{"id":4121,"date":"2023-01-01T12:19:04","date_gmt":"2023-01-01T12:19:04","guid":{"rendered":"https:\/\/www.goodcore.co.uk\/blog\/?p=4121"},"modified":"2025-04-03T08:05:29","modified_gmt":"2025-04-03T08:05:29","slug":"it-outsourcing-companies","status":"publish","type":"post","link":"https:\/\/www.goodcore.co.uk\/blog\/it-outsourcing-companies\/","title":{"rendered":"What are the best countries for IT outsourcing: Eastern Europe or Asia?"},"content":{"rendered":"

Way back in 1989, Eastman Kodak partnered with IBM to set up a data centre and manage it for Kodak, inaugurating the first of all IT outsourcing companies. The concept grew exponentially with the rapidly increasing demand for tech talent and rising software developer rates in the western market. The global IT outsourcing market is expected to touch <\/span>USD 395 billion<\/span> this year.<\/span><\/p>\n

Outsourcing allows organisations to augment existing talent<\/a> with external resources instead of investing in expensive recruitment and training activities.<\/span><\/p>\n

Local, nearshore, and offshore subcontractors minimise costs, increase efficiency, and reduce risks for hirers. By outsourcing certain functions of their operations, businesses can efficiently allocate their more valuable internal resources to core tasks in which their expertise lies. The outsourcing provider can then take over other tasks and processes.<\/span><\/p>\n

For IT outsourcing companies<\/a>, these usually cover desktop, mobile, and web development projects, going over some or all phases of the software product development process \u2013 business analysis, design, coding, testing, and maintenance.<\/span><\/p>\n

Two regions dominating the IT and software outsourcing services market are Eastern Europe and Asia. Both regions have cost-effective labour with quicker hiring times compared to Western and Central Europe, the USA, Australia, and other top economies.<\/span><\/p>\n

Let us see how Asia and Eastern Europe fare against each other in terms of four key factors \u2013 cost, quality, talent pool, and collaboration.<\/span><\/p>\n

Asia and Eastern Europe: The Best Regions For Outsourcing<\/span><\/h2>\n

Asia and Eastern Europe are known for their professional and competent experts, but expenses, work approaches, collaboration methods, and cultures may differ. This contrast may cause significant changes for the companies and affect the timelines and expected returns for outsourced projects.<\/span><\/p>\n

The graph below shows twenty destinations home to the best outsourcing companies. While most of the top spots are taken by Asian countries, we see quite a few Eastern European countries in the list as well. Let\u2019s perform a detailed comparison to explore why Asia and Eastern Europe dominate the outsourcing market.<\/span><\/p>\n

\"Leading
Leading countries in offshore business services worldwide in 2021 \u2013 Statista<\/a><\/figcaption><\/figure>\n

Comparison Criteria for IT Outsourcing to Asia and Eastern Europe<\/span><\/h2>\n

Cost-Effectiveness<\/span><\/h3>\n

High demand for IT talent in the UK<\/span> and US has caused salaries and wages to soar. In such situations, outsourced talent can be procured at much more reasonable costs. Companies can easily save significantly on fixed infrastructure and equipment costs as well as avoid relatively trivial expenses such as training or benefits that they would otherwise have to provide to full-time resources.<\/span><\/p>\n

From the aforementioned graph, you can see that IT services providers in Eastern Europe are credited for their expertise; thus, developers here are in high demand. The hourly rate for experts in top software development<\/a> outsourcing companies in Eastern Europe ranges from USD 25 to 50.<\/span><\/p>\n

The average hourly rate for Asia, in stark contrast, falls between USD 18 and 40. Therefore, Asia seems more lucrative in terms of cost. Outsourcing IT services is so popular here that it plays a vital role in the economy of many countries in Asia, especially India, Vietnam and Pakistan.<\/span><\/p>\n

Nevertheless, when choosing your provider, you must gather all the necessary information before signing up as the quality of service may differ from company to company, no matter which region they may be based in.<\/span><\/p>\n

Asia: \u2605\u2605\u2605\u2605\u2605<\/strong><\/p>\n

Eastern Europe:<\/strong> \u2605\u2605\u2605<\/strong>\u2606\u2606<\/span><\/p>\n

Talent Availability and Accessibility<\/span><\/h3>\n

According to<\/span> recent studies<\/span><\/a>, the global population of software developers rounds off to almost 27 million. Roughly 32.9% of these developers reside in Asian countries, making Asia the market leader in terms of the availability of software development talent. It is closely followed by Europe, with 29.7% of the world\u2019s developers located here. However, when you consider the Eastern European region alone, this fraction drops to less than a third, giving Asia a significant lead in this department.<\/span><\/p>\n

While Asia may house way more developers than Eastern Europe, any IT outsourcing company you choose, regardless of its location, should have an impressive talent pool. It should be proficient in classic and emerging technologies for a timeless software development experience. Choose a development partner who has teams with diverse skill sets and exceptional problem-solving capabilities.<\/span><\/p>\n

