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In the tech world, going from an idea to execution is a lengthy and complex process. For this reason, more and more organizations are deciding to hire a dedicated software development team to expedite the mobile and web development processes and avoid unnecessary expenses.

Offshore software development outsourcing offers business owners the freedom to realize their ideas while keeping their focus on core activities. Without investing in an in-house team, organizations can build exciting and innovative solutions that help them achieve their goals.

In this article, we will cover the topic of offshore software development, its benefits and downsides, as well as costs. Finally, we will explore the guide to choosing the right agency to ensure smooth and fruitful collaboration.

What is Offshore Software Development?

Before we move on to the ins and outs of outsourcing, let’s go over the offshore development meaning. So, what is offshore development? Offshore software development is the practice of delegating a project either entirely or partially to a third-party vendor.

In other words, businesses that lack the expertise or resources to execute the software product development process outsource their application development projects to seasoned offshore software companies.

Nowadays, more and more organizations hire offshore developers based outside of their countries to expand their talent pools, reduce costs, and expedite project development. The range of outsourceable services is very wide and includes everything from actual coding to project management and UX/UI design.

Onshore Software Development vs Offshore Outsourcing

Essentially, the major difference between offshoring and outsourcing lies in the geographical location of the client and its IT vendor. An onshore team is usually located in the same country or region as the client, allowing easier communication. Offshore software development involves hiring a team abroad which usually suggests a more cost-effective collaboration.

Despite the perks of onshore software development companies, this type of outsourcing is significantly pricier. Especially if you’re based in the US or Western Europe, outsourcing companies from your area will charge up to 30 to 50% more than their Eastern European or Latin American counterparts.

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Benefits of Offshore Software Development

Why do business owners decide to invest in offshore software development? Let’s discuss the core advantages of software outsourcing mobile and web development.

Offshore Development

Cost Reduction

Businesses across the world always strive to reduce their costs without jeopardizing quality. Offshore software development is the perfect method of minimizing expenses while maintaining an industry-standard level of quality. By hiring offshore developers, organizations eliminate additional spending associated with recruitment and training.

Large Talent Pool

In the traditional hiring process, you are bound by the talent located in your area which can be quite limiting, especially if you’re dealing with rare experts. Offshore application development removes these restraints and allows you to find a professional of any caliber.

Basically, the wider the pool, the higher the chances of hiring the right talent for your business, project, and team.

Optimal Resource Allocation

The labor division is the true driver of progress, allowing workers to focus on their core competencies instead of spreading themselves too thin. By concentrating your efforts on the core business activities, you are likely to achieve better results much faster.

Meanwhile, your software development partner will dedicate their time to executing your vision in the software development process.

Faster Deployment

The efficiency and convenience that offshore software development outsourcing brings enable businesses to realize their ideas faster. In the fast-paced world of technology, even a slight delay may lead to missed growth opportunities and halted marketing efforts.

Launching your product ahead of your competitors will help you gain an advantage in the market and reach your audience.

Access to Industry Expertise

When collaborating with a seasoned offshore developer, you can rely on their technical prowess and experience to create the best possible product. The right partner will not only aid you in realizing your ideas but also in improving and fine-tuning them. However, you should make sure your offshore outsourcing software development vendor has extensive experience in your industry.

Increased Scalability

As the market changes, business needs also adjust. You will experience rapid growth, sudden stagnation, or even decline at different stages of your company’s lifecycle. While an in-house team carries a slew of benefits, scalability is certainly not among them.

An offshore development vendor has an entire team of software developers on board and can assign missing talent to your project at any time. Depending on your needs, your team can be instantly extended by a professional with the right expertise and tenure without any complications.

Risks of Offshore Software Development

Are there any downsides to working with offshore development companies? In this part, we will take a look at the risks associated with delegating your software project deliverables.

Offshore Development

Communication Roadblocks

An offshore software development company is based outside of your country, which usually means that they speak a different language. This can be a barrier to the understanding of your requirements, industry, and goals.

Cultural differences may also become an obstacle to a seamless collaboration. People from the other side of the world may behave and operate differently, halting your communication.

However, cultural and language barriers can be mitigated through a thorough and diligent vetting process. Make sure your future partner is fluent in English and shares your values.

Lackluster Quality

Hiring an offshore team is taking a leap of faith. Since the offshore partner is based abroad, vetting and testing become more difficult, which can lead to subpar results. Especially if you go with an inexperienced and young team to save more money, you may end up with a poorly performing application.

For this reason, extensive testing and evaluation is a crucial step in choosing the right outsourcing software development company.

Logistical Issues

Managing an offshore development team can be a huge challenge for an organization. You will need to take into account the time zone difference, IT infrastructure, language barriers, and other factors to ensure smooth cooperation. Even finding a suitable time for a weekly call may be problematic when working with outsourcing software development companies.

If you would like to retain control over the project, make sure to set up regular calls or video chats to get updates about the progress and stay on the same page. Additionally, encourage your IT partner to maintain comprehensive technical documentation in software development throughout the entire software project.

