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The Complete Guide to Offshore Development Centers

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Companies constantly seek innovative strategies to enhance competitiveness in today’s globalized marketplace. One such strategy is establishing Offshore Development Centers (ODCs). While this might sound like uncharted territory to some, navigating this can be the key to achieving a competitive edge. Furthermore, ODCs allow businesses to diversify their operational risks, ensuring they do not rely entirely on one region or market. By integrating a global approach into their operational framework, companies can benefit from varied perspectives, fostering innovation and enhancing product quality. As technological advancements continue to make the world more interconnected, the relevance and utility of ODCs will only amplify. Embracing offshore development is no longer just an option for many firms; it’s imperative for sustained growth and success in the modern business landscape.

Table of content

Understanding offshore development centers (odcs) in depth, why offshore development exploring the comprehensive advantages, finding the ideal location for an offshore development center services: beyond just cost, challenges in offshore development, the pros of offshore development: unlocking success, conclusion: navigating the offshore development landscape, faq on offshore development.

Offshore Development Centers

What is Offshore Development Center? An Offshore Development Center (ODC) is a strategic extension of a company’s in-house operations in a distinct geographic location. Typically set up in countries that offer competitive advantages in terms of labor cost, talent pool, and conducive business environments, ODC offshore development center have evolved into an integral part of the global business model.

The structure of an ODC can vary. Some are fully owned subsidiaries of the parent company, while others operate under a partnership with local vendors. Regardless of the setup, the ODC remains aligned with the parent company’s standards, culture, and objectives.

Key Features of ODCs:

  • Infrastructure & Technology: ODCs have state-of-the-art infrastructure to ensure seamless operations. High-speed internet, VPNs, secured data storage, and advanced tech tools are standard provisions, ensuring work continuity and data protection.
  • Skilled Workforce: One of the significant draws for companies to establish an ODC is access to a skilled and diverse talent pool. These centers often employ specialists in software development, data analysis, artificial intelligence, and other IT fields, which might be scarce or expensive in the parent company’s native country.
  • Scalability: ODCs offer flexibility in scaling operations. Companies can quickly ramp up or wind down teams based on project requirements, making it easier to manage resources and budgets.
  • Integrated Management Systems: ODCs often adopt an integrated management approach. This ensures that processes, methodologies, and quality standards are consistent with the parent company, allowing for a unified project management and delivery approach.

Offshore Development Centers

With rapid technological advancements and changing economic dynamics, companies are constantly pressured to innovate, reduce costs, and increase productivity in today’s globalized business landscape. One of the solutions that forward-looking businesses have adopted is offshore development. But what makes offshore development such an attractive proposition? Let’s delve deeper into the specific reasons.

1. Cost Savings

Perhaps the most immediate benefit that comes to mind when considering offshoring is the potential for significant cost savings. Here’s why:

  • Labor Costs: Countries such as India, the Philippines, and Ukraine have a lower cost of living than Western nations. This disparity allows companies to hire highly skilled professionals at a fraction of the cost they would incur in their home country. For instance, a software developer in the U.S might command a salary several times higher than their counterpart in India for the same quality of work and experience.
  • Operational Expenses: Apart from salaries, other associated costs like infrastructure, utilities, and benefits can be reduced when offshoring. Businesses can increase their cost savings by setting up operations in regions with lower costs.
  • Tax Benefits: Many countries offer tax incentives to foreign businesses to encourage investments in their IT sectors. By capitalizing on these incentives, companies can further reduce their operational costs.

2. Access to Talent

The world is replete with talent, and by limiting oneself to a specific region, businesses might miss out on unique perspectives and expertise. Here’s how offshoring can be a gateway to global talent:

  • Diverse Skill Set: Countries like India and Ukraine have a rich history of IT education, producing thousands of IT graduates each year. By tapping into these markets, companies can access a vast pool of specialists, from software developers to data scientists.
  • Cultural Insights: Offshore teams bring in their cultural nuances and perspectives, which can be invaluable, especially for businesses looking to expand globally. This diversity can lead to innovative solutions tailored to cater to global audiences.
  • Training & Development: While some businesses might be concerned about the skills of offshore teams aligning with their standards, it’s essential to note that many offshoring destinations prioritize IT training and certifications, ensuring a workforce updated with the latest tech.

3. Flexibility

In a rapidly changing business environment, flexibility is paramount. Offshore development inherently offers this. Here’s how:

  • Scalability: Businesses can easily scale their offshore teams depending on project demands. This flexibility means that companies can quickly hire more staff during peak periods, and during slower periods, they can downsize without the complications of long-term contracts.
  • Specialized Solutions: Offshoring allows businesses to hire teams for specific projects. Need a team for a short-term project? The offshore development center model can provide that without the long-term commitment.
  • Diverse Expertise: Different regions have specialists in different areas. Need an expert in blockchain? Eastern Europe might be your answer. Looking for a team experienced in AI? Asia has a booming AI sector. Offshoring allows for this kind of specialized team assembly based on project requirements.

4. Round-the-Clock Productivity

The world doesn’t sleep, and this can be a significant advantage in business.

  • Staggered Work Hours: With teams in different time zones, another can begin when one team wraps up for the day. This continuity ensures that there’s always someone working on a project, leading to faster deliveries and shorter time-to-market.
  • 24/7 Customer Support: For businesses in the service sector, offshore development allows them to offer 24/7 customer support without incurring the costs of round-the-clock operations in their home country.
  • Enhanced Collaboration: Modern collaboration tools have made it easier than ever to communicate in real time with teams spread across the globe. This constant communication means ideas are continually exchanged, and projects progress much faster.

Offshore Development Centers

In an era of globalization, the strategic establishment of Offshore Development Centers (ODCs) has become a critical business move. While cost-effectiveness remains a primary lure, selecting a location extends far beyond monetary concerns. Many factors come into play, ensuring the long-term success of the ODC and, by extension, the parent company. Let’s explore these considerations in detail.

1. Political and Economic Stability

Before pouring resources into an offshore location, companies must evaluate the region’s political and economic landscape.

  • Stable Governance: A stable political environment ensures the continuity of business operations. Frequent changes in governance or political unrest can introduce unpredictability in regulations, taxes, and the overall business climate.
  • Economic Growth and Sustainability: A growing economy often indicates favorable business policies, a burgeoning middle class, and potential local market expansion. Countries with steady economic growth are less likely to face labor strikes or other disruptions.

2. Skill Availability

The essence of an ODC is its human resources. Thus, the availability of the right skills is paramount.

  • Educational Institutions: Proximity to reputed educational institutions can be a significant advantage. These hubs ensure a steady stream of skilled graduates and provide opportunities for collaborations, internships, and recruitment drives.
  • Specialized Skills: While countries like India are known for producing many IT professionals annually, regions like Eastern Europe might be hotspots for niche technical skills, such as expertise in certain programming languages or technologies.
  • Training and Development Infrastructure: It’s also crucial to examine the local landscape for professional training centers or organizations that keep the workforce updated with evolving technological trends.

3. Time Zone Differences

Time zones can be both a challenge and an opportunity.

  • Round-the-Clock Productivity: Different time zones mean when the home office winds down, the ODC can begin its day, ensuring projects move forward 24/7.
  • Coordination and Meetings: Conversely, significant time zone differences might mean fewer overlapping working hours. This can pose challenges for real-time collaboration and synchronization.
  • Client Coverage: If a company has clients spread worldwide, strategically placed ODCs can ensure there’s always a team available during clients’ working hours, enhancing service levels.

4. Cultural Compatibility

A factor often overlooked, cultural compatibility, can play a significant role in the smooth integration of the ODC with the parent company.

  • Work Ethics and Values: It’s vital to understand the work culture of the potential location. Factors like punctuality, hierarchy perceptions, communication styles, and holiday calendars can impact daily operations.
  • Cultural Exchange: Locations with a history of cultural exchange with the parent company’s nation might find it easier to understand and integrate shared values. For example, parts of Eastern Europe might have closer cultural alignment with Western businesses, making collaboration more seamless.
  • Language Proficiency: While English is the global business language, understanding the level of proficiency in the chosen location can smoothen interactions.

5. Infrastructure and Connectivity

An ODC’s success is also determined by its infrastructure and the connectivity it offers.

  • Technological Infrastructure: Reliable high-speed internet, modern office facilities, uninterrupted power supply, and advanced IT infrastructure are non-negotiables for an ODC.
  • Transport and Logistics: Proximity to major transport hubs, like airports and seaports, can facilitate travel for executives and stakeholders. This is essential for regular visits, audits, and remote team interactions.
  • Local IT Ecosystem: Being situated in a tech hub or close to other IT companies can offer multiple benefits. The local IT ecosystem can significantly influence an ODC’s growth trajectory, from easy access to vendor services to potential partnerships and collaborations.

Offshore Development Centers

Offshore development, with its enticing benefits such as cost savings, access to a vast talent pool, and scalability, has become a staple strategy for numerous global companies. However, as with any strategic business decision, it comes with its set of challenges that organizations need to preemptively recognize and address. Let’s delve into these obstacles and discuss ways to mitigate them.

1. Communication Barriers

The Problem: Communication is the linchpin of successful offshore development. With teams dispersed across different geographies, languages, and cultural contexts, there’s a substantial risk of miscommunications, misinterpretations, and missed expectations.

Potential Solutions:

  • Language Training: Offering language classes or resources can help bridge the linguistic gap. Both the offshore and onshore teams should be encouraged to attain a level of proficiency in a shared language, typically English.
  • Cultural Sensitization: Organize workshops and training sessions that focus on cultural norms, business etiquettes, and communication styles of the involved countries. This helps in understanding and respecting the nuances and reduces the chances of unintentional slights or misunderstandings.
  • Unified Communication Tools: Implement standardized communication tools and platforms for real-time interaction. This not only simplifies communication but also creates a shared workspace that fosters collaboration.

2. Quality Control

The Problem: Maintaining product or service quality when teams are scattered across the globe is a complex endeavor. Without the physical presence of decision-makers or stakeholders, there’s a risk of the final output not meeting the desired standards.

  • Regular Audits: Establish a routine of regular quality checks and audits. This ensures that the dedicated team consistently meets the expected standards and aligns with the company’s quality objectives.
  • Clear Benchmarks: Clearly defined benchmarks and Key Performance Indicators (KPIs) can serve as a guidepost for the offshore team, ensuring they understand and adhere to the expected quality standards.
  • Feedback Loop: Establish a transparent and robust feedback mechanism. Ensure that the offshore team receives regular feedback on their work and has clarity on areas of improvement.

3. Data Security

The Problem: In an age where data is the new oil, ensuring its security, especially in an offshore setup, becomes paramount. The risk of data breaches, leaks, or thefts can have severe financial and reputation ramifications.

  • Strict Security Protocols: Implement rigorous security measures, including firewalls, VPNs, encrypted communications, and multi-factor authentication. Ensure that the offshore team understands and adheres to these protocols.
  • Data Protection Training: Regular training sessions on data protection, emphasizing the importance of safeguarding sensitive information and the potential risks of breaches, can instill a sense of responsibility in the offshore team.
  • Legal Safeguards: Opt for locations with stringent data protection laws that align with international standards. Moreover, contractual agreements should clearly spell out data protection responsibilities and the consequences of breaches.

Offshore Development Centers

In the digital era, businesses worldwide are leveraging offshore development to drive growth, maximize efficiencies, and achieve their strategic goals. Through this model, companies delegate certain tasks or projects to teams located in different countries, reaping a plethora of benefits. Let’s explore the manifold pros of offshore development, weaving in the key terms provided.

1. Unlocking Cost Efficiencies:

By outsourcing specific functions or projects to regions with lower operational costs, businesses can unlock significant cost savings. This allows them to channel funds into other vital areas, such as research, marketing, or infrastructure building.

2. Access to Global Talent:

Offshore development opens the door to a global talent pool. Whether you’re hiring a specialist to tackle niche technical issues or seeking a broader team for a larger project, offshore destinations often offer a vast reservoir of qualified professionals.

3. Flexibility in Scaling:

One of the remarkable advantages of outsourcing is the flexibility it offers in scaling operations. Depending on project requirements, companies can swiftly scale their offshore teams up or down, without the logistical and financial burdens of hiring or conducting layoffs in-house.

4. Control Over Core Competencies:

By partnering with offshore teams for specific tasks, businesses can retain better control over their core competencies. They can focus on what they do best, leaving ancillary or specialized functions to dedicated offshore experts.

5. Diverse Problem-Solving Perspectives:

Diverse teams bring varied perspectives to the table. By outsourcing tasks to different cultural and professional backgrounds, businesses can gain fresh insights and innovative solutions to longstanding issues.

6. Round-the-Clock Operations:

With teams located in different time zones, businesses can ensure continuity in their operations. When one team wraps up for the day, another can pick up the baton, ensuring that the workflow remains uninterrupted.

7. Legal Compliance and Specializations:

Certain offshore destinations specialize in specific services, be it tech development, finance, or legal processes. By outsourcing to regions with a strong legal framework and expertise in a particular domain, businesses can ensure top-notch service quality and adherence to international legal standards.

8. Enhanced Focus on Strategic Goals:

By offloading certain responsibilities, businesses can channel their energy and resources towards strategic goal-setting and execution. They’re less bogged down by day-to-day operational challenges and can maintain a clear vision of their long-term objectives.

9. Opportunity for Networking and Building Relationships:

Partnering with offshore entities isn’t just a transactional affair. It provides businesses an opportunity to build lasting relationships, opening doors for future collaborations, joint ventures, or even mergers.

10. Continuous Learning and Knowledge Exchange:

Conducting regular interactions, workshops, and training sessions with offshore teams fosters a culture of continuous learning. Both the parent company and the offshore team benefit from exchanging knowledge, best practices, and skills.

11. Access to Niche Expertise:

While a company’s blog might be proficient in presenting generic information, specific technical or industry-related insights might require niche expertise. Outsourcing tasks like specialized blog content creation to offshore experts ensure accuracy, depth, and value addition for the readers.

Offshore Development Centers

Offshore development presents a compelling avenue for businesses to harness global talent, achieve cost efficiencies, and scale operations effectively. However, this venture is not without its set of challenges – from bridging communication barriers to ensuring top-tier data security. The importance of making informed decisions in offshore practices cannot be overstated as the global marketplace becomes increasingly interconnected.

