ahead of their competitors need to assign lots of time, effort, and capital to develop innovative and creative software solutions. In this framework, businesses that are unable to hire the most talented recruits may not achieve their goals efficiently.

Therefore, by hiring offshore developers, these companies free themselves from the obstacle of finding first-class staff while they receive the best software solutions with predefined rates and terms.

Below you can find some of the reasons offshore software development can help your business:

Outsourcing Is More Cost-Effective

By hiring offshore developers, you can prevent your business from running out of money. You will not have to spend on additional expenses such as office rent, salaries, insurance payments, vacations, and many others. 

By hiring a trustful offshore developer with the best offshore software development rates, you will be routing funds into your business’s most crucial areas, developing your projects. 

Offers Flexibility

Flexibility is critical when you scale your team or change the technology stack to match the project’s size. Outsourcing developers are more flexible and can easily switch their focus from one task to another.

Delivers Advanced Skill

Many developers worldwide are working for well-known tech giants such as  Apple, Microsoft, DELL, IBM, and others. IT outsourcing provides you with broad access to a great talent pool with the right skills. 

Nearshore software development in LATAM countries can be very fruitful due to the qualified professionals who will be happy to participate in your startup’s development.

Guarantees Quality

When it comes to the quality of the code created by a dedicated development team, one important thing to keep in mind is that a project’s success and quality don’t depend on the country in which it is released. Instead, it depends on the people who built it and how passionate they were about their business.

What Is the Difference Between Nearshore, Offshore, and Onshore Software Development?

Choosing an IT outsourcing services vendor can be difficult, particularly when you don’t have experience with outsourcing. The first point you need to take is deciding where you will look for a software development outsourcing partner. 

Although you will be looking for the best offshore software development rates, you need to pay attention to the three primary options for outsourcing:

nearshore, offshore and onshore. Bellow, you have detailed the main differences between these options: 

Nearshore Software Development

Nearshore software development may be the most convenient option, and it is when you outsource to developers from countries located near similar time zones. 

Your business can get the best offshore software development rates by nearshoring software development. 

Typically, customers count on geographic proximity and cultural similarities. For instance, a nearshore software development location for the United States would be a LATAM country.

Offshore Software Development

With its option, the service provider’s company is located in a different country found in a different continent with a notable time zone difference. 

For instance, an offshore location for the United States would be India. The negative side of Offshore outsourcing is the lack of proximity and cultural similarities that can make the treatment between your team and the Offshore developer’s team complex.

Onshore Software Development

Onshore outsourcing is when you outsource to developers within your country. Some companies find this option convenient. 

Taking into account that the main reason for outsourcing is to reduce your business’ costs, the negative side of this option is that it can be more expensive than the other options on the list.

Offshore Software Development Rates

As we analyzed above, there are three significant options where you can find a software development outsourcing partner. This decision is crucial and needs to be taken comparing the best offshore software development rates and the quality of the partner.

Thanks to modern technologies, your business can save costs by outsourcing software development to an overseas programmer team, according to this article from youteam.io

Outsourcing methods as nearshoring and offshoring can allow your company to contact a vast global talent pool. The average cost of software development services differs from country to country, and development costs may change depending on the platform you use to hire offshore developers.

Offshore Software Development Hourly Rates by Region in 2021

Let now see an overview of regions and software development rates by areas with the different outsourcing methods that we have seen above. It will help your business make a more informed decision when hiring from overseas.

Nearshore Software Development Rates in Latin America

According to IDC, the Latin American IT industry will be growing in 2021 despite political uncertainty and low economic growth. As predicted by Ricardo Villate, vice president of the consultancy for the region, the IT market reached 4.8% in 2020. IDC reports an increase in business spending on technologies related to AR/VR, AI, IoT, 3D printing, cloud, security, and robotics. 

Uruguay, Argentina, and Brazil are the leading software outsourcing country in Latin America and South America. Over the last 15 years, Uruguay has become a first-class business hub and is chosen by foreign companies to develop their IT products or services.

Uruguay is a country of 3.5 million with an IT services machine that continues to perfect the global export model’s execution. Today, foreign companies come to this country to develop their IT products or services to expand their regional operations. 

Uruguay has remarkable technological advances, which place it at the forefront of technology in the region and the world, the highly qualified talent, and its quality of life. This country is a technological hub with outstanding connectivity and internet penetration. 

