Software development outsourcing has been stepping up into the game for years now as an effective substitute for an IT team. Nevertheless, there are still many companies that avoid outsourcing their software development services due to trust issues and cultural or national barriers. 

However, before rejecting an efficient way of saving time, money, and cutting out additional resources for in-house employees, I suggest going through some interesting facts. If you’re interested in finding the best countries to outsource software development, you’re in the right place.

In this article, we’ll learn why international companies are interested in outsourcing software development especially to Armenia. Before that let’s make sure we understand what is offshore software development and how it works. 

What’s the use of software outsourcing and how companies benefit from hiring a custom software development firm? 

Software development outsourcing is a business model where a company decides to hire a third-party dedicated developer or a software development house to cover its technical requirements. The most common and widely spread industry-standard engagement models for software outsourcing include: 

• Project-Based 

This model is an ideal solution for those companies that exactly know what they want, have a fixed budget, and delivery deadlines. In this case, an agreement between the custom software development house and the client is made beforehand. Constant demos are held to make sure that the two sides are on the same track. 

• Time and Material 

Time and material solution is a great option for those companies that clearly understand and imagine their desired product. One of the advantages of this model is its flexibility. The client can make some changes in their requirement but that will not affect the overall project. This particular model requires daily reports and meetings. Unlike a project-based model, project changes don’t hurt the client’s budget. 

• Staff Augmentation 

Staff augmentation is often used for large projects with tight deadlines. The number of developers is set beforehand. If the chosen software development vendor is a skilled one, then costs will be reduced or diminished in case of adding new people on hand. We, at CodeRiders constantly train our developers and motivate them to be very productive and flexible during staff augmentation models. Daily reports are also provided.

• Custom Model or Hybrid Model

If none of these models seem a good fit for you then there are always possibilities for a customized model. Hybrid models are also very popular in software development outsourcing. We, at CodeRiders, offer all the above models and are open to new suggestions from the clients.

Choosing the right software development house is also as important as the engagement model. To learn more about successful software vendor selection check CodeRiders’ previous article.

After a keen consideration of custom software development outsourcing and how it works, country selection research is advisable. Draw out the best countries to outsource software development and start searching for your ideal custom software development house according to the countries. First, this selection process is much easier and you save lots of time. Second, you don’t get lost in the endless polls of the best companies that offer custom software development services. In the meantime, you have a chance to have a more in-detail picture of the general pros and cons of possible candidates regarding country specifications. In this article, we’ll introduce the reasons Armenia is considered one of the top software outsourcing destinations worldwide.

Why Armenia?  

Armenia is a small, landlocked country in the Caucasus-Caspian region. The country falls under UTC+4 (AMT) time zone. The country’s history dates back to the 9th century BC. Yerevan is the capital and the largest city of Armenia. The population is about 3 million people. Armenia’s official language is Armenian. Other widely spread and popular languages include Russian and English. Ethnic Armenians form 98% of the overall population.

Throughout the past several years, the Armenian tech sector retains 27% + consistent annual growth. In 2017 the turnover of the country’s IT sector formed up to 7% of its GDP. Various international IT companies open their branches in Armenia for quality and cost-saving reasons.

Custom software development companies and startups easily position themselves in the international market and shortly become one of the most competitive ones. For example, we at CodeRiders, have been recently announced as the Best Regional Software Development Partner by EuroAsian Startup Awards and were a finalist at Global Startup Awards.

Reasons international companies choose Armenia as their next offshore software development destination

1.  It’s easy to work with Armenians

Armenia is a perfect example of a highly growing country. In 2019, the world-famous journal The Economist declared Armenia as "The Country of the Year". 

According to the journal, Armenia was the fastest growing country in the latest 12 months, which made its impact on the IT field. On the other hand, cultural and national differences aren’t highlighted. It’s easy and comfortable to communicate with an Armenian developer. This makes Armenian software development houses more attractive for offshore software development. Most of the companies are also open to long discussions and consultations, which is true about CodeRiders as well. If you have any certain questions feel free to let us know. 

2. Top custom software development companies in Armenia are skilled in good business communication and have no language barrier

There are no strict, sharply underlined national characteristic features that can complicate a foreign co-operation. These people have an ordinary, internationally accepted working routine, speak fluently in multiple languages (usually English and Russian), and share business ties with people from various backgrounds and nations. This is highly emphasized especially in the IT field. Thousands of successful foreign IT companies open their headquarters in Armenia and a very extensive number of custom software development firms in Armenia work remotely for international organizations. The employees gain a magnificent opportunity to constantly train and improve their professional business communication skills as well as language skills. In the meantime, the custom software development companies eventually adapt to flexible working. Both employees and software development firms view the job as a “mission” that should be completed genuinely.

3. Quality custom software development services and affordable prices go hand-in-hand

According to a Silicon Valley pre-seed venture capital fund, SmartGate’s overview of the Armenian tech sector, “Today Armenia’s tech is a hyper-growing industry with a massive shift from outsourcing to product creation, a generation of mature engineers who have 5+ years of experience working on cutting edge projects in multinational tech corporations and Silicon Valley startups, and rapidly growing demand for senior talent in engineering and tech business development, which can’t be met in the short to mid-term internally or through local educational institutions.”

As Armenia’s tech sector is still undergoing constant changes and developments, the industry rates are still quite low compared to service quality. So, unlike other well-known countries that pay lucrative wages to their developers, in Armenia, the developer salaries are much lower.  

Let’s take “the PHP salary” example and draw comparisons between the following countries and Armenia.

USA: According to Indeed reports, the average salary of a PHP developer in the United States is $88.431 per year as well as a yearly $3000 cash bonus. In the meantime, to stay competitive with the other firms in the field, the companies should at least include some of such popular benefits as:

● Free snacks, drinks, lunch

● Work from home hours

● Gym membership, Insurance

● Stock options, Flexible schedule, etc.

Canada: According to talent.com, the average salary of a PHP developer in Canada is $90.000 yearly again without additional privileges. Here you can also find the numbers per region, such as:

Ontario - $100.000/year

British Columbia - $83.750/year

Quebec - $80.000/year

Australia: In Australia, the yearly wages of PHP developers vary from approximately $91.000 to $110.000 forming an average result of $97.945 per year. The top highest paying cities in Australia include the capital, Melbourne, Sydney, Brisbane, etc.

Germany: In Germany the PHP average yearly salary may vary from $59.000 to $76.000.

These numbers are mentioned for a medium-level developer without other work-related complimentary services, and privileges. As an alternative to such higher wages and demanding conditions, you can hire a dedicated software developer from top software development companies in Armenia, and you’ll most likely pay an annual wage of $38.000 to $59.000 without additional expenditure. For further information, I suggest getting in touch with team CodeRiders.

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