4 reason to outsource software development

4 Fundamental Reasons to Outsource Software Development Services to India

In today’s era when digital transformation is fast making inroads in industries like healthcare and travel, the demand for software solutions has skyrocketed.

With increasing globalization, outsourcing software development has emerged as a trend which is fast outgrowing its potential. Over the years India has evolved into a major offshore software development hub.

Although there is no dearth of nations that continue to offer stiff competition in the domain of value-driven outsourced software development services like Bulgaria, Ukraine, and the Czech Republic, India by far outshines competition both in terms of cost and quality.

According to the National Association of Software and Services Companies (Nasscom), despite the emergence of other low-cost outsourcing spots in Eastern Europe, North Africa, and South East Asia, India still remains the world’s preferred software development outsourcing destination.

According to a recent Deloitte survey, 59% of businesses that were interviewed confirmed that they were already outsourcing to India, while another 22% were considering outsourcing to India. 

Let’s Examine 4 Key Reasons to Outsource Software Development Services in India

Reason #1: Humongous Talent Pool
Economies of Scale
A significant factor which has established India’s dominance in offshore software product development is the country’s humongous talent pool of software developers. India with the largest workforce of technology professionals is simply incomparable with any other country of the world.

Furthermore, India as an outsourcing destination offers the highest volume of diverse, employable talent which comprises of people digitally skilled in cloud, analytics, social media and mobility. Such diversity of talent adds more value to software development outsourcing in India.

A Few Significant Facts About India’s Vast Talent Pool:

  • India is on the road to becoming the country with the largest and the youngest population. By 2020, the average age of an Indian will be 29 years in comparison 37 for China and 48 for Japan.
  • The Indian IT outsourcing industry employs 3 million people.
  • 200,000 engineering graduates join the Indian IT industry every year.

Reason #2: Economies of Scale

Economies of ScaleThe prime driving force behind developed countries preferring Indian offshore software development companies is the economies of scale. India has low operational and labor costs in comparison to Europe and the United States.

A Few Key Cost Benefits of Software Development Outsourcing to India:

Outsourcing to India means reduction in the need for seeding operations to international assignees/expats since Indians not only have good leadership caliber but are also well-travelled.

 a. It is easier to control spending in outsourced work.

 b. Since offshore service providers already have established infrastructure, it drastically cuts the start-up costs.

 c. Operations can be scaled up and down whenever the need arises.

d. Access to highly talented software developers at low cost.


Reason #3: The English Language AdvantageEnglish Language

While some might say that English is the second language in India, the fact remains that for many people especially those hailing from the southern regions of the country, English, in fact, is the first language.

Remaining under British rule for almost two centuries, India has a deep-rooted connection with the English language. The English language has developed and spread in India to the point where it is spoken, read and understood at par with the English speaking world, if not better.

This knowledge of English language enables better communication between the outsourcers and the Indian software development teams thereby ensuring smooth workflow.

Key Facts About India’s English Language Advantage:

  • India stands second after the United States of America with 100 million English-speaking people. 
  • The British Council estimates that by 2020, the worldwide population of English-speaking people will touch 2 billion.
  • According to EF English Proficiency Index, India ranks third in Asia on English proficiency.
  • As per leading human resource consultancy giant Manpower Group, India has an edge over China in the global labor market owing to its young English-speaking workforce which is globally more relevant.

Reason #4: Time Zone Advantage

Time Zone Outsourcing software development means that you get the advantage of working in different time zones. Productivity is boosted by carrying out round-the-clock operations at different locations across the globe. Working in different time zones also means that 24*7*365 customer support can be provided.

A good example in this regard would be a company based in the United States using its in-house team during normal working hours and shifting operations to the Indian offshore company while its in-house team rests during the night.
A Word of Advice for Prospective Software Development Outsourcers to India

Apart from immediate benefits like lower costs, flexibility, and higher productivity, there are certain other long-term benefits which make outsourcing software development to India a highly lucrative business proposition. Offshoring software development to India also allows a company to focus more on core business areas thereby increasing profits.

A connected economy with a digital-ready population, India is the go-to place for software development outsourcing. Having remained ahead of the curve in offshore software development for more than two decades, India is also a mature market in terms of business delivery.

However, it doesn’t necessarily mean that outsourcing comes without risks or challenges. So, for a prospective software development outsourcer, it becomes prudent to mitigate the risks by identifying the challenges. What comes across as the biggest challenge is adapting to the Indian work culture which is discrete in every respect in contrast to the Western work culture.

Cultural nuances add another barrier in the communication process. It must be remembered that despite using the same language there is vast difference in pronunciation, vocabulary, etc., between speakers of English language from different parts of the world.

Proper research must be done before opting to outsource along with visiting the destination country, India, in this particular case. It is also crucial to choose the right city for outsourcing your software development project. 
The basic point is that you should know the people you are going to hire to outsource your software development project. Remember, a good outsourcing experience begins with hiring the right offshore team.

Gurgaon – India’s Flourishing Technology Hub and Preferred Destination to Outsource Software Development

Although there are a handful of Indian cities that offer great opportunities for offshore software development like Bengaluru, Hyderabad, Pune, New Delhi, Chennai, and Mumbai; over the last two decades or so, India’s “Millenium City”, Gurgaon, has forged a special relationship with outsourcing. 

Gurgaon, located adjacent to India’s national capital, New Delhi, embellished with tall high-rises dotting its skyline, presents a picture-postcard image of India’s flourishing technology hub.

Gurgaon’s affiliation with outsourcing can be traced back to 1997 when Jack Welch-headed General Electric (GE) became the first US company to outsource software work to India. This move encouraged others to set shop in Gurgaon and the rest, as they say, is history. The Millenium City is now home to hundreds of software companies and call centres.

Gurgaon’s proximity to the Indian capital means that companies have easy access to the political decision-makers of the country. Also, unlike metropolitan cities like Mumbai or Bengaluru, real-estate isn’t a problem in Gurgaon, as it is a developers’ mainstay. Both for office and residential purpose, Gurgaon offers myriads of affordable options.

Many Indian experts feel that Gurgaon is in the same cusp as the Silicon Valley which had succeeded by developing crossroads for technical and creative minds backed by the right financial and marketing frameworks. As per India Brand Equity, a foundation established by the Indian government, the total global and domestic outsourcing market opportunity for India is expected to touch $1.5 trillion by 2020. Gurgaon which has evolved as the vantage point of India’s tech industry will most likely grab the biggest slice from the outsourcing business pie in the coming years.

About Kellton Tech Solutions Ltd.

Kellton Tech Solutions Ltd. specializes in outsourced product development (OPD). With over two decades of experience, the company is a leading end-to-end offshore software development service provider across various industry verticals. For all queries regarding offshore software product development write us on: ask@kelltontech.com