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1、2023 Global Software Outsourcing Trends and Rates GuideTopics2023 Global SoftwareOutsourcing Trendsand Rates3Context:Global Insider Point of View52023 Macro SoftwareOutsourcing Perspective82023 SoftwareOutsourcing Trends16The Dynamics of SoftwareDeveloper Jobs and Skills20Software OutsourcingCost Co
2、nsiderations28Global Analysis ofSoftware Developer Rates37Putting OutsourcingExpertise to Work for You2Click on the titles below to go to the topic.Andy HilliardAccelerance CEO3Economists surveyed by the Wall Street Journal in June of 2022 put the probability of the US economy heading into recession
3、 in the next 12 months at 44%.Rising interest rates,inflation and ongoing supply chain disruption are hurting everyone,virtually everywhere.While the outlook for the software sector remainsrelatively bullish Forrester Research predicts 10.5%growth in technology investment globally this year IT leade
4、rs need to prepare for challenging economicconditions ahead.They were already grappling with talent shortages,ballooning developer costs and ongoing pandemic-relateddisruption.Now they are preparing to make budget cuts and adjust revenue projections.We will all need to be adaptable to navigate what
5、is ahead.Thankfully,software outsourcing helps us achieve that.Ifit plays an invaluable role in offering affordable access to talent and resources in boom times,it really comes intoits own in tough times.Outsourcing lets you adjust for economic uncertainty and keep operating and administrative costs
6、 low so you can pivot to meet the changing needs of your customers.Some of the biggest US companies weathered the 2008 global financial crisis by downsizing and outsourcing.Its a proven method of maintaining productivity andtaking pressure off your in-house development team.If youre apprehensive,we
7、dont blame you.Ambitious plans that were hatched early in the year may now need to be shelved due to the changing economic climate.On the other hand,we are still seeing a strong appetitefor digital transformation and cloud migration projectsthat improve efficiency and the customer experience.While m
8、any tech companies are trimming headcount,the market for skilled tech workers remains incredibly tight.We see developer rates slowing in the next year following two years of striking increases.The crippling war in Ukraine sadly challenges the countrys ability to serve as a major outsourcing destinat
9、ion.We stand in solidarity with our partners there who have distributed their people across safer regional locations to keep their projects on track.Ukraine will come back stronger than ever,but rebounding will take time and uncertainty remains.The only constant at the moment seems to be uncertainty
10、.But our 2023 Global Software Outsourcing Trends and Rates Guide helps you cut through the chaos with expert facts and insights.Recessions have forged many a great company.This is your opportunity to thrive.Another year,another crisis.Last year,our focus was on pulling out of the pandemic.This year,
11、its the specter ofa potential recession.In any case,Covid-19 isnt donewith us yet.2023 Context:Global InsiderPoint of View4About the 2023 GuideThe detailed information in this guide is designed to support your software investment and decision-making in the coming year.Its a go-to source for expert i
12、nsights,benchmarking,proposals,skills gaps,tech priorities,professional development and predictions related to software development outsourcing.Our advantage lies in the combination of our vast global network allied with our professional consulting skills,our proprietary partner-selection process an
13、d our unique software outsourcing lifecycle approach.This guide reflects our unmatched assessment skills developed from personally scrutinizing more than 8,000 software development companies worldwide to certify the top 1%as premium enterprise-grade partners.For more than 20 years,Accelerance hashad
14、 its finger on the pulse of the software development outsourcing sector.As theleading Global Software Outsourcing Authority,weve helped thousands of clients use outsourcing to drive strategic changeand navigate business cycles.We bring that deep experience to our 2023 Global Software Outsourcing Tre
15、nds and Rates Guide.Our insights are mined from our global network the worlds largest collection of certified software development firms across more than 30 countries and 60 industries.Now,more than ever,a global view is critical to understanding the challenges and opportunities created by the pande
16、mic,geopolitics and the shifting economic climate.We could all use a large dose of perspective to help us process the tumultuous last few years.Along with our proprietary insights,weve curated key trends and the latest data from industry thought leaders and certified outsourcing partners.Association
17、 for Talent DevelopmentBoston Consulting GroupCIO.comCodinGame/CoderPadComputer EconomicsConsortium for Information and Software Quality CyberseekDeloitte ConsultingDevSkillerDOU software professionals community ForbesForrester ResearchGartnerGlobal KnowledgeHarvey Nash GroupHired State of Software
18、EngineersInfragistics/RevealIDCISACA(ISC)IT Ukraine AssociationKPMGLinkedInMcKinsey&CompanyMicrosoftSoftwareAGStatistaSyntaxThe Hackett GroupThe Standish Group Chaos Report US Bureau of Labor StatisticsWest Monroe PartnersThis guide reflects Accelerances expert perspective along with insights from s
19、oftware outsourcing thought leaders including:2023 MacroSoftware Outsourcing PerspectiveSoftware OutsourcingOutlook 20236Application developers,especially those with the mostprized skills,are extremely expensive.As IT executiveslook to reduce costs,outsourcing work to engineers inlower-cost location
20、s really starts to make sense.Demand ManagementThe need for software developers and specific technical skills will vary significantly as business conditions change in the year ahead.As IT initiatives scale up and down,outsourcing can help you manage fluctuating demand and deliver just-in-time adapta
21、bility and resilience.Skills SourcingTo keep pace with digital transformation,companies are bolstering in-house resources with uniquely skilled outsourced developers.Theyre able to bring in much-needed specialized expertise at a lower cost than the domestic market.InvestmentDespite cutbacks,applicat
22、ion development,often ITs largest line item,will continue to command a bigger share of tech budgets as the innovation agenda remains a priority.Many IT organizations will enhance internal teams through selective investment in outside resources.Technology initiatives have become critical to business
23、growth and competitive advantage.That wont changein 2023.Software development will both supportongoing operations and drive new innovation with outsourcing partners sharing more of the load.In the coming year,outsourcing is predictedto be an antidote for economic woes.Software application developmen
24、t will remain the most outsourced IT function,with the proportion of US businesses planning to outsource at least part of their development holding steady from last year at 60%.Even as the economic outlook deteriorates,Forrester Research is still predicting software growth will outpace pre-pandemic
25、levels this year.That speaks to the ongoing momentum of digital transformation projects.It also highlights the valuable role outsourcing can play in this new era of cost constraints,because of strong business fundamentals in four key areas:Cost Savings$116 billionin 2022+6.3%YoYof companies outsourc
26、ing somesoftware development this year$145.7 billionby 2027+4.7%CAGR 2022-2027Global SoftwareApplication OutsourcingMarket ProjectionsGLOBAL REVENUE IS PROJECTED ATWITHAND EXPECTED TO REACHSources:Statista global software outsourcing data,Computer Economics IT Outsourcing Statistics 2021and Accelera
27、nce analysis60%Geo-political Influenceon Outsourcing Dynamics7We monitor the political stability of the countries in our global developer network.In 2022 the war in Eastern Europe reverberated across the global technology market.The Russian invasion of Ukraine disturbed a large world center for tech
28、 outsourcing talent.Ukraine,known as Eastern Europes Silicon Valley,supplies$6.8 billion of IT services to other countries annually,according to the IT Ukraine Association.The disruption of a key source of IT world talent has had significant impact:Exacerbation of the global software developer gapan
29、d rates increasesIt is estimated that thousands of Ukrainian software developers were forced to flee their homes and even fight on the front lines.The record global talent pool shortage and high rates will take a hit from the loss of Ukraines engineering talent supply.Replacing it will be difficult.