Key considerations, such as the location’s political stability, infrastructure, and cultural alignment, play a pivotal role in determining the success of offshore endeavors. Businesses can confidently navigate this landscape by recognizing and preemptively addressing challenges and through a comprehensive understanding of the pros and intricacies of offshore development.

Furthermore, the value of continuous learning, open communication, and building long-term relationships in this domain is paramount. Offshore development isn’t just a tactical decision but a strategic move that can redefine a company’s global footprint and trajectory. With the right knowledge, insights, and foresight, businesses can set sail on their offshore journey, charting a course toward unparalleled success in the vast seas of global opportunities.

Offshore Development Centers

What are the primary channels for communication with remote offshore teams?

Communication with remote teams is pivotal for the success of offshore development. The primary channels include video conferencing tools, instant messaging platforms, and project management software. It’s essential to select tools that both parties are comfortable with and ensure regular and open communication to bridge the geographical distance effectively.

How do companies determine the feasibility of offshore vs. nearshore software development?

Determining the feasibility involves a comprehensive study considering various factors. Companies need to assess the time zone differences, cultural alignment, language barriers, and cost-effectiveness. Additionally, understanding the specific industry expertise and strengths of both offshore and nearshore regions will play a significant role in making an informed decision.

Is staffing an offshore team different from hiring for an in-house team?

Yes, staffing an offshore team has its unique challenges and processes. Given the geographical and often cultural differences, hiring for an offshore team requires a deeper understanding of the local job market, expertise levels, and even nuances in professional qualifications. However, the underlying principles of looking for the right skills, experience, and cultural fit remain consistent.

How can businesses stay updated about industry best practices in offshore development?

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  • Essential guide for Offshore Development Center setup

offshore-development-center-setup

Having an offshore development center to take care of your IT tasks at a reasonable cost is juicy. Still, every step, challenge, and viable solution of offshore development center setup must be considered carefully, no matter whether you have an ODC partner or set up an ODC business on your own .

There is no fixed way to successfully set up an offshore development center , but here come 8 typical and vital steps:

  • Clarifying your visions & requirements
  • Choosing an ODC model
  • Deciding an ODC destination
  • Selecting a service provider
  • Forming an ODC team
  • Establishing communication protocol
  • Defining project management practices
  • Clarifying security management standards

Let’s go into detail!

How To Set Up Offshore Development Center

offshore-development-center-setup-steps

8 Steps of Offshore Development Center Setup 

1. Clarify Vision & Requirement

For a business, clarifying vision and requirements before initiating dedicated offshore development center implementation is of great importance . This prerequisite helps ensure that the ODC setup is the best option to go with, clarifies what you need in your ODC, and sets out a path for you to follow.

For example, if you prefer cultural and time zone alignment, onshore development is a good option. But in case you prioritize cost saving and extended IT human resources, offshore software development can benefit your business both financially and technically.

Here come the major aspects to clarify upfront: 

  • Business objectives . E.g., whether you want to complete a one-time project or set up an offshore operation. 
  • Priority . E.g., control or cost reduction.
  • Project scope . E.g., whether you need an end-to-end solution package or specific software development and software testing services.
  • Your available resources , including budget and time frame.
  • Security restrictions .
  • Expected outcome .

When you’re done with clarification and grasp a big picture of the project, the next step should be choosing an ODC model.

2. C hoose an ODC Model

So, what are the most common ODC models, and when to use them?

Managed ODC  

If you want to save money and focus on core business activities rather than IT operations, managed ODC will be a suitable option. 

In the managed ODC model, the client joins the ODC service provider during recruitment and team formation process. After that, during the project, the vendor handles the ODC facilities and HR administrative stuff while the client manages the team’s work directly.

The common pricing model for managed ODC is Time & Material (T&M), which uses a pay-as-you-go approach based on the actual time and effort of the development team.

Build-Operate-Transfer (BOT)

In case you want to establish a long-term offshore presence but lack the resources and understanding of the local market to set up the offshore team, the BOT model is for you. 

A typical BOT scheme consists of three phases:

  • Build : The vendor conducts necessary research and discussion with stakeholders to finalize the plan, and subsequently set up the ODC resources and facilities.
  • Operate : The vendor puts the team into operations and runs the operations for an agreed-upon period.
  • Transfer : The vendor transfers ownership of the ODC team to the client.

The BOT model involves the expenditures of ODC resources and facilities and the service fees. 

Are you new to using external IT services? Check out our infographic on IT Outsourcing Strategy Checklist .

3. Decide on an Offshoring Destination 

With an offshore development center, you know for sure that it is located in a foreign country, but the real question is what country it is. 

When it comes to offshore destination decisions, typical deciding factors include price, HR competency, time zone, and business environment .

As of 2023, the most popular destinations for IT outsourcing are South and Southeast Asia, the U.S., Latin America, and Central & Eastern Europe. Among them, the Asia-Pacific region is expected to grow at the highest CAGR , at 8.3% in IT services revenue in the coming years. 

top-it-outsourcing-countries

Top IT Outsourcing Countries 

Certainly, India has been the largest IT outsourcing vendor with a large IT HR pool, but the price has increased significantly as the country primarily serves US clients. On the other hand, emerging nations for ODC like Vietnam can offer satisfactory results with a competitive price, vibrant IT talents, and a favorable business environment . 

For instance, LTS Group as a Vietnamese ODC vendor offers dedicated offshore developers of all seniority levels for less than $25/hour . Since 2016, we have supported big brands from South Korea, the US, Japan and other developed countries to establish dedicated development centers in Vietnam.

Are you curious to explore the landscape of Vietnam’s thriving IT sector? Check out our latest ebook: Vietnam’s IT Service Industry: Landscape, Challenges, Opportunities .

business plan for offshore development

4. Select a Reliable ODC Vendor

IT outsourcing is developing at an unsurprisingly high rate, and software development offshoring is not an exception in this case. Businesses now are spoilt for choices with plenty of service providers to evaluate and consider. 

So, here come the popular criteria to choose the most suitable offshore development center setup partner:

  • Transparency
  • Deep understanding of your project
  • Strong and relevant portfolio
  • Skillful software engineers
  • Clear and frequent communication
  • Cost-effectiveness
  • Timeline guarantee
  • Clear security standards 

Finding a suitable ODC partner to accompany you on your journey is not an easy task. You might have to go over dozens of vendor portfolios, reviews, pilots, case studies, etc .

5. Form The ODC Team

Offshore development center setup is different from IT outsourcing in the sense that ODC involves the vendees in the recruitment process . Since the vendees’ approval of the candidates is the top priority, it is a must to provide the vendors with a detailed job description for the positions needed in the projects.

With this clarified, both client and service provider parties can come clear of the must-have technical competencies and other soft skill requirements . 

  • For the technical aspect : A list of tech engineer interviewing questions can determine the candidates’ capabilities and programming proficiency. 
  • For the non-tech aspect : “Knock-out” questions putting the candidates in actual scenarios and situations should show their personalities and work attitudes. 

Also, remember not to underestimate the language and cultural behaviors aspects to steer clear of potential misleading, inefficiency, or poor final work results.

6. Establish Communication Protocol

Communication is the key to effective offshore businesses . The initial communication process in which you clarify your goals, product concepts, project ideas , and expected results plays the foundation stones of what to be included in meetings and reports later on. 

With this being clarified, your offshore development team can get a better grip on your business goals. Any adaptation and redirection will be of need for the overall resonation of both parties. 

Clear and daily communication via emails, messages, and online meetings can help you build and develop active and long-lasting relationships. It also creates a habit of frequently updating information from your ODC team, which is of great advantage for better management.

At LQA, we employ the most popular channels and platforms for task and communication management such as Jira, Slack, Zoom, Google Meet, Trello, etc . Depending on your preference and business needs, we will propose the best suitable tools.

7. Define Project Management Practices

The determining factor of a project’s prominence and success lies in the capability of the vendee and the vendor in project management. To initially grasp the idea of how to accomplish project management and cover the fundamental features, stakeholders should pay attention to the following aspects.

The development team

Your offshore development team is your partner, not just an IT Outsourcing provider that follows each of your orders. Once you’ve hired an ODC, you work with them as equal parties , meaning that they would receive the same benefits as your other departments.

Since the ODC specializes in IT, decision-makers should consider the team’s technical opinions. It’s a brilliant idea that you involve them in the decision-making process, then evaluate, develop and further contribute to their ideas to come up with the most well-rounded approach and solutions for the company.

Despite the lack of the offshore development team’s presence, members of ODC are still a part of your organization. Thus, to maintain high engagement and connection across departments, you should introduce and engage them in the company’s activities. 

The project manager

For any offshore development project, the presence of an IT project manager can reflect on the professionalism and dedication of the service provider to your project. This manager is required to juggle between tasks and responsibilities with both managerial and technical skills . 

Resources management is an imperative task of a project manager. With a detailed schedule and tasks assigned according to each member’s capabilities, businesses can take full advantage of the team’s potential.

Progress reports

Frequent meetings with a checklist of what to be updated are essential for project management. The main reason why some are still hesitant towards offshore development centers is the unclear working process. 

Some enterprises prefer actual interaction and close-up supervision for comprehensive management, but when the cost reduction outweighs this problem, the optimized management solution is through meetings and reports . 

Both parties are expected to be transparent about the visions, working process, methods, approaches, and resources . Therefore, predetermining the schedule for weekly or even daily reports is a must.

You might wonder: How To Overcome Chronic Problems of Offshore Development Center

8. Clarify Security Management Standards

Offshore development center service providers sure all put down “ High security ” as the perk of partnering up with them. But these security features are still a hazard if you don’t get involved in the process of building them. 

A plan of ODC security measurements that covers physical security layers and confidentiality will protect you from any intruders and intelligence leaks.

At LQA, we implement the following steps for data confidentiality in offshore development center setup and operation:

Legal confidentiality

  • Sign a Non-disclosure Agreement (NDA) on both ends before the knowledge exchange.
  • Well-train staff about ISO 27001 standards.

Network security

  • Use Virtual Private Network (VPN) for communication
  • Continuous risk monitoring from the QA team

Physical security

  • CCTV system is set up in every office area
  • Biometric scanners at the office entrance

Above is a quick guide to set up a dedicated offshore development center. By following our recommendations and breaking down the ODC setup process into sequential steps, you will be able to have an offshore development center that meets your requirements and powers your business growth.

Frequently Asked Questions about Offshore Development Center Setup

1. what is an offshore development centre.

An offshore development center (ODC) is a software development center of a business that’s located in an oversea country. An ODC’s typical components are facilities and a development team.

2. How do you manage an Offshore Development Team effectively?

Managing an offshore development team effectively can be achieved through these practices:

  • Ensure that everyone is on the same page : Before starting, make sure your team knows the project’s goals and what they can do to achieve them.
  • Set milestones and deliverables : Setting clear and achievable milestones for your remote developers, so they know what they need to do, and you can track their progress easily.
  • Eliminate micromanagement : Once you’ve decided on your offshore team members, trust them to do their job and look at the big picture instead of constantly checking every little thing they do. 
  • Treat them like your team : a dedicated offshore team is essentially an extended team of your business. Hence, avoid an “us vs them” mentality, show appreciation for their hard work, and treat them like they are a true part of your internal team. 

Setup offshore software development center is not that complicated. For foreign investment to thrive, many countries have developed favored policies for foreign countries to partner up with domestic businesses, making it easier to enter the market. However, for the firm legal foundation, you can have a legal consultant work on the rules and regulations regarding foreign investment and other legal matters for you. This can prevent any further possible legislative obstacles in the future. 

Having additional questions about the offshore development center setup? Contact LQA to consult our experts and get insights into Vietnam offshore software development center now!

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Offshore Development: Benefits, Challenges, and Best Practices

Table of contents.

Offshore development is the practice of hiring a software development team in a country or region other than the client’s. Many businesses use it to gain access to a large pool of skilled and experienced developers across various technologies and domains, save money, and increase flexibility and scalability.

However, there are some drawbacks to offshore development, including communication and collaboration issues, quality and security risks, legal and regulatory compliance issues, and time zone differences. If not handled properly, these challenges can have an impact on the project’s success and satisfaction.

In this blog, we will discuss the advantages and disadvantages of offshore development, as well as some best practices for selecting and collaborating with an offshore development partner. We will also provide some pointers and suggestions for successful offshore development.

Benefits of Offshore Development

Some of the benefits of offshore development are:

1. Access to a large pool of skilled and experienced developers

Offshore development enables you to access a global talent pool and find the best developers for your project. You can hire developers with the necessary skills, experience, and expertise from a wide range of technologies and domains. Offshore developers can also bring diversity and innovation to your project, which you can benefit from.

2. Cost savings

Offshore development can help you significantly reduce development costs by taking advantage of lower labor rates, operational expenses, and taxes in the offshore location. You can also save money on hiring, training, and retaining in-house developers, as well as avoid the costs of running a physical office and infrastructure. You only pay for the work that is completed, and you can scale your team as needed.

3. Flexibility and scalability

Offshore development provides you with greater flexibility and scalability, allowing you to adjust the size and scope of your project in response to changing requirements and market conditions. You can easily add or remove developers from your team, change your product’s features or functionalities, and change the timeline or budget of your project.

Depending on your needs and preferences, you can also choose between fixed-price, time-and-materials, and dedicated team delivery models.

4. Faster time to market

Offshore development can help you accelerate your development process and get your product to market faster. You can use the time zone difference to work with your offshore team around the clock and ensure that your project is always moving forward.

You can also benefit from offshore developers’ agile and iterative approach, and receive frequent feedback and updates on your product.

Challenges of Offshore Development

Offshore Development

Some of the challenges of offshore development are:

Communication and collaboration issues

Offshore development can pose some communication and collaboration challenges due to language barriers, cultural differences, and poor infrastructure. You may face difficulties in understanding and conveying your project requirements, expectations, and feedback to your offshore team, and vice versa. You may also encounter misunderstandings, miscommunications, and conflicts that can affect the quality and efficiency of your project.

You may also have to deal with unreliable internet connections, power outages, and other technical issues that can disrupt your communication and collaboration.

Quality and security risks

Offshore development can expose you to some quality and security risks due to a lack of oversight, control, and transparency over the development process and deliverables. You may not be able to monitor and manage your offshore team as closely as you would with an in-house team, and you may not have access to the same tools and standards that you use in your own location.

