Offshore software engineering
Software engineering is a prime example of how offshoring makes sense in a global economy
The internet had a massive impact on software engineering in the 1990s. Software teams no longer had to work in a single location; they could be linked across nations, continents, and oceans. They became a prime example of how the global marketplace wasn’t just about trade, products and materials. The employment sector became global too.
Countries in Asia were then able to offer highly skilled workers by developing their education systems around computer-based technology industries. This enabled them to provide skilled and knowledgeable lower-cost software labour to Western European, North American, and Australasian high-tech firms. Today offshore staffing companies such as Remote Resources employ expert engineering talent at a fraction of the cost of ‘on-shore’ software engineers.
So why offshore?
Commonly, the main reason is purely financial; the client is looking to expand their product line without spending too much money in research and development, as well as improving or maintaining their financial operating margin. It is also easier to scale (up and down) by bringing in temporary software engineering staff for short-term projects or initiatives. These staff can be eventually released or reduced in number, as and when required.
It is increasingly common to use an offshore team to manage bug-fixes, maintenance, and support, to free-up on-shore expert staff so they can concentrate on growing the business and more pressing assignments. But of course, offshore teams with many years of experience – such as those employed by Remote Resources – are able to develop products across many technology domains. This can include cutting-edge technologies and verticals. For this reason, it is a common occurrence for an offshore operational office in a remote location to have engineers with the competency a new client may desire.
Many offshore teams will be up-to-speed with the same tools, technologies, and processes. A lot of western firms after all depend heavily on immigration-based talent. Offshoring can avoid the need to engage immigration services for working visas and sponsorship etc.
India was the first country in Asia to introduce low-cost high-tech software development centres, but over the last few years pay demands have increased and employees moved companies for even the smallest pay increase. You can still find organisations with quality staff, but most are of a very low standard.
The emerging country of choice for companies is Vietnam, and the city of choice is Ho Chi Minh City. Vietnam has a technically-skilled labour force, low wages, and a better skill tools to earn a place in media rankings. For example, headlines and ratings declare:
- “Ho Chi Minh City in Top Outsourcing Cities”(Tholons, 2009-2015) and Vietnam is #3 as a global offshoring hotspot, and #1 regarding competitive cost (Tower Watson, Services Offshoring Ranking 2013).
- Vietnam is in the top 10 of countries with most engineering graduates – research of World Economic Forum in 2015 out of 128 countries (Forbes).
- Vietnam is a new emerging market and an investment in the country is worthwhile with a 30% to 40% less expensive than China.
So, in conclusion, Vietnam and Ho Chi Minh City tick all the boxes as regards the perfect location to seek offshore talent in software engineering. As always it is advisable to seek professional advice.