Industry Update

Are Indian Software Development Agencies Trustworthy?

Nirali Shah
Nirali Shah
Business Analyst
16th December 2020 15 mins read

India is arguably the strongest player in the software outsourcing game. And with good reason, A.T Kearney Global Service Location Index 2019ranked India as number one when it comes to attractiveness for outsourcing beating China, Malaysia, Vietnam, and Indonesia. Its budding tech landscape and the vast supply of IT and engineering graduates with good English proficiency could serve as a basis for that statistic. However, the ‘availability of cheap’ labour due to the large populous is a common cited as a key underlying factor.

While it’s widely propagated that many Indian firms are mainly suited for BPO service outsourcing (payroll, accounting, telemarketing, data recording, social media marketing, customer support), it’s fair to also note that more foreign companies have had sustainable success partnering with Indian software-focused firms. Which could explain why they’re arguably considered the number one IT outsourcing destination in the world.

So, during the course of this blog, we aim to dissect the Indian software industry, its myths, strengths and negative perceptions, to possibly ascertain whether Indian software agencies are really trustworthy!

The Software Landscape in India! An In-depth Overview

To fully answer the question of trust, we need to objectively investigate all aspects of the software development landscape in India. For starters, it’s worth mentioning that most Indian software development agencies build across four software categories: standalone applications, websites & web apps, mobile apps and embedded software. However, though a common misconception is that most agencies only provide generalised IT support and maintenance; today’s blog will focus on full-stack software agencies.

How and Why Did India Become a Go-To for Tech Outsourcing?

In the global IT arena, Indian IT exports are unparalleled as we have mentioned. A clear testament is the fact that overall IT service exports from India were valued at 74 billion U.S. billion dollars in 2018. This ascendancy in the global market did not occur overnight and is largely thanks to business from the North American market and European market. Furthermore, fortunately, potential competitors like China maintain a closed economy in terms of software and technology. For example, the world’s most used solutions like Google, YouTube, Facebook are banned in China. Hence, it doesn’t make it a suitable destination for most Startups to source talent for collaboration.

The Pillars of Indian IT Culture

In 2019, A.T Kearney’s Global Services Location Index (GSLI) report rated India as the world’s most sorted destination for IT outsourcing. While such recognition might seem trivial, much of it is thanks to the precedent set by the flag bearers of India IT culture, and Indian’s biggest IT exporters: TCS, Infosys, Wipro, HCL technologies.

These companies might have single-handedly opened up the world to the Indian market and its competencies, and form the foundation on which the Indian export culture is built. They are validation and proofs of the trust that Indian software agencies have stocked up over the past two decades. So, let’s just briefly analyze why.

Tata Consultancy Services (TCS)

Headquartered in Mumbai, TCS became the first Indian IT firm to have a marketcapitalization of 100 billion dollars. The company and its 67 subsidiaries deliver a wide- range of technology-related products and services to both government bodies and private enterprises. Possibly the world’s lаrgеѕt IT service provider with 400,000+ employees in 289 offices across 46 countries, TCS also set up the largest corporate learning centre in India which can train up to 50,000 graduates. Their commitment to industry and innovation is boasted by their 19 innovation labs in 3 countries, as well as fruitful partnerships with leading institutes like IITs, Stanford, MIT, CMU etc.

Wipro

Wipro has over 160,000+ people employed across 6 continents and offers a diverse portfolio of IT services coupled along with business expertise. As the first Indian software technology and services firm to achieve the ISO 4001 certification in 2002, Wipro boasts of the highest Asian sustainability Rating and was recognized as the most ethical company in the world in 2017. Talk about trustworthiness and integrity!

Infosys Limited

Infosys an Indian Multinational Corporation that specializes in information technology, business consulting, and outsourcing. The company has become a household name of IT space with A workforce of over 200,000 people in different countries. As the first Indian software company to be listed on NASDAQ , Infosys is also CMMI Level 5 certified and invests heavily in research and development of NextGen technology solutions that relate to Big Data analysis and blockchain. A true testimony of India’s leap toward cutting-edge tech.

These companies are clear evidence of the success and trust that the Indian IT domain has gained.

But it’s interesting to understand
– Why did these companies gain so much traction in the outsourcing sphere?
– How did they set a precedent and enable India to amass a $150 billion IT outsourcing industry with innumerable startups, small and medium agencies?
– And why is the Indian software landscape trusted by big players like Amazon who have invested over $5 Billion in India?

The answers might be worth exploring to make a case for trustworthiness. We have tried to list some qualities & parameters that make Indian agencies stand out

  1. Flexible Pricing and Lower Production Costs

Indian software agencies are famed for their pricing flexibility. Indian Agencies fundamentally focus on two pricing models: T&M (Time and Material), where a monthly charge is negotiated and charged; and FTFP (Fixed Time Fixed Price), where a fixed fee and tentative time for project delivery is set before the project commences.

