6 reasons to outsource IT to India right now

A smoothly running IT department is an essential part of any business, especially now that work from home has become widespread and cloud computing has become more important. Europe alone faces a major shortage of around 30% of suitable IT personnel. And the professionals who are available come at a high price. In India, these good, experienced and affordable IT professionals can be found: in fact, India has the largest IT labor market in the world.

India is one of the most popular outsource destinations in the world, with around 65% of all outsourced IT and R&D globally being moved to India. Head of IT for Maier+Vidorno, IndiaConnected's partner in India, Satish Tripathi shares the six reasons why India is the best outsource option for your IT department or R&D team:  

1. An extensive pool of highly trained professionals

India has one of the largest talent pools in the world. Every year, around one and a half million students come from the country's top technical universities, eager to get a job with a foreign multinational. Becoming a web or mobile app developer is one of the most popular career options among young Indians. The abundance and availability of dedicated and trained offshore developers makes India the place to have an IT or R&D team up and running in a short span of time. In addition, Indian IT professionals are trained in the latest technological solutions and applications, which are still considered challenging in other places of the world. India not only pulls the proverbial outsourcing cart, but also takes the lead in implementing the latest technology trends.

2. Outsourcing in India is budget friendly

Cost is often the deciding factor in opting for outsourcing and in the case of India, perhaps the most tempting factor in setting up an IT department in this country. Development costs in India are 30-35% lower than in the US and Europe. The average hourly wage of an Indian IT professional varies, depending on knowledge and experience, between €15 and €35 per hour. This is considerably lower compared to the salaries of developers in Western countries, which are around 85 to 125 Euros per hour. Outsourcing your IT or R&D to India can save the company up to 65% of its operational costs.

3. Reliability and high quality standards

Companies providing outsourcing services in India deliver high quality work that meets all international standards. Indian outsource parties work with:

• The Capability Maturing Model (CMM), which indicates the level of software development in an organisation. The model distinguishes five levels, of which 1 is poorly developed and at 5 the development process runs like a well-oiled machine. More than 75% of the worldwide CMM Level 5 certified companies are located in India.

• The International Standard Organisation (ISO 9000), which guarantees the quality of design, development, production and installation. India has the most ISO-9000 certified software companies in the world.

• Total Quality Management (TQM)

• Six Sigma Quality Certification

• Customer Operations Performance Centre (COPC) that ensures the delivery of quality software within the deadline.

With the above standards and certifications, you as a company can be sure that an Indian IT or R&D team is providing your solutions with European quality. 

4. Communication is the key to success

Even though your IT or R&D team operates remotely, this does not affect smooth communication with the European headquarters. Not only because online conferencing is fully established by the corona crisis, but also because English is one of the main languages in India. India is the largest English-speaking country in the world. Good communication is essential for a successful start in India. For example, the the German IT company Optanium has not seen a single employee from its R&D team leave in seven years because of the strong bond of trust the German parent company has been able to build remotely with its employees in India.

5. Use the time difference to your advantage

India is 4.5 hours ahead of Europe, allowing you to solve problems before they will affect your European employees or users. This leads to greater efficiency, higher productivity and more space to focus on crucial tasks. Dutch company ARS Traffic & Transport Technology, a leading market player in technological traffic solutions, has had an R&D facility in India for twenty years for this reason. In addition to software development, the section control systems and matrix signs along Dutch highways are controlled from the Indian ARS T&TT office. "If a system fails, due to the time difference, we can repair the system before rush hour starts," told CEO Jan Linssen told us earlier at an interview.

6. Support from the Government of India

The IT industry is one of the largest sectors of the Indian economy and employs the majority of India's young workforce. The Indian government has therefore designed its policies to give this industry room to grow. With initiatives such as Digital India, which aims to make the country digitally more powerful in the field of technology, the government is trying to stimulate foreign investment in this sector even more. Therefore, you will have little trouble with legal or fiscal restrictions. 

Jump into the new, hybrid way of working - this is the time to outsource:

Many companies are trying to find their way in the post-pandemic world, which brings both financial and work-related challenges. Cutting your IT budget is actually impossible in this era of hybrid working, which is why outsourcing internal IT is a solution that can save companies a lot of money. With our new ways of working, physical distance is no longer a major obstacle to working with a remote IT team.

Wondering what benefits outsourcing has for your business? Get in touch with us:

Outsourcing, insourcing or a hybrid form of sourcing: what is the best solution for your business?

Say you want to set up an IT or R&D department or expand an existing team, but are running into a shortage of capacity internally. Outsourcing is one way to solve this. Are you not entirely comfortable with outsourcing the work, for example, because sensitive information would then end up with third parties? Then it is interesting to look at the alternatives, such as insourcing or hybrid sourcing.