You may also face issues with the quality, reliability, and performance of your product, and you may have to deal with bugs, errors, and defects that can affect your user satisfaction and reputation. You may also have to protect your intellectual property, data, and confidential information from unauthorized access, theft, or misuse by your offshore team or third parties.

Legal and regulatory compliance issues

Offshore development can involve some legal and regulatory compliance issues due to different laws, standards, and regulations in the offshore location. You may have to comply with the local labor laws, tax laws, contract laws, and other legal requirements that apply to your offshore team and project.

You may also have to adhere to the industry-specific standards and regulations that apply to your product and market, such as GDPR, HIPAA, PCI DSS, etc. You may also have to deal with the legal disputes, liabilities, and penalties that may arise from your offshore development project.

Time zone difference

Offshore development can be affected by the time zone difference between you and your offshore team. You may have to adjust your working hours and schedule your meetings and calls accordingly, and you may have to cope with the delays and gaps in communication and feedback. You may also have to manage the expectations and deadlines of your stakeholders and customers and ensure that your project is delivered on time and within budget.

Best Practices for Offshore Development

Offshore Development

Some of the best practices for offshore development are:

Carefully choose your partner

Choosing the right partner for your project is one of the most important aspects of successful offshore development. You should conduct research and compare various offshore development firms based on their expertise, experience, reputation, communication, and project management abilities.

You should also look over their portfolio, testimonials, reviews, and ratings, as well as request references and samples of their previous work. Interviews and tests should also be conducted to assess their technical and soft skills and ensure that they are a good fit for your project and culture.

Be clear on expectations

Another critical factor for successful offshore development is communicating your project goals, scope, specifications, and deliverables to your offshore team in detail. You should also give them the documentation, guidelines, and resources they need to understand and carry out your project.

You should also establish clear and realistic project milestones, deadlines, and budgets, and ensure that your offshore team agrees and commits to them. You should also define each member of your offshore team’s roles and responsibilities, and designate a single point of contact for communication and coordination.

Always stay in the loop

Staying in the loop and maintaining regular and effective communication and collaboration with your offshore team is a third critical factor for successful offshore development. Email, chat, video conferencing, project management, file sharing, and other tools and platforms that are appropriate for your project and team should be used.

You should also develop a communication and reporting protocol, as well as determine the frequency, mode, and agenda for your communication and collaboration. You should also give your offshore team timely and constructive feedback and guidance, and encourage them to share their ideas, suggestions, and concerns with you.

Have a custom-recruited development team

A fourth critical factor for successful offshore development is having a development team that is specifically tailored to the needs and expectations of your project. You should not settle for a pre-packaged or generic team that may lack the skills, experience, and expertise required for your project.

Instead, look for a partner who can offer you a dedicated and tailored team that will work solely on your project and will adapt to your needs and preferences. You should also ensure that your offshore team is motivated and dedicated to your project and shares your vision, values, and culture.

Use time zones to your advantage

A fifth tip for successful offshore development is to use time zone differences to your advantage rather than against you. Plan your tasks and meetings accordingly, and use the overlapping hours to communicate and collaborate with your offshore team.

You should also respect and accommodate the working hours and holidays of your offshore team, and avoid imposing unrealistic or unreasonable expectations on them. You should also use the time difference to work around the clock to ensure that your project is always progressing and adding value.

What exactly is the distinction between nearshore and offshore development?

The difference between nearshore and offshore development is mainly related to the geographical distance, time zone, language, and culture of the software development team and the client. Nearshore development means outsourcing software development to a neighboring country or a country with a similar time zone and culture.

Offshore development means outsourcing software development to a distant country or a region with a different time zone and culture.

Many businesses choose offshore development to gain access to a large pool of skilled and experienced developers, save money, and increase flexibility and scalability. However, there are some drawbacks to offshore development, including communication and collaboration issues, quality and security risks, legal and regulatory compliance issues, and time zone differences.

These challenges can be overcome by carefully selecting your partner, being clear on expectations, always staying in the loop, having a custom-recruited development team, and taking advantage of time zones.

If you need a dependable and professional partner for your offshore development needs, HyScaler is a good option. HyScaler also provides a transparent and effortless development process, complete control and visibility over your project, and high-quality and secure deliverables. Please contact HyScaler to learn more about how it can assist you with your offshore development project.

We hope that this blog has provided you with some insights and tips on offshore development and that you will think about it for your next software development project. If you have any comments, questions, or experiences with offshore development, please leave them in the comments section below. Thank you for taking the time to read this!

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  • Business Planning for an Offshore Multi-User Port Development

We prepared a business plan for the new offshore multi-user port development in Abu Dhabi, involving staged construction of facilities from initial operations in 2010 to full development by 2028.

Requirements

The existing Mina Zayed Port at Abu Dhabi has operational concerns and is constrained by the encroaching city expansion. A new location has been determined for the development of a new multi-user port and 9,900 hectare industrial zone. These new facilities will provide the future requirements for Abu Dhabi and its surroundings. 

We prepared a business plan for the new offshore multi-user port development, involving staged construction of facilities from initial operations in 2010 to full development by 2028. 

The port is projected to handle: 

  • Containers 5.4 million TEU; 
  • Break-bulk 11.0 million tonnes;
  • Bulk 24.0 million tonnes;
  • Roll-on Roll-off 320,000 units plus 670,000 on cassettes.

The development of a formal business plan for Khalifa Port included:

  • Market Analysis 
  • Traffic Forecasting 
  • Port Operations
  • Tariff Analysis 
  • Financial Analysis
  • Organisational Structuring
  • Port Planning & Port Concession Analysis

Related projects

Preview image for the project: Business Planning of a Port Facility

Business Planning of a Port Facility

We prepared a detailed demand assessment to identify the product mix and potential industry clusters that drive the cargo throughout the client's ports in China.

Preview image for the project: Conceptual Development and Business Model for a Chinese Logistics Park

Conceptual Development and Business Model for a Chinese Logistics Park

We were commissioned to build a financial and business development plan for a Chinese Logistics Park.

Preview image for the project: Development of Metocean Design Criteria for Dampier Port

Development of Metocean Design Criteria for Dampier Port

We carried out comprehensive oceanographic modelling to develop the design conditions at various mooring sites in Dampier port and Mermaid Sound.

Preview image for the project: Business Planning of a Special Economic Zone

Business Planning of a Special Economic Zone

Bengal Port Private Limited signed concession Agreements with the Government of West Bengal to develop finance, construct, manage, operate and maintain a Special Economic Zone

6 Best Practices for Successful Offshore Development

6 Best Practices for Successful Offshore Development

Posted By Praveen Joshi

August 11th, 2016

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Offshore development can be very different from how you work with a local vendor. Due to operating in different time zones, there is a popular notion that if you want to get issues resolved, it is going to take a lot of time and follow-ups. But, this might not be the case. There are instances where the issues do not get resolved even if the concerned persons handling the project are available in the same office.

The importance of offshore software product development has been realised by many companies as a boon that they can very tactfully use to their advantage. If you are new to offshore development, you might find yourself being a bit concerned but the trick is to identify the challenges and risks of offshore software development and try to resolve them with some foolproof practises.

Both onsite and offshore development is quite similar to one another. They have the same goals. The only difference is in the work environments. If you ask us why you should choose offshore development over onsite, we can give you a few reasons:

  • Offshore development teams hold high standards of expertise and thus ensure reliability. You can be convinced of receiving good quality.
  • Offshore teams already have a completely functional infrastructure. You do not have to invest time and money during the start of your project.
  • Offshore teams will be a lot more skilled and experienced when compared to your internal resources.
  • Most importantly, your offshore team offers services that include overlapping hours. Any issues can be quickly resolved within the necessary timeframe.
  • Offshore software development services are a lot more cost-effective than maintaining an in-house IT team.
  • Offshore teams have the latest technology and market knowledge that they acquire as opposed to your internal team who will need regular training which is quite expensive.

If you opt for offshore product development activities, carried out by a software outsourcing company , you get access to a massive pool of skilled talent who can deliver the right product based on your expectations. Make sure to

  • Highly Skilled Teams:   Put together a team of highly talented offshore developers. Even if the team is small, it will be a lot more efficient than a large team with mediocre developers. Once the offshore team grows in size, you can consider splitting it. Each team can have a team lead to provide the necessary accountability, and clarity needed in the development process.
  • Frequently Communicate: To ensure that all proceedings of the project are conveyed effectively, proper communication is essential. Ideally, the onshore team lead has to communicate with all developers from the offshore team, on a daily basis. As you continue to work with the offshore team, you can devise an efficient communication plan to build a strong relationship via social and collaborative activities.
  • Account for Time Zone: While you choose your offshore team, make sure a few working hours overlap. It is okay even if the time zones are starkly apart. As long as there are a few hours every day when the team can coordinate and communicate with you, the distance and time difference doesn’t matter. Use these overlapping hours to resolve issues, plan the next steps and take decisions.
  • BOT(Build-Operate-Transfer) Model to Employ: A BOT model liberates you from all development work that will be handled by your offshore team. Instead of worrying about software, you can instead focus on developing your business. You can effectively reduce costs without having to worry too much about building a team or infrastructure during the initial stage. As and when your product matures, you can transfer your team to your own company.
  • Expectation Clarification: Sometimes what we expect and what we receive in a project are poles apart and it is a very common occurrence. What you perceive as good quality might not necessarily be the same for your offshore partner. To avoid gaps in understanding expectations, document every single detail to ensure clarity on expectations, speed of delivery, ownership and quality. Punch in values instead of excessive text to ensure that the expectations are well-understood.
  • Always Stay in Loop: Working with an offshore Software Development Company development team is an ongoing process. You don’t just select a partner and then forget about them. While it is very convenient if the offshore partner can work independently, you do not stop getting updates and providing feedback. This habit ensures that the project is well on the way to completion according to decided timelines. All issues can be resolved and the team can work in tandem with your company to fulfil all your business requirements.

Nurture a relationship with your offshore team. They work with you to fulfil your project goals and accommodate your changes and suggestions in order to provide the best product or service that can amplify the growth of your business. Acknowledge their hard work and talents in order to make them feel encouraged and motivated to work for you. If you are unpleasant to them, it will reflect on their work. Spend some time with them on calls every week to understand the progress and where they would need your assistance and hold them accountable for any glitches and roadblocks. As and when you achieve major milestones in a collaborated fashion, you maximize engagement and ensure a successful offshore software development relationship. At RSK-BSL, our primary goal is to deliver the best offshore software product development services. Take a look at how we can add value to your business here.

Praveen Joshi

Praveen is a seasoned IT Solutions Leader and Director at RSK Business Solutions, a technology-driven IT Consulting Company that specializes in Bespoke Software Development, Agile Consulting, Mobile App Development, Smart Sourcing, and much more. For the last 17 years, he has been delivering quality custom IT solutions that help businesses achieve their goals.

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Offshore Software Development: The Complete Guide for 2024

In an increasingly interconnected digital landscape, businesses are continually seeking innovative ways to cut costs, improve efficiency, and maintain a competitive edge. If you’ve found yourself wondering how to outsource software development to an offshore company, you’re not alone. This trend is rapidly gaining traction as more businesses recognize the benefits of leveraging global talent and expertise. This comprehensive guide will delve into the ins and outs of offshore outsourcing, offering strategic insights and practical tips to help you navigate this potentially transformative business decision.

  • A Deloitte survey reveals that 70% of businesses cite cost-cutting as a primary reason for outsourcing.
  • The same survey shows that 57% of businesses use outsourcing to focus on their core business.
  • According to Statista, the global outsourcing market reached $92.5 billion in 2019, reflecting the widespread adoption of this strategy.
  • A study by Avasant indicates that 80% of software developers in the US and Europe have outsourced at least some development work, underscoring the growing reliance on offshore talent.
  • The stats by Report Linker  prove it: the worldwide IT outsourcing market is expected to obtain $425.19 billion in revenue from 2021 to 2026.
  • In turn, Statista indicates that the IT consulting and implementation services market worldwide will reach $82.44 billion in 2027.

1. What Is Offshore Development?

Offshore Software Development 2

Gone are the days when businesses were confined to local talent for their diverse needs. Now, the world is their oyster! Offshore development is a fantastic way to tap into exceptional skills and quality work from around the globe. Think of it as getting top-notch software development without geographical limits.

Imagine a company in Western Europe teaming up with tech wizards in South America, or a U.S. firm collaborating with Ukrainian software pros. That’s offshore development in action! It’s all about outsourcing work to a partner in a different timezone, bringing fresh perspectives and unique expertise to the table.

And there’s more! Offshore development often goes hand-in-hand with nearshore development. This approach is about partnering with teams in neighboring countries, like a European company working with Vietnamese developers, or a U.S. enterprise joining forces with South American experts.

Whether it’s offshore or nearshore, the essence is the same: collaborating with top-notch developers from another country. This global teamwork can cover everything from simple coding to designing cutting-edge software, web, and mobile applications. Plus, it offers ongoing support and maintenance.

For many companies, offshore development is a game-changer. It opens doors to specialized skills and high-quality outcomes that might be scarce locally. It’s a smart, strategic move for projects needing that extra bit of expertise!

We’ll help you decide on next steps, explain how the development process is organized, and provide you with a free project estimate.

2. So, When to Hire Offshore Developers

In the dynamic world of business, offshoring often emerges as the best solution in various scenarios.

  • The Talent Hunt: In a world where top-notch developers are a rare find, local hiring becomes a challenge. Businesses struggle to recruit skilled in-house engineers. The solution? Partner with offshore software development companies to access the talent pool you need.
  • Filling Specialized Niches: Some projects demand highly specialized skills or temporary roles that are less appealing to the cream of the developer crop. Whether it’s a project manager, quality assurance engineer, or a custom software development team, offshore companies offer the right expertise.
  • Complexity Calls: When projects are intricate, they require deep technical knowledge to avoid pitfalls and delays. Offshore companies bring expertise in advanced tech stacks and complex development processes to the table.
  • Racing Against Time: In a fast-paced business environment, meeting tight deadlines is crucial. Offshore developers help accelerate project turnaround, offering scalability and efficient project management. They can work under your supervision or handle projects end-to-end for greater efficiency and time savings.
  • Support and Insight: Even if it’s not about outsourcing an entire project, the consulting and support from offshore software development firms can be invaluable. They offer expertise in navigating IT regulations across borders and can rescue projects that have hit a snag.
  • Cost-Effective Strategies: Choosing an offshore development company can significantly cut costs compared to hiring an in-house team, without compromising on quality. It’s a budget-friendly approach that still promises high-caliber development processes.

