Even before the pandemic, the Middle East demanded lots of highly qualified software development talents. As the pandemic began and businesses called for digitization, the demand rose even higher.
Impact of COVID-19 on digitization in the Middle East
The COVID-19 pandemic has altered the way UAE consumers shop and pay and has boosted their dependence on and fondness for online shopping. In the UAE, a survey by Visa claims that 49% of interviewed consumers shop online more since the beginning of the pandemic, and 61% of these consumers now use digital wallets and cards more often than cash on delivery.
43% of consumers say they will keep using contactless payments post-pandemic, and 48% say they’ll choose to make digital payments online over paying cash on delivery for future eCommerce purchases.
During the pandemic, UAE consumers moved to online shopping to purchase essential goods and to access products from retailers whose stores closed when restrictions were imposed. Studies also note an accelerated switch to eCommerce and the adoption of cashless payment options during the COVID-19 pandemic compared to pre-pandemic times.
To businesses, these statistics point to the growing need for digitization. Sellers, aware of increasing demand, have strengthened their digital presence, and the pandemic has driven the acquisition of eCommerce platforms according to Visa’s 2020 Report. For instance, in Saudi Arabia, 38% of eCommerce platforms were acquired due to the COVID-19 crisis.
However, there are a couple of challenges that companies face on the way to digitization.
Software development for MENA region: Major challenges
The first major challenge that is constantly talked about is the lack of software developers in the MENA region.
Global publications like CIO have been discussing this issue for a while. Cristina Lago writes that the Middle East’s business and tech landscape is growing. However, a shortage of educational options in fields connected to IT and a proclivity for traditional occupations contribute to a widening skills gap.
The MENA region is experiencing a lack of talent alongside high youth unemployment rates, as the demand for skilled workers surpasses the supply.
Despite the MENA region having one of the youngest populations in the world, lots of young workers don’t have the required medium- and high-level skills. The youth unemployment rate reaches 28.2% in the Middle East and 30.5% in North Africa according to the International Labour Organisation.
The World Economic Forum states that the region demands more tech-specific skills, including information and technology skills.
Another challenge is the Middle East’s software development rates and a lack of information.
The COVID-19 pandemic led to the economic decline of smaller Middle Eastern businesses due to a lack of an online presence according to International Monetary Fund economists.
The MENA region’s small and medium-sized enterprises (SMEs) use the internet less than similar-sized companies in other parts of the world due to a lack of information and resources.
A senior IMF economist who works for the Middle East and Central Asia department, Inutu Lukonga, says that lots of SMEs in the region don’t know which technology to use and don’t trust internet security.
These challenges can be found in various parts of the world.
For instance, Western European and North American businesses often outsource software development to Eastern Europe or Asia due to more affordable rates and a great selection of talented professionals.
Only two questions remain:
- Should you outsource or outstaff?
- What regions are best for outsourcing?
What best fits MENA software development needs?
Outstaffing or outsourcing?
Outstaffing is a type of remote employment in which a hired professional performs all the job responsibilities for a client company (you) while being employed by another company (an outsourcing agency).
Outstaffing is a great fit if you need to expand your development team, but you don’t want or need to hire a long-term employee.
An outsourcing agency employs outstaffing professionals and is in charge of:
Hired outstaffing professionals execute tasks and assignments given by the client company.
Outsourcing is a model in which a client company hires a whole development team through an outsourcing agency to manage a whole project from planning to deployment. This usually includes not only development but also design and sometimes even marketing services.
An outsourcing agency takes care of the same tasks as outstaffing specialists do and helps a client’s company choose team members by offering portfolios and CVs and conducting interviews.
The outsourcing model is the best fit if you have an idea you want to execute but don’t have an internal development team.
The main difference between the two models is that outstaffing is about acquiring individual workers, while outsourcing involves complete project support. With both models, client companies save lots of money and time. For a detailed breakdown of staff augmentation services, read our article on what staff augmentation in IT is and how to close the recruitment gap.
The best regions for outsourcing software development
When deciding what country to outsource to, there are two fundamental factors to consider — the quality of work and the price.
Finances are at the wheel of every project. However, they must be balanced by high quality. If you have an affordable price and good-quality development work, then you’ll be able to achieve your project goals and implement the planned product functionality.
According to the 2021 Worldwide Rates Comparison report by Accelerance, after the start of the COVID-19 crisis, more companies started outsourcing thanks to its many benefits like large pool of highly skilled talents and reduced costs. A rising majority of organizations currently outsource at least part of their application development. And although rates are growing, software development outsourcing continues to be more cost-effective than hiring domestically.
Here’s a general breakdown of 2021 global outsourcing rates:
For countries in the MENA region, the most popular outsourcing destinations remain South and Southeast Asia as well as Central and Eastern Europe.
South and Southeast Asia
Now that we’ve analyzed outsourcing software development rates, the only question remaining is quality.
Generally, Central and Eastern European companies are known for their high quality of work, English proficiency, strong education, and large pool of talent. For instance, let’s consider Ukraine.
Widely known and praised companies including Grammarly, GitLab, and People.ai were Ukrainian startups. GitLab has received €394 million in funding and has been used by such notable enterprises as Alibaba Group, IBM, NVIDIA, and SpaceX.
Ukraine is also among the leaders in the number of developers specializing in:
- Unity 3D
In 2017, Ukraine was named the “Offshoring Destination of the Year” at the Global Sourcing Association awards ceremony that took place in London.
In addition, Ukrainian companies are known for the ease of doing business as well as for affordable and comfortable corporate tax rates and expenses.
However, it’s worth noting that quality does depend on the company, its developers, and its experience, which leads us to...
Steelkiwi’s experience in RTL software development
Clients from numerous countries in the Middle East and North Africa have entrusted Steelkiwi with developing and managing their projects. Look through our RTL software development portfolio to see for yourself.
As a result, we’re familiar with the specifics of working in the MENA market, can offer strong skills in RTL software development, and have all the required experience to make your product launch the best it can be.
We’ve also shared our RTL development experience in an article with design advice for right-to-left website development.
In fact, our Middle Eastern customers have enjoyed working with us so much that we now regularly schedule business trips to the region to catch up with our past clients and meet new ones! Want to jump on a call? Let’s do it!