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The year 2020 is going to mark an increased interest in business offshoring. Since globalization processes are gaining ground, it has become easier to access distant markets. This is especially accurate for the tech industry because IT is one of the leading innovative and fastest developing spheres which needs skillful human resources. Offshoring and nearshoring are the best suitable models for large IT corporations, startups, and SMEs. They require small up-front investments and are very flexible, depending upon the engagement mode. In this article, we’ll discuss the main offshoring and nearshoring trends in 2020 with the focus on software development and offshore engineering teams.
Here are the trends
Trend 1: Offshoring will Replace Outsourcing
IT outsourcing for software product companies will soon go by the wayside due to many risks for IT products. With outsourcing, it’s difficult to control the project because you delegate it (rather than your own). However, for some tech companies it’s vital to manage the ongoing work and supervise the team. In this case, an offshore development center, also referred to as ODC, can be a reasonable solution.
Trend 2: Quality over Costs
Previously, IT companies were outsourcing to developing countries in Asia. In spite of the lower quality of work there, it was a nice opportunity to reduce expenses and finish several projects quite fast. Nevertheless, today high tech enterprises reject cheap, middle-qualified labour in favour of talented software engineers. Now there’s no need in sacrificing your project to save money because the global market has other offshoring opportunities that provide high quality at a reasonable price. It is a common mistake to believe that having a lot of cheap outsourced developers & freelancers will bring higher quality. On the contrary, it won’t guarantee anything but enormous costs. However, a small team (10+) of seasoned and well-versed offshore IT specialists will bring more value to the product development, which is going to result in higher quality and profits.
Trend 3: New Offshore Locations in Europe
Europe has many IT hubs represented by emerging countries with developed IT markets. The Central Eastern European areas are marked by a number of promising offshoring destinations, with Ukraine being one of the leading ones. The Ukrainian IT industry showed a 30% rise in 2019, which supersedes the annual 20% trend of industry growth.
As of 2020, there over 190,000 IT specialists in Ukraine. Having a good command of English, Ukrainian software developers are able to work for international companies. They are also said to be results-oriented and highly committed. The most outstanding trait, to our mind, is the product mindset of developers in Ukraine. They are willing to get involved in all development processes and think proactively about business aspects of their work.
Trend 4: All-in-One Place Service Providers
To have a successful offshore experience, reach out to local service providers. They can help you set up your own software development center and provide access to the pool of eligible candidates. Consider the Alcor company – an all-in-one place to set up a development office in Ukraine. Their services include office searches, IT recruitment, legal support, HR payroll and other operational services for offshoring teams.
As can be seen, IT offshoring drastically differs from outsourcing and has much potential to evolve this year. The emerging markets in Europe will continue their expansion and all-in-one place providers will become more popular among tech companies – mainly because they create the most comfortable conditions for doing offshore business.