Offshore Software Development -Its Benefits, Challenges, and More

However, sometimes custom software development can get expensive, or businesses find it difficult to get relevant skills in the local talent pool. In such cases, partnering with an offshore software development company is considered an ideal solution. It solves the problem of both budget and expertise while ensuring that the development processes are completed in a timely manner.

Before getting into the benefits, costs, and challenges involved with offshore outsourcing, let us discuss what exactly offshore software development is and how it differs from outsourcing. We will end with how to overcome the challenges and effectively manage the offshore team to maximize the benefits of offshore hiring. 

What Is Offshore Software Development?

Offshore development essentially means hiring a qualified and competent software development team from another geographical location for a project to get high-quality services at a relatively low cost. Given the competitive nature of the current market, offshoring a developer or a team of developers is a smart business move.

Businesses leverage flexibility, scalability, and cost-effective services by offshoring developers. This is why it is considered a perfect alternative to on-site hiring for similar services.

Other than these evident benefits, there are many other reasons businesses hire offshore developers, some of them being:  

Facilitated Business Expansion 

Offshore software development is preferred by those who want to expand their business but lack the capital to proceed with on-site hiring in their own country. They hire remote developers from IT service providers in other countries with abundant talented professionals.

Offshore hiring implies working with a team of remote developers, saving you the operations, infrastructure, and equipment costs. This plays a major role in business growth, allowing you to expand your business in comparatively less time and resources.

One of the major perks of offshore outsourcing is flexibility. As a recruiter, you can decide who to hire, how many developers to hire, and for what services. Depending on the budget and requirements, some hire offshore developers for complete development while others divide it between their on-site and offshore teams.  

Access to the Broader Talent Pool 

Thanks to technological advancements, business growth is no longer limited to local talent pool availability. You can access the skills you seek in the budget of your choice from across the globe. Physical borders are no longer a limitation since everyone is connected digitally. So you can easily hire the specialists in a much shorter timeframe.

One important thing to remember is that every country has its own recruitment rules, regulations, and methodologies. So, the duration can vary depending on the specialization you seek and the region you are hiring from.

Round-The-Clock Customer Service

While many consider time zones a hindering factor, you can leverage it to your benefit by providing human-led customer service 24/7. While your local team can handle the customers during your local working hours, the offshore team can take over after their working hours and handle the clients’ requests.

Also, building your offshore team with people from different regions can be beneficial as they can handle queries from their or similar regions quickly. Expanding your IT team with offshore developers can help you speed up the development process in a similar manner, for when the local team clocks out, the remote developer can take over and complete or proceed with the process.

Apart from the time zones, even the cultural differences can be leveraged as the regional holidays will vary from country to country, so there will always be someone available and the process won’t be hindered.

The process can be further optimized by implementing AI/ML development services and letting the AI-driven chatbots resolve general, rule-based customer queries, thus freeing up the representative to handle more complex queries.

Better Access to Overseas Market 

Expanding your business operations overseas implies you also have direct access to their market. Whether you build your offshore team by consulting an offshore services provider or hiring individual offshore employees, working with someone local to a particular region can help you get better insights and a unique perspective, thus giving you an upper hand when it comes to laying out your marketing and sales strategy.

Your offshore team will better know their local market and how it functions, like what can boost sales, what to take care of, and their region-specific trends. This will help you identify what product will generate better results in a particular area, who to contact, and how to establish your stronghold in the market while saving your resources.

Also, based on the market response towards your projects and the cost incurred, you can set up an offshore development and supply facility to avoid the shipping charges and customs. It will help you make the development and supply process more efficient.

Regional Tax Policies and Incentives 

Governments from many countries offer tax concessions and incentives if a foreign brand or business establishes its operating systems in their country. The capital saved by these policies can be utilized to augment other parts of the businesses.

Some countries offer faster processes and assistance while some offer free trade with certain countries for smoother, easier, and faster supply. Some may also offer tax benefits like exemption or tax reduction for a stipulated period.  

These incentives offer additional advantages other than lowered hiring costs. Making offshore hiring much more beneficial for businesses. Not just that, it also creates better brand recognition in the local market. Also, since the customs won’t be added, it would lower the customers' costs, creating a win-win situation for both parties. 

Difference Between Offshore Hiring and Outsourcing

Offshore hiring is usually confused with outsourcing and is often used interchangeably, but the two terms convey different meanings. The former talks about relocating the business processes to different countries while the latter refers to hiring a team of specialists for a short-term, high-quality project development.  

