Offshore Software Development: Benefits, Downsides & Best Practices

Offshore Software Development

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Access to a Global Talent Pool
Flexibility & Scalability for Projects

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Navigating the
Challenges of Offshore Software Development

Whether you are a founder starting an app business or a project manager launching an app, outsourcing software development is a complex decision. There are many factors to consider, and the consequences of a poor decision can be significant.

Last month, a founder shared their experience of hiring an offshore software development company that offered an unbeatable price and a guaranteed timeline. The company assured them that the software would be delivered in four months.

However, things did not go as planned. The software company kept delaying the project, and when the founder threatened to take their business elsewhere, they received a product that was completely unstable. Fortunately, the founder had the resources to find another offshore software development partner, but not all entrepreneurs have that luxury.

The unfortunate reality of outsourcing software development is that this situation is not unique. These occurrences are all too common. However, it is important to recognize the undeniable advantages of offshore software development.

To address the complexities surrounding software development outsourcing, we have created a comprehensive guide that outlines the best approach.

What is Offshore Software Development

Offshore software development services involve hiring developers from countries that offer technical support at lower rates compared to the business’s home country. Companies can choose between end-to-end development services or specific processes such as mobile app development, web development, UI/UX design, and quality assurance.

The most popular regions for outsourcing projects are South America, Poland, and India. These areas are known for their large pool of skilled professionals and competitive development rates. Businesses often choose Eastern Europe and similar regions for offshoring due to the strong English proficiency of local IT professionals, which facilitates smoother communication and better flexibility within international teams.

How is Offshore Software Development Different from Outsourcing?

Although often used interchangeably, outsourcing and offshoring software development are distinct concepts.

Outsourcing is generally ideal for short-term projects where you need an application developed without frequent iterations. Offshoring, on the other hand, involves building a team of developers to work on long-term or complex projects.

The right offshore company can take care of recruitment and evaluation of the team for your project. Ultimately, offshoring is about accessing talent that may not be readily available in your geographical region, enabling you to source skilled developers from locations where they are abundant.

Challenges of Ofshore Software Development

At ORBITS, we prioritize confidentiality, quality, and transparency throughout our engagement, but we understand that the offshore model has its challenges. Here are some key challenges and how we address them:

  • Time Zone Differences
    Working with an offshore development company can be challenging due to time zone differences. Communication difficulties can lead to delays in product development. To address this, as a leading offshore outsourcing provider, we at ORBITS set up pre-scheduled meetings and ensure availability within your time zone to maintain alignment with your team.

  • Security Issues
    Partnering with an offshore development company without proper verification can lead to security concerns, such as misuse of private data or even sharing your app idea with other clients. At ORBITS, we mitigate this by signing an NDA before any engagement begins, ensuring your idea remains confidential. Additionally, during the handover phase, we provide you with all source code and intellectual property rights.

  • Quality Assurance
    Maintaining quality control is a common concern in offshore development, and being involved in the workflow is crucial to ensure high standards. At ORBITS, we keep our clients actively engaged. We conduct weekly update meetings to keep clients informed about project progress and ensure that the project meets their expectations. Clients are involved in every build phase, guaranteeing alignment with their vision.

Why Go for an Offshore Developer?

Many companies choose offshore development to meet their specific requirements. Here are some of the key reasons why a company should consider hiring offshore development experts:

Inexpensive Labor
One of the main reasons organizations choose offshore development is the low labor cost. Offshore developers can accelerate the development process while significantly reducing expenses.

Efficiency
Hiring offshore dedicated developers with top-notch skills, experience, and expertise can lead to outstanding results. Leveraging their knowledge and efficiency helps to expedite projects and deliver better outcomes, making them a valuable asset for any organization.

Worldwide Talent at Your Disposal
Offshore development allows businesses to tap into a global pool of talent, bridging the skills gap in areas like the United States and other developed nations. Due to a shortage of qualified developers in these regions, many companies turn to emerging IT markets. Offshore development offers access to a diverse array of highly skilled technical professionals worldwide, making it an excellent choice for SMEs that cannot afford traditional recruitment and retention costs for local talent.

Regulate Peak Demand
Keeping up with industry trends while focusing on core business activities can be challenging. To stay competitive, companies must be equipped with the latest market insights, which may require additional training for in-house teams. Hiring an offshore development team can help bridge this gap. Offshore developers bring expertise in following current market trends, enabling your company to stay relevant.