30、Source:AcceleranceContinued turmoil in IT outsourcing worldwideThe war tempered demand for the hot Central andEastern European software outsourcing hub.Other global outsourcing regions scrambled to meet the influx of inquiries from clients leaving their Ukrainian partnersor taking Ukraine off their
31、consideration list.Loss of IT destinations in a tight marketRussia and Belarus were previously viable and significant providers of software development.Today,their appeal as outsourcing destinations is effectively null and void.Our experience with our Ukrainian outsourcing partners reflects the macr
32、o trends.Our partners,located in Ukraines Western region,were able to keep operating better than firms in the more affected Eastern region.Some US clients chose to move their software outsourcing from Ukraine,and we found backup or new partners for them-particularly in Latin America.Whats ahead?Cont
33、inued uncertainty as the dynamics play out for at least the next few years.On a positive note,we do foresee affected Ukraine software development firms moving to resume operations within the next year.“Digital geopolitics is now one of the most disruptive trends that CIOs must address.”-Washington P
34、ost,February 2022Fortune 500 companies uses Ukrainian development firms-Washington Post,February 2022The Big Picture:The Ukraine GlobalOutsourcing Disruption141,000IT outsourcing professionals in Ukraine-DOU software professionals community,April 202298%of Ukraines 1,500 development firms provide se
35、rvices to companies outside the country-IT Ukraine Association1 in 52023 Software Outsourcing Trends9Whats Trending in 2023:The Six Big WavesThe guide covers:Looking for more?A perspective on each trend follows.Its never easy being an IT leader,but these last fewyears have been particularly brutal.G
36、etting some proactive perspective helps as we look ahead.Some trends are continuing,some are intensifying and some are new.But all need to be taken into account for a future-proof strategy.With Accelerances global network of hundredsof firms in 30+countries,our trusted advisors have a direct line in
37、to software outsourcing business trends.Here are our experts top picks of high-impact waves that will shape software development outsourcing in 2023.Cost andRight-SizingAgilityDeveloperShortageParadoxHyper Specialized Tech SkillsHybrid TeamValidationCybersecuritySourcing CrisisMulti-Partner Sourcing
38、10Cost and Right-Sizing AgilityBefore 2020,software development outsourcing was evolving from a simple efficiency play to a driver of innovation.But the pandemic,economic uncertainty and the recent tech industry cutbacks changed all that.IT leaders now are focused on ways to reduce expenses and righ
39、t-size.Theyre looking for agility in resourcing costs and levels.Outsourcing offers the control they need in the face of significant business uncertainty.Outsourcing has returned to its roots as a cost savings and flexibility play.Its a trend that started about the time of the pandemic and has been
40、holding strong,according to Deloitte consulting.Its why 89%of companies in a recent BCG study said they intend to strengthen existing relationships with their IT service providers.Software outsourcing has proven its worthfor managing with agility through economic cycles,corporate uncertainty and bud
41、get cutbacks.70%60%50%40%30%20%10%80%0%Source:Deloitte Global Outsourcing Survey 2020“Outsourcing levels are growing as moreorganizations take advantage of the costflexibility that service providers offer.”-Computer Economics IT Outsourcing Statistics 2022AgilityFlexibilitySpeed tomarketAccess totoo
42、ls andprocessesCostOutsourcing helps by:Our network of software outsourcing partners reports that their customers are scaling back some projects while accelerating others.Outsourcing allows that rebalancing of corporate priorities in line with prevailing economic conditions.Realizing a 40%to 70%redu
43、ction indevelopment costs.Businesses are better able to control expenses and budget.Gaining the specialist skills neededfor technology projects along with theadaptability to quickly adjust headcount,through staff augmentation and managed project outsourcing.Finding affordable tech talent to drive on
44、going digital transformation efforts.Reasons for Outsourcing:Cost is Top Priority Among IT Leaders 11Developer Shortage ParadoxSources:Bureau of Labor Statistics and Gartner Report 2022High-profile tech company layoffs are making headlines.Even so,“software developer”continues to top the list of the
45、 worlds mostin-demand positions,with turnover among the highest of any job type.Even as the tech industry cuts back,tech-led companies are still scrambling to find qualified software developers to build applications,undertake migrations and implement new technologies.At least one-half of CIOs report
46、 that the lack of skilled talent makes it difficult for their companies to grow and compete.So its no surprise that recruiting and retaining developers with the right skills are among IT leaders top business challenges.The time-consuming,expensive recruiting process is taking a toll on the software
47、development workforce.Poor retention isnt helping:Only 29%of IT workers have high intent to stay with their current employer.Software development outsourcing can directlyaddress these problems by:Outsourcing stands as a tested and proven answer to talent shortages.It lets you tap into the skills you
48、 urgently need on flexible terms with cost savings associated with working with partners based in the worlds best outsourcing hotspots.Halting the recruitment and retention downward spiral through access to highly skilled developers in locations where labor shortages are less acute.Mitigating develo
49、per turnover.If a team member leaves,your software outsourcing partner is responsible for replacing them quickly and at no extra cost to you.Youdont have to worry about devoting timeto recruiting or paying costly IT recruiters.Accessing the specialist tech skills youneed now so you can get underway
50、faster.53%46%43%Top Business Challengesfor Software Development in 2022Recruiting Developers with the Right SkillsRetaining Current DevelopersKeeping RemoteEmployees EngagedSource:Reveal Survey Report 2022The Recruitment Challengeturnover in software engineering positionsof IT workers have low inten
51、t to stay with their current employer57%71%The Retention ChallengeDevelopers:Highest Turnover Rate in Tech IndustryHigh Attrition Rate in IT1264%The tech talent shortage is the mostsignificant barrier to adoption forPrevalence of Gaps in Specialty TechnologySkills Cited by IT Leadersof emerging tech
52、nologies*40%34%32%28%28%28%26%26%25%43%CybersecurityBig data/analyticsTechnical architectureDevOpsCloudEnterprise architectureBusiness analysisArtificial IntelligenceProject managementAutomation/robotics*Source:Gartner 2021 CIO Agenda*Source:Harvey Nash Group Digital Leadership Report 2021Hyper Spec
53、ialized Tech SkillsThe tech talent shortage is hitting hardest in highly specialized development roles.The most challenging roles to fill relate to dynamic,fast evolving technologies such as security,cloud computing and artificial intelligence.In a rapidly proliferating tech market,IT leaders are st
54、ruggling to keep all the skills they need on hand within budget.Since its costly and time-consuming to build or upskill in-house,software development outsourcing to expert partners is becoming an increasingly popular solution for IT leaders to:Add technology and function-specific domain expertise at
55、 the speed of the market,far quicker than hiring or upskilling in-house staff.Access best-in-class teams that are already trained with the most advanced specialty skills.Cut costs by bringing in specialist offshore development teams at a lower cost with the same quality as expensive US talent.One of
56、 the most successful solutions weve seen is having on-demand sources of software outsourcing partners that are hyper-specialized in critical skills to drive operational excellence and innovation.Its a growing trend with the acceptance of more flexible resourcing driven by the pandemic.Accelerance pi
57、oneered this concept.Our global software outsourcing network of partner firms,with 100+technologies and platforms,is ready to tap in real time to fill specialty skills gaps.Hybrid Team ValidationWith so many employees forced to suddenly work from home during the pandemic in recent years,companies ha