Ninety percent of Uruguayan homes have access to fiber optics, which guarantees fast download speeds, and 100% of public schools have Internet access.

Argentina is ranked 14th among the best software outsourcing countries and is number 2 in the region. It is also the world’s 10th digital nation in the Tholons Services Globalization Index 2019.

When it comes to offshore software development rates, the average hourly rate for software developer talent in Latin American countries is 45.00 dollars per hour.

Offshore Software Development Rates in Eastern Europe

Eastern European countries such as Ukraine, Belarus, Poland, and Romania are now among the top 5 global software development centers, according to a report issued by AVentures Capital, Aventis Capital, and Capital Times at the beginning of 2019.

The average hourly rate for software developer talent in these Eastern European countries is 33.00 dollars per hour.   

Offshore Software Development Rates in Asia

Asia boasts the most significant number of offshore software developers as compared with other regions. In 2018, only in India, this number amounted to almost 3 million. China is also an attractive offshore development destination. Chinese developers are the first across all HackerRank challenges. 

The Chinese government supports the tech sector by offering economic incentives. For example, now, there are more than 50 science and technology industry parks across the country. 

The average hourly rate for software developer talent in Asian countries is 26.00 dollars per hour.

Advantages of  Nearshore Software Development in Latin America

You need to look for reliable partners with whom you can achieve long-term relationships. Therefore, it is essential to know why Latin America is an excellent nearshore software development destination, according to this article from perficient.com

Great Value and Cultural Similarities

Prices in Latin American are commonly higher than in places like China or India, but the benefits far exceed total costs. It’s not enough for companies to focus on the cost benefits. 

The end costs might be very similar when you factor that you’ll be spending more time trying to connect with your vendor in Asia than in Latin America.

Little Time Difference

As  Latin America is so close to the United States, the time difference is minimal compared to India or China. It means that your business will have nearly an entire workday of overlap with your nearshore software development team.

The number of issues that originate from time differences cannot be discounted. It can often lead to massive delays, which can significantly increase the project’s cost, especially if it’s a vital component of a larger project.

Accessibility

Building a solid relationship with your team is the key to success in any IT outsourcing endeavor. The great proximity means that it’s easier and cheaper to get there.

Being able to hop on a flight, visit your team, and return within a few days is invaluable, and you can do it with far greater frequency than if you were outsourcing to Asia.

Cultural Similarities

It is another excellent advantage of proximity. Latin American culture similarities with the U.S. make intercultural interaction to goes much smoother. Latin Americans will have no problem suggesting more effective alternatives when they can’t do something. 

In Asia, in contrast, the attitude of saying no or contradicting your client is considered a lack of respect. And although it was for the client’s benefit, it is something they simply don’t do. 

As miscommunications and delays are reduced over the long term, the cultural similarities between Latin American and the U.S. can eventually lead to far more significant advantages.

Creativity

Creativity is essential in your business to generate innovation and to remain competitive. It isn’t easy to innovate when working with an IT outsourcing team that will never develop new ideas or more efficient ways of doing things because it’s not how they’ve been brought up to think.

Latin Americans will always tell you if there’s a more efficient way of doing something or if your idea isn’t quite as great as you believe it to be. Latin America is a great creativity hub. Combined with their lack of timidity in expressing themselves, people from this area of the world are great partners for any company that wants to innovate.

This creativity is also great when it comes to problem-solving. An Asian team will wait for clear instructions on how to solve an issue, even a minor one. A team from Latin America will at least try to find a way to solve the problem.

Investing in the Future

Many Latin American governments have realized that the IT industry can provide them with significant growth independent of poor infrastructure issues. 

With software development, all a partner company needs is a minimal infrastructure focused on the quality of computers and internet connections. Due to this, many Latin American countries have been investing heavily in IT, especially in tech workers’ education and training.

To end this article, we want to desire you good luck in your future projects. Now you know the cost-savings benefits when offshoring software development and that a nearshore partner from LATAM can be the best option for your software development business.

About ZirconTech: A trusted partner that helps organizations thrive in their digital transformations. Mobility, Internet of things, artificial intelligence, big data, cloud computing and blockchain technologies.

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Andres Zunino

Chief of Operations at ZirconTech - Blockchain Enthusiast