Their renowned flexibility and cost structure automatically provide Indian agencies with a competitive edge over comparable agencies elsewhere. Essentially, organizations can choose to terminate a project without worrying about losses from fixed costs. Only variable costs will matter. So, for instance, if a project is completed after three months – it is entirely finished.

  1. English Proficiency

Indian software outsourcing sphere has language prowess to thank for its growth as a destination for many foreign startups. Basically, all clients desire to communicate seamlessly with their service providers so project instructions are carefully followed and understood. International business communications are paramount and the actual project cost can go up if people can’t communicate in English. So, authentic Indian agencies have somewhat managed handle communication well.

  1. Service Delivery and Versatility

Remote collaboration and outsourcing mainly revolve around “reliability” and “predictability”. Established Indian agencies seem to tick with those boxes as seen on Good Firms. Of course, this doesn’t disqualify some negative experiences that some organizations have mentioned with some fraudulent Indian firms. However, a plausible explanation could be that such organizations did not vet or do due diligence or simply tried to use shortcuts when choosing a reputable agency. As we shall later see.

Delivery capability is non-negotiable and adds to the trustworthiness score of an agency. If a client can avert being forced to always give precise requirements or constantly supervise a contractor, then that’s a plus. Furthermore, Indian agencies have become more versatile over the years. They have flexibly adjusted to acquire new talent capable of feeding the rise in demand for technologies such as VPN, authentication, endpoint security, encryption, and application security.

  1. Project Management Abilities

When outsourcing software work, project management is an important criterion that startups use to assess an agency. It poses a severe risk to any domestic and offshore project. And rightly so! For example, it can cause project time stretches, and eventually, rising costs.

More Indian agencies have obtained CMM level 5 competencies and have world-class project management abilities and certifications. Capability Maturity Model (CMM) is essentially the maturity level or capability level of an organization which provides a way to characterize its capability and performance.

  1. Protection for Intellectual Property Rights

While Asia is assumed as the ‘piracy continent’, many reputable Indian agencies are trustworthy with regards to intellectual property. Such agencies take the protection of intellectual property very seriously and have legal infrastructures to affirm their client’s fears. Many foreign agencies have gotten peace of mind from the improved uniformity
from Indian regulating agencies that police different facets of ICT and institutes suitable regulations for IP protection.

  1. Highly Scalable workforce

There is a breed of highly skilled Indian developers who have cropped and are up to speed with the latest tech. Gone are the days when ‘software development’ was seen as a white-collar industry or where students undertook engineering disciplines out of parental or peer pressure.

More developers are driven by passion, than pressure or money – necessary requisites to grow in this competitive sector. Passion arguably has a major impact on how well one does their job. Of course, this spawned the fear that many Indian software developers were somewhat mechanical and stagnant– without the ability to deeply ‘understand’ or ‘solve’ unique tasks. However, the game has changed dramatically, with more India start-ups actively seeking to tap into the USA market with ultra-innovative technologies.

So, in addition to the above points; in summary, India is a favored IT outsourcing destination for IT because of:

  • Flexible Pricing and Lower Production Costs
  • Service Delivery and Versatility
  • English Proficiency
  • Availability of IT resources
  • Project Management Abilities
  • Favourable time-zone adjustability, and the willingness available to during night hours.
  • Willingness to foster at innovation
  • Focus on IT
  • Work ethic
  • Team scalability
  • Competitive mindset and Cultural hunger for success

What are the problems cited by certain clients about the Indian Software Development Landscape?

Historically, the most common issues brought up by firms that have engaged Indian agencies are;

  • Occasional communication deficiencies
  • Time-zone discrepancies
  • Cultural misunderstandings
  • Technical gaps

Furthermore, a major complaint is that the services provided by most Indian agencies tend to be relatively unsophisticated with an abysmally small output in contrast to large North American software agencies. So, maybe it’s worth delving into the negative elements which have been brought up previously concerning Indian software agencies. However, it’s fair to note that this isn’t a fair judgment of all agencies.

The Issue of Time-zones.

With regards to communication inadequacies, large communication gaps can be attributed to various conditions such as cross-natural cultural differences, time-zone differences and language barriers. In particular, the time-zone difference is an external factor that cannot be controlled. However, time-zones can impact the working hours of partnering companies. For instance, both sides need to sometimes work off-hours to maintain effective communication channels. This is a significant challenge since Americans take working hours seriously whilst most Europeans do not like to work overtime regularly. This could explain the reluctance to hire foreign talent at times.

Cultural Misunderstandings.

Ironically, cultural misunderstandings pose challenges for both clients and Indian software development agencies. Cultural misunderstandings trickle down to organizational culture. Many organizations believe the way business is operated in each country influences, or may even cause clashes between the two collaborating companies.

Myth-Busting: Common Misconceptions about India.

The assumption is that India has less innovation and limited access to bleeding-edge technologies is untrue. This is an unfounded notion as the world has become smaller with wide information access and the internet. For instance, cities like Bangalore have currently been dubbed the ‘Silicon Valley of Asia’ with a thriving start-up ecosystem and active technology communities.