3. What is the Difference Between Onshore, Nearshore, and Offshore Software Development?

In the realm of IT services, onshore, nearshore, and offshore development each offer unique advantages, differentiated primarily by geography.

  • Onshore Software Development: This is when you hire software developers within your own country or region. The key advantage? No time zone differences (usually), which means smoother communication. However, this model often comes with higher costs, as the standard of living and operational expenses are similar for both you and the developers.
  • Nearshore Software Development: Think of nearshore as a geographical sweet spot. It involves partnering with countries in similar time zones, like the U.S. teaming up with Latin America. The minimal time difference allows for real-time collaboration, making it easier to align on daily tasks and project goals.
  • Offshore Software Development: Here’s where global reach comes into play. Offshore development connects you with providers in far-off countries or even different continents. This model is often the most budget-friendly, thanks to lower living costs in these regions. However, the catch is the significant time zone difference, which can pose challenges in monitoring and managing the software development process. Despite this, offshore development brings numerous benefits, including access to a vast pool of talent and cost-effective solutions.

4. The Benefits Of Offshore Software Development?

Offshore Software Development 1

Offshore software development isn’t just a trend; it’s a strategic advantage. Partnering with the right software development company can transform your project’s prospects. Here’s why, along with some additional perks:

  • Access to Premier Tech Talent: The IT world is fiercely competitive for top talent. Offshore development gives you access to some of the best minds in the industry, ensuring your project benefits from world-class expertise.
  • Effortless Workload Management: Offshore teams can significantly lighten your workload. While they handle the technical side, you can concentrate on your core business operations, ensuring a more efficient allocation of resources.
  • Deep-Dive Industry Expertise: Leading offshore development companies come with extensive experience and specialized teams for every tech need. This expertise can be a game-changer for your web and mobile projects.
  • Reduced Project Risks: Top offshore developers bring best practices to your projects, enhancing flexibility and minimizing risks. This means fewer hiccups and a smoother development process.
  • Accelerated Launch Times: With their ability to quickly mobilize expert teams, offshore companies can expedite your project’s completion, complementing your in-house capabilities.
  • Superior Quality Outputs: Combining these benefits naturally leads to high-quality software products. From innovative web solutions to sophisticated product designs, offshore companies deliver excellence.
  • Cost-Effectiveness: One of the most appealing aspects of offshore development is cost savings. You get premium services at a fraction of the cost compared to local options.
  • Enhanced Scalability: Offshore development allows for easy scaling of your project. Whether you need to ramp up or down, these companies can adjust swiftly to your changing requirements.
  • Global Market Insights: Working with a diverse, global team offers insights into international markets. This can be invaluable in tailoring your product for broader appeal.
  • Flexible Engagement Models: Offshore companies offer various engagement models to suit your project’s unique needs, whether it’s a fixed-cost project, dedicated team, or time and material basis.

In short, offshore software development not only delivers top-quality products but also offers flexibility, risk mitigation, and valuable global perspectives, all while being cost-effective. Just remember to verify their credentials and review past projects for peace of mind!

Get in touch with Savvycom’s experts for a free consultation. We’ll help you decide on next steps, explain how the development process is organized, and provide you with a free project estimate.

5. How to Choose an Offshore Software Outsourcing Company

Offshore Software Development 3

Here’s an expanded guide to help you make the best choice, ensuring your software needs are met with expertise and efficiency.

5.1. Seamless Communication and Workflow Integration

  • The cornerstone of successful offshoring is flawless communication. Ensure your outsourcing partner excels in English or your preferred language.
  • Their workflow should align seamlessly with yours, facilitating a smooth development process.
  • Look for companies that use collaborative tools and platforms to ensure continuous and transparent communication.

5.2. Rigorous Security Protocols

  • In our tech-centric world, robust cybersecurity is non-negotiable. Confirm that the IT company adheres to the latest security standards.
  • Check their data protection policies, encryption methods, and compliance with international cybersecurity regulations.
  • Consider their track record in managing sensitive information and ask about their incident response strategies.

5.3. Access to Elite Software Engineers

  • The quality of engineers is a key differentiator. Opt for companies known for their exceptional tech talent.
  • Investigate the skills, qualifications, and ongoing training of their engineers.
  • Look for teams with a diverse set of skills, capable of handling various aspects of software development, from coding to UI/UX design.

5.4. Proven Quality and Experience

  • Scrutinize the company’s portfolio, client testimonials, and case studies.
  • Evaluate their experience in projects similar to yours in terms of size, complexity, and industry.
  • Assess their success rate, project completion timelines, and their approach to handling challenges.

5.5. Comprehensive Service Spectrum

  • Today’s needs might evolve tomorrow. Choose a company with a broad range of services.
  • Their expertise should span across project management, product development, and more, adaptable to your changing requirements.
  • Assess their capability to scale services up or down based on project demands.

5.6. Customized Solutions and Innovation

  • The best offshore companies offer tailored solutions, not one-size-fits-all approaches.
  • Evaluate their ability to innovate and stay ahead of technology trends.
  • Check if they can provide creative and unique solutions that align with your specific business goals.

5.7. Cultural Compatibility

  • Cultural alignment ensures smoother collaboration. Consider the cultural fit between your team and the outsourcing partner.
  • Evaluate their understanding of your business ethos, work ethics, and communication style.
  • This aspect is crucial for long-term partnerships and effective team integration.

5.8. Transparent Pricing and Contract Terms

  • Clarity in pricing models and contract terms avoids future misunderstandings.
  • Analyze their pricing structure, look for hidden costs, and understand their billing process.
  • Review their contract terms, focusing on aspects like intellectual property rights, confidentiality clauses, and termination policies.

By considering these detailed factors, you can make an informed decision, ensuring your offshore software development partner aligns with your business objectives, values, and operational style, ultimately leading to a successful and fruitful collaboration.

6. Most Important 05 Steps to Keep In Mind Before Working with an Offshore Development Company

Offshore Software Development 4

Embarking on a journey with an offshore development company is like setting sail on a vast ocean of technological possibilities. It’s a voyage that can lead your business to uncharted territories of innovation and growth. To ensure smooth sailing and to maximize the benefits of your software outsourcing project, it’s essential to meticulously prepare before diving into the deep waters of offshoring. This preparation helps in minimizing risks and sets a clear course towards achieving your objectives with efficiency and precision.

6.1. Define Goals:

Picture offshoring services as a catalyst that propels your company towards its objectives. It’s crucial to have a lucid understanding of your ambitions. What are you aiming to achieve? What results are you expecting and within what timeframe? Answering these questions will guide you in crafting a technology solution that is not just a fit, but a perfect match for your needs. It’s about aligning your goals with the expertise of the offshore team to create a synergy that brings your vision to life.

6.2. Set Priorities:

The collaboration with an offshore development company is a dance of mutual understanding and respect. While they will assist in mapping out a comprehensive project plan, the rhythm is set by you. You need to voice what’s paramount for your company and your clientele. Take the time to ponder and pen down the short-term and long-term development priorities. This clarity will ensure that your offshore partner aligns their strategy with what’s most crucial for your business.

6.3. Paint Vision:

You are the artist, and your idea is the canvas. The more vividly you paint this vision, the quicker it transcends from mere sketches to tangible software. It’s not just about building a product; it’s about crafting an experience that resonates with your audience. The clarity of your vision acts as a beacon, guiding the offshore team in materializing your ideas into a reality that not only meets but exceeds expectations.

6.4. List Down Your Needs:

Every masterpiece requires the right tools and the right hands to bring it to life. Your project is no different. It demands a specific blend of technology and expertise. Delve into various service models and technologies to discern how they could complement your project. This exploration should encompass all facets, from the size of the team you’ll need to the budgetary considerations. Understanding these needs is pivotal in selecting the right resources and expertise for your project.

6.5. Put It All Into Action:

Transparency and clarity are the cornerstones of any successful offshore partnership. Proper documentation is not just a formality; it’s a roadmap that accelerates the process and fosters an environment of trust and clarity. It’s about laying out your needs and objectives on paper. Your offshore team will then step in to guide you towards the most effective and cost-efficient solutions to achieve your goals. It’s a collaborative effort where every detail, big or small, is accounted for and aligned with your vision.

7. Top Offshore Software Outsourcing Trends

The offshore software outsourcing landscape is undergoing a dynamic transformation, driven by the latest trends and best practices that are shaping the future of global tech collaboration.

Embracing : The surge in offshore partnerships has led to a significant uptick in the use of collaborative tools. These digital solutions, including platforms like Jira and Trello, are essential in orchestrating an organized and cohesive workflow. They not only facilitate task assignments and project tracking but also enhance the overall efficiency of the collaboration, ensuring compliance with project delivery timelines.

Increased Reliance on Cloud Technologies: The offshore software development sector is witnessing a growing demand for cloud outsourcing. This trend is not just a fad but a strategic move, as more companies seek to leverage cloud platforms, particularly from public sources, for robust and scalable data storage solutions. This shift towards cloud technologies is a testament to their reliability and efficiency in managing vast data resources.

Rising Demand for Cutting-edge Skills: The technology landscape is ever-evolving, with new applications and methodologies emerging constantly. In response, there’s a soaring demand for expert software engineers who specialize in breakthrough technologies like blockchain, artificial intelligence, and the Internet of Things (IoT). This expertise is crucial to stay ahead in a market that’s constantly being reshaped by innovation.

Enhanced Focus on Data Security: Data privacy and security remain paramount concerns, especially for CIOs and organizations handling sensitive information. Offshore development companies are responding by implementing stringent and thorough security protocols. These measures, coupled with adherence to comprehensive regulations, ensure the safe and secure management of data, thus fortifying trust and reliability in offshore collaborations.

So, Is Offshore Software Development the Right Strategic Move for Your Company?

Deciding whether offshore software development outsourcing fits your company’s needs is a multifaceted consideration. It’s crucial to comprehensively assess the project at hand. Factors like desired delivery timelines and the potential efficiency boost from outsourcing should be weighed carefully.

Additionally, a thorough analysis of your current resources is imperative. This includes identifying any skills gaps or capacity limitations within your in-house team, which can significantly influence your decision.

When choosing the right offshore software outsourcing company, consider these key factors:

Choosing an Optimal Outsourcing Model: Your business needs should dictate the outsourcing model you opt for. Each model offers different levels of control, flexibility, and collaboration.

Setting Clear Expectations: Clear and precise expectations regarding project outcomes, timelines, and quality standards are vital for a successful partnership.

Maintaining Transparent Communication: Open and regular communication channels are essential to ensure alignment and address any issues promptly.

Developing a Comprehensive Post-Development Strategy: Plan beyond the development phase. A detailed strategy for post-development support, maintenance, and future upgrades is crucial for long-term success.

In summary, navigating the trends in offshore software outsourcing requires a strategic approach, focusing on collaborative tools, cloud technologies, advanced skill sets, and data security. Moreover, deciding on offshore development should be a calculated move, considering project specifics, resource analysis, and careful selection of the outsourcing partner and model.

What Is The Meaning Of Offshore Software Development?

Offshore software development services encompass a range of practices wherein businesses engage offshore developers from regions providing cost-effective technical support compared to their domestic counterparts. Companies have the flexibility to choose assistance for comprehensive end-to-end development services or specific processes, including but not limited to mobile app development, web development, UI/UX design, and quality assurance, based on their unique needs and preferences.

What Is The Difference Between Offshore And Onshore Software Development?

Onshore denotes services performed within the same country where a company's headquarters or primary operations are situated, while offshore refers to services conducted in a foreign country, often chosen for its lower labor and operational costs in comparison to the company's home country.

Here are some key statistics to consider in the Onshore vs. Offshore Software Development landscape:

  • The offshore software development market reached a valuation of $122,275 million in 2021 and is projected to exceed $283,457 million by the end of this decade.
  • According to Deloitte , approximately 70% of companies opt to outsource software development as a strategy to cut expenses and save costs.
  • Businesses stand to achieve substantial cost savings, ranging from 40% to 70% of overall expenses, by partnering with offshore software development firms.
  • An overwhelming 78% of companies that engage in outsourcing experiences positive outcomes and satisfaction with their offshore partners.

What Services Can Be Outsourced?

Nearly all IT tasks can be delegated to an offshore software vendor. The most frequently outsourced processes include:

  • Mobile app development.
  • Web app development.
  • Software maintenance.
  • Cloud integration.
  • UI/UX design.
  • Software quality assurance (QA) and testing.

Challenges In Offshore Software Development

While the advantages of outsourcing software development to offshore companies are evident, they are accompanied by certain drawbacks and risks. Here are some of them:

  • Time difference: Managing projects across different time zones can pose challenges in terms of coordination, communication, and real-time collaboration.
  • Cultural and language differences: Divergent cultural and linguistic norms may lead to misunderstandings, impacting effective communication and collaboration between offshore teams and the client.
  • Lack of supervision and transparency: Offshore development may face issues related to supervision and transparency, as physical separation can hinder direct oversight, potentially impacting project visibility.
  • Potential data leaks: Security concerns arise, and the risk of data leaks increases when sensitive information is shared across borders, necessitating stringent measures to protect intellectual property.
  • Need for additional coordination: Ensuring seamless coordination between onshore and offshore teams requires additional effort, with potential challenges in aligning strategies, goals, and project timelines.

What Is The Average Cost Of Offshore Software Development?

The hourly rates for offshore software development specialists exhibit significant variation based on factors such as region, skillset, and experience. Here are approximate ranges:

  • Eastern Europe: $30-65.
  • Western Europe: $55-150.
  • Asia: $20-45.
  • South America: $35-70.
  • North America: $90-150.

For more precise information and to prevent misunderstandings, it is advisable to negotiate prices directly with offshore software development firms.

Is Offshore Software Development Ideal for your Company?

While offshore software development outsourcing is often a prudent choice, it is crucial to thoroughly assess the specifics of the project before making a decision. Take into account your desired delivery dates and carefully evaluate how the software outsourcing company will enhance efficiency throughout the process.

