Can an Indian software developer go abroad

Software development in India as a recipe for success against a shortage of skilled workers

It is becoming increasingly difficult to find IT specialists in Germany. Outsourcing abroad can help, but it poses other challenges for companies, for example with regard to IT security.

Due to Industry 4.0 and the advancing digital transformation, the manufacturing industry has an increasing need for well-trained IT developers. Image: BEO / India4IT

Digital transformation requires personnel measures to be taken quickly

Buzzwords such as “big data” and “smart data”, artificial intelligence and automation are on everyone's lips in German industry. This does not only apply to large companies. Small and medium-sized companies also have to act now if they want to keep pace with the digital development process and remain competitive.

However, developments such as Industry 4.0 are further fueling competition for qualified information technology developers. It is becoming increasingly difficult to find IT specialists in Germany. The job market has been swept clean. Outsourcing software development abroad can help. However, many industrial companies fear that know-how will leak or that sensitive data could be endangered.

In order to guarantee the security of the company's own data and the internationally popular “Made in Germany” know-how, it is advisable to hire a competent service provider to look for talent abroad. He knows the foreign market from long experience and can rule out negative surprises.

Figure 1. Big and smart data, automation and artificial intelligence: Digital trends and developments such as Industry 4.0 are fueling competition for qualified IT developers.

Outsourcing service provider knows the market situation

Swen Berbett, an expert in outsourcing software development to India and head of “India4IT” at the software service provider BEO, knows the challenges that SMEs have to face. He can explain very well which strategies promise success and which added value the outsourcing of IT services brings to German medium-sized mechanical engineering companies.

Until now, the classic employers of IT specialists have included software companies, system houses and web agencies. Industry 4.0 and the ongoing digital transformation have created an increasing need for well-trained IT developers in the manufacturing industry. “Up to now, large-scale software development has been dispensed with when manufacturing machine controls,” explains Berbett. “Industry 4.0 now has a significant impact on the need for IT specialists. With it, mechanical engineering is becoming more and more process-driven and IT-oriented. Accordingly, more and more companies have to set up their own software development department to keep up with the trend. "

A current trend topic is "Predictive Maintenance": The predictive maintenance means that machines not only communicate with each other, but also with external solutions - they are getting smarter and smarter. In addition, machines must be connected to higher-level systems. Ideally, they are controlled via an app. The effort for programming and further developing such software solutions exceeds the capacity of many IT departments.

Fig. 2. In Germany it is becoming more and more difficult to find skilled workers at all. It is therefore advisable to outsource software development abroad. Image: BEO / India4IT

Competition for IT developers continues to increase

"Experts are desperately wanted, especially in the business solutions segment," reports Berbett. “Every process change results in costs of up to 1500 euros per day. If around 50 to 60 expert days are needed over the year, employees can be permanently employed for this price. ”The salary of an additional employee takes a back seat against this aspect.

The problem, however, is that there are no more experts to be found on the labor market. Even students are already under contract before they graduate from university. According to a study by the trade association bitkom from November 2017, more than 55,000 jobs for IT specialists are already vacant.

In addition to e-commerce or software development companies, more and more companies from the automotive, mechanical engineering and traditional manufacturing industries are now coming into contact with the service provider. In addition, there has been a local relocation. In the past, most of the inquiries came from rural areas, now they are also coming from metropolitan areas. This can be seen as a sign that the recruitment process and the competition for IT developers have become very strong. There are different ways that companies can take to counteract the shortage of skilled workers.

Fig. 3. “India4IT” recruits IT specialists on the Indian labor market and organizes the drafting of contracts and the processing of labor law. Image: BEO / India4IT

Various strategies protect against a shortage of IT specialists

  • Short-term perspective: Outsourcing of individual projects
  • Medium-term perspective: outstaffing
  • Long-term perspective: train yourself or outsource
  • “Sustainable” perspective: holistic outsourcing

Outsourcing sub-projects is particularly suitable if the required services can be segmented and programmed in a modular manner. One of the most popular countries for outsourcing is India: the software boom there began more than 15 years ago. Here companies have access to a very large market of skilled workers. Spontaneous outsourcing of projects can therefore be implemented very quickly in India. In this case, however, there is the problem that there is no longer a permanent contact person available after the project has been completed. In the event of potential complications occurring later, the responsible developers are already busy with other projects.

Another solution is the hiring of IT experts from abroad, called outstaffing. Finding suitable employees is easy thanks to various placement agencies, but also involves corresponding costs: Not only are the integration costs incurred, for example for language courses or the like, but also a salary at the German wage level.

Training IT specialists yourself can be worthwhile

Another way to counter the shortage of skilled workers is to train the next generation of IT staff yourself. Dual courses of study or an apprenticeship, however, take three to five years, so these employees are not immediately ready for action. “After completing their training, it is also not certain that young people will stay with the company. The problem is also that you have to develop smart IT solutions today in order not to miss the boat in two years, ”explains Berbett. "Very large companies are now taking the step of setting up their own branches in India, where there are a large number of qualified developers."

In the case of long-term outsourcing, the specialized service provider takes over the organizational processing, provides qualified personnel and offers a secure IT infrastructure. IT specialists are recruited on the Indian labor market, the drafting of contracts and the processing of labor law are organized. In India4IT's technology park in Kochi, for example, there are numerous workstations available that are equipped with a high-performance IT infrastructure.

Risks and opportunities of outsourcing for mechanical engineers

Despite numerous advantages, IT outsourcing also harbors risks. Above all, it is important to remove cultural differences and linguistic barriers. These hurdles can be overcome with intercultural training and regular meetings in Germany and abroad. In addition, it is important to be able to fall back on a German-speaking contact person abroad who will ensure a smooth workflow. This way, there are no misunderstandings and the project management runs efficiently.

Compared to Germany, the average salary in India is significantly lower. For a full-time developer with around eight years of professional experience, costs of around 3000 euros to 3500 euros per month arise. IT outsourcing has therefore become an exciting option for many companies.

The service provider India4IT

India4IT - workbench for software development is a division of the BEO Group. He has specialized in the placement of qualified Indian software developers to German companies and has been working successfully in this field for 25 years. Almost 100 developers are now working in BEO Park India for BEO's own software products. The company is therefore not a classic “outsourcer”, but a “real” software company that also uses the IT services offered for itself.

The services include the recruiting of IT specialists in the Indian labor market, the provision of jobs with a high-performance IT infrastructure in the company's own Indian technology park, as well as the entire drafting of contracts and processing under labor law. Clients include companies of all sizes and from all industries, agencies and non-profit organizations.