58、d to adopt the business model of“hybrid”teams.Thats code for teams with a mix of people working in-person at corporate offices,at partner locations as well as from home.This work model set off a flurry of speculation.Would productivity fall off under this looser work structure?Would organizations fl
59、ock back to traditional models?At Accelerance,we knew the answer to both questions was“no.”From 20 years working with distributed outsourcing models,we know teams consisting of onshore client staff and offshore resources can perform just as well or betterthan traditional teams.Now theres evidence to
60、 prove it.Numerous studies undertaken during the pandemic have shown that hybrid work leads to more productive teams.There are a number of reasons identified for the increased productivity:Those organizations who embraced remote work fared best in the abrupt,pandemic-driven shift.Most of our outsour
61、cing partners in our global developer network have already mastered this proven model and are making it an even more integral part of their operations.Workers managing their time more effectively because of the flexibility of being able to set their own hours.Increased employee satisfaction resultin
62、g from the lower stress,lower costs andincreased autonomy of working from home.Recruiting employees from anywhere,allowing for the best,most productive talent to be hired for the position regardless of location.13of organizations project anincrease in use of hybrid teams*34%Sources:*Association for
63、Talent Development,March 2022*CodinGame and CoderPad Tech Hiring Survey 2022*Apollo Technical studyand are delivering higher productivityare expected to keep growing Since the pandemic,hybrid teamsare rising in corporate AmericaPercent of Managers Overseeing a Hybrid Team*20%Before the pandemic69%Af
64、ter the pandemic33%of employers*32%of IT developers*Talk about a skills disaster waiting to happen:In 2022unfilled cybersecurity jobs hit a record 465,000(nearly halfof total cyber positions)in the United States,according toCyberseek.At the same time,cyberattacks spiked duringthe pandemic and are on
65、ly intensifying.In response,new security technologies have been developed to combat the increasing number and complexity of attacks.It heightens the need for cybersecurity expertise that isalready in short supply.With internal resources taxed,many organizations arechallenged to build and scale secur
66、ity teams that fully protect their critical assets.Thats not happening any time soon.Its leaving organizations vulnerable to an avalanche of ransomware,phishing,cloudattacks and IoT breaches among many other threats.A growing number of IT leaders are turning to outsourced teams as a way to shore up
67、defenses to:An experienced advisor can make all the difference in building a lock-tight security capability.Accelerances security practice offers services starting with a comprehensive risk assessment to diagnose vulnerabilities,then a remediation plan to close any gaps proactively,and eventually tr
68、ansferring operational skills within the organization.For more insight,check out our perspective for creating a winning cyber defense.Cybersecurity Sourcing Crisis14Sources:*ISACA State of Cybersecurity 2022*2021(ISC)Cybersecurity Workforce Study*SyntaxOutsourcing as a Strategyfor a Fully EquippedCy
69、ber Defenseof cyber leaders haveunderstaffed teams*62%of companies face direct security risks due to understaffing*60%83%of IT leaders with in-housesecurity teams are considering outsourcing*Fill skills gaps in cyber-defense staffing quicklyand flexibly.Add dedicated security specialists on demand,2
70、4/7.Secure experienced,credentialed resources ataffordable rates.Stay up-to-date with market-leading securitypractices as technologies and systems evolve.Ensure compliance with the latest securitystandards and controls.The global cybersecurity workforce needs to grow 65%to meet the growing cyber cha
71、llenge,according to the 2021(ISC)Cybersecurity Workforce Study.15Source:Accelerance InsightsMulti-Partner SourcingThe last several years of crisis have taught IT leaders a lesson:It pays to have multiple partners in different countries to buffer against disruptions from the pandemic to the Ukrainian
72、 war to economic uncertainty.Gone are the days of favoring a single partner with development all under one roof in an offshore location.Savvy IT leaders are looking to spread the application portfolio globally,to mitigate against future risks that can upend businesses overnight.“We are witnessing th
73、e rise of what we call multi-partner sourcing,where our clients are considering relationships with several software outsourcing partners simultaneously,”says Andy Hilliard,CEO of Accelerance.“As cost pressures mount and US businesses cut budgets,multi-shoring is attractive as a way to get software d
74、evelopment in the most cost effective or highly skilled location.”How do multi-partner relationships work in action?Multi-partner sourcing is an answer to a question our clients often ask:“How can I make outsourcing even better?”Its a compelling option for those who have already tested the waters wi
75、th outsourcing and are looking to take it to the next level.It can be daunting to find and manage multiple partnerships.Accelerance can help you with best practices to develop a tech value network of trusted partners to meet all of your needs.They can take various forms,from outsourcing software dev
76、elopment to partners in several countries or to several partners in one region.They provide the ability to shift skills sourcing among optimal locations through a mix of nearshoring,offshoring and onshoring as regional conditions change.They allow IT leaders to access bargainprices for run-of-the-mi
77、ll development work while tapping more advanced partners forspecialized programming projects.Five Key Benefitsof Multi-Partner SourcingManage and Save CostsFind best value providers and shift sourcing to more cost effective regions as pricing fluctuates.Build Best-in-Class SourcingSelect the top qua
78、lity providerfor each technology no single provider excels in everyplatform or program.Minimize RiskDistribute the application portfolio to avoid dependency on any one source(in-houseor outsourced).Increase ProductivityAccelerate the development by dividing work among locations.Improve FlexibilityEa
79、sily adjust location-based sourcing when there is a skill shortage in one region andavailability in another.The Dynamics ofSoftware Jobs and SkillsRecord Software Developer Skills Shortage17*IDC Market Perspective*U.S.Bureau of Labor StatisticsBusinesses may be cutting their headcount inthe current
80、bearish climate,but theres one typeof worker they cant afford to sacrifice software developers.Why?Theyre the lifeblood of any businessleveraging digital platforms and applicationsto serve its customers.So software development remains in high demand even as companies cut back other functions.Signs i
81、ndicate the record talent gap isntgetting better any time soon.So its a great time to be a software developer,but frustrating for those trying to put a quality development team together.Gartner this year identified“increased employee leverage”as one of its 20 top emerging risks.Acute demand for high
82、ly skilled tech talent puts software developers in a position of power to name their price and terms.It will be an IT management challenge for the foreseeable future.Through the rest of this decade,there will be about 189,200 job openings for software engineers every year,according to the US Bureau
83、of Labor Statistics.The current US gap of unfilled engineering positions is estimated at 918,000 and counting.Software development outsourcing offers relief from the stranglehold of the lack of available talent.Were finding more US companies at the mercy of the market are reaching out to inquire abo
84、ut adding or increasing outsourcing in their resourcing mix.LinkedIn lists software engineer as having the most job postings across its network,and four other development or engineering roles are among the top 10 in demand.US companies will be most affected by the worsening talent gap.Forecasts show
85、 an alarming rise in the shortage up through 2030.Roles with the greatest numberof LinkedIn job posts,Q2 20221.Software Engineer2.Registered Nurse3.Javascript Developer4.Salesperson5.Java Software Engineer6.Project Manager7.Delivery Driver8.DevOps Engineer9.Full Stack Engineer10.Customer Service Rep