It's like how developers talk about Angular vs React and compare the two as popular front-end frameworks, but Angular is a full-fledged and complex front-end framework while React is a JavaScript library focused on virtual DOM rendering. Many tend to compare offshoring and outsourcing as well.

Some call offshoring a concept that comes under the umbrella of outsourcing, and both are quite similar in how the situation eventuates. However, there are certain key factors that differentiate offshoring from outsourcing.

When businesses go for offshore software development, it essentially means expanding their workforce in another country, the primary reason being cost saving. When they outsource a team, they give the task to a third party and get it done to fill the expertise gap created because of the lack of relevant skills in the local talent pool.

The main purpose of offshoring is to minimize the cost without compromising the quality of the product. While, outsourcing is done so that the non-essential tasks can be done by the third party while the company can focus on the core operations.

Another key difference between the two is when you go for offshore software development you shift your business operations to another country, a foreign market, while outsourcing can be done within the same country or a foreign land depending upon your requirements.  

Now that the difference between the two is clear, What are the benefits of offshore software development services? Other than cost savings, why do businesses go for it? 

Benefits of Offshore Development Services 

Faster Onboarding 

You can easily overcome geographical restrictions and leverage the benefits by accessing the global talent pool and connecting with a reliable team of offshore software development service providers. Whether you want a team for designing, development, or testing, easily hire a team of professionals by tapping into the extensive global talent pool.  

Offshoring provides the trustworthiness of in-house development while saving you time and resources associated with the hiring. So you can quickly find a number of competent professionals and scale up seamlessly.

Reduced Operational and Development Costs 

Working with a team of developers from another country is considered profitable because you do not have to invest in building up the workspace, designing the infrastructure, or providing other IT services, thus saving you a large sum of operational costs.

Also, the cost of hiring can vary depending on the region you decide to hire the remote team from. Generally offshoring is done from a country where the cost of living is relatively low, and the talent pool is really vast. This allows companies to bring high-quality products without exceeding the budget.

Faster Project Delivery 

You can let your development teams work in their time zones and speed up the development process with a centralized communication process. With that, your local teams and the offshore team can easily collaborate. One can continue with the said project while the other logs out. This will help you extend your working hours without overburdening the resources.

This is especially beneficial for startups that can effectively strategize and leverage the factor of different time zones to speed up their development and increase their production capacity thereby getting a significant advantage from their competition.

Better Flexibility and Scalability 

Make a better selection precisely for the skills or the services you seek. Offshoring allows you to broaden your horizons, get more options to compare, and find the perfect candidates after evaluating their past projects, backgrounds, and specializations. Also, you can increase or decrease the team size per your convenience and market demands.

Businesses can easily adapt to the changing market trends and demands. Thus creating opportunities for easy upscaling and growth.

Access to Modern Technology  

The current digitally transforming scenario calls for custom-tailored services in all areas. Be it custom mobile app development or website development, these tailored solutions are crucial for successful digital integration. However, providing these services is difficult and requires a team of specialists for streamlined expertly-crafted digital solutions.

In-house hiring can get very tiring and extend for a longer time if you are looking for a certain skill. It will get even more difficult if you want to hire a whole team of professionals. There is a high chance that the technical expertise you are seeking is not accessible in your region. In this case, offshore hiring plays a major role in giving you easy access to the said skill and giving you a competitive edge.

This whole process can be easily simplified by connecting with an offshore software development company, sharing your requirements, and accessing their wide talent pool at a much lower cost. So you can hire experts with extensive knowledge of the latest technology, frameworks, and tools quickly.

Unparalleled Quality and Security 

Offshore development means you won’t have to worry about the whole development, designing and deployment for it will all be taken care of by them. They will employ their premium resources and have their best talent work on the project to provide top-quality final products. They will be responsible for designing, developing, and thoroughly testing the final product before deploying.

Your offshore team will have hands-on experience with that technology and have created numerous similar projects. Their focused and dedicated mindset helps them design and develop top-quality products that match the high industry standards when launched.