Outsourcing: a good option for non-essential tasks

Outsourcing is a business strategy where certain work, for example IT or Research & Development, is outsourced to an outside company or a freelance employee, often based abroad. An outsourcing company usually works on a contract basis, meaning that the team that will perform your work is hired for a defined period of time. Outsourcing almost always involves outsourcing "non-essential tasks and processes," that is, work that is not part of the company's core business and has a more supportive function.  

When is outsourcing beneficial?
Outsourcingrelieves an organisation of the responsibility for, and in many cases reduces the cost of, a support department such as IT or R&D. The outsourcing company not only provides the manpower, but also has the right resources and infrastructure at its disposal to support the client organisation in the best possible way. The outsourcing company not only provides the manpower, but also has the right resources and infrastructure at its disposal to best support the client organisation. Full outsourcing or outsourcing of work is therefore the best option when it does not concern the core tasks of the company, because you are literally handing over the responsibility to an external company and therefore no longer have any great influence on exactly how the work is carried out and by whom.  

What are the benefits of outsourcing?

• Lower costs: In many cases, just outsourcing the work to a location outside the Netherlands saves money. You also save on the fact that you do not have to set up a complete IT department or invest in sophisticated equipment.

• More choice of highly skilled, technical employees: IT outsourcing companies almost always have a wide range of professionals who have been specially trained for certain tasks. This makes it easy to assemble a team that fits your project. 

• Access to a new market: Outsourcing helps some companies to expand and enter new markets by bringing the production location or service point closer to their end users. Take, for example, ARS T&TT of The Hague, which develops smart technological traffic solutions. They started outsourcing their R&D in India and now sell their products to large, local governments. 

What are the disadvantages of outsourcing?

• Unmotivated: In many outsourcing companies, employees are assigned to different projects. This can lead to employees performing tasks properly, but otherwise having no idea who you are as a company and what the overarching goal is. As a result, you are one of the projects to be completed and the employees do not feel any dedication to your specific project. 

• Cultural differences: When you outsource work abroad, you always have to deal with the local work culture. If it does not fit in with your company's culture, it is not only difficult to adapt, but it can also lead to problems that can cause the project to fail. 

• Communication problems: A differentiation in work culture, for example, can lead to communication problems. Is your local team used to receiving detailed assignments while you would like to have input from their side on the possibilities? Chances are that your request for input will not be understood and therefore the results will not be satisfactory.

Insourcing: the solution if you already have the right infrastructure in place

With insourcing, a solution is sought or set up within the organisation. It may be that the work is integrated into the existing structure by recruiting new staff or through a temporary partnership with an affiliated company or subsidiary. When we talk about the insourcing of work, this also concerns tasks that are not directly considered as core tasks of the company, but often fall a little bit between 'essential' and 'non-essential' and where more direct oversight from the organisation is desired. One example is software development, where the software plays an important supporting role in the efficient execution of the company's core tasks.  

When is insourcing beneficial?

Insourcing is particularly recommended for specialist work that requires special expertise or if the company already has an existing infrastructure in which the new tasks can easily be accommodated. For example, an organisation might insource technical support for a new product because the company already has technical support for another product within the organisation. In this case, it will also be very difficult to fully outsource, as most service companies do not have the capacity and knowledge to take on such specific tasks. 

What are the advantages of insourcing?

• Flexibility: An on-site team can also be deployed on other tasks as required. For example, they can not only update and manage your software, but also maintain hardware equipment.

• Short lines of communication: Since your insourcing team is in your office, you can communicate easily and quickly. They can also get in touch with other departments within the company more quickly, so that potential bottlenecks can be identified and resolved quickly.

• More control over the workflow: You are in charge of the team, without the intervention of possible local managers. This allows you to adjust them faster, evaluate the work and motivate your team. This often results in more dedication and higher motivation. 

What are the disadvantages of insourcing?

• Higher costs: Because you will be looking for a suitable team in your own country and will have to invest in building the infrastructure and other necessary resources, the price will be a lot higher than for the other two alternatives. 

• Shortage of talent: In the Netherlands, we are facing a shortage of more than 40,000 technical staff. For many companies, it is therefore a difficult and expensive procedure to form a team that meets all the conditions and requirements.  

• Indispensability of certain employees: If you have a unique project and one of your valuable specialists decides to leave the company, this may lead to the project coming to a standstill or even being halted. Especially since it is a challenge to find a replacement quickly. 

Hybrid sourcing: the best of both worlds

As the name suggests, a hybrid form of sourcing brings together different elements of outsourcing and insourcing. The hybrid model allows you to find talent abroad that is not available domestically, for example, without being directly tied to an outsourcing organisation that determines the team composition and working methods. This means that you can take advantage of the large talent pool and lower costs of the outsourcing location, but your new employee or team becomes truly part of your company. This has the advantage that you don't have to share sensitive information with third parties because you will be directly managing your new employee or team. However, it's important to choose a hybrid provider that can provide the right infrastructure at the location where your remote workers will start, so you can ensure a consistent experience across all locations and easily scale or migrate resources as needs change.