86、resentativerise in the global shortageof full-time developers from1.4 million in 2021 to 4 millionin 2025*shortage of software engineers in the US by 2026*increase in demand for software developers between 2022 and 2030*+186%1.2 MJobs with the Most Demand Overall+22%The Hottest SoftwareProgramming S
87、kills18Source:Hired 2022 State of Software EngineersGo or Golang is a lightweight language that cross-compiles a variety of architectures and operating systems.Known for its efficiency,its used for cloud-centric applications anddistributed network services.Ruby on Rails and Ruby(the framework)use op
88、en-source software to build web applications at affordable rates,making them popularchoices.Demand Higher than Marketplace Average1.5x1x2x.5xThe Most In-DemandCoding Skills 20221.8x1.78x1.73x1.69x1.63x1.61x1.59x1.5x1.45x1.45xFor web and mobile development,Java andJavaScript still prevail,with React
89、as the most popular technology within the JavaScript stack.Scala is a fast-growing general purposeprogramming language.Top in-demand skills for 2022 are:As digital innovation continues to accelerate,developers who are skilled in emergingtechnologies are the rising stars in todaysjob market.Programmi
90、ng languages that support newtechnologies are gaining popularity.However those skills are scarce and expensive compared withmore established languages such as Java or.Net.IT skills gaps have increased by 155%in just three years,according to Global Knowledge.Businesses looking to fill in-house gaps a
91、re turning to software outsourcing,such as Accelerances global network offering 100+technologies.Relative Demand for Coding Skill vs.Marketplace AverageThe Hottest Emerging Technologies19Source:Accelerance Research and StatistaEmerging technologies are set to transform entire industries and are driv
92、ing new imperatives for software development in the process.This has created a competitive race toward digital transformation that companies are struggling to keep up with.The tech talent shortage is makingit even harder.Our partner assessment team is continuously benchmarking to ensure that our par
93、tner network has capabilities across the full range of established and emerging technologies for our clients.Based on our market insights,weve identifiednine technologies that will have the most powerful impact across business sectors in technology trends for 2023:Its difficult and time prohibitive
94、to build these capabilities in-house,especially with advanced skills in short supply.Thats where Accelerance comes in.Our business proposition is to offer you a network with a pre-vetted pool of the most up-to-date skills in the world.We give you access to the emerging technologies driving digital t
95、ransformation and the people who can help you make the most of them.Cloud:From hybrid cloud to multi-cloud architecture,virtually every business is embracing the cloud as part of their digital transformation.Cybersecurity:An onslaught of cyber attacks has made security a top priority.AI and machine
96、learning:Powerful tools can generate data-driven insights and automate processes to make companies more efficient and competitive.AR/VR:The metaverse,gaming applications and hardware advances are opening up new possibilities for augmented and virtual reality products.IoT and 5G:The high data speeds
97、and low latency of 5G enable new types of real-time applications on the phone and edge computing based on new IoT sensors.Blockchain:From decentralized finance to supply chain traceability,blockchain is creating more secure,transparent and efficient ways of doing business.20182023Top Trending Techno
98、logies104%CloudCybersecurityIoTAIAR/VRBlockchainRobotics5GMachine learninggrowth rate in emerging technologies over last five yearsSoftware OutsourcingCost ConsiderationsKey Software Outsourcing Cost Factors21With hot tech skills in short supply,expect to paya premium for cutting-edge or highly spec
99、ialized skills.No matter where the location,skills suchas architecture,DevOps,AI and data sciencewill command higher rates than“core”development skills.The more seniority that a developer has,themore expensive they are likely to be.However,this comes with all the benefits of hiring seasoned professi
100、onals.Developer rates will be variable even within a specific region based on experience and skill levels.Certain regions develop a reputation for specificexpertise,generating demand and driving up prices.In addition,nearshore regions with close workday overlaps will elevate rates.Rates also trend a
101、 little higher in countries located near a first-world economy.Language difficulties increase the likelihood oferror and confusion,resulting in project slowdowns,poorer outcomes and potentially the need for rework,incurring additional expense.Look fora good distribution of fluent English speakers,fr
102、om management down to developer level.Outsourcing firms take into account project timing when setting rates,with better pricing extendedto longer projects compared to short-term ones.If youre planning to run your engagement forseveral years,disclose that upfront for potentialrate concessions.In-Dema
103、nd SkillsEnglish ProficiencyLocationExperienceLength of EngagementFive critical factorsinfluence global software outsourcing rates and the corresponding level of value.They are:Cost Consideration:Pricing Models22Source:BCG 2021Companies(%)Choosing the right pricing model for your outsourcing project
104、 is just as important as finding the right partner.Your pricing model should have the right balance between your expectations for budget,timeline and quality.An effective up front negotiating process will help set you up for success.Pricing structure is one of the top three reasons(56%)that companie
105、s renegotiate their outsourcing contracts,according to a study by BCG.The experts at Accelerance have gathered insights into four pricing models to consider when youre setting up your next outsourcing agreement.1.Fixed Price Model:Standard fixed-price contracts are based on a clearly defined scope o
106、f work and requirements.These models are best suited for small-to-medium size projects that are well-defined in scope and timing.They incentivize the partner to complete the work more efficiently.2.Time and Materials(T&M)Model:This modelis based on the time it takes for your outsourcing partner to c
107、omplete their project.It requires your partner to bid for the project based on your requirements,breadth of scope and the amountof work to be completed.It is popular for long-term projects because it allows for flexibility in scope change and avoids contingency fees of fixed price projects(up to 30%
108、for custom development).3.Incentive-based Model:Extra payments are added on top of the price estimated in the original contract when the development team exceeds goals.Incentives can make up for limitations in fixed-price or T&M models,ensuring your partners motivations stay in line with your own.4.
109、Shared Risk-Reward Model:Similar to incentive-based pricing,this model is based on a flat-rate and holds additional payments until your partner achieves specific objectives.The key difference here is that the development of new products is jointly funded by both the client and the outsourcing partne
110、r,with the partner sharing in the rewards for a defined period of time.Our team of dedicated advisors can help you choose the best model for your engagement,whether youreoffshoring,nearshoring or onshoring your software development.SharedRisk-RewardModelIncentive-Based ModelFixed Price ModelPrice Mo
111、del Structures DefinedTop Reasons forContract RenegotiationsTerms and conditionsPricing structureDelivery model56%48%59%EstimateHoursConfirmed priceFinal priceRequirementRatesInitial PriceBonusTotal paymentFlat RatePerformance%Compensation+=+=+=+=Time&Materials Model23The Importance of Regular Rates
112、 BenchmarkingWhen is the last time you took a look at the software outsourcing agreement your company signed up for a year or two ago?In todays market,regular benchmarking is an important part of your tech sourcing strategy.It provides insights into whether or not your service provider agreementsare
113、 competitive with current rates,helping you manage your costs.If you think youre paying too much for your software development whether in-house or with a partner you need to seek professional advice to find out whether youregetting the best service at the current market rates.If your software partne