Apart from this, another benefit is the highly secured development process and final product. They understand the importance of the sensitive data shared and how it needs to be in a secure environment for ensured confidentiality.  To avoid any security breaches, they follow strict security protocols while also providing quick and effective disaster recovery plans to minimize risks in case of any crisis.                                                                                                                                                                                                         

Focus on Important Tasks 

When you decide to go for offshore software development, you can have more time to focus on other important tasks. For example, if you own a travel company and want specialized travel software development services but do not have the right infrastructure or team, you can easily offshore a team of developers who have worked on similar projects or have the skills and knowledge to bring your idea to reality.

What are the benefits of doing so? There are no infrastructure costs, no lengthy and exhaustive hiring processes, and top-quality software development services. Doing so will help you get the top IT development and maintenance without worrying about making space for the new team or delving into the IT field. Thus, freeing up your team so they can focus on other core activities associated with your business.

This is especially helpful when non-IT businesses (like healthcare, retail, education, finances, etc.) want digital transformation services to optimize their operations but don’t have the technical expertise to hire the right candidate. 

What Type of Businesses Can Benefit the Most From Offshore Hiring?

Anyone who hires strategically after carefully planning and thoroughly researching the investments and possible gains can benefit from offshore software development services. Whether you are a startup, a small business, or a large enterprise, you can enrich your business operations per your specific requirements by offshoring. 

Startups 

Startups are budding businesses with unique ideas and innovative approaches but lack the budget and in some cases, space. Startups can benefit the most from offshore hiring especially if their business is not essentially IT-oriented. They can hire a team or build one with the relevant skills and expand easily without worrying about the other requirements that often come with in-house onboarding.

They can easily upscale with high-quality solutions by hiring dedicated developers from a reputed source and letting them handle the development process. It will help them focus on expanding their business while the offshore team manages the digital solutions.

Small and Medium Scale Businesses

Offshoring is slowly gaining popularity among small and medium business owners because of the flexibility and expertise it offers. It also allows them to access the country's market, where they hire the developers. Thus providing better exposure and growth opportunities.

Another benefit of offshore software development is better revenue generation. When the offshore team handles the technical aspect, your team can use the available resources to focus on other business activities and enhance the quality of services offered, thus improving the customer experience.

Large Enterprises

Large-scale businesses can seamlessly expand with offshore software development. They can easily quicken the development processes by directly working with experts with extensive knowledge of the latest technologies and frameworks.

Fast development will allow enterprises to easily reduce the time to market thereby releasing newer digital products before their competitors. It will help them retain their standing in the market. While ensuring that their core business operations are not hindered. 

Things to Consider When Going for Offshore Hiring

The benefits of offshore hiring can be leveraged only if you get the right expertise for the project. This is why it is essential to hire the right people, and for that, you can keep the following pointers in mind. It will assist you in building the right offshore team so that you can expand your business easily.

Their Expertise 

Check their portfolios, previous client testimonials, and reviews. It will give you an insight into their skills and knowledge. You can also see if they have experience working in your industry or similar projects as yours. This will help you determine and shortlist the offshore software development company for hiring the talent.

Technical Knowledge 

Check their technical proficiency and whether it matches your requirements or not. Partnering with someone who has professionals with practical experience would be highly beneficial so that you can easily design resilient and robust digital solutions. Build your skilled offshore software development team and develop optimal software services.  

Price Quoted by the Company  

Connect with multiple software development companies, compare their service quality and quoted price. But don’t just select the company based on the price quotes, a high price quote doesn’t ensure quality while a lower price quote doesn’t necessarily mean bad quality services. Hiring offshore developers from a company that quotes an appropriate price while offering quality services is best.

Flexible Approach 

Before you make a long-term commitment with any offshore company, make sure that they provide you flexibility in terms of the team size and time allocation so that you can easily scale up or down the team based on your resources and requirements.

Their Reliability  

Observe their responses during the interview. It will help you understand whether or not they are interested in the opportunity you offer. With that, you will be able to grasp how motivated and dedicated they would be towards all the projects you demand, helping you determine whether or not you should hire them.

Development Time and Process

Building custom software is just as complicated as it is essential for business growth, especially if you are looking for custom mobile app development services. The crucial part is releasing it before your competitors to get that competitive advantage and maintain a strong position in the market.  Hire someone who matches your pace and provides software solutions per your timeline.

Non-technical Skills

Hiring an offshore software development team means working with remote employees. This will limit the communication process because of not being in the same space and sometimes working in different time zones. Plus there can be both cultural and language barriers. This is why hiring someone who is fluent in the same language as yours and is available to connect with you at mutually decided times is essential. This will facilitate the development process for both your in-house and offshore teams.

