With the economy fluctuating worldwide, cost has become one of the biggest factors in any software development project. Hence, it is key to understand the cost base framework and factors that affect the offshore software development rates of your IT Solutions provider.
Offshore Software Development can be affected by many factors related to a country, its economy and project requirements. Here are some of the main factors that can cause changes in the rates that you get for your software development project.
The average and median salary for developers in the country you are offshoring your project in plays a major role in the cost of your project. When comparing salaries among countries, convert them to a common currency to check.
A country’s cost of living, purchasing power and taxes will affect software development rates adversely. The higher they are the more that you will have to pay. Countries with lower living costs, such as Sri Lanka will have lower software development rates.
If the country you are planning to offshore to has high supply of IT professionals with low demand, that means the cost will be lower in comparison to countries such as the USA with high demand and a shortage of IT experts.
he programming languages that you use for your project will play a part in increasing or decreasing the cost. Those that are well known and widely used can be lower cost than those technologies that are very modern and in their growth stage. This is because the developing technologies would require particular coding expertise that is rare and highly in-demand.
As can be expected, higher expertise and experience among the developers you use will result in higher offshore software development rates. A junior software engineer will have a much lower cost than a senior specialist with over 5 years of experience, a large range of skills, and many projects under their belt.
The complexity of your project, in relation to the tech stack you use, the number of features you require, the time that will be required for the development and more, will increase your offshore software development rates in direct proportion.
The Asian Subcontinent has the lowest hourly offshore software developer rates in average among all other continents. In terms of both cost and quality, Sri Lanka is uniquely ranked at the top for offshore software development. The country has some of the lowest offshore software development rates in the world and in the Asian subcontinent. This is due to the high supply of IT professionals, comparatively low living cost index, and other factors. It is notable that the quality of developers in Sri Lanka are very high despite the low rates with many being skilled in ultramodern coding technologies that are in much demand. However, be prepared to pay much higher rates (than is average within Sri Lanka) for ultramodern high demand technologies such as Blockchain or Augmented Reality. That said, considering that it would be the same regardless of which country you do the development, chances are that you will get your work done at a steal.
Era Biz uses 3 main pricing structures as the base framework for the calculation of our offshore software development rates.
A fixed price contract or lump sum contract is where the IT Solutions provider and client agree on a fixed price when there is a well-defined scope of work with clear specifications. This is a Low Cost-Low Risk Model for the client. It’s used in engagement models such as Full Project Outsourcing, where we work with clients with exact deliverables and timelines defined to determine the mutually agreed upon fixed price. Any additions/changes to the scope or specified deliverables in the contract will be calculated as add-ons.
Time and Material Contracts or Unit Price Contracts are an hourly pricing structure which is most often used for short term tasks where the scope of work is not clear at the start of the project. Usually used in our Staff Augmentation requests where we first analyze the project at no cost so as to select the most appropriate and cost-effective skill set for you. This model is also suited for complex projects inclined to fast-paced specification and design changes.
In case of large on-going projects, you may be better off on a monthly-charge basis. If there seems to be enough work to keep a dedicated software engineer/a team of dedicated software engineers busy for full time for a long-term period, then this model would be cost-effective for you as it is very flexible and adaptable with regards to any changes you may want to make.
Contact us right away to discuss the pricing for experts in PHP , .NET , Java , AJAX, Perl, React.js , Next.js, Python and more. We have Web Designers, HTML Coders , Project Managers, Scrum experts, UX/UI Designers, and any other IT experts you may require for your software development project.