Cost Savings from Outsourcing

What Are Your Cost Savings from IT Outsourcing

by Dmytro Ternovyi

Outsourcing your IT needs can help your company realize plenty of cost savings. Many organizations are moving to outsourcing their computing needs. One of the primary reasons is due to overall cost savings from outsourcing IT. But where should you outsource your IT needs? That is, what country or region of the world offers high quality, yet affordable IT outsourcing fees?

Australia and the United States are the two countries who pay their IT developers the most, for instance. Certainly it can be worthwhile to consider offshore IT consulting when a business is serious about savings from outsourcing. Here we’ll take an in-depth look into global costs for hiring outsourced developers. Read on for some valuable outsourcing savings statistics.

Read More: Best Practices for Outsourcing Software Development in 2016

Top 10 Countries for Outsourcing

Below we list the top 10 countries in which to outsource. This is according to the advisory firm of Tholons, “2014 Tholons Top 100 Outsourcing Destinations”:

  1. India
  2. Philippines
  3. Poland
  4. Ireland
  5. China
  6. Costa Rica
  7. Czech Republic
  8. Vietnam
  9. Malaysia
  10. Sri Lanka

How Global IT Outsourcing Measures Up

Next, let’s see how countries measure up in IT Outsourcing. But first, it is important to note that cost effectiveness is quickly becoming the primary reason for outsourced IT as opposed to lower costs, according to Tholons. The firm reveals that price is not the top aspect when choosing offshore IT services. More important factors are shifting to proximity, such as countries in Eastern Europe, with a slight decline in India as the top choice for IT outsourcing. Tholons provides these factors as to why Eastern Europe is quickly becoming an important IT outsourcing destination:

  • Less difference in time zones between clients and suppliers
  • Fewer language barriers
  • Less difference in cultural affinity
  • Intellectual property laws

The top IT outsourcing countries in Eastern Europe include:

  1. Poland
  2. Ukraine
  3. Czech Republic
  4. Romania

When a business considers maintaining onsite IT staff in a country such as the UK, it isn’t necessarily taking into account the extreme costs it will pay as opposed to the tremendous benefits of cost savings from outsourcing.

Digging a little deeper, below we’ve included the average annual salary for software developers in various countries.

India £ 7,487
UK £ 27,254
Ireland £ 29,299
Switzerland £ 43,513
USA £ 58,649
Ukraine £ 11,807
Japan £ 19,494
Philippines £ 4,962
Germany £ 35,927
Malaysia £ 9,603
Denmark £ 36,336
Australia £ 66,097


As the table above indicates, Australia developers earn the highest annual salaries of any country in the world. This gives a good snapshot of the disparity between countries and what one can expect if hiring an outsourced IT developer. Here the outsourcing savings statistics are obvious, but let’s break it down for yet an even closer look.

For instance, a midsized IT company in the UK might have two to three IT developers. Let’s say, for example’s sake, this particular business employs two full-time developers. The annual salary cost for two IT in-house developers in a medium-sized business in the UK would be £54,508, and this is on the somewhat conservative side. In comparison, hiring two outsourced developers from Ukraine would cost the company £23,614, over half the cost in salaries. So the actual cost savings of outsourcing IT from the Ukraine would be £30,894!

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Hourly pay would be £6.14 for a Ukrainian outsourced developer, whereas a UK onsite developer’s hourly wage would be £14.19. With how expensive it is to run a business, cutting costs is imperative nowadays. Savings from outsourcing only makes sense, especially when it comes to hiring those who are closer in proximity, do not have as culturally diverse customs, and those for whom time zone extremities aren’t such an issue as, say, offshore consultants in India or Asia.

Advantages of hiring IT outsource providers from Eastern Europe fall into all of these categories. Indeed, many companies are discovering that hiring consultants with the absolutely lowest wages is not always a good business decision. Indeed, countries other than India are slowly but surely surfacing as formidable competitors when it comes to IT outsourcing.


Ukraine: Maintaining a Steady IT Outsourcing Pace

The primary key to successful IT outsourcing is a thorough cost-benefit analysis while weighing the outcomes that are going to leverage business operations. Bargain-basement labour rates need to be carefully examined to ensure ample IT provisions are going to be furnished if considering the least expensive computing services in the world. But it isn’t always worth it to hire the least expensive.

More and more companies are looking to Ukraine for their ability to offer fair outsourcing prices and quality work along with talented and dynamic developers. By partnering with Ukraine IT service providers, companies aren’t paying the bottom dollar which often times results in sacrificing quality. In fact, they are doing just the opposite. They are getting high-quality services. As an interesting aside, software development is the most popular outsourcing service in Ukraine, according to Computer Weekly.

Ukrainian software developers usually have had excellent educations, with a clear focus on UK enterprise. Computer Weekly reported that Christopher Lemoine, Chief Technology Officer at Chartsnow, a UK-based mobile application organization, has been outsourcing its IT development in Ukraine for several years now. He opted for Ukraine instead of Asia because, “Including transport costs, we spend nearly half of what we would back home for these services,” he said. How’s that for outsourcing savings?


Consider Ukraine

So if you’re looking for optimal savings from outsourcing, consider Ukraine for technical proficiency, including a host of talented developers. Ukraine is giving India and other more traditional IT outsourcing companies a definite fun for their money. Speaking of money, why not save yours? Consider Ukraine for your IT outsourcing needs.