Nepal: A serious contender in software development outsourcing

Jeroen van der Horst
Account director

Say the words ‘outsourcing destination’ to people in the software industry, and they’ll probably reply with the name of one of the major players – like Bangladesh or India.

Sure, these countries have been dominating the outsourcing market for a while now. But over the last few years, there’s been an increasingly strong contender in software development outsourcing: Nepal. And while he may be biased, Proshore co-founder, Roshan Bhattarai, has seen the talent pool grow firsthand – in Kathmandu and beyond.

A mountain to climb​

Nepal might be better known for having eight of the world’s highest mountains, but perceptions of this previously overlooked outsourcing destination are changing – and with good reason. In 2020, just over half of Nepal’s gross domestic product (GDP) came from the service sector. Couple that with a significant increase in internet penetration over the last decade (up almost 30% since 2011), and the conditions are perfect for software development outsourcing. 

Right now, companies like Proshore are demonstrating the potential for Nepal-based jobs in the IT industry by offering ‘ready-to-code dev teams’ to businesses around the world from offices in Kathmandu. With a low unemployment rate (4.44% in 2020), a population of 30 million, and steadily increasing literacy in school-age children – the country has the talent and a growing appetite for skilled jobs within the IT industry.

Even more importantly, there’s a real social need to create skilled, international-level jobs in Nepal because suitably qualified candidates tend to migrate abroad in the pursuit of opportunities – approximately 354,000 people in 2018. 

The potential of remote working​

To encourage IT students in Nepal to take up skilled positions in the industry, companies have been doing their bit to incentivize them to stay, creating pathways into the sector through opportunities like Proshore Bootcamp. Increased internet penetration across the entire country has created more opportunities for people in rural communities to find a way into careers like software development. 

The possibilities for remote working reflect a national rise in post-pandemic job opportunities. It seems like businesses have seen the true potential of what can be achieved through ‘new ways of working’. However, this is nothing new for companies like Proshore based in the Netherlands and Nepal – we’ve been working this way for over a decade – and in the process, proving that it can be done effectively.

Nepal’s emerging market for outsourcing​

It’s true that many international companies – some big brands – have been outsourcing functionality like software development to Nepal for some time now, it’s just that as an emerging market, no one’s really talking about it in the same way as India or Bangladesh. Yet.
Roshan Bhattarai Director of Operations

But the country is certainly gearing up for a digital revolution with ever-increasing internet penetration alongside both a public and private sector push for investment in high-quality IT infrastructure, bandwidth provisioning, and grid-based resource-sharing. A great example of this would be 4G coverage at the summit of Mount Everest, which enables climbers to stream the view from the top! 

As we’ve already seen, when you take a closer look at the availability and quality of education in Nepal – things are looking up. The teaching of international languages, such as English, in schools alongside the earlier introduction of technology in the classroom, means that young people are emerging from education better prepared for work in digital and global contexts.  

Not only that, Proshore and other international companies have already set the precedent for remote working in Nepal with clients around the world. It can be done. And more importantly – it works while being more cost-efficient compared to other outsourcing countries, not just in South Asia but the world!

You can directly compare and see the difference in rates across tech and roles on our cost calculator below.

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Proshore has helped to blaze a trail so that overseas companies already have a sense of what to expect from an offshore software development team from Nepal.

Nepal as a tech hub​

By managing international expectations of remote teams based in the country, Nepal is able to grow as a tech hub. Right now, cities like Kathmandu are at the epicenter of the digital revolution, but knowledge and skills are becoming more evenly distributed as colleges and universities make tech and computing courses more widely available and accessible.  

Nepal is also gaining an international reputation for having a friendly and welcoming business environment – an attractive place to do business and start a company.  Co-located in Kathmandu and Eindhoven, the ready-to-code development teams business model set up by Proshore seems to be gaining traction as more businesses look to leverage the potential of the country’s IT talent pool. 

However, the key differentiator between this business model and simply outsourcing software development is integration.

International integration​

Integration is the main difference between ‘outsourcing’ software development and bringing onboard a dedicated development team. And it makes a big difference. With Proshore you can get a single developer or an entire managed team to integrate with your existing set-up and scale it up or down as required. How you integrate one of our ready-to-code dev teams depends on the work to be done and your existing provision – whether that’s an in-house team or developers brought in from elsewhere. 

Interested in ready-to-code dev/teams from Nepal?

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No matter how large or small your organization, our ready-to-code dev teams can become part of it – the only difference is that they’re working remotely in Nepal. If you’re a smaller enterprise, you might not have a development team of your own, and in these circumstances, Proshore becomes your team for the duration of the work to be done, typically over a series of sprints. 

In other situations, you may need the flexibility to scale software development up or down as needed. Regardless of where the extra capacity comes from, you need skilled developers you can rely on. Proshore takes account of the work to be done and tailors a solution based on the relevant skill level, and expertise of our individual team members.

Working internationally brings its own challenges, such as different time zones. However, it is possible to turn this potential barrier into a competitive advantage. With Kathmandu almost a full day ahead of Eastern Standard Time (EST), it creates a convenient feedback loop, with a client in the US able to provide feedback for the next working day. It also means that questions from the team in Nepal can be posed, and the client can take a full day to answer them ahead of the next day’s development.

Climbing to the summit of software development ​

Nepal as an outsourcing destination is ripe for growth. Right now, it has a less competitive market for talent than some of its rivals, plus there are a whole host of upskilling initiatives like Proshore Bootcamp designed to nurture the talent of future IT professionals looking to be based in the country rather than seeking opportunities abroad. To give that some context, the most recent bootcamp received over 100 applications for the 20 places available. So demand is high.

Client by client, Proshore has built a reputation for strong and productive integrations on an international level, so our teams gain experience in the culture of the UK and US. This valuable experience is an investment in the Nepalese community and helps to shape tomorrow’s talent pool – creating the reality we want to see for the IT industry in Nepal.

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