Additionally, conduct a comprehensive analysis of your current resources, with a special focus on identifying any skills gaps and capacity limitations within your in-house team. This holistic overview ensures a well-informed decision that aligns with your project goals and organizational capabilities.

From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.

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Before You Take to Offshore Software Development in 2023: The Ultimate Guide 

business plan for offshore development

  • Development
  • July 12, 2023

Unlock the potential of offshore software development in 2023, and discover the key considerations, best practices, and tips for successful offshore projects. Maximize cost savings, tap into global talent, and confidently achieve your development goals. 

As technology continues to reshape industries at an unprecedented pace, businesses must remain agile and forward-thinking to stay competitive. Embracing offshore development services has become an increasingly popular strategy, offering organizations access to global talent, cost savings, and accelerated innovation. However, before taking the leap into offshore software development in 2023, navigating the landscape with prudence and awareness is crucial.  

The market for global managed services reached a valuation of $161 billion in 2021, and experts predict it will surpass $300 billion by 2027. These figures clearly illustrate the increasing demand for offshore software development services in the foreseeable future. The growth trajectory highlights the recognition of the value and benefits that businesses derive from engaging offshore development teams.  

In this article, we will delve into everything you need to know before offshore your software development, from steps to ensure a smooth transition to key considerations when choosing an offshore software development company .  

What is offshore software development? 

Offshore software development is a business process outsourcing BPO model in which a company outsources some or all of its software development to a team located in another country. This can be done for a specific project or on an ongoing basis. 

Offshore software development offers businesses a number of benefits, including cost savings, access to a global talent pool, faster time to market, and focus on core competencies.  

In this process, the responsibility of building software or applications is delegated to these offshore developers. The term “offshore” highlights the significant geographical distance, resulting in time-zone differences between the client and the location where the offshore developers operate. However, challenges posed by time zone differences between you and your offshore software development team can be easily overcome, even turned into advantages, following these 5 key tips . 

Also Read :

5 Tips To Manage Time Zone Differences With A Dedicated Software Development Team

5 Key Metrics Accurate Time To Market With a Dedicated Software Development Team

Moreover, building an app from scratch is not the only way businesses can utilize offshore software development services. Offshore software programmers and offshore web development to developers provide services like back-end development, UI/UX design, software testing outsourcing , or app development. 

For example, providing IT workplace solutions to help enterprises secure their virtual collaboration tools, a SaaS company, engaged our dedicated software development teams at FlairsTech in delivering a Microsoft (MS) Certified application on Teams. 

Working with tight timelines, our agile development teams were able to deliver 3 fully validated products within only 3 months. 

How is offshore software development different than nearshore software development? 

T he distinction between onshore and offshore development is straightforward: 

Onshore software development involves hiring contractors who are located in the same country as the hiring company. This approach ensures alignment in terms of business practices, hiring costs, and data policies. 

In contrast, offshore software development companies are situated in different countries, often allowing them to provide cost advantages compared to onshore options. 

For a comprehensive analysis of onshore versus offshore development, we invite you to explore our detailed blog post on the subject.

What are the benefits of offshore IT services?  

Offshore software development services can be highly beneficial for businesses, and the reasons why you should take to offshore software development services are multiple. Here are five key advantages: 

  • Cost efficiency and budget predictability   
  • Access to a global talent pool  
  • Faster time-to-market  
  • Flexibility and Scalability   
  • Focus on core competencies  

offshore IT services

What to do before offshoring software development? 

Before offshoring software development, it’s essential to take certain steps to ensure a smooth and successful transition. Consider the following actions: 

  • Define your project goals and requirements: Clearly articulate your project goals, objectives, and specific requirements. This includes determining the scope, functionality, technology stack, and any specific design or performance expectations. A well-defined project plan will help guide the offshore development team and ensure they understand your needs. 
  • Research and select the right offshore partner: Thoroughly research and evaluate potential offshore software development companies. Look for companies with a strong track record, relevant experience, and expertise in your industry or technology stack. Consider factors such as their technical skills, portfolio, client reviews, cultural compatibility, communication abilities, and quality assurance processes. 
  • Establish effective communication channels: Communication is vital when working with an offshore team. Establish clear and reliable communication channels to ensure seamless collaboration. Regular video conferences, emails, project management tools, and instant messaging platforms can facilitate effective communication and address any concerns promptly. 
  • Create a detailed project plan and timeline: Develop a comprehensive project plan that outlines milestones, deliverables, and deadlines. Set realistic timelines for each phase of the development process and discuss them with the offshore team. A well-structured plan helps manage expectations, track progress and ensures everyone is on the same page. It can also help you mitigate offshore Software development company technical debt .  
  • Define roles and responsibilities: Clearly define the roles and responsibilities of both your in-house and offshore development teams. Establish a clear chain of command, designate project managers, and ensure that everyone understands their respective roles and responsibilities. This clarity helps streamline decision-making processes and avoids confusion during development. 
  • Protect your intellectual property: Take steps to protect your intellectual property rights. Before starting the project, sign a comprehensive non-disclosure agreement (NDA) with the offshore software development company to safeguard your confidential information and ensure they adhere to strict confidentiality standards. 
  • Start with a smaller pilot project: Consider starting with a smaller pilot project before scaling up to more significant initiatives. This allows you to assess the offshore team’s capabilities, communication, and project management skills while minimizing risk. Based on the results, you can decide whether to continue with the same team or explore other options. 
  • Conduct regular progress reviews and quality assurance: Regularly review the progress of the development project to ensure it aligns with your expectations. Implement a robust quality assurance process to identify and rectify any issues or bugs in the software. Regular feedback and evaluation sessions help maintain transparency and ensure the project stays on track 

By following these steps, you can effectively prepare for offshoring software development and increase the likelihood of a successful and productive partnership. 

Why Egypt is One of The Best Countries for Offshore Software Development

A Simple Guide:  Offshore Web Development Challenges and How to Overcome Them

How to choose an offshore software development company? 

Businesses across industries are increasingly turning to offshore software development companies to meet their technological needs. Software development outsourcing has numerous advantages, including cost savings, access to a global talent pool, and faster time-to-market. However, selecting the right offshore software development company can be daunting. With numerous options available, it is crucial to follow best practices to ensure a successful partnership.

business plan for offshore development

  • Reputation and Experience 

When choosing an offshore software development company, reputation and experience are essential factors to consider. Look for a company with a proven track record of delivering high-quality solutions. According to a survey conducted by Deloitte, 59% of organizations prioritize a partner’s track record when selecting an offshore software development company. Additionally, research by Clutch revealed that 83% of companies consider experience the most important factor in their selection process. 

  • Technical Expertise and Skill Set 

Evaluate the technical expertise and skill set of the offshore software development company. Ensure they have the necessary knowledge and experience in your industry and the technologies you require. A survey conducted by Statista found that 60% of companies consider technical expertise the most crucial factor when selecting an offshore partner. Additionally, 76% of respondents in a study conducted by Accelerance believe that technical skills are the most important consideration in choosing an offshore software development company. 

Also read: driving success how an offshore software development company can tackle technical debt

  • Communication and Language Proficiency 

Effective communication is crucial for the success of any software development project, especially when working with an offshore team. Look for a company with strong communication skills and proficiency in the language you prefer. According to a study by A.T. KearneyL, 91% of IT decision-makers consider communication skills and language proficiency essential selection criteria for offshore software development partners. 

  • Quality Assurance and Testing 

Ensure the offshore software development company has robust quality assurance and testing processes in place. offshore software testing service quality assurance is critical to ensure the software testing outsourcing meets your requirements and is free from bugs and glitches. A report by the World Quality Report revealed that 79% of organizations consider the quality assurance and testing capabilities of an offshore partner when making a selection. 

Also read: offshore software testing Services definition and benefits

  • Security and Data Protection 

Data security is of utmost importance in today’s digital landscape. When choosing an offshore software development company, prioritize security measures to protect your sensitive data. According to a study by Deloitte, 57% of organizations consider security and data protection as a critical criteria when selecting an offshore software development partner. 

  • Cultural Compatibility and Time Zone Alignment  

Cultural compatibility and time zone alignment are vital for effective collaboration with an offshore team. A survey by Accelerance found that 87% of respondents believe that cultural compatibility is an important factor in the success of an offshore partnership. Moreover, 74% of organizations consider time zone alignment when selecting an offshore software development company, as it facilitates real-time collaboration. 

  • Cost Effectiveness 

Cost savings are one of the primary reasons companies choose offshore software development. However, it is crucial to strike a balance between cost and quality. According to a survey by Statista, 53% of organizations consider cost savings a significant factor in their decision-making process when choosing an offshore partner. 

  • Client Reviews and References 

Before making a final decision, read client reviews and seek references from the offshore software development company. This will provide valuable insights into their past performance and client satisfaction. A survey by Clutch revealed that 91% of respondents consider client reviews and testimonials when selecting an offshore software development company . 

Choosing the right offshore software development company requires careful consideration of multiple factors. Reputation, experience, technical expertise, communication skills, quality assurance, security measures, cultural compatibility, and cost.  

Key Outsourcing Statistics: 

  • The global offshore software development market is expected to reach $283.5 billion by 2030, growing at a CAGR of 10.13% from 2022 to 2030. 
  • The most popular programming languages for offshore software development are Java, Python, and C++. 
  • The most popular software development frameworks for offshore software development are Spring Boot, Django, and Laravel. 
  • The most popular project management tools for offshore software development are Jira, Trello, and Asana. 
  • The most common challenges faced by businesses with offshore software development projects are communication, quality, and security. 

How Can Flairstech Help You Build Your Software Development Dream Team Seamlessly? 

Overall, offshore software development can be a great way to save money, improve quality, and increase your focus on your core business. However, for the best outcome, different projects require different approaches. Based on your business needs, choosing the right approach to fill in skill gaps and more can improve your organization’s productivity and help you gain a competitive edge in the market. Here’s how we, at FlairsTech, can help you improve the agility of your operations and gain the desired competitive advantage:   

  •   We have over 1,000 available talents delivering top-notch results from three continents (North America, Europe, and Africa) covering every language and time zone on the planet.        
  •   Over 100 global enterprise clients rely on our digital solutions on a day-to-day basis.       
  •   Our size, however, does not affect our agile processes, as we have fast and exceptionally efficient processes when it comes to hiring and time-to-market.       
  •   We guarantee the products we deliver for life.       
  •   We will cut your development budget in half, increase your overall output, and achieve the desired results.        

At  Flairstech , our business analysts and technology consultants work with you to scope a project that meets your expectations. Moreover, our certified software engineers, developers, and QA testers, led by an SDM to keep everyone on track, work hand in hand with your in-house team to build a high-performing software solution that meets your exact specifications. Start by analyzing your project objectives and scope, and if you need any help, you can always  book a free consultation with one of our experts  to discuss your goals and challenges and explore possible approaches.    

Frequently Asked Questions (FAQs):   

What is offshore software development  .

Offshore software development is a business process outsourcing method where a company outsources some or all of its software development to developers in another country.  

For this, companies either hire individual developers or an entire dedicated software development team through a service provider or an offshore software development company. 

There are many benefits to offshore software development, including: Cost savings, access to a global talent pool, faster time to market, and focus on core competencies. 

How do you manage offshore software development?  

Offshore software development can be a great way to save money and access a global talent pool. However, managing offshore software development cvan present challenges but can also be a rewarding strategy for cost savings and high-quality outcomes. Here are some valuable tips to effectively manage offshore software development: 

  • Select a reputable development team 
  • Set clear expectations 
  • Foster effective communication  
  • Utilize project management tools 
  • Establish a robust feedback mechanism 

How can I ensure the quality of the software developed offshore?    

Offshore software development is a cost-effective way to tap into a global talent pool, although ensuring software quality can be challenging. To mitigate this, there are several things to keep in mind. Firstly, selecting a reputable offshore development vendor with a proven track record is crucial. Secondly, clear expectations must be established with regards to the project scope, timeline, and budget to avoid any misunderstandings. Thirdly, implementing a quality assurance process that includes unit testing, integration testing, and user acceptance testing can identify and correct any defects in the software before release. Communication is also crucial to success in offshore development, and regular updates with the vendor are essential. Finally, do not hesitate to ask your vendor any questions you may have about the software development process, as they should be able to provide clarification and guidance. By following these tips, you can ensure the quality of offshore software development. 

What are the risks associated with offshore software development?   

Offshore software development can be a great way to save money and access a global talent pool. However, there are some risks associated with this approach. One risk is that you may have less control over the development process. This could lead to misunderstandings, communication errors, and missed deadlines. Another risk is that the quality of the software may not be as high as you would expect. Offshore vendors may not have the same standards as onshore vendors. There is also a risk of intellectual property theft or security breaches. Finally, cultural differences and language barriers can make communication difficult. 

It is important to vet potential offshore development vendors to mitigate these risks carefully. It would be best if you also established clear expectations and communication protocols. Implementing a quality assurance process, regular communication, and maintaining a good working relationship with the offshore vendor can also help minimize risks and ensure the project’s success. 

How do offshore software development costs compare to onshore development?    

Offshore software development costs are generally lower than onshore development due to lower labor costs in certain regions.   

How do I ensure effective communication with an offshore development team?    

Effective communication with an offshore development team can be ensured by establishing clear channels of communication, leveraging collaboration tools, defining communication protocols, scheduling regular meetings, and maintaining a responsive and transparent communication culture.  

How do I manage the time zone difference when working with an offshore team?    

While working with a dedicated software development team in a different time zone poses a few challenges, there are key tips to overcome these challenges such as utilizing collaboration tools, establishing regular communication channels (video calls, chat platforms), providing clear project requirements, maintaining an open and transparent line of communication, and more. 

Sources: 

  • https://www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-global-outsourcing-survey-2022.pdf  
  • https://www.statista.com/topics/1900/it-outsourcing/  
  • https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2022/05/06/the-state-of-tech-staffing-success-tomorrow-relies-on-smart-outsourcing-today/?sh=295360393fd5  

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Offshore Software Product Development: The Ultimate Guide for Business Owners

Five offshore software development benefits.

