Offshore Software Services: All You Need to Know

The software domain is becoming more saturated by the day. Technology startups are coming up at an exponential pace. Experts in the industry predict there might be more than one million software enterprises around the world in the next decade. As the competition increases, the cost of operations continues to soar and resources and talent become more scarce. 

Offshore software services are a key solution that Western enterprises are adopting. These services help them stay ahead in today’s saturated market. You too can leverage this model for your venture. Let’s find out how. 

Benefits and Advantages of Offshore Development Services:

Offshoring in the context of the software industry refers to companies building their development team in a different country. They create a focused team and a new office beyond their geographical borders. The team functions like regular employees would, just that they are based in a different country. 

There are several important reasons why businesses should choose offshore application development services.

  • Reduced operating costs: Operating costs vary by country. Building a team in one country could be much cheaper in a different country. This includes expenses, salaries and rent.
  • Meeting scarcity of talent: Finding the right talent in your country is not always easy. Countries like India produce more talent than New York and can be beneficial as resources.
  • Tackling limited scalability: Upscaling businesses can be challenging. Offshore teams help businesses to continue growing without worrying too much about extra costs and resources. 

Difference between Outsourcing and Offshoring:

Businesses that outsource generally hire professionals on a project or need-basis. These professionals don’t work for the company exclusively. They have other clients and projects as well. As costs are the primary drivers for outsourcing, business enterprises keep pushing for lower prices. The output is often underwhelming as the developer is not incentivised or motivated to work harder. 

Offshore teams are employees in every right, with salaries, professional infrastructure and an exclusive contract. Offshore development services give you the exact output you want if you choose the right team of professionals. You also get this output at a fraction of the cost.

Types of Outsourcing:

Outsourcing your development needs can be done in three different ways. These are onshore, nearshore and offshore outsourcing. Let’s look at the differences between them.

 

  • Onshore outsourcing: You hire a third party operating in your region or country. This is beneficial as you understand the same language and can meet personally whenever needed. You also have no cultural or time-zone differences. However, this costs as much as the local market and you can’t save too much.
  • Nearshore outsourcing: You partner with an enterprise in a country on your continent. The benefits are that there are no significant time-zone differences or cultural gaps. You can contact low-cost vendors and travel to them within a reasonable time. But the price difference, again, is not that much. This means you won’t save too much and the travelling might seem tedious after a point.
  • Offshore outsourcing: You sign a contract with development teams located in a different continent. The key benefit here is the great rate difference that brings down your development budget significantly. However, there are other differences too, like cultural and time-zone gaps. These can be managed if effective processes and procedures are put in place. This is often included in the price of development.

 

Points to Remember to Avoid Extra Risks:

Working remotely in the same country is one thing. Operating with an entire team in a different country is another. Here are some things you should keep in mind to avoid certain problems:

  • Cost pitfalls: Budget planning is the most important step for success while working with offshore developers. Your plan needs to be thorough and you need backup resources in case unexpected costs or expenses arise. 
  • Legislation issues: It is the most beneficial when you hire an offshore development team in locations where business restrictions are the lowest. Countries with supportive startup infrastructure are the most beneficial. 
  • Legal specifications: You need to clarify every aspect of operating within a country, including local regulation compliance, data protection regulations, IP rights, confidentiality, liability and terms of non-solicitation. 
  • Keep track and document everything: When you cooperate with foreign teams, every interaction and process needs to be carefully documented. Even seemingly unimportant conversations need to be registered and tracked. 

Now that you know everything you should, it’s time to choose your offshore software services team. Make sure you think it through completely.