Legal Procedure and Security

Before you assign a highly sensitive and confidential project to your offshore team, design a contract that ensures the IP rights are yours, along with secure code lock-in terms. Doing so will ensure that you can easily take the project to another company once the contract ends.

Code lock-in is necessary, especially when you are seeking services related to digital transformation in healthcare. They have the most sensitive and confidential patient data that can be misused if the app or website’s security measures are compromised. 

The Cost Incurred in Offshore Software Development

Cost determination is tricky when it comes to offshore hiring as it varies depending upon the region you hire the developers from, with their skills and experience. They might also require training to understand your system or refine their skills per your requirements, which can add to the total cost. A few factors determining the overall cost of offshore outsourcing are:

Hiring Cost 

Whether you are hiring a single developer or you want to hire a team of developers, plus the amount charged by the employer who hires based on your project requirements adds to the hiring cost. Other than these two, the hiring type, like, whether the team will be paid hourly, daily, or monthly plays a major role in determining the hiring cost.

Development Cost 

From planning to development to final deployment, all the cost incurred during this comes under the category of development cost. Numerous factors like complexity, scope, and type of development services received determine the development cost. It can vary from one industry to another as well. For example, real estate software development will have a different price quoted from software development services for other industries like education or hospitality.

Project Management Cost 

As the name suggests, it ensures that the project is completed within the stipulated time and without compromising the quality of the end product. It involves dealing with all the tasks and queries related to the said projects. The project duration is a major determinant of the cost of project management services. The longer term would mean a higher price and the shorter term would mean a lower price.

Quality Assurance 

While some companies prefer to do the testing and quality assurance by their in-house team, there are some that seek complete offshore software development assistance, i.e., from development to testing to deployment and further maintenance. This can be seen in the case of non-IT-oriented businesses. Offshoring the technical assistance would help them focus on their essential business operations. Whether or not you get the quality testing done by the offshore team can affect the overall cost incurred.

Other Miscellaneous Costs 

All the other costs such as licensing costs, tools costs, and other technical infrastructural costs that you provide come under this category. These costs should be identified and discussed clearly between the parties involved for seamless offshore development services. 

Challenges Involved with Offshore Hiring

Many businesses are going for offshore software development services because of the flexibility and seamless expansion opportunities they offer. It has allowed businesses to go beyond their local talent pool and leverage the skills and competencies of the global talent pool. But, it also comes with challenges that businesses might face as they deal with a remote team from another country. Some of the challenges of offshore hiring are:

Time Zone

Working with multiple teams across different locations and huge timezone differences can pose a major challenge as it will make it difficult for you to keep track of the project’s progress and schedule the meetings.

Check the timezone and calculate the time difference between your company and the offshore software development company you work with. This challenge can be easily overcome by partnering with a service provider with less time zone differences, conducting fewer meetings, and maintaining a task sheet for easy tracking.

Data Privacy 

Data is the most important asset in today’s business environment. Many companies fear offshoring a team as it may compromise data security. However, it is also true that leaking information is not as easy as it may seem. One can easily avoid security breaches by integrating the latest technologies and some useful practices.

When partnering with a service provider, sign a “Software Agreement” and NDA a “Non-Disclosure Agreement” to protect your data and designs legally. Other practices you can implement are creating a local database shared with the other team members for adequate security measures or designing a smart backup system to maintain privacy and security.

Quality Services 

Offshore hiring assures cost-effective solutions, but the doubt around the quality of products and services can be the major challenge. A lot of times due to communication gaps the developers are unable to understand the requirements, and sometimes clients might not get the exact skills and expertise promised to them.

There is no way to judge the competence of the developers during the online interviews, which is why finding a reliable offshore development services provider is a must for cost-effective and high-quality solutions. Don’t just rely on the quoted price; also check their previous works and do thorough research before hiring the offshore team.

Cultural Gaps 

While language issues can be tackled with English being a widespread language globally, cultural differences can be a huge challenge to overcome. Different cultures follow different norms and rules; things considered polite in one culture might be considered rude in another.

This is why before or during the hiring process it is essential to educate yourself on different cultures so you can avoid any internal conflict by unintentionally hurting someone’s sentiments or mocking someone’s cultural practices.

