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IT Outsourcing Cost Comparison : India, China, Vietnam

  • Post category:Trend & Insights
  • Reading time:6 mins read

IT outsourcing is growing more popular as a cost-effective, highly productive, and expert alternative for fulfilling the demands of software engineering, testing, maintenance, and administration worldwide. Not only does software outsourcing offer large businesses access to the global talent pool, but it also enables expansions to SMEs and startups. Companies may now select from a wide range of choices based on their unique requirements. 59% of international enterprises employ offshore IT and Software engineers to reduce the price of software development. And while offshore developer prices vary by nation, you may still save between 40% and 70% of overall expenditures.

In recent decades, countries like India, China, and Vietnam are seeing an influx of international companies eager to outsource software specialists. And if you are here to understand which of these IT hotspots will offer you the best return on your investments, you are at the right place.

In this blog, we will discuss in-depth the outsourcing cost comparison between India, China, and Vietnam and help you determine which country offers you the most lucrative conditions to outsource talents from!

1. Overview of IT Outsource in India, China, and Vietnam

India

photo of Taj Mahal

With the rapid growth of the IT industry over the last 25 years, India is an ideal destination for outsourcing IT and Software Solutions for many. With a large talent pool, operational transparency, and great communication, India attracts global companies to invest in quality services. With a large number of IT professionals, as well as top-quality service, India is expected to remain on top for a longer period of time.

However, there are some downsides to working with IT professionals from India. Cultural compatibility, power connectivity, and lack of infrastructural development are among some of the noteworthy issues. Also, there is a lack of extensive privacy and security laws, unlike in that in the US. And although outsourcing to India was initially to cut costs for companies, slowly, with the increase of popularity, the cost is also rising significantly compared to other popular destinations.

China

architectural photograph of lighted city sky

With their biggest assets of low cost and productive labor, infrastructural integrity, and skill promotion strategies, China has a huge advantage in surpassing many countries in the IT outsourcing industry. The Chinese government also constantly focuses on improving the IT sector with friendly policies that attract entrepreneurs to invest their skills in this sector.

However, similar to India, IT outsourcing costs are also on the rise in China. Alongside, their culture is new to most westerners, making it hard to adapt before coming to any consensus. Even being a non-speaking English country and with little to no effort in learning English, the communication gap is a critical issue for most. Another major concern is the compromised Intellectual Property rights that result in many software piracy cases in China.

Vietnam

city building photo

Vietnam is increasingly emerging as a popular outsourcing destination in the Asia-Pacific region, thanks to its developing IT infrastructure, better logistical and regulatory structure, and business-friendly economic changes at an affordable cost. Their Information Technology industry has grown at an unprecedented rate of 9.8 percent annually over the last five years. And with annual sales of 110 billion USD in 2019, the IT sector’s contribution was 14% to their GDP. And with 69.3% of its massive population in the labor force, Vietnam has already shown great potential in providing quality services in the software development industry. Alongside having a high emphasis on technical education, their proficiency in English is also commendable. And even though some improvement is needed in the QA testing and code reviewing sector, the Vietnamese youth are quick to adapt to new challenges.

2. Cost Comparison

Although India and China have been popular destinations for outsourcing IT and Software specialists, Vietnam is showing potential to surpass these IT giants owing to cost-efficiency, quality services, and a massive talent pool. Attracted by Vietnam’s enormous development in the IT infrastructure, companies like Intel, IBM, Cisco, Sony, and Apple, have selected Vietnam to invest in. Companies like Nokia also relocated their production facilities from China to Vietnam.

And if you are looking for the most cost-efficient outsourcing destination that will offer you quality services, you are in the right place.

The outsourcing development cost in Vietnam is 90% lower than that of hiring experts from the US. And if you are confused about whether to choose India, China, or Vietnam, undoubtedly, Vietnam offers the highest cost-efficiency for quality services that would surpass others! In comparison to these other outsourcing locations, labor costs in Vietnam are quite low. Vietnam’s IT outsourcing salaries are more than 30% lower than those in India and 50% lower than those in China as well. While hourly rates for Vietnamese IT and Software experts would range between 20-40 USD per hour, Indian outsourcers may demand anywhere between 25-50 USD, and Chinese may have an hourly charge of 30-60 USD for almost similar quality works.

So, if you are looking for a highly productive team of software experts who will ensure constant communication and safety of your enterprises’ systems at an affordable cost, Vietnam is your ideal choice. And our IT and Software experts at TMN Solutions are here to assist you in achieving your goals!