Offshore Software Development: Unleashing Global Tech Excellence

As the world keeps moving to digitalization and more and more companies develop their own apps and software, businesses start searching for cheaper and faster ways to build what they need. However, most of the really good developers are busy with software projects from faster companies, and the price of their services grows along with the general market level.

There is a solution to the problem of getting cost-efficient but professional teams: instead of hiring expensive experts in-house, companies use offshore software development services. Let’s take a closer look at what offshore development services can bring businesses.

What is offshore software development? If you have ever thought about software development outsourcing, you might have heard about «onshore,» «nearshore,» and «offshore» software development.

• It seems that the «shore» part in «offshore» means literally hiring people from another continent. In reality, it just means ordering software development services from a country located far away from your headquarters, in a different timezone, with another language and culture.
• «Onshore», in its turn, refers to the practice of hiring a software development team within your own country. This can be done outside of your immediate region, but the location typically implies a lack of significant time zone and cultural differences.
• «Nearshore» is the same intuitively clear. «Near» means either neighboring countries or close countries with the same time zone.

When it’s clear that «offshore» means «in a faraway country,» the next question comes to our minds: is offshore software development different from outsourcing? And while the meaning seems to be the same, in reality, «outsourcing» is a broader term. Let’s look deeper.

Offshore software development can definitely be called «software outsourcing,» with the transparent task of building some software abroad. At the same time, «outsourcing» is not only about developing software only. You can outsource literally everything, from some core business competencies to localization and design.

Another Orbitsoft article provides examples, telling which tasks did a Finnish IT company outsource to OrbitSoft employees. To find the best vendors, you can consult with an Offshore development center or search by your own (which can bring many challenges).

Any outsourcing (and we mean more than just offshore software development here) is done for two main reasons: cost-effectiveness and a richer talent pool. We have selected some more benefits of offshore software development:

1. Cost Savings.

This is about cost-effectiveness in terms of salaries, infrastructure, and operational expenses. Most often, companies outsource to software development teams from countries where everything is cheaper and the level of salaries is significantly lower.

2. Richer Talent Pool.

The previous reason is closely tied to the opportunity for the companies to find greater experts while saving money. Software developers in other countries might expect lower payments, which means that you can hire a senior-level expert at the price of a middle or even junior. Sometimes, even the teams can offer a ready-to-go solution for the same price that you could have spent to hire two seniors in your country.

Outsourcing software developers abroad also helps when all the experts you need in your country are too busy with other web development projects. Just reach out to the outsource team, and you will definitely find the person with the skills required around the world.

3. Easy scalability.

Having an in-house team brings challenges here: you will have to fire people constantly, hire new ones, or pay the ones who don’t bring you any results. Outsourcing resolves it: when you hire an outsource development team, you will most probably provide a technical task and expectations. The team will offer the needed amount of experts: more developers when you have a bigger task and fewer employees when the task is small.

4. Fast time-to-market.

Imagine you have two teams: your in-house team working in the day and the team from another timezone who works at night. This is possible by hiring an offshore team. As a result, you will get your solution much faster than your competitors.

Obviously, there are challenges in outsourcing offshore teams as well. However, all of them can be easily resolved with the right strategy:

1. Communication barriers.

You and your outsource software development team will most probably speak different languages and have other cultural peculiarities. You can easily resolve this by using proper communication tools, time and work management instruments, and precise documentation. Try to find a common language (for example, most countries can use English). Find a medium employee who speaks both languages. Learn more about the country’s cultural peculiarities and do some training related to cultural sensitivity, and you are done.

2. Time zone differences.

The benefit of offshore and the challenge. Most possibly, it will be hard to synchronize. However, with a good work management tool, it won’t be as challenging.

3. Quality control.

Offshore teams can have different quality standards compared to your clients' or yours. The solution here is to establish clear quality benchmarks. Try to meet more often, ensure you regularly review the process and discuss retrospectives. In this case, everything will work great.

