Last updated on October 11th, 2023
Over 60% of companies will outsource software development in 2022, which is now the primary method for hiring tech talent for their companies.
Outsourcing can come in several forms, but perhaps the most intriguing is the strategy of outsourcing software development to an offshore company. The Offshore Software Development Process approach can yield many benefits, but it also presents some challenges compared to onshore hiring.
How Does Offshore Software Development Work?
Offshoring refers to companies relocating their operations to a foreign country to reduce costs while maintaining control. A US company might hire offshore development services from an Eastern European partner. When it comes to software development, outsourcing refers to transferring work to a different country where the local team takes full responsibility for the work. Alternatively, clients can keep track of the process and control it.
Outsourcing can be compared to offshoring. A company may outsource software development to another country, but this is not always the case. Within a country, outsourced tasks can be delegated to contractors. In contrast, offshoring is outsourcing development activities to another country.
Offshore Software Development: Benefits And Risks
When software is outsourced, it enables access to a large pool of software engineers that would otherwise not be available. Offshore Software Development Process is an excellent solution for businesses that need highly specialized expertise and high-quality deliverables that are difficult to source locally. It is only when an owner understands the advantages of hiring offshore developers that they will employ them. We must therefore identify all the advantages and disadvantages of offshore development.
What are the Best Case Scenarios for establishing an ODC?
Here are the business needs and conditions necessary to establish an offshore development center to reduce costs, be more flexible, and access the required technical talent.
The project you are working on is large and has the potential to scale.
ODCs are reasonable business strategies only for large-scale projects. Using this method, you can grant full project development responsibility to a remote team while remaining focused on your core business functions.
More than one project needs to be developed simultaneously.
Having several technical teams all under one roof in an offshore development center is the most cost-effective way to hire and retain these experts.
Digital transformation is upon you.
To transform the company digitally, you must embrace cutting-edge technology and adopt a new paradigm. Your company could create an offshore development center if you follow this step-by-step process of creating and integrating new software into your business processes.
Your company wants to expand internationally.
To expand your business, setting up an offshore development center makes sense. This strategy is followed by most companies that eventually turn their ODCs into full-fledged business units with an established employee brand.
Employing offshore IT developers can benefit your business.
1. IT professionals with the best skillsets available
IT is a sector where the most scarce and competitive resource is talent. It will always adhere to high standards to produce high-quality products if you locate a reliable company. Furthermore, offshore companies tend to deliver the best results and solutions to particular business industries and technologies.
2. Industry expertise
Professional IT companies have created offshore development teams that are experts in every technology and have years of experience. When this level of expertise is applied to a project, the outcome can be completely altered. In addition, the offshore partner has experience with international custom software development projects for various clients, so the difficulties are well understood and familiar to them.
3. Optimization of workload
You can free yourself from the burden of hiring an outsourcing company. Rather than recruiting specialists, purchasing hardware, and so on, clients do not have to spend time purchasing software. You can then spend your time and resources on your company’s core business after the completion of development work. You can focus on your core business strategy without worrying about keeping an on-site software development office.
4. Market entry faster
A high-quality company aims to provide reliable offshore development services, so it sticks closely to deadlines. In addition to providing helpful bits of knowledge, an external group can help you enhance your business metrics. This will make it easier to utilize innovation and development throughout the product’s lifecycle. In addition to developing custom solutions for the specific needs of your business, offshore development teams usually complement your in-house staff’s skills.
5. Costs of Development
As a result of offshore development, clients get high-quality software at a lower cost since hourly rates in offshoring countries are generally lower. In addition, if you outsource software development, you don’t need to invest in IT infrastructure or recruit, train, and prepare employees.
Risks associated with offshore development. Identification and resolving issues
It would help if you had a few things in mind when outsourcing offshore software. However, we want to assure you that every risk can be mitigated.
Difference in timezones
Due to the substantial time difference, it can be difficult for a client to reach a company located on another continent. As a result, this should not pose a significant problem because reputable development companies will always find a convenient time to contact clients. Furthermore, the software is developed at night when clients are sleeping. That can’t be all bad, can it?