When is hybrid sourcing beneficial?

Hybrid sourcing is a perfect solution if, for example, you are looking for an employee or team for an internal solution, but the vacancy is difficult to fill due to a lack of candidates. For example, if you choose India, the number one outsourcing country in the world, with the hybrid model you enjoy the benefits of outsourcing there, such as lower costs and a larger pool of suitable employees, and you don't have to deal with the difference in work culture because you remain in charge of your project. You decide who will do the job or work for you and what conditions they must meet.  

What are the benefits of hybrid sourcing?

• A wider choice of suitable talents at lower cost: You benefit from the large talent pool of technically skilled employees at a lower price and without compromising on quality. 

• No cultural or communication problems: Because you determine what skills your future employee or team must possess, you can pre-select employees who fit in well with your company's culture. This way, you not only bring in motivated employees, but also prevent communication problems due to possible cultural differences. 

• Control and flexibility: With a hybrid model,you do not have to deal with a local, intermediate management layer, but directly with your employees. This gives you better control of the working method and the final result. It also offers you the possibility to quickly switch or scale up if necessary. So it offers you the flexibility of outsourcing and the control of an insourcing team.

What are the disadvantages of hybrid sourcing?

• Time difference: Because you are hiring talent from abroad in the hybrid model, in almost all cases you have to deal with some time difference. This can be tricky because your teams (in-house and remote) don't quite overlap in time, but you can also use this to your advantage. The time difference with India, for example, is about four hours, so you can easily have problems solved before your European employees or users are affected. 

• Intensive preparation time / familiarisation time: Since you and your employees will be working with remote colleagues, it is a good idea to review the work processes in advance. For example, additional steps can be introduced to ensure that there is always a good understanding of the tasks that are assigned to the remote colleagues and how they are progressing. This requires some extra preparation and familiarisation time for you and your in-house team. 

• Language difference: If you choose fromthe most popular destinations to set up a remote team, you will always have to deal with employees who do not speak Dutch, but English. This can be difficult for you or your team, so check carefully whether not only your new remote colleagues, but also your team in the Netherlands has a good enough command of the English language. 

Do you also have one or more technical vacancies that you cannot fill? Then hybrid sourcing to India could be a good solution for you. It will give you access to the world's largest talent pool, save you money and bring in a new engaged colleague or colleagues who will truly become part of your business.

These are the four most popular locations to set up a remote IT team in 2022

It is currently difficult for European companies to find good IT professionals, engineers, data specialists and other technical staff. For years, companies have been looking across borders for solutions in the form of a remote team or outsourcing. But what is the best destination for setting up such a remote team? Where can you find a large pool of highly educated people who speak English well? We take a closer look at four popular destinations: India, China, Argentina and Poland.

India has more tech talent than Silicon Valley

The Indian talent pool

According to a study by Price Waterhouse Coopers, India is not only the largest IT hub in the world, but cities such as Bangalore and Pune attract more tech talent than Sillicon Valley. India has one of the largest and most educated talent pools in the world. Around one and a half million students enter the country's technical universities every year, and they are not the least of these. In fact, six of the seven Indian universities with a QS World University Ranking are technical universities. According to research by Gild , Indian developers scored as much as 11% better than their American counterparts on maths and mathematics assessments. Indians also speak excellent English, the country's second official language. 

The Indian IT market 

India is the country with the most ISO-9000 certified software companies in the world. ISO stands for International Standard Organisation and the certificate guarantees the quality of software design, development, production and installation. In addition, over 75 per cent of the global CMMI Level 5 certified IT companies are located in India. The CMMI is a scale that indicates the level of software development of an organisation. The model distinguishes five levels, of which 1 is poorly developed and at 5 the development process runs like a well-oiled machine. With about 67% of the global market, India is the world's largest outsourcing destination for the IT industry. India's outsourcing market currently employs around 5 million developers who specialise in app development, both native and hybrid, the Python, Java, JavaScript, C/C++ and PHP programming languages and the country is rapidly developing machine learning, AI, GIS and blockchain technologies.

The advantage of outsourcing to India

By outsourcing your IT or R&D to India, you can not only make significant cost savings of 50-80%, but you can also use the 4.5 hour time difference (3.5 in summer) to your advantage. For example, by solving problems before your European employees or users are affected. For this reason, ARS Traffic & Transport Technology in The Hague, a leading player in technological traffic solutions, has had an R&D facility in India for the past twenty years. In addition to software development, the section control systems and matrix signs along Dutch motorways are monitored from the Indian ARS T&TT office. "If a system breaks down, due to the time difference, we can repair the system before the rush hour starts," CEO Jan Linssen told us. 

