The global market for Information Technology (IT) has been valued at $565.2 billion in the past few years. The increasing popularity of IT outsourcing serves as a key contributor to the market value. IT service providers cater to a variety of technological needs that companies have.
In this article, we’ll cover what you should think about before hopping on the outsourcing bandwagon and the twelve best countries for IT outsourcing.
What To Look for When Working with Offshore Vendors?
When it comes to outsourcing IT needs, there are various factors that need to be considered. Some of them include:
- Technological Alignment
The first that should be considered by you is tech alignment. When the choice of working with an IT service provider, it’s important to consider whether they align with your tech needs and objectives. To do this, an analysis of their expertise should be done by you, and you need to see if they match your tech stack.
- The industry
If reluctance is something that you’re experiencing when pursuing offshore IT outsourcing, you need to familiarize yourself with the industry in that region. To do this, different factors need to be considered by you. Common examples of such factors can be vendor expertise, the skills and competencies of professionals, customer support protocols, and so on.
- Scope
Before outsourcing tech operations to an offshore vendor, the scope of the initiative also needs to be considered. What this means is that many different things, such as key performance indicators (KPI), requirements for resources, service needed should be considered by you. Doing so will help you develop effective protocols and set clear expectations.
- Budget and Pricing Models
When you’re working with IT vendors that are located offshore, you must look into your budget and their pricing model. Different models and the cost of services are common, so check to see which one suits you best, be it a monthly one or a yearly one. In addition, things like price differences due to varying currencies and other transactional charges should also be considered.
- Communication
Another important thing that must be considered is communication. When one company works with another that’s located offshore, it’s possible for communication barriers to arise. What needs to be understood is that such hurdles come up due to language, culture and time zone differences. To overcome them, clear protocols must be developed by you and the vendor beforehand.
Top 12 Countries for The Best IT Outsourcing
IT service providers can be found in different regions of the world. Now, you might be thinking that’s great, but how can the options be narrowed down? With that in mind, let’s look at the best countries for IT outsourcing.
- Singapore
Singapore is at the top on the list. In Singapore, Science, Technology, Engineering, and Maths (STEM) subjects are a prominent part of the education system. What needs to be known by you is that here, the talent pool is rich in tech skills and knowledge.
A tech services provider in Singapore can be used by you for a variety of different needs and objectives. Alongside this, some of the major strong points of the IT market in Singapore are the language, quality control protocols, high security, business efficiency, low taxes, and the region is a tech hub. What all these factors mean is that high quality results can be obtained in a timely manner by you.
Singapore is a leading country in technology in Asia and the IT sector is the fastest growing sector in this country.
It’s also ranked number two in the world in the EF English Proficiency Index. Due to the country being highly westernized, the communication flow will be very smooth.
The only drawback to outsourcing to Singapore is the time zone difference if you are in the western part of the United States.
Furthermore, the market volume for IT outsourcing in Singapore is expected to increase and go up to $4.39 billion in 2024.
- Argentina
Argentina is another suitable option for tech outsourcing that needs to be considered. Want to hear something interesting? Argentina is considered one of the most educated countries in Latin America. Guess what? It has the highest English proficiency score in Latin America.
So, language barriers will usually not be a problem. A technical education system is also present in Argentina. For you, this means competent developers and other IT professionals can be easily found and trusted upon. If software development is being considered by you, professionals here are skilled in Python, SQL, Java, and more.
The drawback outsourcing to Argentina is the time zone if you are located in Europe. In addition, the cost of outsourcing your IT is somewhat higher compared to the Southeast Asia region.
Lastly, the market volume here is supposed to reach $417 million in 2024.
- Canada
Canada is one of those regions worldwide that is rapidly becoming a melting pot. Now, you might be thinking how is this beneficial to me? As you know, language plays a critical role in the effectiveness of the service. Since Canada is a melting pot, professionals here can speak different languages.
So, the best part is that communication barriers are something that will not be an issue. Furthermore, professionals here are known for being well-educated and are competent and collaborate on projects in a seamless manner. All of these reasons make this country one that should be considered by you.
The major drawback is the cost of hiring employees, which is more on the expensive side compared to all these countries mentioned in this article.
What is also worth mentioning here is that this market in Canada is expected to grow by 10.89%.
- China
It’s no secret that China has become one of the many technology leaders all over the world. Chinese are well-versed in emerging technologies like IoT, AI, ML, quantum computing, and more.
If technology adoption is a key concern for your businesses, the decision of choosing China for IT outsourcing could be beneficial for your company. But that’s not all. China also has a great educational system in which technology is prioritized. So, professionals here are highly skilled and competent. The major drawbacks of outsourcing your IT to China are the Intellectual Property rights. As an organization it’s important to understand the legal framework in depth pertaining to trade secrets and patents.
Moreover, the IT outsourcing market in China is expected to reach around $28.76 billion in 2024.
- Poland
One of the key regions that should be considered when pursuing IT outsourcing Poland. This is considered as one of the best countries for IT and software development. The talent pool here is highly competent as they possess a wide variety of technical skills and expertise. A common example of this is proficiency in different programming languages like Java, Python, Ruby, etc.
So, if frequent and dynamic software development is something that your software development needs entail, outsourcing here should be pursued by you. In Poland, English is a second language, and 30% of the population speaks it. So, there are no communication barriers here.