Form a team that quickly identifies the time zone difference so that meetings run smoothly. Because of this, you can determine a convenient time for both of you.
Barriers related to language
Because many offshore outsourcing software development companies are based overseas, the majority of them do not speak English as their first language. There might be a linguistic barrier that causes a breakdown in communication. However, there is hope.
A useful tip: ask your HR manager about the team’s English proficiency when looking for an offshore software development company. Choose a team with a level of English equivalent to Intermediate or Upper-Intermediate.
Unexpected lack of control
Project management from a distance isn’t always simple. When something goes wrong, clients may not be able to handle every detail, and repairs may take longer if something goes wrong. While a reliable business keeps in touch with customers to inform them of any changes, unreliable businesses do not.
It is unfortunate that some companies cannot provide offshore development services. At first glance, they appear to be advantageous because of their low hourly rates. As a result, the client ends up with a substandard product.
A useful tip: be cautious and specific when choosing an offshore software development company. Recruit a team with a high success rate, positive reviews, and a good portfolio. Time and money will be saved.
Projects can be stolen
Offshoring may end up being the worst case scenario. A general scope of work is developed by explaining the project needs and offering specific details. Later, you find out that a product based on your idea was released by your vendor.
Sign a nondisclosure agreement (NDA) to avoid such a catastrophe. By signing an NDA with the development company as soon as possible, you can make sure the company cannot exploit your ideas or data.
When hiring an offshore development team, what is the total cost?
Hiring an offshore team is associated with several cost elements. The most important ones are:
- Hiring and training
- Developing
- Project management
- Quality assurance
- Auxiliary costs
- Service costs
- Cost of infrastructure
The geographical region where a company is located is another factor that is included in the cost element list.
Choosing an offshore company: Steps to Follow
You can minimize risks when you do your research before deciding on offshore software.
Define your Goals
Offshore outsourcing services boost a company’s ability to achieve its goals. When you know what you want and what you expect in a timeframe, you can plan a custom technology solution that suits your needs.
Set Priorities
You need to decide what matters the most to your company and your clients before outsourcing a project to an offshore development company. Write down what should be the short- and long-term priorities for development.
Decide what your vision is
Developing software is your development partner’s job, but you bring the idea. Wireframing and sketching your project will be faster once you have a clear picture of what you want. Building an experience, not a product, is what you need to focus on.
Make a list of your expectations and needs
Each project requires engineers with expertise in different fields and a different technology stack. Explore other service and technology models to determine how they can help your project.
Make a note of everything
It makes everything much more transparent when documentation is properly done, speeding up any process. Based on your needs, your offshore team will help you determine the right solution for achieving your goals on time and at a reasonable cost.
Success depends on communication
The success of any offshore software outsourcing company project is largely determined by one key factor: communication. You can determine how quickly your project will progress and how good your final product will be by establishing an efficient workflow with your development team.
It is in the best interests of both of you to establish a productive and professional relationship. Asking a lot of questions and giving honest feedback can work to your advantage. The directions below will lay the foundation upon which offshore developers can work and produce valuable results, even if your project wasn’t very defined at the beginning.
During the entire development process, keep the feedback cycle going! Your software development journey will be most successful if you return to your communication channels periodically (email, phone, video calls, web platforms, etc.).
Can your company benefit from offshore software development?
It is always a wise idea to outsource software development offshore, but you have to understand the project at hand before you make a decision. You may want to consider the software outsourcing company’s delivery dates as well as how it will improve efficiency. Analyze your current team to determine if any skill gaps exist and capacity limitations exist.
Choose an offshore company based on the following factors:
- Outsourcing the right way according to your requirements
- Stating clearly what you expect
- Communication that is clear and open
- Post-development plan that is comprehensive
Are You looking for offshore Software Development Company?
The process of partnering with an offshore development company can be overwhelming, even though it can be best to do so.
Our solution is just what you need. iTechnolabs has helped a number of entrepreneurs create digital empires across industries. While updating our clients on the work’s progress in the time zones they’re active in, we work around their time zones. At competitive prices, we offer you the possibility of working with experts in all technologies, whether they be time-tested or cutting-edge. This allows you to maintain and dominate your market.