Transparency 

Another challenge of offshore software development is the lack of transparency, which can be due to a lack of proper communication channels and an inability to get immediate feedback and responses. The businesses might not have access to the development process and be unable to keep track of everything which might lead to the feeling of being in the dark.

This challenge can be easily overcome by implementing a seamless and easy-to-use communication channel between the business owners and the offshore team. Streamlining communication and scheduling regular meetings at mutually convenient times can be really helpful in tackling this problem. 

When to Hire a Dedicated Offshore Team

Hiring an offshore software development team is not tough, nor there is a set rule to hire them at a particular stage. You can hire trained professionals at any stage of the development journey per your requirements and needs. This kind of flexibility can only be leveraged if you work with the offshore service provider, thus making it a preferred choice among businesses that want to expand quickly.

Whether you are at a stage of determining the technicalities, looking for quality development service providers, or need professional post-deployment maintenance services, offshoring can be chosen at any stage of the product development lifecycle.

Ideation Stage

You can get offshore development services if you have an innovative idea but lack the technical knowledge and team of experts. Thus, ideating with an offshore software consultant can be really helpful.

Doing so will help you gather all the necessary tech insights, and you will be able to make an informed decision based on expertly driven software solutions.  

Development Stage 

There are certain businesses that might have the idea and the relevant knowledge to understand the technicalities as well but do not have the resources to implement it. They can directly share their technical and non-technical requirements with the offshore software development service provider.

This way you can easily start the development journey and launch it in the market while also focusing on the other core business processes.

Post-deployment Stage 

In case the digital solution has already been released, you need additional resources for its proper maintenance and regular updates. You can partner with offshore service providers to handle the post-development updation and maintenance.

This lets you focus on newer tasks without worrying about previous projects and their requirements.

How to Manage Your Offshore Team?

nlike your in-house team which is always available during your working hours, the offshore team requires proper communication and scheduling to know about their current projects, progress, and issues if any.

You must properly plan and think through everything before integrating offshore software development service into your organization. The top four practices that can be easily incorporated into the existing system are:

Setting Clear Goals

It is essential to have a clear goal before beginning the development process. This is the foundational step that will determine the course of the whole development, so making sure that your requirements are well communicated is essential.

Ensuring that you and the offshore software development team are on the same page streamlines the process, reducing the chances of any delays and extra charges for any changes and feature integrations.

Effective Communication 

One cannot stress enough on how important it is to ensure effective communication. Especially when working with remote teams across multiple locations. From time zones to language to culture, there are many opportunities for communication gaps to occur.

Regularly connect with your remote team to check on them and ensure the development process progresses as planned. This will keep them motivated and make them feel like a part of the team while reducing the chances of miscommunication.

Structured Workflow 

A well-planned approach is the key to achieving a smooth workflow and easy progress tracking regardless of how many people work on a project. Some simple steps can ensure an organized workflow, like 

• Communicating the expectations and the quality of work required clearly 
• Providing employees with a handbook of the company’s procedures, rules, and regulations
• Using proper communication channels 
• Establishing the rules to be followed mandatorily from the beginning

You can incorporate cloud-based solutions to simplify and securely share resources between your offshore and on-site teams. Implementing Agile methodologies and providing the right digital tools can facilitate collaboration and boost productivity.

Avoid Micromanagement

Instead of constantly asking them about the progress of the projects via mail or calls or conducting meetings repeatedly, trust them and let them do their work. Often when you partner with an offshore software development company, you get a highly skilled and dedicated team to work on your projects who are adept at self-management.  

This is why, after providing them with the right tools, guidance, and training, you can let the experts handle your projects. 

TRooTech Can Help You With Offshore Software Development

We hope you find this guide helpful in finding the right offshore development team to design the digital solution of your choice. From minimal to feature-rich and off-the-shelf to bespoke software development solutions, with the right partner, you can easily overcome all the technology-related hurdles.

But, at times it can be overwhelming with all the variables involved. Working with a remote team can fill you with many questions and doubts, what if you don’t find a competent team, what if you don’t get the right quality, etc. To solve this issue, you should partner with someone who has been in the industry for long enough to understand and simplify both the offshoring and development process for you.

With years of experience and a world-class team of professional developers, TRooTech believes in simplifying digital complications. Our client base is widespread across numerous countries and industries, thus making us a highly qualified custom offshore software development solutions provider.

Stay ahead of the competition curve with our innovative software solutions that match your requirements. Connect with us and unlock growth with our digital transformation solutions.