114、r is on target with competitive or favorable rates,and isproviding a high level of service,thats great news.But if the benchmarking report shows performance has slipped or you are paying above the market rate,you needto re-evaluate your contract terms.The options are:Benchmarking is a complex scienc
115、e.The objective is to obtain a neutral expertassessment of the market price for your outsourcing services.Its often beneficialto involve a well-established,professional outsourcing advisor that will help make valid comparisons based on key metrics.Conduct interim price renegotiationsImplement a new
116、pricing structureAdjust the service delivery modelAlter the scope or budgetWant to learn more about benchmarking?See our point of view for tips to make sure youre right on the money.How do you benchmark?Follow this three-step process.AGREE on how to calculatea market rate.A commonapproach is the hig
117、hest price within the lowest quartile(the cheapest 25%)of prices.GROUP the results into three categories:favorable,competitive and unfavorable.CONDUCT an evaluation basedon a combination of rates and service levels typicallyacceptable within a 5-10%deviation from your agreed-upon market benchmark.12
118、3The following chart provides an example of the differences between a partner at the“sweet spot”range versus a lower-cost partner.24The“Sweet Spot”:Quality Versus Cost ConsiderationsWhat tough calls are you willing to make when selecting an outsourcing partner?A focus on cost at the expense of quali
119、ty comes with increased risks and the added stress of partnering with a less skilled,less stable or less efficient software partner.Software development that costs$100 per hour in the US can be outsourced in most locations for just$55 per hour at an equivalent standard of quality.For companieson tig
120、hter budgets,there are even cheaper options available,but some compromises will inevitably need to be made.Through our proprietary analysis of cost-versus-quality tradeoffs,Accelerance has identified a“sweet spot,”a prime range of rates from$40 per hour to$90 per hour.At this level,your can have con
121、fidence that your outsourcing partner will deliver cost-effective,high performance solutions.Its important to understand quality-cost trade-offs.As rates decline,quality can drop off exponentially.Weve seen this dynamic play out to companies detriment too many times.Undercutting the market rate by$1
122、0 per hour might win you short term kudos from the CFO but it often results in sacrificing a level of skills and experience youneed so as not to jeopardize the quality and timeliness of product delivery.Companies seeking to cut rates need to ask themselves what they are willing to give up in return,
123、says Accelerance CEO Andy Hilliard.“Less English competency?Lessexpertise?Less seniority in development?Less QA?No one ever gets somethingwithout giving in return.If the primary goal of your offshore strategy is either cash conservation or price reduction,go for that model,but within that sub-contin
124、uum,pay the absolute most you can.”Domestic FTEDomestic OutsourcedGlobal RatesLow CostLowest-caliber talentLow maturity environmentHigh outcome failure rateDanger ZoneOffshore Body ShopsCost savingsHigh quality talent comparable to domestic outsourced timeProfessional services level maturityLower ri
125、skThe Sweet SpotEnterprise-grade Offshore PartnersHigher rates(with employee benefits and other costs)Average talent qualityLess mature development environmentMediocre outcomesIn-house StaffHighest ratesSuperior talent staffing and managementProfessional services level maturityHighest success outcom
126、esProfessional Contractors&Agencies$20$20-$40/hour$40$90$40-$90/hour$90-$150/hour$150$330$150-$330/hourSource:Accelerance Analysis 2022 Source:Accelerance AnalysisComparison of Low Cost vs.“Sweet Spot”Partners25English Proficiency and FluencyCultural Understanding andExperience with Western TeamsCer
127、tificationsQuality Recruiting and RetentionPartner Evaluation CriteriaUsually performs adequately in sales cycle:Project deliveryteam often does not speak or write fluent English with frequentcommunication issues.$20-$40/hour:“The Danger Zone”Hourly Rate of Software Engineers$40-$90/hour:“The Sweet
128、Spot”Has minimal direct work experience with Western clients atthe team level may have exposure to smaller clients,often only one project.Lacks track record and enterprise-grade attributes to gaincertifications.Follows instructions only as order takers with little collaboration or innovation;often u
129、nable to deliver to expected schedule,budget and scope.Invests little to no effort for hiring more experienced resources and toward reducing turnover;employees aretreated as commodities.Brings A+English skills:Converses and communicates with confidence with all offshore team members collaboration is
130、 much smoother.Requires a solid understanding of Western culture and practical work experience with teams 95%of work is for Western clients.Possesses leading quality,industry and partner ecosystemcertifications.Engages resources who understand client needs and produceto their desired business outcom
131、es,seeking to exceed expected performance.Recruits top-tier professionals with exceptional work experience and references,and invests in programs to attract and retain the best talent.This chart lists the criteria that Accelerance looks for in certified partners and rates them against a spectrum of
132、software engineer hourly rates from$20 per hour to$90 per hour.It highlights the differences between the“sweet spot”rate software developer rate range of$40 to$90 per hour,versus the“danger zone”range of$20 to$40 per hour,which putsthe quality of your coding and project at risk.The Big Picture:Total
133、 Cost of Engagement ConsiderationsAlong with outsourcing rates,the total cost of engagement will also need to befactored into the budgeting process.When hiring your own developers in-house,for instance,the total cost of engagement includes a base hourly rate,plus taxes,healthcare,retirement plans,va
134、cation,etc.When you outsource,many of those in-house costs disappear.However,its important to be mindful of other expenses.You will have someadditional costs to bear for communication,travel and management oversightof your new outsourcing partner.An offshore developer in a remote part of Southeast A
135、sia might quote you an amazing rate,but management and travel costs will needto be taken into account.Most outsourcing experts suggest the total cost ofengagement can be as much as 20%on top of the base rate.26SalaryBenefits,Taxes,OverheadOperational ExpensesTotal Cost of Engagement$60-84/hour$13-18
136、/hour$10/hour$83-112/hourIn-House versus Outsourcing Cost ComparisonIn-HouseOutsourcingSource:Accelerance Analysis 2022Total Cost of EngagementOperational Expenses&ProfitBenefits,Taxes,OverheadSalary$40-90/hour$10-24/hour$10-21/hour$20-45/hour(Including Communications,Travel and Overnight)The total
137、cost of engagement is a compilation of blended rates from the Accelerance Global Network.CASE IN POINT:Cost Savings and Flexibilitywith Software Development OutsourcingMike Williamson,Vice President of Research and Development at Softdocs,needed tech sourcing models that providedgreater scalability
138、and cost control throughout business cycles.Leading a 50-person engineering team,Williamson was looking for nearshoring partners to build new product features andoperational functions.His solution was to add outsourced teams into his tech sourcing.He turned to Accelerance for risk-free partner match
139、ing services.Accelerance has assisted Softdocs with what Williamson calls“swallowing the watermelon.”This outsourcing strategy allows him to add“burst capability”just-in-time resources to his organization quickly when he needs significant resources to take advantage of an opportunity or to solve a c
140、hallenge.His outsourced teams allow him to adjust resourcing and budget up or down quickly as market conditions change.He plans to add more resources outside the US in the next year,citing the pandemic-driven trend of“borderless sourcing.”When he rewrote a contract with for one of his outsourcing te
141、ams,he was able to get even better pricing that shielded him from continual increases in developer rates.The terms specified a two-year period for the outsourcing team.With a longer-term contract,the Accelerance partner was able to give Softdocs only a minimal rate increase well below market trends.
