Why A Software Consulting Firm in India Can Provide Better Service at Competitive Price

During the past decade software development outsourcing has become a widespread business activity and a software consulting firm in India is far better positioned to get a business contract from abroad and for good reasons. Global economic downturn has played a role in India's emergence as leading world provider of software development services within outsourced projects but other factors like government-backed investments in appropriate infrastructure and education have been the major drivers of such a development.

India inherited a relatively well developed educational system based on a British system that has a proven record in the course of centuries. The country managed to expand its reach nationwide and meanwhile created a number of technological educational centers that served as the stepping stone for development of modern research and development centers in the field of software and hardware engineering. Later on, India invested heavily in modern infrastructure required to maintain those facilities and attract foreign investors interested in outsourcing in part or in whole their software development and software support services abroad.

In the course of a couple of decades, software consulting companies in India gained enough professional experience to compete on equal terms with counterparts in leading technological nations in the West, backed also by the rapid expansion of local software development industry and the growth of India's economy as a whole. As the number of outsourced projects grew, local software consultancies gained not only valuable experience but got access to cutting edge technologies that are rarely accessible even to leading Western software consultants. Within a few years major world software vendors and hardware manufacturers set foot in India through local consulting firms or through direct investment in regional research and development facilities which hire local software experts. A good number of software professionals later moved to locally-owned software companies or established new software consulting firms that possess both the required professional know-how and cheaper labor resource to provide extremely competitive service.

India's software consulting firms are much better positioned when it comes to payroll expenses due to some specifics of the country's economy which provides great opportunities for career development of locally-grown software expenses but still can offer more affordable services in terms of labor costs involved in a technological project. Local software consultancies have been forced to increase remunerations due to prevent brain-drain of well-trained experts but are still able to prevent India-educated software engineers and consultants from fleeing the country, while providing decent standard of living to them.

Local companies involved in computer hardware and software industry have enjoyed a stable rate of growth for more than a decade, a growth rate much higher than the industry average across the world, thus they piled significant strategic financial reserve that can be used for further service enhancement and strategic investments in infrastructure development and continuous employee training programs. During a very short period of only a few years, foreign-educated Indian software experts started to flow back to India, attracted by markedly improved work environment, more lucrative remuneration packages, and last but not least possibility to work on complex projects that involve latest technological developments in the field of hardware and software research.

That said, a software consulting firm in India is better positioned to attract projects from abroad compared with peers in the region or any other country in the world. In fact, a software consulting firm in India can afford to lower the price of its service without sacrificing quality, backed by a combination of strategic reserves piled in the past and smart investment in locally-grown experts who are well-prepared to provide world class service to customers at home and abroad.

Reasons Behind the Booming Software Development in India

Offshore software development and software development outsourcing are often cited as main reasons behind the rapid growth of software development in India. Nevertheless more fundamental factors influence this trend, while the global shift toward software outsourcing only highlights how basic principles of economics work. Outsourcing software development to third-party developers and software vendors in India is not an exotic option but a matter of lowering costs and gaining competitive advantage for a fair number of enterprises based in Europe and the United States, where local software developers are able to provide cutting-edge yet expensive solutions.

Selected countries in Asia, Latin America and Eastern Europe that invested wisely into their high school and tertiary educational systems during the past decades, now can enjoy flourishing software development industries, with global demand for software applications growing, while costs of developing software in the West is rising. Thus, software development outsourcing emerged as a solution in a very natural way, with enterprises across the world seeking less expensive yet reliable software solutions abroad.

India's strategic location in Asia, growing economy, and high educational standards allowed for creation of numerous local enterprises providing software development, IT management, and IT consulting services to business all over the world. Although Latin America and Eastern Europe are emerging as strong competitors in the field of offshore software research, development, and consulting services, India leads the pack with nearly half of all global software outsourcing contracts heading for this country. Such an unrivaled position is partially due to the huge number of local software developing companies that compete not only with software vendors abroad but tend to push prices down to the very limit, forced by the fierce local competition.

Payroll costs and labor efficiency in the West are among the hottest topics amidst ongoing economic downturn, while India does not seem to experience such problems. Local software vendors are able to provide extremely competitive pricing for high-quality services performed by well-educated specialists, which results in a constant flow of contracts from both local and international business customers. Thus, local software developers can focus on enhancing their service whereas their Western counterparts are forced to increase their marketing efforts and invest in marketing campaigns that have no immediate positive effect on their core service (a costly marketing campaign may boost sales but it does not help a company in developing better software products).

According to reports by the Indian government, India's software export is growing at the tremendous rate of 30 percent a year, urging the United States and the European Union to adopt protectionist measures to curb outsourcing of software research and development to third-party countries like India. Although such measures are welcomed in certain business circles and among white collar workers engaged in the software industry, governments in the West have to face the inevitable: enterprises will continue to look for cheaper high-quality software products and services abroad until software vendors in Europe and the United States are able to cut costs and adopt more reasonable pricing for goods and services they offer.

On the other hand, Silicon Valley companies are still in possession of cutting-edge technologies and face no serious challenge neither from European nor Asian peers. Therefore, India-based software vendors are more orientated toward IT servicing and consulting, and software development in India is still in the stage of providing supportive services to large-scale corporations based overseas.

