You’ve probably heard the term offshore development tossed around in business conversations before. But what does that really mean? Let’s explore why more and more companies are choosing the offshoring model to leverage their software development solutions.
At the rate at which our global economy is growing, offshoring seems logical for reducing operational costs and scaling operations. Being able to find and secure incredible talent in the tech industry at an affordable cost is a no-brainer.
By offshoring your development tasks, entrepreneurs can focus more on growing their businesses. They are not constrained by operational challenges such as recruitment or training employees.
Additionally, offshoring equips companies in building high-quality software products in the least amount of time. Reducing development time simply means that business owners can accelerate their go-to-market timeline; hopefully leading them to real revenue faster.
In this blog, we’ll take a deep dive into everything offshore development and how your business can capitalize on it. These are the key points:
- What is Offshore Software Development?
- Why Should You Hire an Offshore Development Company?
- Risks of Offshore Development
- Steps to Get Started with Offshore Development
- Hire Offshore Developers from Full Scale
What is Offshore Software Development?
Offshore software development is a business process wherein a company delegates all or a portion of its development projects to a third-party service provider. Essentially, companies send their in-house workload to either an external company or a team overseas.
For example, tech companies like Microsoft, Google, CISCO, and IBM all have offshore IT operations outside of their home country. Their offshore employees are the same as their in-house team, except they are physically located elsewhere.
In an offshoring model, a company hires a third-party company, usually from budget-friendly countries, to reduce its operational costs. They can outsource a few of their tasks or an entire project.
Additionally, clients can hire a solo developer, a team, or the entire software development company. An offshore development company may offer these services:
- Software development
- Mobile app development
- Web designing
- Software testing
- Project management
- Business Analysis
- Product Management
Popular destinations best known for providing software development services are the Philippines, India, and China. Here at Full Scale, our offshore staff currently includes 250+ software experts ready to work on various software development projects.
Why Should You Hire an Offshore Development Company?
Now that it’s clear what offshore software development is, let’s move on to the benefits it brings to a company.
1. Reduce costs
Cost is, by far, one of the critical factors to consider when deciding to outsource your development tasks. For this reason, countless US-based companies actively offshore some of their operations outside of their home country.
With offshoring, they significantly lower their spending on recruitment, training, and IT infrastructure. Developing countries tend to have lower labor costs, thereby charging more affordable rates than onshore or nearshore vendors.
2. Wide access to a talent pool
When you choose to go the offshore development route, you dramatically increase your access to specialists with top-notch expertise in building software. With the ongoing shortage of talented developers in the US, you’ll find incredible options outside the States.
3. Expedite time-to-market
Having a dedicated offshore team means you can count on skilled team members to work round-the-clock on your software project. Doing so will not only accomplish the job faster, but you can launch your product sooner too. Moreover, your offshore development team can provide fresh insights to infuse innovation and optimize business operations.
4. Employee training isn’t required
As most entrepreneurs know, training requires more budget and time. And, this may not work to your advantage if you’re looking to launch a product soon. Hiring offshore developers means that your team can start working on the project without training or reorienting them on their tasks.
5. Focus on key business strategies
With offshore development, you have more time to work on your core business activities. You don’t have to go through the complex process of software development and managing a team of developers but instead, focus on direct revenue-generating activities.
Risks of Offshore Software Development
Like everything else, going the offshore route isn’t always a bed of roses. You need to take stock of the possible risks before taking the plunge.
1. Communication issues
Cultural and language barriers may pose challenges when working with offshore development teams. Team members who don’t understand the business requirements may derail the team’s process, resulting in more errors and rework.
Employees who are not fluent in the client’s language will find it difficult to communicate solutions during the development process. Moreover, a person’s cultural background may influence how they behave with others and view power structure and hierarchy at work.
2. Substandard results
If you don’t thoroughly vet your developers, you’ll run into quality issues in the future. This is especially true if you try to cut corners by hiring fresh IT grads or amateur developers. Additionally, some offshore developers may have a different way of managing deliverables or maintaining quality control.
This, in turn, may result in a software product that doesn’t meet the market’s expectations. So, development teams need to be vetted carefully to ensure they meet your defined standards.
Aside from problems that may arise from the work setup and the people you hire, there are other crucial things to consider. Two of which are the political climate and legislation in the country you want to offshore.
In some countries, specific industries don’t receive as much legislative support. This factor could hinder an offshore company’s ability to offer a fair quality-price ratio. Also, make sure that the offshore country you choose has laws in place that protect patents, copyright, and trademark rights.
4. Logistical problems
You need to consider time zone differences, deadlines, IT infrastructure, and work expectations with an offshore partner. You can’t simply have a meeting with them once and hope for the best. Minor inefficiencies in work setup can balloon into bigger issues if not planned or resolved immediately.
Steps to Get Started with Offshore Development
Now that you understand the possible pitfalls of offshoring, you might have some qualms about partnering with an offshore development company. But, don’t worry. Here are some recommended steps you can follow to make your offshore transition as seamless as possible.
1. Start with a small but highly skilled team
While having a large team of developers seems ideal, you would want to start small first. A small team allows better visibility, making it easier to know who’s working on what since there are only a few people involved. This helps you to streamline the process effectively—getting you that much closer to a “bigger” offshore dev team.
2. Set clear goals
Before sending your work to an offshore team, be clear on the goals and expectations. As in most cases, taking the “we’ll see how it goes” approach isn’t typically beneficial to business operations. Here are some questions you should answer early on in the offshoring process:
- What problem will the product solve?
- What is your overall goal for this software project?
- What ROI do you expect once the product is in market?
- What other goals are you trying to achieve with your business?
3. Use the right tracking tools
Part of the software development process is to meaningfully track its progress before testing and launching the product. To do this, we recommend using tracking software like Jira, Trello, or Monday. These tools enable you to plan and delegate tasks to team members and view priorities conveniently. Don’t fall victim to communication issues!
4. Close the culture gap
If your local team will be working with its offshore counterpart from a country like the Philippines, expect that there will be cultural differences. The key here is to promote a culture of unity and belonging amongst team members.
Let teams know that they are all working together toward a shared goal. If the whole project is successful, it’s a win for everyone regardless of any cultural or personality differences.
5. Have a dedicated onshore and offshore team lead
Both the onshore and offshore team leads are critical for a smooth communication of priorities. They can discuss the required coding practices and standards, share updates on challenges and wins, review code, and train and mentor members all while ensuring everyone is on the same page.
Hire Offshore Developers from Full Scale
Hiring a third-party expert for your software development needs makes sense. As long as you do your due diligence and understand the challenges involved, offshore development is an accelerator for businesses.
At Full Scale, we provide all the tools and resources you need to mobilize your software projects. We are a custom development firm headquartered in the Midwest, with an offshore extension in the Philippines. Our Filipino developers have the expertise you need for web and mobile development.
Ready to explore offshore software development for your company? Let’s do it! Tell us what you’re looking for.