142、Accelerance has helped many clients navigate challenges similar to the ones Williamson faced.Our trusted advisors are hereto provide software solutions through market fluctuations and changing capacity needs.“We can quickly supplement our team with outsourced partner resources or reduce the team siz
143、eif needed.It helps because we can scale up or down as conditions change.”27Mike WilliamsonVP of Research andDevelopmentEnterprise contentmanagement provider focused on educationAccelerance worked with Williamson to find a nearshore outsourcing partner to help grow his software development team from
144、 4 to 14 people.He also valued Accelerancespost-selection management services:Contracting and negotiation servicesOnboarding support for fast ramp upOngoing help with issues resolutionMike WilliamsonGlobal Analysis of SoftwareDevelopment Outsourcing RatesAccelerances Proprietary Rates Analysis29Usin
145、g a detailed set of criteria,Accelerancehas researched more than 8,000 softwaredevelopment companies to identify the top 1%worldwide to create a premium pool of certified outsourcing partners.The global softwareoutsourcing rates outlined in this report represent benchmarks gathered from our unique,w
146、orldwide insight into hundreds of firms that meet the highest standards.Software development outsourcing rates varyconsiderably by region,skill level,experience,the specific technology stack involved and the length of commitment required.The rates presented here are based on a six-to-eight person te
147、am working full time for 12 months or more.Rates in the following charts have beenassessed on the basis of building a blendedteam,not augmenting staff by engaging individual contractors.While this may involve more upfront costs,it usually works out at a lower overall rate per resource.Its also an ap
148、proach that lays the foundation for a partnership that has a much greater chance of success.Our analysis covers rates for nearshore and offshore partner locations:How to Read Accelerances Global Rates TableHourly software engineering rates are shown in US dollars and presented as a range,broken down
149、 into these quartiles:These tables are based on data captured by the Accelerance research team from several hundred enterprise-grade software development firms in key outsourcing regions across the world.All of the companies surveyed deliver more than 50%of their work into the US,UK,Europe or Austra
150、lia.Data was not gathered from IT staffing companies,where rates may be slightly lower.$70$54$6425th percentileMedian75th percentileThe 25th percentile represents up to 25%below median.$54The median rate represents the 50th percentile.$64The upper quartile represents up to 25%above median.$82Nearsho
151、re partners are defined as firms that are within three time zones from your location:Pro:More workday overlap of business hours and less travel time for on-site visits.Con:Often more costly than offshoring.Offshore partners are defined as firms that are more than three time zones from your location:
152、Pro:Usually greatestcost savings.Con:Navigation of a greater discrepancy in work times and cultural differences.2023 Global Software Outsourcing Rates ComparisonPartnering with nearshore or offshore software development firms can typically save a company from 40%to 70%of overall costs.Its good timin
153、g for savings.In North America,a record talent gapfor software engineers contributed to a 23%overall increase inonshore development rates in 2022.As rising interest rates,inflation,supply chain disruptions and the Ukrainian war put budgets under even more pressure,outsourcing remains the most cost-e
154、ffective way to keep digital strategies on track.Regional dynamics:Rates surged by 24%in Latin America,dueto escalating labor costs and an influx of clients exiting partnerships in Ukraine.In contrast,rates edged up only slightly in Central and Eastern Europe given the turmoil in the region and held
155、 steady inboth South and Southeast Asia,which remain the least-expensive outsourcing regions.Outlook for 2023:High ongoing developer demand,a rising cost of living and global inflation continue to inflate prices.Senior engineers will command top rates,and specialized skills in key technologies will
156、come at a premium.Global insights:For Latin America nearshoring,pressure onresources will make it increasingly difficult not only to recruitdevelopment teams but to retain them.Consider offshoring to Asiaas an alternative for faster hires at significantly lower prices.Source:Accelerance Analysis 202
157、2Regions are defined as:302023 Global Software Outsourcing RatesSouth Asia:Bangladesh,India,Pakistan,Sri LankaSoutheast Asia:Philippines,VietnamLatin America:Argentina,Bolivia,Brazil,Chile,Colombia,Costa Rica,El Salvador,Honduras,Mexico,Panama,Peru,Puerto Rico,UruguayCentral&Eastern Europe:Armenia,H
158、ungary,Poland,Romania,UkraineThe Balkans:Bosnia,Bulgaria,Croatia,Montenegro,Serbia,SloveniaAfrica:Egypt$62-$209North AmericaCentral&Eastern Europe$26-$95$34-$96Latin America$24-$71South Asia$18-$70Southeast AsiaSurging global demand saw a 24%spike in hourly rates across Latin America in 2022,reflect
159、ing an influx from Eastern Europe as a result of the turmoil in Ukraine.Less aggressive increases,more closely aligned with inflation,are expected in 2023.With the domestic market in North Americaexperiencing a parallel rise in rates,the margin for cost savings remains attractive.A predicteddevaluat
160、ion of the Argentine peso against the USD is set to make prices even more competitive.For US-based companies,the benefits of nearshore outsourcing to Latin America include a close workday overlap,strong cultural fit and ease of communication given high English language proficiency.Key Trends for 202
161、331Hourly Rates in Latin AmericaInsights$20$10$0ArchitectBusiness AnalystProject ManagerScrum MasterGraphic DesignerDevOpsLead DeveloperJunior DeveloperIntermediate DeveloperSenior DeveloperJunior QA Engineer(Manual)Intermediate QA Engineer(Manual)Senior QA Engineer(Manual)Junior QA Engineer(Automat
162、ed)Intermediate QA Engineer(Automated)Senior QA Engineer(Automated)$120$110$100$90$80$70$60$50$40$30$52$34$41$96$72$85$68$56$64$82$66$74$59$42$52$82$59$65$53$41$47$66$53$61$79$54$62$66$53$59$53$35$45$75$48$61$82$65$71$62$48$59$72$59$68ROLE(USD)$59$73$82Source:Accelerance Analysis 2022Increased focus
163、 on company culture to counter high turnover and attrition rates as developers remain in high demand.Region-wide recruitment of engineering talentaccelerating borderless outsourcing,with development teams operating remotely across multiple countries.Rapid expansion of the outsourcing sector inCentra
164、l America,where Honduras,El Salvadorand Panama are emerging as top contenders.$120$110$100$90$80$70$60$50$40$30$20$10$0ROLE(USD)ArchitectBusiness AnalystProject ManagerScrum MasterGraphic DesignerDevOpsLead DeveloperJunior DeveloperIntermediate DeveloperSenior DeveloperJunior QA Engineer(Manual)Inte
165、rmediate QA Engineer(Manual)Senior QA Engineer(Manual)Junior QA Engineer(Automated)Intermediate QA Engineer(Automated)Senior QA Engineer(Automated)$47$63$43$61$74$54$41$59$44$71$79$62$35$53$41$82$71$95$34$44$26$68$78$82$71$76$68$81$57$74$65$71$53$68$78$53$48$47$61$39$32$51$65$74$61$65$53$47The crisi
166、s in Ukraine continues to deter outsourcing toa tumultuous Eastern European region.Prior to the war,the region and Ukraine in particular were emerging as powerhouse global locations.However,the exodus of many Western companiesfrom Ukrainian outsourcing partnerships temperedrate increases in 2022.Rat
167、es in Central and Eastern Europe rose only slightly,with the geopolitical crisisfueling a shift of outsourcing business to Latin America in particular.However,there were pockets of outsourcing growth in some countries namely,Romania,Bulgaria and Montenegro.On the global stage,losses in the Ukrainian
168、 developer pool exacerbated the worldwide talent shortage.Key Trends for 202332Hourly Rates in Central&Eastern EuropeInsightsSource:Accelerance Analysis 2022Continued cutbacks in software outsourcingbusiness to Ukraine from Western companies seeking more stable locations.Modest price increases due t
169、o salary growth driven by growing demand for specialized skills.A rise in key technologies,especially dataanalytics,IoT and cloud services.$120$110$100$90$80$70$60$50$40$30$20$10$0$71$58$60$44$29$35$29$24$24$40$61$46$53$44$51$55$44$47$36$25$30$35$41$36$32$25$29$41$49$46$39$29$33$35$46$39ArchitectBus
170、iness AnalystProject ManagerScrum MasterGraphic DesignerDevOpsLead DeveloperJunior DeveloperIntermediate DeveloperSenior DeveloperJunior QA Engineer(Manual)Intermediate QA Engineer(Manual)Senior QA Engineer(Manual)Junior QA Engineer(Automated)Intermediate QA Engineer(Automated)Senior QA Engineer(Aut
