What is Offshore Software Development? Why Hire Offshore Development Team?

Are you a startup with limited resources and want to create reliable solutions by saving costs?

Are you an enterprise-level company that wants to outsource software development companies to meet the deadlines?

Offshore software development services help you scale your business without much hassle. In fact, the global IT outsourcing market is projected to reach $425.19 billion by 2026, according to GlobeNewswire.

No doubt, outsourcing is a popular option for developing a web app, mobile app, or enterprise-level solution. With research, we have written this guide that helps you to know whether offshore outsourcing is a suitable option for your business or not.

This blog post will take an in-depth understanding of what offshoring is, the business model’s benefits, and how you can outsource your software development processes to remote locations.

Let’s dive in.

What is Offshore Software Development?

Offshore software development is the process of hiring a project development team from a third-party software development company. Either you hire for entire software development tasks or develop some parts of your project.

Generally, the outsourcing of project development is done for three core reasons.

  • Reduces the development costs
  • Saves time for core business goals
  • Scale the business rapidly

Businesses also find it beneficial to opt for offshore software developers to cater to the high technical demand generated without additional costs and hassles. There are three types of outsourcing.

3 Types of Software Development Outsourcing

Before we get into the details of offshore development software services, let’s better understand the various types of outsourcing and get a basic overview.

  1. Offshore Software Development

    Offshore software development means outsourcing projects to countries that are far from your location and have different time zones. The main reason for offshore software development outsourcing is the affordable cost.

    For example, you are in the USA country, and you hire developers from Ukraine.

    As the hourly rate of developers is cheaper in many countries, the overall cost of project development becomes less. The most popular destinations for offshore software development are India, Ukraine, and China.

    But essentially, it totally depends on your business requirements and the complexity of your project.

    Although, the successful collaboration of North American businesses with Western European software vendors proves otherwise.

  2. Onshore Software Development

    As the name suggests, when a business recruits a software development team within its geographic location, it is referred to as an onshore software development process.

    For example, you are in Canada, and you hire developers locally in Canada.

    This is an option taken by many IT companies as software engineers are more approachable in their own country. However, setting up offices for the development team incurs additional production costs, which may add extra costs to the budget of companies.

  3. Nearshore Software Development

    Nearshore outsourcing refers to hiring talents from nearby countries to get your work done. Nearshore outsourcing offers services similar to other types of outsourcing; it’s just that you hire talent from the nearby country location.

    For example, you are in the USA, and you hire software developers from Canada or Argentina or Mexico.

    Western European countries, for example, have the nearshore option among Eastern European countries, such as Poland and Ukraine. Likewise, USA-based IT companies can opt for software service providers from North America.

Want to know the detailed comparison of nearshore vs offshore outsourcing?

difference between nearshore and offshore outsourcing

Download the Complete Comparison Between Nearshore vs Offshore

When to Hire Offshore Developers for Your Project?

Here’re two essential reasons that help you to decide when to hire offshore developers.

  1. When You Have a Limited Budget for a Project

    Employee-centric costs like wages, insurance, and yearly bonuses tend to drive your operating costs through the roof.

    Hiring in-house developers are costly for SMBs and startups as they are tight with limited budgets. So, choosing offshore software development services is economically reliable. Because you get experienced developers with your limited budget.

    It helps you save your budget instead of spending on in-house resources.

  2. When You Want Enter Into Market Faster

    Most business owners want to enter the market as early as possible with their products. When thinking about building an in-house developers team, you need to invest your resources, time, and money in hiring professional app developers, designers, and QA analysts. And you might know that hiring a perfect candidate is not an easy task.

    Therefore, if you want your project to get developed in a short period, then outsourcing to an offshore development team is a suitable solution. As a result, you are able to focus more on the core part of your business.

Let’s now look at the benefits provided by the offshore development model and why switching to this service may be critical for your business’s profitability.

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5 Benefits of Offshore Software Development

  1. Access to Global Talent of Developers

    One of the essential benefits of hiring an offshore software development team is you get accessibility to vast talented developers and engineers. Here you are not restricted to hiring a limited number of talented software programmers for your project development.