  • Cost-effectiveness 01
  • The motivated, skilled, and diverse talent pool 02
  • No administrative hassle 03
  • Flexibility in time and resources 04
  • Different work models for each use case 05

The Top Five Offshore Software Development Risks and How to Avoid Them

  • Communication and control 01
  • Do you want to perform project management tasks on your side, or will you delegate them to your offshore team?
  • What kind of project management would you like to apply?
  • How often do you want to receive updates on your project?
  • How often do you want to have online meetings? Who should attend them?
  • Do you need your offshore development team to participate in some of your planning sessions?
  • Do you need any overlap in your working hours?
  • What kind of project management software are you familiar with?
  • What kind of reports do you need?
  • Do you need your offshore team to be dedicated to your project exclusively or part-time?
  • What do you need to see in your project estimation? What payment model is the most transparent for you?
  • How does your contract regulate deadlines?
  • Legal issues 02
  • Data protection 04
  • Knowledge transfer 05

Offshore Software Development Pricing and Management Models

The best offshore software development countries, eastern europe, latin america, our experience, final thoughts.

  • Analysis Collecting requirements, reviewing best practices, competitive analysis - to organize the best offshore product development process.
  • Technical specification Writing technical documentation.
  • Designing UX/UI Using company brand book or creating unique design from scratch.
  • Development and QA Web development, server side development, blockchain technologies, high-load systems development.
  • Production integration
  • Post-development technical support and maintenance
  • Full code transfer
  • CVs selection & review Fayrix HR department analyses team requirements and collects the most matching employees. The stage typically takes 3-10 business days.
  • CVs approval by the client Fayrix managers present the pre-vetted CVs to the client and comment on the candidates' skills and experience, if necessary.
  • Skype interviews with the selected candidates The client selects the most matching candidates. Fayrix managers appoints convenient interview time & dates.
  • Project initiation The client and Fayrix negotiate final engagement terms and conditions, sign the agreement and start the cooperation.
  • Choose offshore development model. There are two basic offshore software development team models. They are: project-based outsourcing (when a client hires a team of developers for a short-term project) and staff augmentation model (the dev shop supplies the developers, the client company hires a project manager or lead engineer/developer to oversee the process).
  • Define your budget. When discussing the cost of a project, make sure the agency specifies the services and infrastructure that are covered by the total cost, as well as those that are not. The total price must include the cost of using the agency's infrastructure too.
  • Choose your vendor. Check portfolio, rates, skills and recent cases. If it is an agency, visit their website to find a portfolio of past projects they have handled. For individual freelancers, request their resumes and personal portfolios too.
  • Finalize work conditions and legal agreements.
  • India While Western companies might pay $75/hour for software development, you can hire someone at $10-$15/hour in India.
  • Ukraine The average hourly rate in Ukraine is about $25 compared to $100-120 or more in Western Europe and the US, respectively.
  • Hungary They offer service to several businesses and companies of all sizes at reasonable prices of about $39 – $52/hr.
  • Philippines An excellent pool of skilled, English-speaking professionals—including a growing contingent of developers with a solid understanding of cutting-edge mobile and web technologies at the price of about $4 – $10/hr.

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business plan for offshore development

Offshore Software Development: The Complete Guide for 2024

Updated 20 Jun 2023

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Technical writer

There are piles of things you should remember when creating a product from scratch: deadlines, staff management, tech peculiarities of the project, etc. Everything will be easier if you use offshore outsourcing software development. There’s no need for a significant emphasis on running the project and doing other things when you outsource a portion of duties to specialists. Offshore software development statistics shows that such approach is quite popular these days. The stats by Report Linker prove it: the worldwide IT outsourcing market is expected to obtain $425.19 billion in revenue from 2021 to 2026. In turn, Statista indicates that the IT consulting and implementation services market worldwide will reach $82.44 billion in 2027.

This article will show you whether offshore software development is suitable for your company. You’ll also know more about offshore development advantages. Then we’ll tell you how to avoid common pitfalls while selecting and working with an offshore software provider and more necessities.

What is Offshore Software Development: Essence and Types

Offshore development means transferring a project (fully or partially) from a client to a third-party software development vendor. But keep in mind: intending to outsource the entire building workflow, you should better cooperate with a software development vendor, not a freelancer. Here’s the thing: a freelancer may be an expert in one related field or some more (e.g., mobile or web development, etc.). While to create, let's say a mobile app, you need at least one skilled designer, QA engineer, and software developer. Offshoring is a great way to find such an IT vendor for cooperation. We’ll tell you more about it right now.

At its core, offshore software development is a type of outsourcing that involves working with an IT vendor that will be headquartered at a distance from your region: in Central Europe or Asia, for example. These are the most popular outsourcing locations, offering flexibility, competitive pricing, and labor. Offshoring allows you to remove the responsibility for creating software and managing the development team. At the same time, you aren’t limited to hiring specialists in your city or country, and access to vast talent and technology worldwide.

The US-based scientific and commercial company that provides an IoT-based telecare solution engaged a Cleveroad team to develop an IoT-based system that allows users to track their hydration level from mobile devices. Our team has successfully delivered a holistic system integrated with an IoT sensor and suitable for calculating the hydration level for any need.

However, you have to consider the following peculiarities when offshoring a project. Because of the geographical distance between you and your offshore IT partner, a significant time zone difference can affect your development workflow. You may also encounter significant cultural and language barriers. Nevertheless, all these problems are easily solved. You just need to be careful in choosing a technical partner and pay attention to their customers’ reviews.

What Services Can Be Outsourced?

Outsourcing gives companies a range of indisputable benefits, including pricing flexibility, large talent pool, scalability, and so on. There is a vast of tech-related services that can be outsourced: mobile development services , web development, UI/UX design etc. Let’s dig deeper.

Mobile app development. Offshore mobile development is quite popular since you don’t need to hire an in-house team, pay fees and sick days, hardware and software, or office rent. Offshore software developers will build a cutting-edge solution for you without extra expenses for equipment and working space.

Web development services outsourcing provides your business with a leg up over the competition with a flawlessly operating web product. This product will boost your company's online presence, as offshore software programmers will do their best for flexible and modern website development in the shortest time.

UI/UX design. Keep in mind that you obtain a range of preferences outsourcing this service. Skilled designers will make all the complex things amazingly simple. As a result of cooperation, you’ll obtain an intuitive app interface or site that is easy to navigate. Moreover, you’ll be able to focus on other essential business issues entrusting your design creation to the offshore programming vendor's safe hands.

QA services. Developing software solutions needs thorough testing of every app part to ensure it works without bugs. Even the best offshore software programmer can make mistakes, but they'll soon be tired, being obliged to write test cases and check each product detail. In this case, outsourcing is an excellent approach to maintain your solutions at their best without exhausting your devs.

You can also outsource software product maintenance, customer support, data storage, or security. Outsourcing became the optimal solution to all business problems, even at the time of the world pandemic restrictions: you can remotely collaborate with an offshore programming team from around the world.

Read our case study: The application for effective networking allowing to easily remember all the new acquaintances

When to Apply to an Offshore Development Vendor?

In order to stay competitive in a fluid market, companies have to implement the latest IT technologies in their workflows and products. But, if you’ve got no experience in the tech sphere, an offshore software development outsourcing company can help you. What are other situations when you’re able to outsource product creation?

When you’re on a budget

Engaging in-house software developers is high-priced for SMBs or startups with limited funds. Recruiting skilled staff usually costs a lot of money; thus, the financial problem is critical when deciding whether to outsource software creation or not. The offshore development process is an economically rational option that allows you to work on your project with experienced software developers while remaining within your budget.

When your business requires flexibility

Working with offshore IT staff, you have a right to wait to fulfill contractual obligations that the agreement of both parties can change. Compared to recruiting a full-time software development engineer for a short-term project, this makes much more sense. When working with an offshore development software team, your responsibility to them terminates after the project is over.

When you need to improve the quality of your services

The fundamental values of a business should be quality and innovation. They provide customers with good value for their money, put the company ahead of the competition, and help it win the market. If you see that the quality of your goods and services is decreasing, now is the greatest time to explore hiring an offshore developer.

We named only the most common reasons to use offshore software engineering, but there are more than three ones. You may add something to this list when you start working with an offshore outsourcing team and see how convenient it is. Now we’ll keep discussing offshore software outsourcing advantages and challenges.

Offshore Software Development Benefits

First, let's consider the main benefits for you as a customer in case you decided to use offshore development services.

Reasonable development costs

Most offshore outsourcing software development companies provide their customers with flexible prices and first-grade services. Central Europe, for example, gains its popularity concerning a bunch of talented individuals, state backing, and low taxation for the IT sector. It also displays the ideal value for money balance of the software provided.

The development costs (as well as software development time ) may also be influenced by staff size, technology stack used, experience, anmay also be influenced by staff size, technology stack used, experience, and duration of the collaboration. Furthermore, many offshore software development service providers strive to give their clients the best possible circumstances, offering them additional pleasantries (like some free services).

Take a look at outsourcing in Europe hourly rates

Quicker concept implementation and delivery

The total time spent on recruitment can be reduced by cooperation with an offshore software development outsourcing company. You can always speed up the project completion by collaborating with as many experts as you need. But keep in mind: just doubling the team will not necessarily cut the project completion time down. Such a relationship would be valid only if jobs are properly partitioned between staff members and they contact each other well.

In this case, the time to market and costs would be reduced, and you'll be able to outperform your domain competitors.

Qualified talents

IT outsourcing makes available cooperation with a variety of technical experts competent in needed business domains. For example, there are over 9K of annual tech graduates in Estonia, and this number is growing. Such a wide talent pool is one of the reasons why companies from all over the world open their headquarters and R&D centers in this region.

The internal recruitment may be completed in some days rather than months. Outsourcing allows you to hire as many people as you want. So, you may select the best offshore developer (or a whole team) by considering different specialists from all around the world with various talents and expertise.

Need experts in development?

Cleveroad is ready to provide you with a team of specialists with the expertise in your domain

High scalability

Development is a tricky business, and you never know how many developers you'll need at any time of the project. The offshore software development model allows you to scale up and down easily: expand your team if you need to speed up product development or reduce the number of specialists if you don't have any jobs for them to do. This way, you'll avoid overpaying and time-consuming employee searches.

Offshore software development outsourcing enables a variety of cooperation models, ranging from dedicated teams to staff augmentation, in order to provide organizations with the most efficient and fitting solutions appropriate for different issues.

  • Low building risks

Working with outsourcing professionals allows you to acquire a dependable final product that has been examined and corrected on time. For this reason, every software development offshore project includes not only a project manager but also a QA team that is responsible for debugging written code to ensure that future product runs smoothly.

The latest technologies

Most offshore outsourcing software development companies specialize in certain sectors or operate with technology stacks that are rare for in-house team qualification. So, you may be able to hire a certified professional (or even a team) with the needed hard skill set from a vendor’s company. This may help you build an advanced product that will be competitive in the market.

offshore outsourcing benefits

Why offshore software development is so popular: benefits of your choice

Offshore Software Development Challenges

The offshore software development model is attractive for a lot of companies due to its set of undeniable advantages. But it also has a bunch of hidden hazards, and you should know them in order to easily obtain a product that will satisfy your company’s business needs. We’ll name the most common of such challenges to help you understand how to offshore software development with fewer problems.

  • Time zone differences

When dealing with offshore IT development staff, time zone difference is crucial. If you and your vendor are in different time zones, communication may take a little longer. In addition, product development may be delayed from time to time if the organization has a critical question that requires your response and permission. At Cleveroad, we schedule all meetings in advance to improve communication efficiency and reduce possible time lags.

  • Communication issues

This is one of the most common software offshore development problems, which can be traced back to various factors. Your communication, for example, may degrade as a result of your vendor's poor command of the English language. To cope with it, pick an IT partner, assess their English proficiency ahead of time, or discuss it individually with the company's representative or team members.

  • Security challenges

Data leakage is one of the most pressing challenges today because working with offshore software companies typically entails providing some information. You can address the problem by contacting a partner firm and signing an NDA.

You should also ask the vendor if they employ security technologies like user privacy policies, private data storage, and encryption or if their solutions comply with the General Data Protection Regulation (GDPR), among other things.

  • Quality assurance

If you value quality over quantity, start thinking about it now. You should also be active in the software outsourcing workflow, attending all meetings to keep track of the business position and grasp the team's daily challenges.

Moreover, examine your forthcoming team's skill set (including hard and soft abilities). Keep in mind that both types of capabilities are necessary for optimal growth.

offshore dev challenges

What is offshore development challenge set: the pitfalls you should be aware of

Offshore Software Development Steps

It’s high time to consider what steps to take before the offshore software development process starts and how to find a reliable company.

Even if you choose to assign all technical tasks to an outsourcing team to develop offshore software, you would still have much to do as a stakeholder.

1. Research your target audience

Before looking for an offshore software programming vendor, analyze competitor solutions to see what extra features you can provide your audience to help them solve their problems. You can check many aspects of your competition if your project involves offshore site building. You can find out where their traffic originates from, what technologies they work with, and how they scale, for example. It's achievable owing to the plenty of web analytics tools, and the information you gather may help you make better judgments.

2. Obey regulations

If your domain requires it, you must check that the product you plan to develop complies with current laws. It may be relevant for software that uses private data or those linked to payments. For example, if you need to develop a healthcare solution, you must make your app GDPR-compliant (if your target audience is from Europe) or HIPAA-compliant (oriented on the US market). If your app deals with payment cards and systems, you should know how to become PCI compliant : this standard helps to protect private data from being hacked.

3. Identify your needs

We mean technologies to use, and specialists to hire (e.g., designer, developer, etc.). If you're not sure about all this, you can ask for consultation with your offshore software development company.

It's a good idea to complete this list before contacting a company or at least take a break after consultation with its representatives to consider these points. This way, you'll have a clear understanding of what you need and define your goals.

4. Define your goals

Developers without well-defined objectives may be unsure of what they need to perform and, as a result, may feel constrained and lose productivity. All this leads to increased project risk and lower earnings for your business; the quality of offshore programming services will also suffer. Setting clear, achievable goals for your offshore staff is important to your software project's success.

How to do it? For example, you can use a SMART system, according to which your goals should be Specific, Measurable, Achievable, Relevant, and Timely. This abbreviation will help you analyze the set goals and improve them to obtain a high-quality product.