Utilize Modern Technologies
Staying up to date with modern technologies is essential, but it can be challenging for internal teams to adapt to continuous changes in the software development cycle. By hiring offshore developers with proven experience in the latest technologies, companies can leverage these advancements efficiently in their projects.

Flexibility
Flexibility is one of the key reasons businesses choose to hire offshore development teams. Offshore models provide the ability to scale the development team up or down easily to meet project needs. Rather than requiring a complete team from the start, businesses can bring in the necessary experts at each project stage, ensuring an optimized, cost-effective process.

 

When to Hire Offshore Software developer?

When considering offshore developers for hire, it’s essential to understand the scenarios where hiring a dedicated offshore software developer is the best choice. The following situations highlight when this approach is most advantageous:

Decreasing Workload
When you have taken on a project but cannot manage it along with all other ongoing projects, hiring offshore developers to outsource the work can be highly beneficial. This approach helps reduce the burden on in-house employees while allowing the company to achieve its goals more effectively.

Tight Budget
Hiring a US-based developer can be expensive compared to hiring from countries like India. For instance, according to Grid Dynamic, the average hourly rate for a developer in the US is $65-$130, whereas hiring an offshore developer from India costs around $15-$30 per hour. If you have a tight budget and a looming deadline, offshore developers from regions like India offer a cost-effective solution without compromising on quality.

Business Scaling
To succeed in today’s dynamic market, businesses need to scale their operations efficiently. Adopting modern technologies and cost-cutting measures is key to growth. Utilizing an offshore development team provides operational flexibility, access to new markets, and adaptability. This approach allows for both upscaling and downscaling as needed, helping businesses expand and manage growth effectively.

To Achieve Targeted Time-to-Market
Time management is critical, particularly for IT firms aiming to deliver products quickly. Hiring an offshore development team ensures that the product is completed in the shortest possible timeframe, enabling you to meet increasing competition and shorter development cycles. This approach allows for faster time-to-market.

When in Need of a Specific Skill Set
Sometimes, your in-house team may lack the specific skills required for a project. In such cases, you can either wait for your team to develop these skills or hire offshore software developers who already possess the required expertise. This approach is not only faster but also cost-effective.

When You Need Resources for Short-Term Projects
For short-term assignments, hiring a full-time employee may not be cost-effective. Offshore dedicated developers offer a flexible and cost-efficient solution, providing the necessary skills for the duration of the project without long-term commitments. This approach offers greater freedom and helps reduce overall costs for short-term needs.

How to hire Offshore Software Developers? Checklist:

Define Your Needs and Goals
Identifying the primary goals for your company should be the first step. Set clear priorities for your offshore development team, such as defining the objectives of your minimum viable product (MVP) and what you want to accomplish with the software. Setting achievable milestones helps create manageable goals, making them easier to communicate to other teams and ensuring smooth progress.

Define Your Budget
Staying within budget is crucial for the success of your company. Establish your budget early to avoid unexpected costs like recruitment expenses. Make sure to evaluate the appropriate salary range for potential hires, including the expenses associated with onboarding new team members. Proper planning, including sourcing and researching potential locations, helps determine the range of compensation and ensures your outsourcing goals are achievable while staying cost-effective.

Reach Out to Preferred Developers
Ensure that the developer’s processes align with your organization’s workflow before making a final decision. Different geographical regions may use distinct methods, which can lead to variations in development approaches. For example, agile methodologies are often used by US-based teams, whereas some Asian companies prefer waterfall methodologies. Understanding these differences is crucial to ensuring a coordinated workflow between in-house and offshore teams.

Assess the Skillset
Evaluating the skills and past performance of offshore developers is a critical step in the selection process. Focus on individuals with a track record of highly effective and successful projects. Review candidates through reputable platforms like Clutch, DesignRush, or Aciety, and ask for client references to assess their ability to deliver successful outcomes in previous engagements.

Wrap Up the Legal Paperwork and Work Conditions
Finalizing the hiring process includes wrapping up all legal paperwork and agreeing on work conditions. By this point, you should have decided on the offshore development firm or developer you wish to work with. Setting clear working conditions and expectations is essential, as sensitive data and company activities will be involved when outsourcing.