Challenges and Opportunities of being a Software Company in Nepal

Despite the fact that the IT industry and software company in Nepal has become a hype in recent years, the software development company in Nepal is still in its early stages and is developing. However, the development and growth of this industry in Nepal just like any other part of the world is rapid. The number of good software development companies in Nepal and IT professionals is also growing. It is safe to say that there is a pretty good population of software companies in Nepal that are great in their work providing a wide range of high-quality services to their clients such as custom software development, web development, mobile app development, IT consulting,  and more. 

This drive in the industry has been supported by different factors: may it be the availability of the right education and training, or be it the push from the government. The industry has seen a positive evolution in the environment and the opportunities around this sector with many technology parks and incubation centers being established to support the growth of the software development industry. Also, policies in the favor of the development of the software development industries are being made with the target of a boom in the exports of IT or software development services. 

Moreover, just to look at the situation from a general perspective, all of us have seen the shift that technology has brought in the overall way of human life, and we know that technology is not going to leave the picture anywhere near the future. Just trying to say that the opportunities for the IT industry and software development companies are just immense. And more so in the context of developing countries like Nepal where things are just starting to take a shift to digitalization. With the growing demand for software or any other requirement for IT work in terms of blooming eCommerce businesses in Nepal, there is a great opportunity. 

However, where there are opportunities, there are challenges, especially when it’s a fairly new market. So, let us dive into what great opportunities software companies in Nepal have and what are the possible challenges these companies face in the operational process. Let’s start with the good ones, the opportunities for software companies in Nepal. 

Opportunities of being a software company in Nepal 

Nepal is in its developing stage for the software development industry, so it is a fresh market. There are a couple of factors that make Nepal a great option for software development.

Growing Industry with High Demand 

The whole tech industry is at the point of evolution in Nepal. There is an inclining rate of acceptance of digitalization, especially in the business sector. There is a demand for software development, and web development services more than ever. The market already has some renowned software development firms and is a big player in the market. So, there is a great opportunity for a software development company to step into the game in Nepal especially, as it is a relatively untouched and growing market. 

Increasing Number of Talents 

The IT industry itself is a buzzword in Nepal and with that, there are thousands of students pursuing their studies and careers in this sector following this exposure. Also, in today’s context, there are much better colleges or educational institutions providing proper training and education to the students in the IT sector in Nepal compared to a few years back. This has resulted in a massive number of IT graduates with proper talent and specialization. This means you as a software development company have a lot of choices for the best of the best professionals that you might want to choose to fuel up your business. 

The Remote Working Trend 

After the pandemic, the work-from-home culture really took off which resulted in an increasing number of freelancers, and organizations accepting this working structure. This factor can really play off as a plus point for the software development company as they can collaborate with diverse talent groups according to their needs while also saving some resources for the company. 

Government Initiatives

We have discussed this briefly before, but getting deeper into this topic, the government has realized that the IT sector in Nepal holds the potential to provide valuable opportunities in terms of export service sectors and contribute to the nation’s economy. If we see the statistics, the Information, Communication, and Technology (ICT) sector contributes up to 2.3% of the total GDP which roughly calculates to about 80 billion Nrs which is a great amount.

So, realizing its potential, the government has implemented initiatives like Nepal Software Policy to support the growth of the technology sector. The government also has been pushing the growth by establishing technology parks and incubation centers. So, looking at the overall context, software development companies have an assuring and supportive environment for their growth in Nepal.

Challenges faced by Software Company in Nepal

Limited Access to Technologies

Though the software development industry is very prevalent and rapidly growing these days, we need to understand it is still in the developing phase. So, the reach of recent, modernized and advanced technologies is either inaccessible or unaffordable for most companies in Nepal. There might be some big corporations that might have access to recent technologies, but if we are to look at the larger picture, most of the small software development companies and startups are not able to access the advanced technologies that are available in the market which might act as a disadvantage for them leaving them behind their competitors. 