The drawback of outsourcing to Poland is the time zone difference if you are in the west coast of the United States (9 hours’ time difference).
Lastly, the revenue of the IT outsourcing industry in Poland is expected to reach $3.05 billion in 2024.
- India
Another key region that can be considered when it comes to IT outsourcing is India. The main reason for companies outsourcing to India is due to the significantly lower rates compared to other western countries. One of the main key strengths the region is known for is its higher education system. It is the result of this system that the region produces some of the most skilled IT professionals in the world.
Although Indian IT professionals have proficient English skills, cultural differences have been an obstacle for some companies resulting in communication issues. Another drawback of using India is the lack of quality control. Data protection is another issue that westerners face when outsourcing to India.
Moreover, the market revenue for the software industry in India is expected to reach $9.56 billion in 2024.
- Romania
Next up on our list of countries that should be considered for IT outsourcing is Romania. Similar to most others on the list, a primary strength for this region is the language. In addition, Romania also has some of the top IT specialists for the business region at very competitive rates.
The region is also feasible for Western and European countries, given the time zone difference. That said, it creates a time overlap which ensures that companies in other countries can easily collaborate with IT specialists in Romania. The drawback is the time zone differences especially in the western part of the United States (9 hours’ time difference).
In addition, the IT services market in Romania has been projected to be around $455 million by 2024 in terms of market volume.
- Taiwan
On number 8 of this list, we have Taiwan. This region offers a business-friendly environment and is renowned for its advanced technology. In addition to that, Taiwan also has an improvised STEM education system, meaning that professionals here have the opportunity to enhance their skills in a dynamic learning environment.
What this means for companies is that they can have access to a large talent pool that embeds their technology stack with a wide range of dynamic functionalities.
The drawback outsourcing to Taiwan is the generally low English proficiency rate. However, for the most part, the younger generations among IT professionals possess good English communication skills. Another drawback is the time zone difference, especially in Europe and in the States.
The IT market in Taiwan is expected to reach around $3.40 billion in 2024.
- Vietnam
Another country that should be considered for IT outsourcing is Vietnam. One of the primary reasons for this is that the government in the region has increased support for a STEM strategy and is investing in educational infrastructure.
What this essentially means is when IT needs are outsourced, there are endless benefits to be availed of since the region has several highly skilled experts. In addition, experts here are keen on using advanced communication tools so communication by you with IT experts won’t be a problem. Another benefit is the cost advantages over western countries. Lastly, there is a young, educated population in Vietnam with 45% younger than 45 years old.
A drawback of using Vietnam is the low English proficiency for most of the population. However, most of the younger IT generation possess good English communication skills. Just like in Taiwan, another drawback is the time zone difference, especially in Europe and in the States.
Also worth mentioning here is the fact that the IT outsourcing market is expected to reach over $694 million in 2024.
- The Philippines
When it comes to outsourcing, this region is highly prominent. Companies from all over the world outsource their IT operations here. Given this, it can be stated that the region has highly skilled tech professionals that you can benefit from.
Another factor worth noting here is that tech experts here are highly proficient in English and is ranked #20 according to the EF English Proficiency Index. In addition, professionals here are also known for their work ethics and are highly disciplined.
The low-cost wages are another factor companies outsource to the Philippines.
The disadvantage of using the Philippines is the poor infrastructure and out of date technology compared to other Asian countries. Another drawback of outsourcing to the Philippines is unexpected business disruptions such as flood and typhoons.
Lastly, the IT market in the region is expected to be over $715 million by 2024.
- Mexico
It’s understandable that this isn’t the first region that comes to mind when a decision to outsource IT is needed. But before you overlook it, know that it’s a feasible option. Why? If your company is in the North American region, the time difference won’t be too much of a problem.
So, you can collaborate with those IT experts easily and timely project completion can be ensured by you. In addition, the costs of outsourcing here are also lower so that is a plus point worth considering too and experts can be retained for longer time periods.
The con of outsourcing to Mexico are the cultural differences such as time management, so you need to be patient with time related aspects such as meetings.
The outsourcing market for IT here is expected to reach $6.18 billion by 2024.
- Brazil
And lastly, another option worth considering for IT outsourcing is Brazil. One of the reasons companies outsource here is the cost savings but also similar time zones with companies operating from the United States.
In addition, the government has invested heavily in solid infrastructure and IT technologies to ensure smooth business operations across the country and now boasts 90 technology parks across the country.
The country has also invested a lot in STEM education. Thus, there is a large pool of highly skilled IT professionals.
The drawback of outsourcing IT to Brazil is the cultural differences regarding the importance of deadlines and time management practices.
Lastly, the IT outsourcing market here is expected to reach $6.63 billion in 2024.
Conclusion
Outsourcing IT needs and operations, be it primary or just providing support, is becoming a common choice that is made by businesses worldwide. It gives them access to tech expertise at lower costs when compared to in-house initiatives.
Companies can choose to work with such service providers based on a fully managed or co-sourced model. Some of the best countries for IT outsourcing include Singapore, Argentina, Canada, and China.
FunctionEight, for instance, can help your organization with cloud and Office 365 migration, cybersecurity training, tech stack maintenance, and a ton of other IT needs.
Looking for IT support services for your business? Contact us today and learn how we can help!