5. Select a trustworthy partner

For offshore software development to succeed, choosing an experienced and reliable technical partner is crucial. Here's some ways to find a sure-fire IT outsourced partner:

  • Examine the experience level of the software provider and check their portfolio
  • Check the company's expertise and its relevance to your business domain
  • Pay attention to he level of team’s English proficiency to ensure you get a product corresponding to your requirements
  • Read the clients’ reviews, on Clutch or GoodFirms to decide whether it’s a good idea to work with the company

Steps to hire offshore developers

Steps to hire offshore developers

How to Choose the Right Offshore Software Development Outsourcing Company

There are hundreds of offshore software development companies. How to choose the most reliable one? Let's try to find this out.

Verify the references

How to determine if an offshore software development outsourcing company is worth cooperating with? How to find the best one? We have already provided you with a few tips above, but there are more. To decide what company is right for you, study it in more detail:

  • Look through the company's website, explore the blog materials
  • Carefully examine the portfolio to get acquainted with the vendor's projects
  • Check out the company's profiles on LinkedIn and Dribble
  • Learn more about offshore developers on their social networks: Facebook , Instagram , and Twitter

This information can tell you a lot about the organization and its history, and help you make a decision.

Check the rankings

You may take it a step further and look for specialist rankings on sites like Clutch or GoodFirms. Based on customer evaluations and other criteria, they will offer you the finest outsourcing companies in your chosen location. If you're looking for offshore software development services in Central Europe , for example, you may select companies based on characteristics, such as development kinds (e.g., mobile development companies ).

Protect your idea

Make sure that your concept is properly secured. For this purpose, you can contact a vendor to find out whether they sign a non-disclosure agreement (NDA) or not. It's essential if you have a unique app idea and want to know it won't leak anywhere.

Looking for a reliable vendor?

Our team is ready to help you and provide you with top quality offshore development services

Practical tips for managing offshore development teams

Suppose, you've decided to work with an offshore development company or establish an offshore development center . Now, how to rest assured that you get good outcomes and hassle-free communication? We've prepared some actionable tips to cooperation success:

Share the project vision

Your team needs to know all the details about your business, deadlines, software development goals, and expectations. That way, your offshore programmer can complete the task for you in the best possible way.

Coordinate online meetings

Cooperation with offshore software developers will be more productive if you establish effective two-way communication. Determine the times and days you will contact the team or its members through audio or video conferences. This will help you track development progress and modify it as needed. Experienced offshore IT providers have a PM on their side, who keeps the client posted on the process and informs about the results of the work done

Define a shared schedule

Since offshore software development involves working in different time zones, you should set aside several hours daily when real-time communication with the technology provider occurs. Make a schedule that allows you and offshore app software developers to interact effectively. We, at Cleveroad, make an individual communication plan with each client to hold meetings at the time that is convenient for client.

Manage priorities

Before getting down to software creation, you and the offshore software developer should discuss the key performance metrics, development milestones, priority tasks, etc. Structuring the duties will speed up the work and make it more efficient.

Delegate the management to a specialist

Professional offshore outsourcing software development companies are ready to provide you with an experienced Project Manager (PM) who will set tasks and monitor their fulfillment. You can be sure of the project's high quality by delegating administration to a specialist. At the same time, you won’t spend your time studying the development details and making management decisions.

Include developers in your team

Treat each programmer as if they were an employee of your company. Ensure transparent communication, and familiarize the team with your corporate culture. So if already have an in-house team, you can make both your employees and offshore developers feel comfortable and build trust and mutual understanding.

Using these simple tips, your cooperation with an offshore software development outsourcing company will be pleasant and productive.

Cost to Hire Offshore Development Team

The cost of offshore software development differs, depending on the team’s location you choose to work with. Below are the hourly rates of specialists in the most popular outsourcing areas.

So, depending on the region you choose and the project's complexity, the development costs will vary. Feel free to contact our specialists for a detailed estimate of the software cost for your business.

Offshore Development Advantages Offered by Cleveroad

Cleveroad is a professional offshore software development outsourcing company from Estonia. We have assisted startups, small businesses, and large corporations in achieving their objectives and bringing ambitious ideas to reality for more than 10 years. Our variety of IT services and bespoke software solutions improve workflow efficiency, address business issues, and aid in the acquisition of competitive advantages.

There is a large benefit set that you can get working with us:

  • An experienced team rapidly adapting to new requirements and modifications
  • Non-disclosure agreements (NDAs) execution per your request
  • Product quality assurance and control at all stages of the development workflow
  • Profound software development experience in various business sectors
  • Innovative building approaches and a cutting-edge tech stack
  • Post-release support, maintenance, and advertising services

Our portfolio includes a bunch of offshore software development projects in different domains. And we would like to tell you about the latest ones.

One of our works is a mental health app called Nedley Lifestyle Scorecard (NLS). The software solution is designed for the healthcare domain and is aimed to help customers struggling with depression. Using NLS, people can enhance their mental state during a particular time.

Another example of software developed by Cleveroad is a full-fledged management transportation platform built for an enterprise that offers warehousing and logistics (generally dropshipping) services. The app is intended to cut costs, save time for route planning, optimize fleet running prices, etc.

Our other offshore development work is RetailOps — a versatile SaaS platform with a powerful toolset (including Inventory and Warehouse Running, Receiving, etc.) for retail companies focused on e-commerce and omnichannel sales.

The offshore IT development sphere offers businesses a range of opportunities, according to which they are able to save their efforts, time, and money. If you also want to save your resources and achieve good results, you can also apply to offshore IT professionals in order to obtain a completely new product, flexible and thriving on the market. Contact us to get a consultation on all questions related to offshore software development you may have.

Offshore software development means transferring a project (fully or partially) from a client to a third-party software development vendor.

The main benefits of offshore software development services are:

  • Reduce development cost
  • Diversity of qualified talents
  • Scalability
  • Strong skillset
  • Employee training
  • Quicker concept implementation
  • Latest technologies

There are several steps to approach offshore software development:

  • Decide on features for your target audience
  • Take care of regulations
  • Define your business goals
  • Mind needed tech stack
  • Start searching for reliable outsource software development offshore vendors

Offshore software development has its own challenges:

Author avatar...

Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics

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How to choose an offshore software development company

offshore software development company

An offshore software development company is the first thing that comes to mind for many people when they think about developing software. 

The reason?

Offshoring your software development tasks offers tons of benefits, like high-quality talent and lower rates . 

Now, you may have several questions — like where to find an offshore software development company, whether they all produce the same quality of output, and how you can distinguish a good offshoring partner from the rest.

Don’t worry. We’ll answer all these questions and more in this article. We’ll cover what offshore software development companies are , why you should consider offshore developers , and how to select a good one . 

Also, we’ll go over how you can use the right tools to manage your work with offshore development companies. 

This article contains:

(use the links below to jump to a specific section)

  • What is an Offshore Software Development Company?
  • 4 Key Benefits of Offshore Software Development
  • How to Pick an Offshore Software Development Company   
  • 5 Things to Look for in an Offshore Software Development Company  
  • How to Manage Offshore Software Development Teams  

Let’s jump in.

What is an offshore software development company?

Offshore development companies carry out software development services in different countries or regions, usually areas with low living costs. 

Offshoring software development offers several benefits to companies, but it’s often confused with other business strategies like nearshoring and onshoring. 

Offshoring vs. nearshoring and onshoring

Offshoring is when processes are outsourced among businesses in different countries/regions with separate time zones. 

Nearshoring is when outsourcing happens among countries in the same region, usually within the same timezone. For example, nearshore outsourcing occurs when US-based companies outsource to companies in Mexico or Canada.

Onshoring (onshore outsourcing) occurs when a company outsources business functions to another firm in the same country. 

What services do offshore software development companies offer?

Offshore development companies offer several software development services, but you can categorize these into five types:

1. Development

Depending on the company you hire, they can offer offshore development service types like:

  • Cloud-based SaaS development.
  • Web application development .
  • Front-end development. 
  • Back-end development.
  • E-commerce development.
  • Enterprise application development.
  • Custom application development.
  • Mobile app development.
  • Blockchain and artificial intelligence (AI) projects.

Offshore development companies specialize in user experience (UI/UX) designing to make apps look more intuitive, offer user-friendly interfaces, and enhance custom software development performance. 

3. System upgrades

If you want to upgrade a legacy system or initiate a complete digital transformation of your business, an offshore development company can carry out services like: 

  • Data migration : Move your data from the old system to the new one. 
  • Re-platforming : Upgrade old applications to move them to the cloud. 
  • Enterprise application integration : Unite databases and workflows to have a single source of data.
  • Process redefinition : Change system processes to make them more efficient. 

4. Quality assurance and testing

As software needs rigorous testing before release, offshore development companies hire Quality Assurance (QA) engineers and testers to carry out problem checks and create superior products for clients. 

5. Support and maintenance

All software requires constant maintenance to function correctly. Offshore development companies offer continued support and maintenance and implement upgrades to software based on client needs. 

4 key benefits of offshore software development 

Offshore software company benefits

Here’s why you need to think of hiring a development company based outside your country:

1. Access to top IT talent pools

It’s natural for you to want the best offshore developer teams to work on your software product , right?

The problem is: talent is one of the rarest resources in IT.

Since offshore software outsourcing partners hire top developers worldwide, offshoring software development gives you access to top-notch talent. 

With offshore outsourcing, you’ll get access to a team of knowledgeable, experienced, and specialized professionals equipped with the latest technology who’ll work on your software product. 

2. You can focus on your core business

When you hire an offshore software development company, forming a team to handle software development isn’t your concern anymore. 

You can use that time and resources to improve core business processes such as strategy, expansion, acquiring new clients, etc.

3. Faster launch times with the lowest risk

Offshore development companies specialize in quickly delivering high quality software . If you choose to offshore your app development, it’ll be much faster than using an in-house team. 

Moreover, since they have years of experience in software development, an offshore development company will have a lower risk of failure when compared to an in-house, dedicated team. 

4. Low-cost solutions

Did you know that 70% of businesses outsource to lower costs?

Cost-effectiveness is one of the main reasons for offshoring. 

The cost of living in many offshore countries is much lower than in western countries like Australia and the USA, letting you save on wages and administrative costs.   

Here’s an estimate of how much you’ll have to pay per person, per hour of a software development team around the world:

  • Asia & Africa: $18-$40.  
  • Eastern Europe : $25-$50.
  • Central & South America: $30-$50.
  • North America: $100-$170.

That’s why offshore software development is the ideal choice for building custom software solutions. 

How to select an offshore software development company  

Here’s how you can pick a company to offshore your software development project:

1. Define your business needs

Before you start looking for an outsourcing partner, prepare a document that outlines your project. 

Be sure to mention: 

  • Your goals.
  • Metrics you’ll use to measure performance.
  • Potential setbacks.
  • Anything else related to the project. 

You can then use your project outline to look for software engineering offshoring companies that can deliver everything you need within a suitable time frame. 

2. Pick a location

Picking a good location for outsourcing is critical to the success of your software development project. 

When deciding on an outsourcing location, you should consider key factors like:

  • Cost of living.
  • Ease of doing business.
  • Infrastructure.
  • Data security.
  • Availability of labor. 

Asian software development outsourcing hotspots include India and the Philippines due to the low cost of living and the growing software engineer population. 

However, if you’re looking at Eastern Europe, consider countries like Ukraine, Belarus, Poland, and Romania — some of the best offshoring locations with low development costs. 

3. Decide on a budget

Your budget will depend on the offshoring location. However, you can still find varying prices for different companies in the same region. 

For example, even though the average offshore software development rates in Asia are around $30 per person per hour, the best offshoring companies in Asia can easily charge twice that amount. 

Additionally, any offshore company could be cutting down on training, technology, and the quality of their work environment to achieve lower rates. This can ultimately affect their team and the firm’s output. 

Remember to keep your budget low enough to save money compared to local rates — but high enough to get the best quality and value for your money.

5 things to look for in an offshore software development company

Here are some things that can help you tell apart a great offshore software developer from the rest:

1. Efficient communication workflows

One of the first things to look for in an offshoring service provider is how fluent its employees are in the language of your choice . 

If you can’t communicate with them clearly, it doesn’t matter how good their work is — you’re bound to be disappointed with the result. 

Always check if the staff is fluent in English or whichever language you prefer. 

Additionally, observe how efficient their flow of communication is. Since the offshore development center will be in another timezone, they’ll be working similarly to a remote team. 

Ensure they have systems in place to communicate all updates regarding the development process quickly and transparently. 

2. Rigorous cybersecurity protocols

Cybersecurity is now a significant concern for any company looking to offshore their projects. 

Your offshore software development company should have tight security protocols and legal restraints like NDAs in place to keep all data and software safe. 

You can search for details of previous cyber attacks on your offshoring partner to get a good idea of how they’ll deal with your data in the case of a cyberattack. 

3. Best-in-class talent

One of the main goals of offshoring is to hire the best talent from around the world. 

An ideal offshore software development partner should have a workforce of the best software developers in their region. 

Additionally, your offshoring partner should also provide each developer with an excellent work environment  — giving employees continuous training, recognition, and incentives to stay happy and motivated. 

4. Strong portfolio

A good offshore software developer will have a strong portfolio of previous projects. 

Look for companies that have worked on projects in various industries. This way, you can rest assured that they have the experience necessary to develop and deliver your project with minimal risk. 

5. Wide variety of services

Developing software isn’t a one-time affair. 

In addition to regular maintenance, you’ll also require upgrades to your software sometime down the line. You might even need a completely different tool that integrates with your current software. 

It’s essential to choose an offshoring partner that offers a wide range of services . It’ll make things easier when the time comes to implement upgrades to your software. 

Feel like you want to do more research before picking an offshoring partner?

How to manage offshore software development teams

Once you’ve found an offshore software developer to partner with, here’s what you can do to manage them efficiently:

1. Define your expectations

When managing your offshoring partner, the first step is to let them know exactly what you need. 

Be sure to communicate everything you want them to know and paint a crystal clear picture of your vision. Ensure you’re satisfied with their plan before the project moves on to the development stage. 

If you’re not satisfied with the initial approach, try other ways to obtain a result that’s precisely what you want before finalizing the wireframe. 

2. Ensure regular communication

It’s always a good idea to stay updated on the progress of your project, right?  

Instead of waiting for your offshoring partner to bring you updates every week -— maintain regular contact with the chief software developer. It’ll help you stay updated on the progress of your software development project. 

You can use these updates to understand how well the software outsourcing project progresses and provide any clarifications the developers need from you. 

