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The geopolitical and economic turbulence has reshaped the role of software outsourcing in 2024 and has enhanced the ability to adapt to ever-changing business conditions and ongoing disruptions. Outsourcing software development allows companies to access talent and resources in times of instability while keeping administrative and operating costs significantly lower.
Strong appetite for digital transformation is increasing and the scarcity of talents becomes even more visible. Our article will reveal the reasons why key market companies outsource software development and 2024 and name the top outsourcing destinations for the following year.
Why do companies outsource in 2024?
In 2024 software development outsourcing will be the magic pill for companies in times of uncertainty. According to the Deloitte report, the global budgeting spent on outsourcing software development will reach $731 billion in 2024.
Taking into account all the global changes we are seeing today, it is possible to predict that software development outsourcing will play an even more important role during the upcoming year, influencing the main business aspects.
The critical factors in boosting business growth and gaining a considerable competitive advantage will still be technological initiatives. And this digital transformation could be supported by outsourcing software development.
Since the costs associated with qualifications and training are considerably lower in some countries, many companies find that they get more bang for their buck when they outsource their software project to software engineers in the best outsourcing destinations.
Additionally, an outsourced team can help ensure consistent deliveries across multiple platforms, ensuring more efficient operations and a better experience for customers.
Outsourcing benefits
There are many benefits of outsourcing software development, including:
Cost and sizing ability
The current geopolitical positions have changed the role of outsourcing software development services. The choice of outsourced teams offers the needed level of stability in times of uncertainty. Moreover, outsourcing software development allows finding the affordable third-party vendor needed to support the ongoing digital transformation efforts.
Overcome the developer’s turnover
Although developers today are in very high demand, the shortage rates in the outsourcing software development industry are growing. Outsourcing development projects allows you to successfully mitigate the developer’s turnover, placing the responsibility of the specialists on your outsourcing partner.
Overcome tech talent shortage
Business owners across the world are struggling to have the needed skills in their teams and keep up with their budgets. Software development outsourcing allows for finding the needed domain expertise, accessing the best teams, and receiving higher quality for a lower cost.
Supports the smooth cooperation inside hybrid teams
Due to the pandemic, the global economic downfall, and War in Ukraine, businesses now prefer a dedicated team model. Most software development companies have successfully mastered the remote working model and will satisfy smooth software project development, no matter the external circumstances.
Buffer against disruptions
As the previous year’s experience shows, it is always more secure to have software development team members from different countries, apart from the in-house team. The outsourcing team will maintain the needed level of stability in case of disruptions.
Outsourcing enables business leaders to distribute technical expertise and skill sourcing across several locations and tap more advanced talents needed to cover the project needs and efficient risk management.
Top outsourcing countries in 2024
Outsourcing software development to Eastern European software development companies has become an increasingly popular option due to its many advantages. By outsourcing projects to Eastern European countries, businesses can benefit from a broad talent pool of highly skilled engineers and developers that boast significant coding expertise at competitive rates.
Eastern European third-party service provider will generally have more flexible working hours and schedules. Compared to outsourcing developers from other locations, a European software engineer will work on projects more efficiently.
Excellent level of English among the developers helps facilitate better communication between teams during the development process.
Reasons to outsource software development to Eastern Europe
- The wages in Eastern European countries are highly competitive, making it an affordable option for outsourcing software development.
- The talent pool of developers in Eastern European countries is extremely talented and skilled in cutting-edge technologies.
- The labor laws in many Eastern European countries are flexible, making it easy to outsource services.
- Due to the low cost of living, businesses can save on costs by outsourcing software development to Eastern European countries.
- Eastern European developers are known for being diligent and hardworking, ensuring high-quality standards for every project.
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Most popular Eastern European outsourcing destinations
When it comes to software development in Eastern Europe, several countries stand out as top destinations. Slovakia, Ukraine, Poland, Romania, and Hungary are the five most popular countries for outsourcing IT projects.