When to Opt for an Offshore Development Team

Businesses aren’t built equally and require a different set of practices to maximize the outcomes. While organizations have various needs, processes, and goals, not every firm will benefit from outsourced product development. Let’s investigate scenarios in which the offshore software development model will be most lucrative.

Offshore Development

Handling Budget Restraints

Whether you’re a startup or a company going through a financially difficult phase, a tight budget can become a huge hurdle to success. Instead of reducing scope and making your application less attractive to the user, consider offshore programming services. A reliable partner will find a way to build a high-quality digital product without compromising performance and functionality.

Lack of Technical Expertise

Having a mobile or web application is not a luxury but a necessity for virtually any business. However, if your specialty is not IT, you may struggle to bring your ideas to fruition. Without decent technical acumen, even conceptualizing an idea may present some difficulties as you may not be aware of what is possible and what isn’t.

An offshore development company will help you bridge the gap between your vision and reality and help you build a successful product.

Dealing with Tight Deadlines

In the ever-changing tech market, launching your application at the right time is key to its success. Delaying production by a few weeks or even months while assembling an in-house team or training your existing staff can be detrimental.

Consider hiring an offshore software development company to accelerate the app-building process and release the product before your competition.

Guide to Offshore Software Development Outsourcing

If you realize that an offshore software development team will benefit your project but don’t know how to proceed with the cooperation, this part is for you.

Here, we will go through a step-by-step guide on how to kick-start your outsourcing collaboration.

Offshore Development

Establish Clear Goals

Much like any big project, offshore software development begins with goal definition. Start with identifying your weak areas and creating a solution that will fix them. These findings will define the team composition, tech stack, and other vital aspects.

Select the Hiring Model

Essentially, there are three main types of offshore software outsourcing: Time and Material, Fixed Price, and Dedicated Team.

  • Time and Material: In this model the scope and cost aren’t fixed, which allows for on-the-go changes to meet changing market trends.
  • Fixed Price: This approach involves planning out each step before the project begins without any modifications to avoid exceeding the budget.
  • Dedicated Team: This model is also known as Staff Augmentation and offers a different outlook on offshore outsourcing. Instead of completely handing over your project to a third-party vendor, you can borrow one or several specialists who will join your software development team for the duration of a task or entire project. For example, if you have a development team on staff but lack quality assurance experts, you can opt for dedicated teams to close that knowledge gap.

Set up Communication and Management Channels

Communication is a two-way street, and both you and your offshore development company need to work on it. Tech firms use tools like Jira, Zoom, Slack, and many others to stay in continuous contact with their clients. Discuss the options with the potential partner to find the most fitting solution for everyone involved.

Aside from technology, it’s imperative to assign the primary person of contact for both parties. Decide who will be responsible for receiving and sharing updates between the teams to ensure nothing gets lost or forgotten. Additionally, designate in-house and offshore team leads to instill accountability.

Also, if you want to stay on top of the software development projects even remotely, set up some tools to track and record progress. Measuring success without any tools for measurement is difficult, or almost impossible. Project management software like Trello and Jira allow teams to create timelines, divide them into shorter sprints, assign team members to tasks, and monitor the completion.

Choose the Right IT Partner

Finally, look for the right partner for your business, current team, and software development project. During the vetting process, test the company’s communication patterns, experience, industry expertise, skill sets, and IT infrastructure.

In the next part, we will focus more on how to choose the best offshore software developers for your organization.

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How to Choose an Offshore Software Outsourcing Company

Finding the best software development company to meet your needs, achieve your business goals, and become your trusted partner is easier said than done. Let’s dive into some criteria that will help you recognize red flags and choose an appropriate offshore team.

How can you identify the best offshore development team for your business?

Offshore Development

Assess their Technical Prowess

Examine your project specifications to identify which technologies you will need to achieve your goals. Based on that, look for offshore software development services that cover your requirements.

However, during the project timeline, your goals and needs may change which is why it’s recommended to find a partner who provides a holistic approach. A provider that offers a wide range of services will be able to quickly readjust and continue meeting your requirements. Pay attention to their coding and QA process in software testing to maximize the chances for a fruitful collaboration. 

Seek the Best Talent for the Job

Inquire about the company’s employees to evaluate their expertise and tenure. Make sure your future partner has a wide array of top-notch offshore developers to cover your needs and fulfill your ideas. This list should include specialists in different fields, from a business analyst, designer, and project manager to a software developer and quality assurance expert.

Evaluate their Experience

Having theoretical expertise is not sufficient in and of itself; experience is another crucial aspect. Check the prospective offshore software development companies’ portfolios to measure how much experience they have in your field.

Aside from their homepage, verify the vendor’s claims by reading their B2B reviews. Sites like Clutch and G2 are great sources to learn more about the offshore development company, its processes and mode of work, as well as soft skills.