Moreover, you can provide feedback and direction to the development team through these regular sessions, so the final software product will look exactly the way you want. 

3. Plan for regular deliverables

Don’t wait to test the entire project at once. Talk with the partnering firm to organize deliverables at various stages of development. This way, you can ensure the project is on the right track and avoid any unpleasant surprises towards the end. 

You can talk to your project manager and detail which areas are high-priority and need to be completed first. 

Once you set an achievable timeline, you can expect them to provide the deliverables on schedule for testing and additional feedback. 

4. Don’t micromanage

Staying updated on the progress of your project is essential.

But telling the software developers how to do their job?

Not really. 

While you should provide your offshore software outsourcing partner with all details necessary to create your product — remember that you hired them because of their expertise. 

Give them the time they need to come up with a solution for your needs. Provide clarifications when they’re unsure how to proceed, but don’t try to micromanage their work. 

For example, don’t try to tell offshore software developers which tools to use during product development; they have the experience to know what best fits the situation. 

If you try to micromanage , it’ll only lead to inefficiencies and delays in launching your product. 

5. Use technology

It’s impractical to meet offshoring partners in person to discuss project details, right?

Thankfully, a countless number of apps can help you hold face-to-face conversations with your offshore software outsourcing company. 

You can use tools like Zoom or Microsoft Teams to connect with your IT outsourcing company easily. However, since they work for multiple clients simultaneously, it’s impractical to hold virtual meetings daily. 

Sure, you can use emails or even a Slack Workspace to receive updates on the project. 

But wouldn’t it be easier to use a productivity management tool? 

A productivity management tool can show you:

  • How many hours a day the offshore developers work on your project.
  • How productive they are during work.
  • What apps and sites they use while developing your custom software. 
  • Whether they are often distracted while working on the project.

Fortunately, Time Doctor could be just the productivity app you need. 

Time Doctor is a powerful and user-friendly productivity management tool used by SMBs and large companies to gain insights into employee productivity.  

With Time Doctor, you can:

  • Track the time developers spend on your project. 
  • Prevent the offshore team from idling during work. 
  • Access real-time reports to check the performance of your offshore partner. 
  • Use the Chrome extension to integrate easily with other project management and productivity tools. 

Check out other features and benefits of Time Doctor . 

If you want more information on offshore team management, read our guide on managing offshore teams . 

Wrapping up

While hiring a software development company can be great for your business, there are several factors you need to consider before diving into offshoring. Use the tips we have mentioned in this article to understand how you can offshore software development without setbacks in the process. Once you have zeroed in on the right offshore software development company, you’ll be able to enjoy the many benefits of offshoring.

Time Doctor - start a free trial

Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.

10 strategies for success when managing from a distance

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Full Scale

What is an Offshore Development Center?

Looking for a faster, cheaper, more efficient way to increase your business output and streamline and manage your operations? Look no further, an offshore development center (ODC) might just be what you need to improve your business process. Read on to learn more about what an ODC is and how it works.

An offshore development center is an extended, integrated, and dedicated offshore team supporting a company located in another country. Specifically, it is a branch or a subsidiary of a company existing in another country. The ODC is a popular business model for different kinds of companies, including startups and enterprise companies. This model has been used for various business processes and services, such as the creation and maintenance of solutions and software , project management, testing and migration, and technical or customer support.

In addition, the ODC model has been used by IT companies to offshore the design, development, and testing of their products. The demands of clients for products that can be deployed much faster and the limitations of in-house resources such as cost, development time, infrastructure, and availability of specialized skills are the main reasons for companies to have an ODC. The IT company, as the client, will partner with an offshore provider to establish an offshore team in the country of the provider.

Let’s examine the key roles in an offshore development center, the advantages of an ODC, and the best practices to maintain an ODC.

When you, as the client, are planning to work with an offshoring provider to create an ODC, you must coordinate with the provider to identify your business requirements. You’ll also need a solid team to get the job done. Here are the key roles in the offshore team:

  • Account Manager – Directly works with you or your team to make sure that all your needs are addressed and continually reaches out to determine if you need other services or support.
  • Project Manager – Makes sure that all the requirements relating to budget, scope, schedule, communication, and other resources are considered in a project.
  • Designers and Developers – Responsible for your software’s design, installation, testing, and maintenance.
  • Test Engineers – Check and verify the integrity, quality, and even non-functional requirements of your product.
  • Usability Engineers – Perform tests to evaluate the usability or user-friendliness of your product.
  • Graphic Designers – Create visual and graphical concepts or language to promote a product’s unique persona or brand.
  • Content and Technical Writers – Create instructions and content integrated into the software or website.

Advantages of an Offshore Development Center

Forming a business partnership with an ODC provider yields a lot of benefits to your company. These are the advantages of having an ODC:

  • Reduce costs in infrastructure – You don’t have to spend on setting up office facilities and equipment, communications and IT infrastructure, and utilities because the offshore provider has already set up the necessary infrastructure. The provider can focus on hiring the members of the offshore team so a project start-up can begin much faster compared to starting everything from scratch.
  • Autoscaling your IT department – Autoscaling is the process of dynamically allocating resources to match performance requirements. The number of resources that your company needs may fluctuate according to the requirements of specific projects. There are situations when projects need a large number of resources, and then there are times they require few resources. When those situations happen, you might have to switch and reduce resources or tasks in your in-house team, which may involve a complicated process of resource allocation. With an ODC, the allocation of resources will be less difficult because the offshore team can absorb the roles or tasks from the in-house team.
  • Reliable operations – Leading ODC companies are efficient, lean, and reliable in their operations to attract clients in a competitive market. They have efficient evaluation and reporting procedures to be accountable and transparent with their clients. You’ll be able to assess and monitor the progress of the projects they’re doing in real-time. If you are dissatisfied with the project’s results, you can demand the ODC to redo the project with no additional costs if your contract with them stipulates this.
  • Timely delivery of projects – An ODC operates under optimized environments and implements streamlined procedures to ensure your projects are completed on time. They strictly follow the project timelines that you set for them from planning, design, development, testing, and deployment. The seamless collaboration between the in-house team and the offshore team makes it possible for the project lifecycle to have shorter timeframes.
  • Technical support and knowledge retention – ODCs offer continuous technical support during the project’s entire lifecycle as part of their customer satisfaction. Their approach to knowledge retention is preserving all the knowledge gained during a project’s lifecycle. The retained knowledge can be further developed and improvised so you can use it for other projects.
  • Access to the best skills and technology – The best ODCs employ highly qualified IT professionals with specialized skills in developing customized software for your targeted customers. Their offshore teams have exceptional expertise, multi-discipline skills, and years of experience. They invest in regular training and upgrade the skills of their employees. All of this ensures you get a good return on your investment in an ODC.

Best Practices to Maintain an Offshore Development Center

As a business owner, it’s not just enough to find an offshore provider that can produce your company’s products. It’s also important to maintain a long-term relationship with the provider for a successful business partnership. This is possible if you implement best practices to maintain a successful offshore development center.

The following are the five best practices for maintaining an offshore development center:

  • Explain your company’s culture and values – When all the employees of the offshore team have been hired, discuss with them your company’s culture, mission, vision, and values. This ensures that you and your in-house and offshore teams are aware of your company’s business practices and processes. This ensures transparency of communications between the teams, and everyone is equally responsible for the tasks in a project.
  • Treat your in-house and offshore teams as equals – Make sure you give equal attention and guidance to your remote team and in-house team. Include the members of both teams in simultaneous web calls and video conferences if it’s possible in spite of the different time zones and work shifts. Prevent animosities between your two teams so their tasks will not be distracted by any personal issues.
  • Inspire your offshore team – You hired the offshore team members for their exceptional skills and expertise. Take advantage of the qualities by motivating them to rise up to the occasion. Give them critical tasks instead of just doing support tasks for the in-house team. Giving challenges to the offshore team will maintain their motivation and the momentum of the quality of their work.
  • Allow the offshore team to be autonomous – Show your confidence and trust in your remote team by allowing them to make independent decisions. This will prove to them that their opinions matter and you value their contributions to a project. It will also motivate them to deliver high-quality results for their work. However, make sure that they will consult you for important project-related decisions to ensure transparency between you and the team.
  • Include the offshore team in your business decisions – Get feedback from the offshore team when making business decisions for projects they are involved in. Doing this will boost their morale and let the offshore team feel that they’re equally important as your in-house team for the success of your company

If you’re interested to know more about how you can benefit from offshoring, Contact us today! We treat our clients as partners since they directly coordinate and work with the offshore teams that we provide. Our teams consist of senior developers, programmers, designers, testers, and digital marketing experts. They can communicate well in English and have exceptional skills and experience in assorted IT technologies. Full Scale has also helped offshore companies – GigaBook and Stackify  – to establish offshore development centers in Cebu.

Learn More about Offshore Development

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Renewables giant Orsted exits several offshore wind markets, pauses dividend after turbulent year

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Orsted, the world's largest offshore wind developer, said it planned to take steps "to become a leaner and more efficient" organization following a year marked by "substantial challenges."

  • These measures include a reduction of as many as 800 jobs worldwide, a pause for dividends and a retreat from markets in Norway, Spain and Portugal.

"Despite a year with strong underlying business progress, 2023 marked a year with substantial challenges for Ørsted," Mads Nipper, chief executive of Orsted, said in a statement.

Danish renewables giant Orsted on Wednesday announced plans to cut jobs, pause its dividend payouts to shareholders and exit several offshore wind markets after a tumultuous year of rising costs.

These measures include a reduction of as many as 800 jobs worldwide, a pause for dividends for the financial years 2023 to 2025 and a retreat from markets in Norway, Spain and Portugal.

Shares of Orsted traded 1% lower at 11 a.m. London time (6 a.m. ET).

The Copenhagen-listed stock price has fallen more than 40% over the past 12 months, with the company beset by challenges facing the broader wind industry. Supply chain disruption and higher interest rates sent wind energy stocks tumbling last year.

Nipper said the company's financial results had been "adversely affected" by impairments on U.S. offshore projects taken in the third quarter of 2023.

Orsted canceled two major offshore wind farm projects in the U.S. late last year, citing high inflation, rising interest rates and supply chain bottlenecks.

Orsted said it was now targeting 35 to 38 gigawatts of power generation capacity by the end of the decade, a downward revision from its previous target of 50 GW.

Project cancellations and the phasing out of capital expenditure across the portfolio will result in roughly 35 billion Danish kroner, or $5.05 billion, of capital expenditure relief in 2024 to 2026, the company added.

"We've revisited our portfolio to prioritise growth options with the highest potential for value creation and at the same time reduce risks in the development and execution of our projects," Nipper said.

"We remain optimistic about the future of the renewable energy industry, and we're confident we can be a key contributor in accelerating the renewable build-out in the years to come." Don't miss these stories from CNBC PRO:

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U.s. department of commerce releases 2023 update to equity action plan, outlines new commitments to advance equity, office of public affairs.

Today the U.S. Department of Commerce released the 2023 update to its Equity Action Plan , in coordination with the Biden-Harris Administration’s whole-of-government equity agenda. This Equity Action Plan is part of the Department’s efforts to implement the President’s Executive Order on “ Further Advancing Racial Equity and Support for Underserved Communities Through The Federal Government ,” which reaffirmed the Administration’s commitment to deliver equity and build an America in which all can participate, prosper, and reach their full potential.

“Homogeneity is the enemy of innovation. If we are to out-build, out-innovate, and out-compete the rest of the world, we need to ensure we’re harnessing and empowering Americans across the country by utilizing our greatest strength - diversity,” said Secretary of Commerce Gina Raimondo. “That’s why the Biden-Harris Administration’s commitment to equity is so important and why I’m proud to see that reflected in this updated action plan. We fail to meet our full potential as a nation unless we harness the talents and strengths of all parts of the country, including those who have too often been left behind.”

Deputy Secretary of Commerce Don Graves will participate in an event at the White House this morning to outline the updated Equity Action Plan, where he will be accompanied by Donna Ennis, Co-Director of the Georgia Artificial Intelligence in Manufacturing (Georgia AIM), who is a winner of the Build Back Better Regional Challenge (BBBRC). The presentation will highlight  workforce pipelines put in place to ensure all Americans, including people from underserved communities, can participate in the innovation economy.

“Thanks to President Biden’s continued and steadfast commitment to supporting underserved and underrepresented communities, this Administration has made historic progress to achieving equity centered initiatives,” said Deputy Commerce Secretary Don Graves. “Through investments in business grants and funding opportunities, the Secretary and I are proud of the Commerce Department’s efforts in promoting equitable and inclusive capitalism that will pave the path to America’s economic prosperity.”

In alignment with the Department of Commerce’s strategic goals , the Equity Action Plan includes real-life examples of how America’s economy and people are best served by filtering our work through a prism of equity. America’s diversity is its competitive advantage – but only if everyone has an opportunity to fulfill their potential and fully participate in our economy.

The equity strategies associated with each strategic goal will assist in designing programs that will address barriers to equity and meet the needs of all Americans, including underserved communities.

  • Equity Strategy 1: Mobilize our nation’s diversity to fuel innovation and sustain our global competitiveness across geographic regions so that all communities have equal access to opportunities.
  • Equity Strategy 2: Expand growth opportunities for businesses and entrepreneurs, including in underserved communities.
  • Equity Strategy 3: Promote equitable economic development and career pathways to good jobs.
  • Equity Strategy 4: Use targeted investments and program design to address the climate crisis through mitigation, adaptation, and resilience efforts to ensure environmental and economic resilience.
  • Equity Strategy 5: Expand opportunity and discovery through data to inform and evaluate actions that improve community outcomes.

Since the release of its first-ever Equity Action Plan in 2022, the Department of Commerce has:

  • Released $3 billion in American Rescue Plan dollars across 780 awards through six innovative economic development programs.
  • Reduced the cost of bringing high-speed internet to unserved and underserved communities, and increased the resilience of internet infrastructure.
  • Invested $100 million to support the needs of tribal governments and Indigenous communities across 51 awards in 25 states and the Northern Mariana Islands.

Learn more about the Administration’s equity work at whitehouse.gov/equity and check out all Federal Equity Action Plans at performance.gov/equity .

To follow stories and posts across agencies, follow the hashtags #GovEquity and #GovDelivers on social media.

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