    In addition, you have the option to hire a highly-skilled professional who has expertise in various domains. Also, these technical software professionals possess a specific skill area, which makes them highly talented professionals. They follow the latest software development methodologies to create scalable applications.

    According to a HackerRank report, China, Poland, Russia, Switzerland, and Hungary are top-fives countries where the best developers are available to hire. So, if you opt for offshore outsourcing, then you get to hire top talents from these countries.

  2. Reduce the Development Costs of Your Operations

    Outsourcing from offshore software development companies reduces your cost without compromising the quality of your work. Hiring from the North American continent results in saving the cost of your project development.

    Check this report.

    According to the Deloitte survey 2021, cost reduction and process efficiency are two benefits achieved while opting for outsourcing services. The key benefits achieved by the businesses for opting for outsourcing services are as follows.

    • 88% cost reduction
    • 78% standardization and process efficiency
    • 63% business value

    Also, outsourcing the IT services helps to reduce the time and reflects in the cost reductions. Because your organization doesn’t need to invest time and money in the premises, administrative staff, legal work, payroll, developer salaries, and other operational costs. As a result, choosing offshore development services is typically lower than working in-house.

  3. The Opportunity to Scale Quickly

    You have the option to scale up or scale down your resources as per your requirements. Outsourcing your project development brings another advantage to hiring developers when the requirements of the project get increase.

    It helps you to decide when to increase developers to scale up your business. And sometimes, scaling your web or mobile application immediately is not easy. That’s why choosing offshore software development processes is effective. When you want to speed up your project development, you get the option to hire more offshore software developers. Also, it is a reliable solution when you want a team for a limited time period.

    If you hire an offshore software development team, then the risks are substantially reduced. Additionally, you can expand your offshore software development and scale your business quickly with digitalization, allowing you to meet growing demands and thereby increase profitability.

  4. Focus on Your Priority Tasks

    If you are dealing with multiple variables of your business, then it might be difficult to manage several things at a time. Multitasking leads to decreased efficiency as your attention is diverted amongst many verticals.

    Bringing on an offshore project development team helps you to focus your attention and resources on expanding your business and working on the profitability metric. This also gives you ample time to market your core business values while the offshore software development team can handle your business’s software-related aspects.

  5. Opportunities for New Projects

    As said, outsourcing from offshore software development companies helps you reduce costs. You get an opportunity to invest that cost into the research and development of your business. Streamline your funds into projects and ventures that were a part of your business roadmap but could not be implemented due to financial constraints.

    Additionally, the time and resources that are saved by hiring an offshore software development team can be used elsewhere, including ideas for new ventures. It is thus a win-win situation for your business.

How to Manage Offshore Software Development Team in 5 Steps

Here are a few tips to help you effectively manage your newly recruited offshore software development team.

  1. Share the Vision and Goals of Your Business

    One of the most critical steps that are often overlooked by businesses. In the initial stage of business, it is essential to introduce your business formally. Things like the principles on which your business is built and your business’s goals and projects you want to work on in the future.

    This helps the offshore developers fully understand your business and its role. The better understanding developed by the offshore development team, the more effective solutions are prepared.

    Sharing your vision and goals with an offshore software development company helps to build the solutions as per your requirements. This reduces the changes in the development process of your project idea.

  2. Bridge the Culture Gap

    It is natural for you to encounter some cultural differences with your offshore software development team. However, instead of letting that get in your way, you should use it as an opportunity to learn more about contemporary culture.

    Be open to getting to know the offshore developers’ cultural practices and also introduce your cultural practices to them.

    It is essential to establish this unification of cultures with no hindrances while collaborating on a joint project.

    Thus, it is your responsibility to ensure that the offshore team has ease while interacting with other employees. Visiting your offshore team once in a while will help in the cultural exchange.

  3. Collaborate and Communicate

    When working with an offshore team, communication is the effective part of obtaining effective results. It allows you to get the tasks accomplished within the deadlines and requirements.

    But how do you manage the communication process effectively?

    Check the following tools that help you to manage your communication effectively with your offshore software development team as well as in-house developers.