Find the Optimal Ratio between Cost and Value

Choosing an offshore software programmer you can’t afford will lead to debt and possible legal complications, while opting for a cheaper vendor may jeopardize the quality of services. Ideally, find the middle ground and hire an offshore company that provides high-quality outcomes at a reasonable price.

Prioritize Flexibility and Innovation

Before signing months-long contracts, start with a small sprint to test how well the collaboration goes. Based on the outcomes, you can either look for a new partner or change the workflow to accommodate both parties. A project-based relationship leaves more room for flexibility and change, allowing you to opt out whenever needed.

Furthermore, don’t settle for offshore software development companies that agree with your every word and do not provide any additional value. A reputable IT partner is a company that strives to take your idea and make it better.

By relying on their knowledge, experience, and know-how, good offshore software developers will refine your vision to find the best solution.

Check their Soft Skills

Aside from technical prowess and industry experience, partner up with offshore software developers who possess great soft skills, including communication, teamwork, time management, and more. Although you can’t build a functional software system without technological understanding, your project will fall apart without well-oiled communication mechanisms.

Find a partner who responds to you in time, regularly shares updates, actively uses project management tools, and values your time and resources.

Discuss the Legal Side

No matter how short-term your collaboration may be, it’s vital to sign an agreement that will protect your assets. From safeguarding your intellectual property to securing your sensitive data, make sure your contract covers every part to establish superior security in software development.

How to Manage Your Offshore Development Teams

Managing an offshore team can be quite an undertaking for any company. Time zone differences, cultural nuances, and contrasting internal processes can significantly complicate your management techniques.

We’ve already discussed the importance of open and transparent communication alongside some tools that make collaboration easier. In this part, let’s examine some tips that will help you manage your offshore developers.

Celebrate Diversity

Dedicate some of your resources to develop cultural awareness programs to help both of your teams understand each other better. It’s important to make your offshore team feel welcomed and included as opposed to supplementary. Consider including them in your festivities and celebrate a diverse range of holidays to make sure everyone feels involved.

Exclude Micromanagement 

There is a fine line between monitoring and micromanaging and you don’t want to cross it. Offshore software development teams that feel micromanaged will likely become frustrated and maybe even resentful. In order to avoid these tensions, make sure you’re giving them enough space to autonomously work.

Recognize their Efforts

Take some time to show your appreciation to your remote team of software engineers. This can be as simple as saying thank you, offering a small gift on a holiday, or writing an official letter that shows how much you value their input. Public and private demonstrations of your appreciation will tighten your bond and help your relationship grow and foster.

Offshore Software Development Costs

Unfortunately, it’s impossible to tell you exactly how much your project will cost without going over the entire timeline. There is a plethora of factors that can impact the outsourcing software development costs, including complexity, application category, team location, requirements, and many others.

In this section, we will dive into the main components that will determine how much offshore development services will cost.

App Complexity

Depending on the number of features and their complexity, the cost can considerably vary. For example, functions like VR or IoT will significantly drive up the final bill. However, it’s highly recommended to start with simpler functions that are absolutely essential for the app to function and then move your way down the list.

Native vs Cross-platform

While native mobile app development targets a single platform, iOS or Android, the cross-platform model enables code deployment on both operating systems. Native apps provide higher performance and speed but modern cross-platform technologies are bridging this gap. The development costs do vary quite significantly: platform-agnostic software projects are up to 30% more affordable.

UI/UX Design

Your choice of design will also be a deciding factor in the price composition. While a simplistic design can be affordable, features like 3D visual processing and complex animations will bulk up the expenses.

Urgency

Urgency costs additional money. If you’re on a tight schedule and can’t afford a single mistake, your offshore development partner will likely charge you higher rates. In order to accommodate your deadlines, they will have to allocate more resources to your project which will escalate the price.

Offshore Team’s Location

Finally, the country of the vendor also plays a major role in the offshore software development cost. The most popular destinations for offshoring software development include Eastern Europe, Asia, and Latin America.

  • Eastern Europe is a prominent IT region, known for excellent offshore software development services at a reasonable cost. Paired with cultural similarity, good English proficiency as well as a manageable time zone, countries like Ukraine, Poland, and Romania are among the top tiers.
  • Asia is another region that has been widely known as an offshore development mecca. Especially English-speaking countries like The Philippines and India are highly regarded among business owners. A significant time zone difference does pose an obstacle but can be mitigated with the right management tools.
  • Latin American countries make a great choice for the US-based firms looking for a closely located partner. Brazil, Argentina, and Mexico are great examples of IT regions with expertise at lower offshore software development rates.

Conclusion

Offshore development is a lifesaver for millions of businesses around the globe, from startups restrained by their budgets to corporations looking to expand. If you recognize the benefits of offshore software development teams and would like to learn more, reach out to NIX.

We are a software company with extensive experience, a lengthy list of success stories, and technological know-how. We provide offshore development services across industries and sectors. Get in touch to discuss your ideas and needs and begin your next project as soon as possible.

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