171、omated)ROLE(USD)$38$42$43$44$45$50$32$29$29$37$35$34In 2022,rates remained flat across South Asia,a highly cost-effective region that offers opportunities for Western companies seeking the advantages ofa less-crowded offshore market with lower rates.Nowhere in the world has a more mature IT outsourc
172、ing sector or a deeper talent pool:India alone produces more than 20 million new STEM graduates each year(and the highest percentage of female developers).Asia is rapidly closing the innovation gap with North America and Europe,and development teams canbe pulled together or scaled up at speed,avoidi
173、ng costly delays.Key Trends for 202333Hourly Rates in South AsiaInsightsSource:Accelerance Analysis 2022A steady uptick in rates due to strong demandfor senior engineers who speak good English.Cross-region expansion and acquisitions assoftware development companies in India andPakistan look to acqui
174、re firms in Latin America,which would offer opportunities to pairnearshore/offshore outsourcing resourcesfor lower blended rates.Increased interest in outsourcing to a regionhaving long experience with Western companies and comparatively lower rates than other global destinations.$120$110$100$90$80A
175、rchitectBusiness AnalystProject ManagerScrum MasterGraphic DesignerDevOpsLead DeveloperJunior DeveloperIntermediate DeveloperSenior DeveloperJunior QA Engineer(Manual)Intermediate QA Engineer(Manual)Senior QA Engineer(Manual)Junior QA Engineer(Automated)Intermediate QA Engineer(Automated)Senior QA E
176、ngineer(Automated)$70$60$50$40$30$20$10$0$70$47$53$62$35$42$28$18$24$25$38$31$37$29$29$35$25$30$40$29$32$60$44$37$41$38$34ROLE(USD)$41$45$41$35$21$24$31$35$47$32$22$28$27$29$34$22$26$29$48$54$5934Hourly Rates in Southeast AsiaInsightsSoutheast Asia is entering a new era of digital innovation,with a
177、rapidly expanding business and technology sector.Its proved remarkably resilient,despite the global economic upheaval of the past two years.However,the impact of inflation is being felt across the region,even as overall post-pandemic economic growth rates remain high.A stagnant outsourcing market sa
178、w a slight overall rate increase of 3%in 2022 as many software development companies scaled back.Now,the brakes are off.Both the Philippines and Vietnam singled out as leaders in the latest Global Innovation Index are in hyper-growth mode.Partnering with Western clients is high ontheir agenda.Key Tr
179、ends for 2023Source:Accelerance Analysis 2022Inflationary pressures and escalating demand for resources will drive up rates as engineering teams become harder to recruit.The Philippines and Vietnam will become even more desirable destinations.Companies in the UK,Australia and New Zealand will increa
180、singly look to Southeast Asia as acompetitive outsourcing option.ROLEArchitectBusiness AnalystProject ManagerScrum MasterGraphic DesignerDevOpsLead DeveloperJunior DeveloperIntermediate DeveloperSenior DeveloperJunior QA Engineer(Manual)Intermediate QA Engineer(Manual)Senior QA Engineer(Manual)Junio
181、r QA Engineer(Automated)Intermediate QA Engineer(Automated)Senior QA Engineer(Automated)$120$170$150$200$160$110$140$190$100$130$180$90$80$70$60$50$182$139$159$148$114$130$126$104$114$109$154$128$169$209$187$117$139$128$123$96$109$91$75$82$94$74$83$153$121$136$144$119$131$151$125$137$100$79$89$78$62
182、$69$172$147$157$167$140$154Theres no way to sugarcoat it:US and Canadian firms faced an average increase of 23%in hourly rates across software development roles in 2022.An incredibly tight labor market was already pushingup rates before a series of economic issues addedyet more inflationary pressure
183、.The need to sustaindigital transformation projects saw businesses payinga premium for tech talent.35 Hourly Rates in North AmericaInsightsSource:Accelerance Analysis 2022Transformation progresses,but IT leaderswill carefully choose priorities as economicuncertainty drives cost management measures.T
184、he mix of onshore versus offshore softwaredevelopment is unlikely to change substantially,but many businesses will seek to renegotiaterates with their outsourcing partners to helprelieve domestic cost pressures.Businesses will attempt to deepen relationships with trusted partners while being more st
185、rategic about how they invest in in-house development.Accelerance tip:Look for leading software development firms offshore with high-caliber resources that are often sought after by US companies to recruit as employees.These foreign companies meet the highest USstandards at a fraction of the US cost
186、.Key Trends for 2023Source:Accelerance Analysis 2022362023 Global SoftwareOutsourcing RatesPer RegionSummary View:omated)$72$66$65$53$41$56$59$48$59$54$34$42$53$35$48$59$96$82$82$66$53$68$82$75$82$79$52$59$66$53$62$72-$71$68$68$47$35$57$62$53$53$61$26$41$47$32$43$54$95$82$76$65$53$81$79$71$78$74$44$
187、59$61$51$63$74-$58$44$41$35$25$40$29$38$44$44$24$29$34$25$29$35$71$53$49$41$36$61$44$43$55$50$29$32$37$32$39$46-$47$41$34$27$21$31$35$29$37$48$18$22$25$22$25$29$70$45$41$34$35$47$62$37$60$59$28$32$38$29$35$40-$139$169$143$119$75$109$114$79$96$121$62$104$117$74$125$140$182$209$172$144$91$154$148$100$
188、123$153$78$126$139$94$151$167-LatinAmericaCentral&Eastern EuropeSouth AsiaSoutheast AsiaNorth AmericaArchitectLead DeveloperSenior DeveloperIntermediate DeveloperJunior DeveloperBusiness AnalystDevOpsGraphic DesignerProject ManagerScrum MasterJunior QA(Manual)Intermediate QA(Manual)Senior QA(Manual)
189、Junior QA(Automated)Intermediate QA(AutSenior QA(Automated)Putting Outsourcing Expertiseto Work for YouEnterprise-grade Partners:Your Best BetSize of company(including ability to complete projects effectively and forced on schedule)Technical competencies Multiple technical certificationsIndustry/ver
190、tical experienceProject structureViability of the region(solid infrastructure,political/social stability and relationship with the US)Human Resources processes(such as recruiting,vetting,and retention of talent)Longevity(well-established companies that have been operating for at least five years)Eng
191、lish skillsTime-zone flexibilityCultural fit Pricing structureInsurance(professional indemnity and public liability insurances at a level adequate for Western customers)Business continuity plans(ability to handle economic fluctuations or an unexpected crisis)Compliance with legislation related to th
192、e Office of Foreign Assets Control(OFAC),anti-corruption and money-laundering,human trafficking and other legal requirements for onshore operationsCRITERIA INCLUDESource:Accelerance Insights 2022Software outsourcing,done right,requires hiring highlyprofessional development companies.We call these“en
193、terprise-grade”partners,certified global software development firms that can easily integrate into an existing team with minimum disruption while providing the highest level of technical performance.These partners command a slight premium because of theconsistently high quality level of work they de
194、liver.They provide software development better,faster,and more expertly than you could do on your own.Our checklist shares the business and technical criteria we useto identify top-quality partners.It provides a guide to conducting meaningful assessments that align businesses with the mostproficient
195、 and compatible outsourcing partners.Modern software outsourcing is a collaborative endeavor between you and your outsourced team.Instead of settling for a groupof low-performing,order-taking developers,do the due diligenceto find an enterprise-grade partner with proactive problem-solvers who will d
196、eliver results beyond expectations.Accelerance can take off the pressure by finding a high-performance software outsourcing partner thats the best fit for your next engagement.38Prior experience working with Western partners,and education or prior work positions in Western countriesSource:Acceleranc
197、e Analysis 20228,000+Firms Evaluated30,000+Developers3%Qualified Partners 1%Certified Partners30+Countries39Locations of Accelerance Enterprise-grade PartnersA World of Enterprise-grade Partner Choices Software development outsourcing can be a dream come true,or a nightmare.It all depends on the qua
198、lity of the partner you select.In a global market awash with great and not-so-great software development firms,there are thousands of confusing options,risky unknowns and tepid qualifications to sort through.Due diligence can take hundreds of hours of evaluation to find a top-quality partner.Only pr