Lack of Capital/ Funding 

This is the case with most of the startups in Nepal, they do not have access to funding or enough capital. When you run an organization, there are different aspects that you need to invest in apart from your core business that includes marketing for instance, in order to compete with the established names or similar startups in the market. But what happens is, in Nepal, you have very limited options for collecting the funds like bank loans as the idea of investing and crowdfunding especially in the technology sector is very new in Nepal. 

Competition from Large Entities 

Nepal is a very small market, and if we talk especially about IT sectors, there are some renowned, trusted, and established companies which have taken most of the markets. In the context of Nepal, larger corporations have been dominating the tech market in Nepal. And most of the software development startups in Nepal, tend to follow outdated operational models with limited funding and most of them eventually shut down.

Limited Market in Nepal 

The evolution of the Nepalese market in terms of the technology sector has just started to take a shift. This means that even though there is increasing demand, the idea of digitalization has not fully been accepted. Businesses in Nepal have just started to understand the need for a digital presence and digital payment gateways are still new ideas to Nepalese people with only limited users.

This is why there is comparatively lesser demand for software development services in Nepal and other countries. And that makes the majority of these software development companies turn to outsourcing to international companies. Because the industry is still developing and there are fewer opportunities in the country itself, software development companies might face potential limitations for growth of the company.

Tips for the growth of software companies

● Focus on building a strong team: As a company, you need to have a strong inner team or workforce to support the proper operation and growth within the organization. This is the first step you need to take before you launch your software development company as a strong team is the foundation of a successful company. Investing in training and development for employees and creating a positive and supportive work culture can help you attract and retain top and the right talent for your organization.

● Invest in the market research: Separating the budget for market research is one of the wisest choices you can make when starting a software development company. Through market research, a company can ascertain the necessities of the market. Additionally, it aids startups in identifying their target market and competitors. Similarly to this, in-depth market research assists in identifying the best marketing strategies and predicting growth variables. A tech business can benefit a lot from its investment in the market research campaign.

● Invest in technology: Technologies can be the key to boost up your performance. Especially as a software development company you need to stay up-to-date and ahead of the game with the latest technologies and tools that work just right for you. So, investing in the hardware and software you need to support the performance of your employees and deliver high-quality software solutions is always a wise choice.

● Build a strong brand: You have your software development company established and you do your job greatly but is that enough? You need to do more than that to stand out in the competitive and crowded market by establishing a strong sense of your brand from the consumers’ perspective. You can do this by tailoring your marketing campaigns aligning to your customer’s value, focusing on providing excellent customer service, and delivering high-quality products to build a positive reputation.

● Build partnerships: Now, this is the part where most of the companies in the market miss out on. However, people have realized it recently and are actively building partnerships in this sector recently. There are many plus points you can gain through partnerships that you don’t want to miss out on. Partnering with other companies and organizations can help you access new resources, expertise, and markets. That is why you need to consider partnering with complementary businesses or organizations in order to grow your company.

● Explore international markets: The globalization and internet have brought this huge advantage of accessibility and convenience to tap into the global market without many costs. And the software industry is global, which brings in opportunities to expand your business beyond Nepal. Consider working with international clients or partnering with companies in other countries to tap into new markets.

Summary

The market software development industry is relatively new but at the same time, the growth in this sector is immense. And with that fact, there comes a lot of pros and cons to the scene. As the market is fresh and there is booming interest surrounding this industry, it brings in many opportunities for software development in Nepal. There is a growing number of talented professionals in the sector. However, the fact that the market is still developing leaves a lot of challenges to tackle for software development companies.

Factors like less access to technology, funding, and limitation of the market impact the sustainability of software development companies. So, here are some of the strategic steps you might want to take as a software development company in Nepal to sustain and grow over the years. 

Making wise choices for your business by investing in aspects such as technologies and market research, building partnerships and strong brand presence, and exploring markets beyond Nepal can help you plan out a long and successful journey for your company.