Major Benefits of Outsourcing to Customized Software Development Company

Most enterprises rely on commercial-off-the-shelf (COTS) software for performing day-to-day activities like processing and management of office documentation or electronic communications like email, while preferring to take advantage of tailored solutions commissioned to a customized software development company to meet the specific requirements of in-house business processes. Large multinational corporations often look abroad to outsource expensive processes like software development with a growing number of foreign enterprises outsourcing IT application development to India, due to lower labour costs and advantageous value-to-quality ratio offered by local software developers.

IT outsourcing is among the fastest growing segments within the IT industry with India and the Philippines accounting for about 50 percent of the world’s offshore software development, including time-consuming client server application development. Enterprises headquartered in North America and Europe face growing costs related to software development due to the growing compensations of developers and other IT experts, whereas outsourcing provides a method to reduce expenditures related to software development with the benefit of remote support and maintenance services that can additionally reduce costs.

Large corporations and medium-sized businesses need custom software solutions to perform tailored tasks concerning their daily activities in the sphere of content management, customer and customer relationship management, inventory management, human resource management, and enterprise resource planning. Thus, corporate executives look eastward to find affordable solutions that specialised software developers in countries like India, Philippines, and to some extent China can offer.

A decent licensed office package is usually able to meet corporate needs to create and maintain office documents, spreadsheets, and business presentations; but complex processes like content management and customer relationship management require implementation of sophisticated software that can be very expensive if developed in-house. Customised solutions cover the full range of businesses, not only niche markets, for large corporations often run their business according to a set of specific requirements that are not covered by standard mass software solutions.

Therefore, IT outsourcing proved to be a cheaper alternative to in-house development of tailored software when the matter in hand is to design an application that is custom-made to meet very specific requirements and offer high configurability, in addition to customisation. Major advantages of software development outsourcing are not limited to lower costs and customisation, though.

Enterprises using the services of specialised developers of custom software are able to focus on their core business and more efficiently allocate resources to deal with day-to-day business activities. Corporate executives can more easily predict variable costs related to software development and IT services by outsourcing such activities to a third party company, improving operating leverage that compares fixed costs to variable costs.

Custom software solutions can boost quality of services offered by an enterprise by obtaining access to operational best practices that should otherwise require significant investment to develop internally. In addition, an external software developer can bring product innovation ideas that rarely can be produced by in-house staff that get used to perform routine tasks within their respective departments. A customized software development company can take a different approach to standard business processes and tasks in an enterprise and enhance best practices according to accepted industry standards, thus placing the keystone of a modernisation process of core IT and business procedures.

India IT Market Set to Grow, Software Development Is Gaining Momentum

India is the third largest domestic market for IT services in Asia/Pacific region with local market forecast to reach $15 billion by end-2014, including software development, ranking it amongst the major emerging markets for IT services worldwide. India IT services market posted revenue of $8 billion in 2010 with industry analysts forecasting market growth of 18 percent, year-on-year, to $9.5 billion in 2011. Software development in India is gaining momentum partly due to the competitive costs offered by local software vendors and the country is rapidly transforming into a regional software development center, where numerous software developers compete on a highly fragmented market. In addition, India offers great competitive advantages to companies that want to outsource their services there or hire local software developers.

The domestic market for IT services is driven by high GDP growth in the past decade as well as government-backed infrastructure projects that fuel development of advanced IT services and software applications deployed by manufacturers, while the financial services sector, which traditionally relies on sophisticated technologies, is also booming. Telecommunications is another sector of the local economy that boosts software development market in India, demanding high-quality products and forcing local software vendors and service providers to compete with large multinationals on equal terms.

India offers tremendous growth opportunities both in terms of domestic market and as an outsourcing destination because of the evident trend to lower the cost of IT services. Organisations worldwide seek alternatives to high IT usage costs, looking for ways to reduce costs and outsource services, while a growing number of enterprises realise that developing customised business solutions in software development centers like India can prove to be less expensive in the long run, compared to the purchase of high-priced enterprise software offered by multinational software vendors.

Actually, India software development market currently stands where the Silicon Valley stood in the early 1980s; namely, numerous small and mid-sized software vendors offer highly competitive services while a few of those companies are destined to witness their products and business models become worldwide industry standards. Local software vendors and developers are strategically positioned within the region while modern infrastructure allows service providers to offer competitive prices for outsourced services to enterprises headquartered at all continents. To some extent, fragmentation of local IT services market can be regarded as a competitive advantage, stimulating new market entrants and players to offer more competitive services and high-quality products at a reasonable price.

Software development in India can boast traditions and achievements a few markets in the region have with local software developers working under projects commissioned by leading world software vendors. The country’s strategic position in the region and the fast-paced economic development that earned the country a place in the BRIC group (Brazil, Russia, India, China) of the fastest developing emerging markets will inevitably result in marked growth of India’s market for IT services in the near future. Furthermore, local software development is maturing and now can offer solutions designed to compete on equal terms with products developed by leading world software vendors.