Outsourcing rates are probably the top-wanted thing to receive from a service company. Check the factors that influence them and some tendencies for 2017.

Why Companies Go for Outsourcing?

To begin with let’s find out why so many companies find outsourcing so attractive.

7 Common Myths about Software Development Outsourcing

To be honest there is a quite lots of reasons for that, including cost efficiency and reducing the workload tension inside the company. Some more good reasons to go for outsourcing are that it gives one a wider choice of expertise, which lets you solve some issues in a much more efficient way.

No wonder that with every year more and more companies all over the world go for outsourcing handing over all or part of required activities. Due to peculiarities of IT industry, outsourcing in this field has become especially popular.

Some More Hidden Savings

When talking about things like IT, even more factors come in place. Since technology development allows performing same tasks from any corner of the world with almost zero loss of efficiency, even more savings take center stage. Have a look at sample costs of In-house and Offshore developers compared.

As you see, even with travel taken into account, it is still more cost efficient to outsource at least some of the activities.

Factors that Influence Outsourcing Rates

OK, but how are outsourcing rates formed? There are a few factors that influence the final price. Let’s have a look at some of them.

1. Geographical Location

Basically, there are 3 most popular areas where outsourcing companies are located. They are Eastern Europe, Central & Western Europe, and Asian region.
Eastern Europe is known for a huge amount of IT companies with high level of expertise. Comparatively low rates here go hand in hand with high professional level. Belarus, known as the Silicon Valley of the Eastern Europe, stands out among others (and it’s not only because Rubyroid Labs headquarters is here).

Hiring an IT specialist in Central & Western Europe will definitely cost you 1.5 or 2 times more. Specialists from this region are also for high-level expertise and background in a large number of knowledge domains. Besides, many of them have English as a native language, which also helps a lot.

Asian region is known for extremely low rates. India, being the heart of outsourcing here, delivers hundreds thousands (if not millions) of specialists for all sorts of purposes. If you choose to cooperate with this region, choose wisely, since a wide range of offers inevitably leads to a generally lower technical level of specialists.

2. Specialist Expertise

Another factor that influences the rates is the level of expertise you are looking for. No surprises here: the higher level you need, the higher the price will be. It is a good idea to do some interviewing when hiring outsourcing specialists.

Rubyroid Labs Hacks: How We Interview Ruby on Rails Developers

It is a good way not only to check their technical knowledge but also to get to know them better and see whether they fit your working processes and spirit.

3. Project Scope

And finally, Project Scope can’t but influence the price you are going to pay. If you have a huge long-term project, which will last for a year or two, you can definitely expect some sort of a discount.

Estimating Development Part 2. Practical Guide

At the same time, since a small project, similar to big ones, needs phase 0 before the kick-off, they turn out to be more expensive. This way, if you have a few small projects you want to outsource, it might be advisable to set some business relationships with the same vendor, which would save you some time and effort.

Digest on 2017 Outsourcing Rates

But what are the trends in outsourcing in 2017? Outsourcing Advisory Authority called Accelerance has recently published a report, in which it pointed out the average Global Outsourcing Rates. Let’s have a look at them now:

Numbers speak for themselves. As you see, Asia and Eastern Europe tend to offer most affordable price ranges. This way by choosing the right vendor, you can definitely save quite a sum.

We in Rubyroid Labs will deifnitely be happy to help you with any sort of project. If you have any questions, don’t be shy to drop us a line.

Read about Ruby on Rails developers hourly rates here.


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Daria Stolyar is a Marketing Manager at Rubyroid Labs. You can follow her at Linkedin.

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