Slovakia
Software development services in Slovakia are highly sought after due to the country’s abundance of talented developers. Companies such as MoroSystems, Altamira.ai, and Rare Crew are some of the top software development companies in Slovakia.
Many software development outsourcing companies in Slovakia specialize in creating custom websites, such as Alva Commerce, Pastilla Inc., Art4web, and LoopLabs.
Software development outsourcing destinations like Slovakia and Ukraine have many experienced developers who can provide reliable long-term solutions for businesses.
Ukraine
Despite the current tough times, Ukraine still holding its popularity for software development services due to its competitive rates and experienced professionals. Ukrainian developers are highly trained and work hard to deliver the highest quality of work on time and within budget.
Additionally, Ukraine’s government offers generous incentives and programs to encourage the growth of its technology industry. Companies looking for reliable, cost-effective software development services should consider Ukraine as a top option.
Poland
Software development services in Poland are renowned for their quality and affordability. The country’s cost-effectiveness makes it an attractive option for businesses looking to hire developers on a budget.
Companies such as Jcommerce, ArtiCode, and Blue Media specialize in custom web and mobile development, while BattleDev focuses on artificial intelligence technologies. Furthermore, Poland’s tech industry is proliferating, with numerous organizations and educational institutions helping to foster innovation and development.
Hungary
Software development services in Hungary are some of the best in Europe. Companies such as BlackBriar, Bitsycom, and ProductiveWebs offer custom software and mobile development solutions tailored to clients’ needs. Additionally, several educational institutions are helping to foster a new wave of developers in Hungary.
Hungary’s cost competitiveness provides significant cost savings for businesses compared to Western Europe or North America. Overall, Hungary is a great choice for businesses looking to outsource their operations and gain a competitive edge in the global marketplace.
Romania
Software development services in Romania are becoming increasingly popular due to the country’s highly skilled and experienced IT professionals. Romania is home to some of the top software developers in Europe, with many companies offering custom software development solutions for businesses of all sizes.
Companies such as Further Digital Solutions, Tremend Software Consulting, Pentalog, Roweb Development, Adventure, and DevsData Tech Talent offer a wide range of services from user experience design to offshore software development.
Romania has a competitive salary market for software developers, making it an attractive destination for outsourcing. With its growing tech industry and talented workforce, Romania is quickly becoming one of Europe’s top destinations for software development services.
Software development rates by country
When it comes to rates associated with outsourcing software development services, there are several factors at play including labor costs in different countries as well as the complexity of the project itself.
Generally speaking though, prices range from around $20 per hour up to $200 or even higher depending on the country you choose and the skill sets needed for your project. On average though most organizations pay somewhere between $50-$80 per hour for outsourced services.
What determines the outsourcing software development cost in each country?
The cost of outsourcing software development in each country is determined by several factors, including the availability and skill level of developers, the country’s economy, the currency exchange rate, and local wages.
Countries with a high cost of living are more expensive to outsource development services than those with a lower cost of living. Additionally, some countries offer incentives such as tax breaks or special discounts that can help reduce costs. The cost also depends on which specific services are being outsourced and how long the project will take to complete.
Countries with a high cost of living are more expensive to outsource development services than those with a lower cost of living. Additionally, some countries offer incentives such as tax breaks or special discounts that can help reduce costs. The cost also depends on which specific services are being outsourced and how long the project will take to complete.
Software development services can vary in cost depending on the country. In Ukraine, software development services typically cost between $20 and $50 per hour. In Poland, the average cost of software development services is around $30 to $50 per hour.
Romania has an average rate of around $25 to $35 per hour. Slovakia’s software development services usually range from $15 to $40 per hour. Lastly, Hungary’s software development services typically cost between $25 and $45 per hour.
Software outsourcing examples
Outsourcing software development has become a popular solution for businesses looking to reduce costs, save time, and access a wider pool of talented developers. Successful software outsourcing examples are numerous, and showcase the benefits of working with an experienced team of developers.