A budding Tech Landscape!

Furthermore, on the contrary, Indian software companies are working hard to promote the participation of their employees in advanced learning programs to break the monotonous thinking. While Indian universities are fostering a culture of innovation constantly. Perhaps the older software developers still stick to existing methods, however, the younger generation is at the forefront of world-class innovation. I dare say, the most talented developers in India are underutilized or not utilized at all.

The Indian Infrastructure

Additionally, India generally maintains a good infrastructure for startups, a relatively strong intellectual protection law and legal framework, favourable government IT policies, good political politics and great cultural similarities with many European and Western nations. In particular, the political stability gives foreign firms the peace of mind that their projects will get completed without major political instability causing delays.

Why Established and Reputable Indian Software Development Agencies have a Competitive Edge.

The Indian software outsourcing sphere has kept dominance because of the country’s deep technical strengths in information technology, science, and engineering. Their education system and its enduring focus on science, and technology are largely to credit for the plethora of engineering, science, and information technology graduates.

Furthermore, established agencies are known to be brilliant communicators. India is reportedly the second-largest English-speaking country with more than 125 million English speakers. That being said, most renown agencies understand that software is much more than writing multiple lines of code, but also communicating with the customer about their requirements and communicating with other members of the client’s technical team. This ultimately translates to an affordable skilled labour force with great English communication skills.

How to Identify a Reputable Indian Software Development Agency?

The majority of the big pool of international customers who work with Indian agencies tend to work on a platform of trust. Trust typically comes from experience, portfolio, and business processes, but also ties to cultural understanding and personal relationship. The most successful Indian engineering agencies value the importance of cultural understanding in gaining initial trust from clients.

Generally speaking, great developers are known to:

  • have good communication skills,
  • be responsive, keep deadlines,
  • have integrity,
  • always suggest actionable inputs, and take client requirements responsibly and seriously.

So, an established software agency should maintain a host of developers with the above attributes. We took the liberty of further detailing the requisites for hiring a dedicated team here. However, here is a quick summary:

Honorable Mentions.

  • Critically analyze their Software Development Process and industry practices
  • Carefully evaluate their specialization and Deep Expertise
  • Ensure to check for credible opinions on trusted forums or freelance websites.
  • Investigate the software agency’s online rankings.
  • Assess their project management competencies and workflows
  • Inquire on their flexibility and availability whilst also honestly communicating your expectations and concerns with regards to their availability.
  • Evaluate the size and experience of their team. This could be helpful when outsourcing highly complex solutions that require significant collaboration and iteration.

Future Opportunities

As we have deeply assessed, Indian software development agencies have pivoted from conventional I.T support and consulting, and are now capable of developing customized and world-class software products. Consequently, India remains unmatched in terms of a scalable workforce around 4 million graduates are added to this workforce each year. There is also a conscious effort to diversify into emerging state of the art areas like cloud-computing, Analytics, artificial intelligence, payment technologies, Social Media, Health and Edu-tech solutions etc.

So, gone are the days where they focused on the lower end of the value chain by executing low-level design, coding and maintenance projects. Furthermore, more upcoming Indian domain specialists continue to lend to the trustworthiness of the Indian software export space.

Final Thoughts.

Overall, low cost is believed to be only a trivial factor as more clients would rather pay for a slightly expensive service with a trustworthy result. Generally, established and reputable Indian software agencies are highly trustworthy. Indian agencies generally offer a safe sense of trust, otherwise, India would not have grown as a leading IT economy.

However, this doesn’t negate the obligation for organizations to do due diligence on an agency. And also, doesn’t downplay the fact that there will always be fraudulent actors in every domain, hence the need for conscious evaluation and interrogation before project commencement. If you are interested in outsourcing your software development without overpaying, whilst still getting a high-quality solution, kindly contact us! We provide competent, highly skilled, and time-zone flexible specialists, tailored to your niche and ready to deliver a competitive, scalable, and reliable product.

Sources

  1. https://engagedscholarship.csuohio.edu/cgi/viewcontent.cgi?referer=&httpsredir= 1&article=1063&context=bus_facpub
  2. https://www.researchgate.net/publication/265922285_An_Overview_of_Software_Industry_in_India_Protagonist_in_the_Growth_Story_but_Worries_Ahead
  3. https://www.researchgate.net/publication/5223758_Indian_Software_Industry_Gr owth_Patterns_Constraints_and_Government_Initiatives
  4. https://www.equitymaster.com/research-it/sector-info/software/Software-Sector- Analysis-Report.asp
  5. https://www.quora.com/Why-are-there-so-many-Software-Developers-from-India
  6. https://www.quora.com/What-factors-need-to-be-considered-when-contracting- software-development-Especially-in-India
  7. https://www.kearney.com/digital-transformation/gsli

Nirali Shah
Nirali Shah
Business Analyst A business analyst at Creole Studios, and an unapologetic binge watching millennial, who can do unlimited reruns of Doctor Who.

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