    • Email and Calendar: Official communication, schedules, and setting up project-related meetings can be done via online calendars accessible to everyone.
    • Messaging: Tools like Slack and Skype are efficient in forwarding information regularly.
    • Project Management Tools: Monitoring the progress of your project is critical when working with a technology partner. Because, without it, you wouldn’t know the particulars of project development on which your developers are working. Tools like JIRA, Asana, Slack, and Basecamp help the project managers to keep track of everything that is working in a project.
  4. Consider the Time Difference

    Differences in time zones are bound to come up when working with offshore development teams. Instead of letting this be an obstacle, you can overcome it by working in alternation and overlapping the work hours.

    For example, If you hire an app developer from Australia and you reside in the UK, then it creates time differences to work together. That’s why you should establish proper coordination between your in-house and remote development team to avoid communication issues.

    Overlapping the working hours will help you build a more efficient schedule for your business. Overlap meetings and weekly progress call to ensure that communication between your teams is not affected due to time difference.

  5. Avoid Micromanaging

    Are you trying to manage every little detail on a project? Do not try to micromanage.
    It hinders work and overall performance.

    Because the hired offshore firm is a thousand miles away from you, it is best not to interfere with every tiny detail of the project. The offshore team will feel constrained; this lack of freedom will affect performances.

    Therefore, communicate with your offshore team at the start of any project and only ask for an update on important information.

Want to Hire an Experienced Software Developer?

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Still, have some queries or questions related to the offshore software development or offshore team?

Check the following frequently asked questions section on offshore software outsourcing.

FAQ About Offshore Software Development Process

  1. How to hire an offshore development company?

  2. Step 1. Check the experience of the development company
    Step 2. Check the previous work or portfolio of the company
    Step 3. Know if they provide good security services
    Step 4. Check the time-zone hours
    Step 5. Communicate with your selected vendors’
    Step 6. Short-list one software development company

  3. What is better offshore or onshore development?

  4. This depends on your business model and its needs. The offshore software company or outsourcing software development developers model offers scalability, customer support, and other advantages at a feasible cost. In contrast, an onshore model ensures a quick turnaround and acts as a boundary against delays caused by time zone differences.

  5. What are the top offshore destinations for hiring offshore software developers?

  6. North America (mainly Canada), India, Ukraine, Belarus, Poland, Czech Republic, and Estonia are countries that provide some of the best destinations that house the best software outsourcing companies or offshore software development centers.

  7. What are onshore and offshore in software development?

  8. When a business recruits a software product development team within its geographic location, it is an onshore software development process. Offshoring software development is when companies seek software and web development partners/services from development companies located in a foreign country. That is known as the offshore software development process.

  9. How do offshore outsourcing services work?

  10. Typically, an offshore outsourcing service is a process of hiring a third-party software development team to work on your project. Your hired app or web development company works on the technical part, so you are able to devote your time to the core business activities. Although, the company retains full ownership of its business and hires offshore development services.

  11. What is offshore web development?

  12. Offshore web development services provide an alternative web outsourcing model to businesses that have a limited budget. These businesses get options to look across the globe – for a custom software development company or a dedicated team of web app developers to develop their software products, web application development projects, and core business activities.

Looking for Offshore Development Services?

You have learned about offshore development services. In short, in the following conditions, you should choose offshore development services.

  • If you want to develop high-quality software within a limited budget.
  • It is preferable to choose offshore outsourcing when you immediately need to scale your project, so you do on-demand hiring.
  • When you want to hire niche-based technical experts, then opting for offshore gives you the opportunity to choose the best.
  • You get an option to choose from a large pool of talent that helps you cover your demands and build the best products with creative insight.
  • You don’t want to take frequent onsite visits, and managing the team digitally is a suitable option.

Want to hire an offshore development firm? Connect with us to develop software solutions. We are one of the leading offshore development companies in Canada. With years of experience, we have created 300+ custom mobile and web solutions.

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Rakesh Patel

Written by

Rakesh Patel

Rakesh Patel is the Founder and CEO of Space-O Technologies. He has 28 years of IT experience in business strategies, operations & information technology. He has expertise in various aspects of business like project planning, sales, and marketing, and has successfully defined flawless business models for the clients. A techie by mind and a writer at heart, he has authored two books – Enterprise Mobility: Strategy & Solutions and A Guide To Open311.