Top 5 reasons why entrepreneurs from the United States prefer offshore software development companies in IndiaJune 23, 2020 3:50 pm
Top 5 reasons why entrepreneurs from the United States prefer offshore software development companies in India
Find out the reasons why most entrepreneurs from the USA prefer to outsource their work to offshore software development companies in India.
The key reason for outsourcing a business process is to improve efficiency and increase productivity. However, many of the entrepreneurs from the United States are now outsourcing some of their IT workloads to more skilled and cost-effective destinations such as India. By doing so they can ensure to dedicate more time to their core business.
Despite the growing concern of the United States government against the outsourcing of skilled American jobs to other countries, there is now an increased demand in the United States for highly skilled Indian Workforce. In the case of offshore development services, India by far has secured the top position as one of the most preferred destinations. Let’s understand how and why.
- The IT industry in India today contributes as much as 8% to the GDP of its economy. Moreover, the Indian IT industry has generated $177 billion USD in income and more than $135 billion USD by exporting software products, software, and engineering services in the last fiscal year.
- from 2018 to 2019. The IT industry has also produced over five million direct jobs and fifteen million indirect jobs.
- Throughout the years, the Indian offshore software development companies have matured from providing cost-effective business process support to fostering digital transformation for international giants. Moreover, entrepreneurs from thousands of global enterprises across the United States, Europe, and other locations have understood India’s potential in technology and have built their own research and development facilities to take advantage of the active Indian software ecosystem.
1. Fast-growing offshoring market:
As the international market for offshoring services expands, Indian offshore development companies are booming rapidly. According to a recent study by Gartner, India’s outsourcing industry is projected to total $100.2 billion in 2020, an increase of 6.7% from estimated spending of $98.6 billion in 2019.
Although there are other countries in Asia that offer offshore development services to international businesses, they encounter lots of challenges such as language barriers, cultural and time-zone differences while outsourcing to them.
2. Tech talent numbers:
Indian developers are having more technical skills, and quality when compared with programmers from other countries. Apart from that, there’s also a growing number of startups in the country.
Businesses based in the United States such as Intel and Microsoft have already hired Indian offshore software vendors for outsourcing their IT workloads and also have their R&D centers in the country.
The offshore software development companies that are based in India always ensure
the delivery of high-quality software. The country’s improved quality and relatively lower development cost enabled businesses from the United States to save more cost which helped them to invest in expanding and transforming their business.
Over the last five years, the Indian software development industry has helped global enterprises save over US$500 billion. Moreover, India has a higher number of software development companies that are appraised with CMMI level3 certification or higher.
What are the benefits of partnering up with a CMMI appraised vendor?
- Precise work: Higher levels of precision and forecastability are the main advantages of doing business with a vendor that has been appraised at CMMI level 3 Company or higher
- Agility: When developing software, the developer can immediately address and work out problems in order to move forward with deliverables, clearing the path for speed and quality.
- Cost-efficient: CMMI appraised vendors usually have less rework and fewer defects in their development process. This enables them to complete development projects without exceeding their client’s estimated budget.
4. English Proficiency:
India offers an extensive pool of certified technology experts – more than 60% of them have a major in technology and a significant portion of the joined IT job market yearly.
According to the EF English Proficiency Index 2016, India ranks 22 out of 72 countries in English proficiency. And more English-speaking Indians are graduating from thousands of India’s tech universities. Moreover, Indians are investing more in English communication and interpersonal skills.
Most of the entrepreneurs who are based in the United States start their business either as a startup or as a part-time initiative by sticking on to their 9 to 5 jobs. Startups that are booming in the United States initially start their venture as part-time and their working hours match the Indian business hours.
Indian offshore software development companies offer a cost-effective way of outsourcing development. Their hourly rates are generally 40%-50% lower when compared to other countries. Hiring quality developers in the US costs anywhere from $80 to $150 per hour, whereas hiring remote developers from India costs only $20 to $30 per hour respectively, which is less than 1/4th of developers in the United States, with the added advantage of fast turnaround time.
By hiring an offshore software development team from India, entrepreneurs don’t have to invest in expensive infrastructure that comes along with hiring in-house developers.
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