Offshore development, it will cost around $19-$40 every hour. Out of all the outsourcing destinations for international corporations and big enterprises, India has become one major one. The cost to hiring developers herein, it too, varies just like the other outsourcing destinations. The reason for this varying cost is the expertise level that one seeks for.
For any business, location is the important factor for the success and World Bank, it has identified India to be the mature hub for the offshore development center. According to World Bank, India controls the global outsourcing and the offshore industry of around 46%.
Asian Countries- Offshore Software Development Rate per Hour
The rates in Asia for the offshore developer at entry-level begins at $20 and for the senior offshore developer at $35. The rates in Asian tech hubs, it has been increasing, and the same can increase to even per hour $40-45. But even after this, the companies in Asia, they charge a much lower rate in comparison to the European competitors.
India and China, they are the main hubs that have a large number of offshore software development engineers, i.e., around 5 million in every country. Other Asian countries like Indonesia, Vietnam, they too are gaining ground by offering similar services.
In case you prefer a lower rate, providing offshore software development, it will provide poor quality. Even cultural differences, disparity and adverse working conditions within the time zones, they will have a cumulative effect (negative) upon correspondence, and this results in the quality decrease. The talent pool of Asia is getting a boast, and there exist a total of 10 million+ developers.
Cost and Savings
One will be paying around $110,000 to $130,000 for the full-time and junior to the mid-level experienced development team. This cost is just an estimate, and it can be tailored to the requirements of the individuals based on the services of offshore softwar centers.
Furthermore, even the team makeup will be different, and it too will affect price estimate. In comparison to Europe’s ODC, they charge between $25-$50 per hour, and in India, if you hire a developer, they will charge between $3-$20. So, the average full-time offshore development team working remotely will cost $120,000 every year. But in comparison to $112,000 in-house software developer, in the U.S., the amount of $120,000 is high.
ODC- Individual owner vs. Vendors
Having ones’ own ODC without the involvement of the vendor will bring in a lot of hassle and paperwork. So, it is a good idea to setting-up ODC with an established vendor, who has a market presence. The overhead cost which will be incurred herein, for both individual owner ODC and vendors are,
- Own office- Rent and property cost, water and electricity, hardware and internet, team salary, insurance, cost of recruitment, etc.
- Vendor- Most of the cost is covered by the vendor and the salary for the team, HR, etc., are negotiable.
It is to be noted that, having to opt for the dedicated team model, it will bring in deliverable consistency. Not much of a cost difference is there in between ODCs fixed engagement and dedicated team ODCs, if the needs are analyzed beforehand.
In our recommendations, it is better to have the fixed engagement model if it is a short-term team requirement. Just note the major overall cost, it will get dedicated based on team size.
How many members are in the hired team?
While setting up a dedicated development center, the team will need at least:
- Designers/Developers (3-6x)- This is at the team core who hold responsibility for development and design.
- Project Manager- The manager ensures the functions run smoothly, and they have the responsibility of meeting the deadlines, QT/QC.
- Graphic Designer- Helps in creating visual appeals for the content that is used for products/services promotion.
- Account Manager- Helps in the management of sales and clientele relationships.
- Usability Testing Engineer- Helps to look for glitches/flaws within the software, website and programs.
- Content or Technical writers (2-3x)- Has the responsibility for the creation of manual, instruction and the content which gets integrated within website, program and software.
ODC- what one gets with it?
Cost reduction is a plus point, but then there are many things which one will get in the budget specified above. The investment will offer value for the money by providing,
- Outreach Team
Based on ODC workforce size, one will outreach team or the manager assigned. One can even choose which services are not to be availed, but many vendors too offer this option.
- Professional/Corporate Benefits
Any vendor, they will offer the employees corporate benefits like leave allowance and medical insurance. Many ODCs, they also engaged in the workshops of team-building frequently and also other professional development forms for the employees.
- Dedicated Workspace
As per the team’s strength and size, there are many vendors who are equipped with the ODC, own floor space or bespoke office. It will ensure that the team will continue the operations without disruption by any other team within the vicinity.
- Contact at dedicated points
The vendor will provide customer support or the link for live chat. To have the person who can be called helps in crisis mitigation successfully and crashing of the company.
- Commitment and Security
ODC security, it is an important aspect for consideration as the data will be changing hands frequently. Just vet the vendors’ ISO security certificate before taking a step to enter into a contract. The team should remain familiar with the encryption standards of the global data like the DES and AES or AES 2.
The offshore software development global outsourcing market, it was in 2019, worth around $92.5 billion as per Statista. So, if you have made the decision that you are willing to the action piece, then it is food. Set up the offshore software development India or hire a developer in India; it is the best decision for the business you own.
Can one get a flat fee?
To get the services of offshore development India, based on the requirement, it will be better to go with the flat-free and the fixed engagement team. The team prices will vary as per duration.
How is billing done?
When onboard with the vendor, they explain the billing cycle in detail; there are 3 types of billing including,
- Fixed-engagement billing- It is suitable for ultra-short and short projects. The cost is decided before and gets paid in the split of 60-40, wherein 60% is paid after work.
- Dedicated Resource Hiring- For projects of long duration having unclear requirements and scope, it is useful. Clients will pay the security deposit, and they will get charged a monthly sum for covering overhead and salaries.
- Material and Time-based billing- For fixed scope, long-duration projects with unclear requirements, this billing is best. Clients pay for actually done work and the used materials. It is suitable for a smart outfit.
What will be the final cost?
It is dependent on,
- Expertise level
- Team size
- Project time
- Full-time or part-time employment
- Project length, etc.
There are many involved variables for stating the baseline figure. As per estimation, the media to the corporates, they settle with the ODC costing $100,00 per year. Small enterprises, including start-ups, they hire the professionals required, like marketers or developers, and the cost of it comes to around $30,000 every year.
Author Bio –
Atman Rathod is the Co-founder at CMARIX Technolabs, a leading Website and Mobile App development (android app & iPhone app development) company with 13+ years of experience. He loves to write about technology, startups, entrepreneurship, and business. His creative abilities, academic track record and leadership skills made him one of the key industry influencers as well.