Day: March 29, 2023

Business

Outsourcing Software To India Or The Philippines? Double Yolk Compares Pros And Cons

by CEO Weekly Staff

March 29, 2023

Outsourcing software has become a popular trend in the tech industry, allowing businesses to cut costs while still receiving quality ...

Outsourcing software has become a popular trend in the tech industry, allowing businesses to cut costs while still receiving quality development work. A report by Clutch found that 37% of small businesses outsource software development, and 52% of companies do it to reduce operational expenses. However, choosing the right outsourcing location is crucial to ensure success. Enter Double Yolk, a New Zealand and Australian-owned and operated offshore software development company. With over 100 businesses in New Zealand and Australia trusting Double Yolk with their software needs, the company has built a reputation for delivering quality work through its team of 65 development staff spread across India and the Philippines. They offer a range of expertise, including Business Analysts, Project Managers, Scrum Masters, and Front End/Back End Engineers, among others. Through their unique 'cross-shore' delivery model, Double Yolk solves the issue of finding skilled developers rapidly while maintaining high-quality standards. It is important to note that both India and the Philippines are leading countries for outsourcing due to their large pool of talented IT professionals, lower labor costs, and favorable government policies. With Double Yolk conducting its business operations in both countries, it's worth using their lens in evaluating the pros and cons of outsourcing software development to two of the most popular destinations. India's benefits India is a prime choice for businesses looking to outsource due to its combination of lower labor costs and one of the largest pools of skilled IT professionals in the world. India has been one of the primary IT offshoring markets for decades. Largely driven by the US, the Indian IT sector has learned how to tackle almost any software requirement. With the growing competition in the market, the likelihood of encountering issues when outsourcing to India is minimal. Outsourcing is also advantageous for businesses that offer multiple services, as it eliminates the need for large investments and reduces the risk of limiting projects to specific periods. This makes it an ideal option for scaling and creating a conducive environment, especially for IT startups. The cons of outsourcing to India However, despite these benefits, the cost of offshoring to India has become more expensive in recent years. Accelerated digital transformation and widespread adoption of remote working in a post-COVID-19 world have fuelled demand for India’s highly skilled tech sector like never before. Add in India’s aging demographics where skilled labor is becoming harder and harder to replace with younger workers, and the supply and demand balance is beginning to shift. Cultural, time zone and language differences also require businesses to adapt and communicate clearly to ensure project success. Clear communication and detailed project planning are crucial to ensure the success of outsourcing projects to India. While outsourcing to India has its challenges, careful planning and clear communication can help businesses take advantage of the lower costs and talented digital and technology professionals available in the country. The benefits of outsourcing to the Philippines Offshoring is a common practice among companies looking to reduce costs. One common concern associated with offshoring is the language barrier. However, this is not a problem when outsourcing to the Philippines, where the country's high English proficiency levels rank 20th out of 100 countries and second in Asia. The Philippines also has a large and diverse talent pool of competent workers, with over 700,000 graduates annually. In terms of technological competency, the Philippines has a significant demographic of over 37 million millennials, with a median age of 25.7 years old, who are familiar with technology and capable of improving businesses through their understanding of it. Additionally, compared to the US, the Philippines has a lower cost of living, which translates to lower employment costs for outsourced talent due to currency exchange rates. Statistically, the average Filipino citizen can live comfortably with between 9.6K and 14.5K USD per year, significantly less than the 58K to 99K USD per year required by an average US citizen. The Philippines' disadvantages Despite the benefits, outsourcing to the Philippines comes with its own set of challenges. The country is situated in the West Pacific, which is prone to around 20 storms per year, leading to power outages and work disruptions. The Philippines is also in the Pacific Ring of Fire, meaning there are an average of 100 earthquakes and volcanic eruptions yearly. In addition, the Philippines has more holidays than the US, with 18 official holidays when people don't have to work. Labor codes that favor the workforce make it challenging to terminate employees and require organizations to pay them an additional 13th and 14th-month salary. These labor laws, however, result in lower turnover rates. It is also important to note that some foreign companies have had poor experiences with hiring less capable talent, leading to generalizations that Filipinos are lazy or incompetent. Business owners can avoid this by hiring quality talent through outsourcing agencies. Choosing where to outsource Understanding the pros and cons of outsourcing to both countries discussed is crucial to finding the right outsourcing partner for any business. To ensure a successful outsourcing journey, business owners should clearly understand what they want to achieve and the reasons for offshoring necessary business tasks. It is also essential to communicate these goals to the future hired outsourced talents to prevent misunderstandings. The process may sound easy, but with the rising trend in outsourcing, it is crucial to partner with those who know the industry best. Finding an outsourcing company that provides reasonable, transparent pricing and flexible deal options can help avoid hidden charges and provide consistent service. With Double Yolk as an outsourcing partner, business owners are assured of having the best talents in either The Philippines or India, helping them scale and achieve their objectives while minimizing risks and maximizing benefits.

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