4. Data security and intellectual property.

Different countries have different regulations regarding data protection and privacy. However, you can always sign an agreement that corresponds to GDPR or other documents and sign an SLA confirming the quality of the upcoming software. As for intellectual property, implement stringent IP protection measures in accordance with international standards: protect yourself and your development project on the stage of agreement signing.

5. Integration with an in-house team.

Integrating in-house efforts with offshore results can be challenging. However, you can always do some professional team building and ensure your project management is transparent. Moreover, hiring an expert who knows how to manage both teams can be really efficient.

Who should outsource offshore development teams? We could say, «Everyone who wants to save their money and get higher quality,» but that won’t be true. Some companies do not need offshore development because their task is too small, and it is better to hire a smaller onshore team. Others do not need it for security reasons. For example, any governmental development should not cross the border.

However, most of the companies could still benefit from hiring an offshore development team abroad. Here are the types of companies that need it most:

1. Small businesses and startups. This type of company is usually short on budget and needs rapid growth to live long. Even the ambitious ones look for some partner who can complete the needed development process faster and cheaper compared to the prices of experts they could hire.
2. Technical and hardware companies. Most of these businesses work with very specialized tools, and finding an employee who works in this exact field is challenging. Outsourcing software development teams make it all easier: you can reach talents you didn’t know existed by only starting to hire offshore. As a result, you will get a more cost-efficient workforce with the exact skills you need.
3. Enterprises that look for digital transformation. This is a very challenging segment. Most of the huge companies moving to digital need to do it as fast as they can while opening many large-scale projects. In a moment of transformation, companies can request cost-effective innovation from outsourced teams. And offshore software development companies can easily offer their help.
4. Agencies, consultancies, and the ones with project-based work. These companies usually need more time and power to develop their solutions in-house. Moreover, they may need these services once a year or even more rarely. Offshore development will help: all you need to do is to explain the tasks clearly. Outsource companies may have done something similar before so you can consider a half of the task done. For example, Orbitsoft offers an AdServer solution that makes creation of customized platforms for online ad management simpler and faster.

The ones who cannot find a team onshore. We do not mean a lack of teams in the countries where big companies are headquartered. However, it sometimes happens that the companies spend months to find the employees that are ready to work in their stack, accept their salary offer, guarantee high quality, and more. If the process of searching becomes too long, it’s time to consider offshore software outsourcing.

The challenge of finding a good outsource partner lies in the fact that many companies do not know where to start and how to go. Here, we have prepared a few steps that can be useful to find your perfect offshore software development vendor:

Step 1. Think about what you really need. Analyze your current needs and capabilities and define your project requirements clearly. Have a clear understanding of the specific skills required and the technology stack needed for your custom software project. Such analytics are important for you to understand if you need outsourcing or can do it with an in-house team and what kind of outsourcing developer you might need.

Step 2. Do a thorough research to find the right outsource location. Always balance the cost savings with the quality of talent, as many regions offer very cheap services of poor quality. Sometimes, it turns out backward: the cheaper region that you haven’t considered at first might offer greater skills and quality. Also, think about time zone differences. While working with an outsource team is always about different time zones, the cooperation must still be convenient.

Step 3. Conduct deep-level vetting and interviews. Assess the technical skills of the teams you are hiring for your software development project by finding out if they had similar success stories and work enough time in the needed industry.

Step 4. Plan for onboarding and integration. Create your own onboarding plan to connect your internal teams with the new offshore software development vendor. Foster a sense of team unity and collaboration; this will help you work more transparently and faster in the future.

Step 5. Sign the contract and SLA. Ensure that your contract does not contradict any regulations and requirements. Always request an SLA guaranteeing a high-quality result and support options, usually the SLA doc includes a detailed technical task with what should be done and the deadlines confirmed. Do not forget about the payment part: try to forecast the total development costs before the project starts.