199、e-vetted,enterprise-grade software firms qualify for Accelerances certified global network.Our deep industry insights come from managing the worlds broadest portfolio of nearshoring and offshoring outsourcing partners.Accelerance has enterprise-grade partners in these locations:Latin America:Argenti
200、na,Bolivia,Brazil,Chile,Colombia,Costa Rica,El Salvador,Honduras,Mexico,Panama,Peru,Puerto Rico,UruguayCentral&Eastern Europe:Armenia,Hungary,Poland,Romania,UkraineThe Balkans:Bosnia,Bulgaria,Croatia,Montenegro,Serbia,Slovenia South Asia:Bangladesh,India,Pakistan,Sri LankaSoutheast Asia:Philippines,
201、VietnamAfrica:EgyptGetting Outsourcing Partnerships Right from the Start“The traditional outsourced software development model simply standing up projects in an offshore location leads to flawed outcomes or outright failures.Work practices,communication and collaboration between your onshore team an
202、d offshore partner are often out of sync.Theres a better way.After thousands of software outsourcing engagements,weve found that clear direction and team building at the onset of the outsourcing partnership provide the foundation for flawless execution by the blended team.Expert consulting advice in
203、 partner matching,team alignment and performance management can make all the difference to your engagements success and pays for itself.”40Accelerances Proven Partnership Process-Andy Hilliard,CEO of AcceleranceRequirements Gathering Before any work begins,we seek to understand yourdesired business
204、outcomes,your deliverable specifications and your end user expectations that will impact your staff augmentation needs.Partner Selection Knowing your needs,we seek a perfect-fit development team from our worlds largest certified network of software development firms.Within 10 business days,we can ma
205、tch you with a partner the right level and skills of resources.Operation Once the work starts,its important to regularly assess progress and the blended teams performance.Our flexible consulting services ensure that your partner team members deliver against their agreed targets and outputs.Planning
206、We identify exactly what you need to achieve your business outcomes.Our Baseline assessment service can give you an independent appraisal of your current capabilities so you know where you most needstaff augmentation resources.Onboarding We set you up for success through our Alignconsulting services
207、.Our onboarding workshops help you integrate outsourcing development team members with your in-house resources for seamless execution.CASE IN POINT:Solving a Team Selection-to-Stand-Up SOS in Record TimeMark Stewart was facing a CTOs nightmare:War broke out when a Ukrainian software development team
208、 was his sole supportfor a critical product.He needed backup resources ASAP for the product,a leading back-office software platform for real estate professionals.On top of that,Stewart was looking for highly specialized skills during a record developer shortage.And any new team had to hit the ground
209、 running.The odds for a timely solution didnt seem in his favor.Part One:A Successful SearchStewart decided to bet on Accelerance.He had previously used our Rapid Referral partner matching services to find perfect-fit engineering teams quickly.After a consultative discussion about his needs for a so
210、ftware development partner,Accelerancedelivered spot-on recommendations.“Within a couple days,we had three strong contenders,and we were interviewing them within a week.It was all very easy forus,even though we were searching for a needle in a haystack,”he recalls.An Accelerance partner in Brazil pr
211、oduced a team ofsix developers skilled in the Ruby programming language and on the Flutter framework.Part Two:Fast TractionWith the escalating conflict in Ukraine,Stewarts new team needed to start performing immediately with their US colleagues.So he used Accelerances Align team building service to
212、help with the team transition and integration.This three-day intensive workshop,facilitated by an Accelerance expert,brought together the partner and client teams to agree on operating approaches and practice working together.“It was definitely valuable to get the teams up and running quickly and to
213、 establish their working norms,”Stewart says.“They got off on the right foot.”Within a month,Accelerance helped Stewart to stand up a new team,with an indefinite payoff:Stewart now has a stable long-term resource to ensure the core products continuity.Risk resolved.41Mark StewartChief TechnologyOffi
214、cer Experienced senior IT executive withmultiple high-tech companies offering software products and solutions.Accelerance worked with Stewartto quickly find and launch a nearshoreoutsourcing team to provide keyapplication support from a morestable world region.The combination of our partner matching
215、 and team alignment services turned a CTOs nightmare into a future-proof capability by:Finding options to source scarce skills for a new outsourceddevelopment team.Preparing the new partner and client teams to work seamlessly together from the start.Facilitating a smooth transition of work to the ne
216、w nearshore team.Perspectives:Outsourcing Partnerships in Uncertain Times42“Lean in with your partners.They can figure out ways to streamline their delivery,migrate more work to lower cost locations.”Michael Fuller,Principal at The Hackett Group“Software outsourcing relationships arean accepted prac
217、tice in todays borderless,fast-evolving reality.In the face of business volatility,the right partners will help ITleaders with agile,future-proof strategies.”Ryan Schauer,Partner Success Manager at Accelerance“Those providers that can deliver demonstrated,quantifiable,financial value can and shouldc
218、ontinue to be rewarded by their clientsas this is key to successful growth ina recessionary environment.”Marc Tanowitz,Managing Partner at West MonroeNever a Better Timefor Software Development OutsourcingHeading into 2023,we face continuing economic headwinds.However,there also is an ongoing requir
219、ement to innovate and capitalize on the gains in digital progress during the pandemic.The new financial reality sees every organization tasked with having a laser focus on cutting costs,managing demand and securing the right skills.The global geopolitical situation is only likely to get even more co
220、mplicated,which will require that we build resilience and flexibility into our business plans.The good news is that when it comes to software development outsourcing,the experience of the pandemic has led to new ways of working in sync with the distributed virtual outsourcing model.We are seeing the
221、 proliferation of hybrid teams made up of in-house staff and outsourcing partners.Hyperspecialization is causing many outsourcing partners to assist with in-demand and emerging technologies where the domestic skills shortage has stalled progress.Multi-partner outsourcing will become the new norm as
222、businesses deepen and expand their offshore relationships.Developer recruitment and retention will remain the key pain point in 2023,leading more organizations to look offshore to beat the scarcity at home.Now is the time to get the fundamentals of outsourcing right,to fine-tune your pricing models
223、and to undertake regular developer rates benchmarking.2023 promises to be as challenging and as unpredictable as anything weve encountered so far in this decade.If you are in the software development game,Accelerance is here to help you take advantage of outsourcing to not only survive through uncer
224、tainty,but to thrive.4344As the premier Global Software Outsourcing Authority,Accelerance helps technology leaders to build and scale software development capabilities through top-tier engineering teams and expert consulting services.Acceleranceclients gain access to:Our precision approach sets us a
225、part from do-it-yourself outsourcing orbrokerage services which can be a hit-or-miss proposition.With our globalnetwork and most knowledgeable client advisors,were big enough to scalebut small enough to care.The worlds largest network of premium partners:Weve personallyvetted more than 8,000 softwar
226、e development firms against 500+criteria and certified only the top 1%across 30+countries.Our proven partner matching expertise:For more than two decades,weve helped thousands of clients by identifying perfect-fit partnersfor outsourcing success.Our experienced consulting and advisory services:We provide the right level of professional guidance that you need throughout your engagement.45Thank you for your interest in our2023 trends and rates guide.Whats next?Consult with our expertsSee our 5-star client reviewsVisit us