Read also: <\/span>Software Development Team Structure: The Roles and Responsibilities You Can Outsource<\/b><\/a><\/p>\n

Asia: \u2605\u2605\u2605\u2605\u2605<\/strong><\/p>\n

Eastern Europe:\u2605\u2605\u2605<\/strong>\u2606\u2606<\/span><\/p>\n

Quality of Work<\/span><\/h3>\n

It is commonly believed that Eastern European developers possess a better level of technical competence than their Asian counterparts. Another widespread opinion is that Eastern European engineers have a more disciplined approach in terms of adhering to deadlines and standards. It can be difficult to prove these claims using numbers or statistics, but a recent survey helps uncover the skill level and work quality in each region.<\/span><\/p>\n

The<\/span> Washington Post<\/span><\/a>,<\/span> Business Insider<\/span><\/a>,<\/span> eWeek<\/span><\/a>, and<\/span> InfoWorld<\/span><\/a> refer to an insightful bit of research provided by<\/span> HackerRank<\/span>.<\/span><\/p>\n

HackerRank regularly posts a plethora of unique coding challenges that allow software engineers and developers to put their programming skills to the test. The tech hiring platform grew curious about which countries its top-scoring participants belonged to. They decided to factor in some basic geographical data and unearthed<\/span> some interesting facts<\/span> about how programmers from different countries performed at the various coding challenges.<\/span><\/p>\n

\"Which<\/p>\n

We can see that among the most noted Asian outsourcing destinations, only China is at the top of the list. Countries like India, Pakistan, and Vietnam rank much lower, beyond the top 20 positions. Meanwhile, multiple countries from Eastern Europe, such as Poland, Ukraine, the Czech Republic, Hungary, and Bulgaria, are at the top.<\/span><\/p>\n

When outsourcing IT services, every customer expects access to seasoned and skilled experts. For IT outsourcing companies in Europe and Asia both, you may need to verify the experience and skills of the specific firm you outsource to. Choose a firm that provably and regularly trains its staff to keep them up to date with the latest technology advancements. You can use platforms like<\/span> Clutch<\/span><\/a> with proven client reviews for further verification.<\/span><\/p>\n

Asia: \u2605\u2605\u2605<\/strong>\u2606\u2606<\/span><\/p>\n

Eastern Europe: \u2605\u2605\u2605\u2605<\/strong>\u2606<\/span><\/p>\n

Convenience of Collaboration<\/span><\/h3>\n

There are several factors to consider when comparing how easy it is to collaborate with IT outsourcing companies in Asia and Eastern Europe.<\/span><\/p>\n

The first factor is the difference in language. It is a well-known fact that English is the lingua franca of businesses \u2013 both buyers and sellers \u2013 all over the world. Developers and IT specialists from both Asia and Eastern Europe have, over the years, gained fluency in the language. Their ability to easily communicate with clients from all over the world has led to language differences not being much of a hurdle anymore.<\/span><\/p>\n

Offshore custom software development outsourcing is also often accompanied by minor or major differences in time zone. A difference of eight or more hours usually limits the amount of overlap between the client and service provider\u2019s work timings. This means you might not be able to closely supervise the team or have your questions answered immediately. The ease of collaboration depends entirely on where the two partnering companies are located.<\/span><\/p>\n

The last concern pertains to security and privacy regulations. In recent times, we have seen European countries \u2013 including almost all of the ones situated in the Eastern region \u2013 wholly embrace region-wide and standardised privacy laws such as the GDPR. In the Asian region, we noticed a certain lack of formulation and enforcement of any such laws which would guarantee data privacy for client organisations. This factor caused us to lean slightly in favour of Eastern Europe in terms of ease of collaboration.<\/span><\/p>\n

Asia: \u2605\u2605\u2605\u2605<\/strong>\u2606<\/span><\/p>\n

Eastern Europe: \u2605\u2605\u2605\u2605\u2605<\/strong><\/p>\n

Popular IT Outsourcing Regions in Asia<\/span><\/h2>\n

India<\/span><\/h3>\n

According to the National Association of Software and Service Companies (NASSCOM), India\u2019s IT industry revenue reached USD 227 billion in 2022. NASSCOM also revealed that almost 50% of all Fortune 500 companies choose to outsource software development to India.<\/span><\/p>\n

The country ranked third worldwide in 2021 with 608,000 cloud experts across all verticals, including technology. Gartner estimates that IT spending in India will increase to USD 101.8 billion in 2022. Some famous organisations that outsource to India are Microsoft, Ford Motors, CISCO, Amazon, Google, IBM, American Express, and Dell.<\/span><\/p>\n

\"Popular<\/p>\n

India has long been a top destination for IT outsourcing, thanks to its vast talent pool and cost-effective services. However, there are also some challenges businesses should consider before choosing India as their outsourcing partner.<\/span><\/p>\n

Pros of IT Outsourcing to India<\/span><\/h4>\n