China invests to become a major tech destination

The Chinese talent pool

The Chinese government has been investing in improving the country's tech sector for several years now and it seems to be paying off. China is not only the birthplace of big tech companies such as Huawei, Alibaba and ByteDance, the parent company of the app TikTok, but is now also ranked 14th in the Global Innovation Index. This is an annual ranking that ranks 126 countries based on their ability to innovate. Science and maths are also major focus areas in Chinese schools and universities, resulting in some 5 million IT students graduating each year. Because technology is a relatively new focus of the Chinese government, the IT sector is still very young. About 57 percent of the Chinese developers have only one to three years of working experience. This makes them a lot less experienced than their international colleagues, where half of them have four to ten years of experience. 

The Chinese IT market

According to experts, the Chinese IT sector is highly fragmented. There are few large IT companies and the small companies all focus on the domestic market. This is partly because Chinese developers often speak little or no English. China is now mainly concerned with product development and low-end, relatively uncomplicated IT applications. Although the IT products developed in China are simpler, the price is not extremely low anymore. On average, a cost reduction of 40% can be expected. One of the biggest obstacles for foreign companies wishing to outsource to China is the lack of intellectual property protection. Although the government is already working hard to crack down on piracy and other forms of intellectual property infringement. Chinese developers generally excel at functional programming and the Python and Shell script programming languages.

Argentina is the number one outsourcing location for US companies

The Argentine talent pool

Over the past 20 years, Argentina has invested heavily in technical higher education, with some 90,000 students now leaving university each year with a technical diploma. In recent years, several Argentine universities have appeared in prestigious international rankings, including QS, the Center for World University Rankings (CWUR) and Times World University Ranking. As a result, Argentina's talent pool has grown to around 135,000 developers in a short period of time. According to the 2019 Global Skills Index by Coursera , Argentine developers are the best software engineers in the world. They also speak the best English in all of Latin America. The cost savings that outsourcing to Argentina could bring you depends on the erratic economy. At the moment, the country is relatively cheap and would be around 40 percent, but in good times it would be more like 20. 

The Argentine IT market

Despite Argentina's faltering economy, the country's IT sector has been showing strong growth of around 3 to 5 per cent per year for a decade. This is partly because the Argentine government made the growth of this sector a priority back in 2004 by introducing the Ley de promoción de la industria del software. This law made the sector completely free of restrictions on foreign investment, making software development the most important source of foreign investment, up to 58 per cent, in Argentina. Argentina's IT sector comprises about 3,800 companies, including big names such as IBM, Intel, Motorola, Microsoft, Oracle, Siemens, and Gameloft. It is the number one outsourcing destination for companies from the United States due to the zero time difference. The difference with Europe is quite significant, with the Netherlands running four hours ahead. Outsourcing companies in Argentina specialise in app development, open source projects, cloud computing, Magento, PhP and DevOps. 60 percent of the IT companies are ISO9001 certified.

Poland is the Finech location of the European Union

The Polish talent pool

The best universities in Poland are four technical universities, and some 140 000 technical students graduate there every year. IT courses in the country are very popular not only among Polish but also among international students due to their high level and low cost. The IT industry in Poland has about 300,000 developers, but 80 per cent of them work in the R&D offices of tech giants such as Motorola, IBM and Shell. Poland is in fact known as the R&D hub of Europe. Only 20 percent of Polish developers are therefore available for outsourcing projects. Poland has no time difference and no major cultural differences with most Western European countries, so the prices are at a European level. The cost savings from outsourcing IT or R&D will be around 20-30 percent.

The Polish IT market

The Polish IT market is growing at a steady pace. In 2019, the sector grew by about 2.9 per cent and revenues increased by 4.6 per cent. This makes the IT industry account for about 8 percent of Poland's GDP. In addition to the many large multinationals that have established their R&D in Poland, the country is also known as a good location for FinTech projects. Developing such projects requires experience to make them bug-free and, more importantly, safe for users. Polish developers are experts in this field. Poland is the largest FinTech market in the European Union with an estimated value of €856 million. Because Poland is a member of the EU, it follows European privacy and intellectual property laws. This can give European companies a huge advantage when they want to start a web development project. Front-end and back-end development is therefore a much sought-after service by European companies. Polish developers are also known for their specialisation in PHP, Java and .NET. 

This is the time to outsource

All four locations have their advantages and disadvantages, but one thing is clear. Since the outbreak of the pandemic, we have faced a major challenge worldwide. Companies have suffered a severe financial blow, but at the same time the need for digital solutions for customers and employees has increased. Cutting your IT budget is impossible in today's digital world, which is why outsourcing internal IT is a solution that can save a lot of money. Wondering how outsourcing to India will benefit your business?