One example is Skype, which was founded in Estonia in 2003 and outsourced software development to developers in Estonia, Denmark, and Sweden. With the help of outsourced developers, Skype was able to build a product quickly and on a limited budget, which ultimately led to its acquisition by Microsoft for $8.5 billion.
Another example is Alibaba, which outsourced development to the Chinese software outsourcing company, Bleum. The partnership helped Alibaba to develop a robust platform capable of handling a massive amount of traffic and transactions during the company’s Singles Day promotion, which generated over $25 billion in sales.
Outsourcing has also helped companies in other industries to improve their operations. For example, Walmart partnered with an outsourcing firm, Wipro, to build a new digital platform for the retail giant.
The platform was designed to streamline the shopping experience for customers and improve the efficiency of Walmart’s supply chain. The project was a resounding success, with the platform helping Walmart to boost online sales by 43% in the first quarter of 2018.
These examples illustrate the many benefits of outsourcing, including the ability to tap into a global talent pool, reduce costs, and improve the speed and quality of software development. With the right outsourcing partner, businesses can achieve their software development goals and take their operations to new heights.
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Altamira - outsourcing software development company
At Altamira, we pride ourselves on our innovative approach, cutting-edge technology, and unwavering commitment to customer satisfaction. With years of experience in the industry, our team of expert developers has worked with clients from various industries and developed solutions for complex business needs.
One of the biggest advantages of working with Altamira is our focus on communication and collaboration. We understand that outsourcing software development can be a challenging process, which is why we make sure to keep our clients involved in every step of the development process. We also work with agile development methodologies to ensure that we are always adapting to changes and delivering on our promises.
At Altamira, we believe that the key to a successful project is building a strong relationship with our clients. We take the time to understand your business goals, and we work tirelessly to develop customized solutions that meet your unique needs. From concept to launch, we are committed to delivering quality work and maintaining transparency throughout the process.
We understand the importance of cost-effectiveness in today’s business world. That’s why we offer competitive pricing for our services without sacrificing quality. You can rely on Altamira to provide the best possible value for your investment.
To sum up
The demand for outsourcing software development is increasing, and it is expected to become even more important in 2024 due to the global geopolitical and economic changes that are driving the need for digital transformation. Companies are outsourcing software development to access talent and resources, especially in times of instability
Outsourcing benefits include cost savings, overcoming the turnover of developers, overcoming the shortage of tech talent, supporting cooperation inside hybrid teams, and buffering against disruptions.
Eastern Europe has become a popular outsourcing destination due to a broad pool of highly skilled developers and engineers with significant coding expertise at competitive rates. Ukraine, Poland, Romania, Slovakia, and Hungary are the top outsourcing countries in Eastern Europe, known for their competitive wages, talented developers, and flexible labor laws.
Eastern Europe has become a popular outsourcing destination due to a broad pool of highly skilled developers and engineers with significant coding expertise at competitive rates. Ukraine, Poland, Romania, Slovakia, and Hungary are the top outsourcing countries in Eastern Europe, known for their competitive wages, talented developers, and flexible labor laws.
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FAQ
The key advantages to outsourcing software development in 2024 include access to experienced talent, competitive wages, flexible labor laws, cost savings due to the low cost of living in many Eastern European countries, and diligence and high-quality standards provided by Eastern European developers.
Before you outsource software development, it is important to do research on the available options, evaluate potential vendors and establish clear expectations. You should also define a timeline for the completion of the project and create a budget based on estimated costs.
Understanding the local culture and language of the region where you plan to outsource is always beneficial to build better relationships with your partners.
Yes, there is always some risk associated with outsourcing software projects as businesses are relying on external vendors for their software development needs. However, risks can be minimized by carefully vetting vendors, establishing clear communication channels, and having well-defined project timelines and budgets before beginning work.