In case you haven’t yet found your perfect outsource partner, here are some tips for you on how to go through this offshore software developer hiring journey:

• Use reputable platforms and services to find your perfect vendor. In case you are looking for an individual developer to outsource, try to look at Upwork, Fiverr, or Freelancer platforms. They usually offer an opportunity to filter freelancers by country or price, which will give you a chance to find whatever region you need. Partnering with an offshore development company, select the consultancy companies and portals that have greater reviews and can offer a wide variety of companies with live use cases. We have thoroughly examined the difference between freelancers and offshore development companies in this article: check it out.
• Always look for relevant experience. Ensure that the potential offshore software development vendor has done some similar projects before. They are more likely to understand your needs and challenges. Check for industrial expertise: if the vendor knows industry-specific standards and can comply with them, you will have fewer things to control.
• Establish clear processes and use modern communication tools. You will have to make meet-ups and check-ins regularly. Select the tools and platforms that will help you to build transparent communication and ease up the process’s control.
• Focus on long-term relationships. Treating offshore developers as an integral part of your team can help you build greater trust and loyalty, leading to more productive and fast teamwork. Provide feedback where it’s possible and share opportunities with our outsourcing teams. And ensure everyone is comfortable. A win-win strategy is always great.

While many companies believe that hiring an offshore team is cheap in all aspects, here is the truth: yes, mostly, it is cheaper, but it doesn’t mean it’s easier. Compared to hiring an on-site team, outsourcing to the offshore software development team has more steps. And each step might require its own costs. Let’s look at some of them so you can thoroughly plan your potential spending:

1. Mind the recruitment costs. This includes posting job advertising, paying recruitment agencies (if you use some), some possible technical payments, and more. Moreover, you will probably pay some technical experts who will assess your outsource vendors' test tasks.
2. Salaries, payments, and hourly rates. Developers' compensation is one of the most challenging things. It depends on location and expertise, hourly-based rates or fixed rates, and more. Learn the market you are outsourcing to and thoroughly assess the experience.
3. Needed infrastructure and tools. Always assess what licenses and subscriptions you will have to pay for. All expenses for your management and communication tools should be accounted for. If not provided, include the cost of hardware and computers as well as any other infrastructure.
4. Include training and onboarding in your costs. You have to offer to onboard and spend some resources for it. Besides, outsource software teams might need some training to learn about the latest technologies relevant to your project.
5. Mind legal and administrative costs. As you are hiring from abroad, you will probably need some lawyer or any other legal help to realize if you have accounted for everything required. Moreover, with the risks related to offshore development, you will need to protect your intellectual property. Ensuring you comply with all tax requirements is also a must.
6. Traveling costs, logistics, and communication. Sure, outsourcing from other countries means mostly communicating online. However, meeting in person is sometimes necessary to discuss some important points. You might need to send some documentation or hardware, and these will be logistics costs. And even if you are not ready to travel, you will most probably need subscriptions for the communication tools or specialized platforms.
7. Management overhead. While hiring an offshore software development team usually implies that the team knows what to do, you will still need some control. So you have to forecast some spending on the additional work of project managers, technical leads, and other experienced in-house members.
8. Performance bonuses. Yes, if you want to build excellent cooperation, you have to think about bonuses. Analyze the market and decide on the size of benefits you are ready to offer.
9. Unexpected costs. Always consider a budget for some unexpected expenses. These can be some additional work or even fluctuations in currency exchange rates. Whatever it is, you have to be ready to cover these expenses.

While hiring outsourced teams seems to be challenging, in reality, offshore software development teams can bring you many more benefits than expected. Besides providing cost-efficient services, the teams from other countries can offer more expertise and more significant experience in working in the same industry as you. Most importantly, you can speed up your development significantly: while your in-house team works days, your vendor works nights (due to time differences).

All this means that if you are a startup or if your company needs a project to be done ASAP, hiring an offshore software development team is a must. The most important part is choosing a trusted vendor. We at Orbitsoft are always ready to prove our expertise with multiple use cases and provide a free consultation. If your potential outsource vendor doesn’t offer this, think about choosing another one.