A Comprehensive Guide to Setting Up an Offshore Development Center

What is Offshore Development Center? (ODC)

So, first things first - what an ODC is? An offshore development center (ODC) is a specialized facility or team that an international business establishes to manage particular business processes, IT services, or software development. Offshore development centers are often used to boost operational flexibility, gain access to a larger talent pool, and save money.

Thanks to the outstanding benefits it brings, ODCs are increasingly developing and are the top choice of many companies and businesses.

Why you should choose Offshore Development Center

Skimming through the concept of Offshore Development Center might help you partly understand the benefits that this model brings. Now, let's make it more clear why you should choose to use the services of OCD.

• Cost Savings: Compared to in-house development, offshore development centers can save a lot of money because they are frequently located in areas with cheaper labor costs.

• 24/7 Productivity: ODCs facilitate continuous work cycles, allowing teams spread across multiple time zones to work on projects around the clock and accelerate time-to-market.
• Access to Global Talent: Through ODCs, businesses can reach a wide range of talented individuals from around the globe who can offer a variety of viewpoints and specialties.
• Concentrate on Core Competencies: Businesses can foster efficiency and innovation by focusing on their core business activities by outsourcing non-core functions to an ODC.
• Faster Time-to-Market: By taking advantage of an ODC's 24/7 productivity and experience, product and service development cycles can be sped up, resulting in a shorter time to market.
• Flexibility and Adaptability: ODCs enable businesses to stay responsive and agile by offering flexibility in responding to shifting project requirements or market conditions.
• Scalability: ODCs provide resource scalability. Without the difficulties of hiring and firing locally, businesses can quickly scale up or down in response to project requirements.

It's easy to see that using ODC brings countless benefits to you but to choose the right partner for your business and guarantee a fruitful and advantageous partnership, it is essential to carry out in-depth research and set up efficient communication channels.

How to Set up an Offshore Development Center

Perhaps realizing the benefits of ODCs is making you eager to know the fastest and most effective ways to set up an Offshore Development Center. Then please take a few minutes to refer to our step-by-step guide below:

1. Define Goals and Scope: Clearly state the aims and purposes of the ODC establishment. Determine which particular projects or tasks will be delegated to the offshore center.

2. Choose the Right Location: Examine and decide on an offshore location that meets your needs taking into account aspects like cost, talent pool, language ability, compatibility with different time zones, and legal considerations.

3. Legal and Compliance Requirements: Comprehend and abide by the laws in the location of the parent company as well as the offshore site of choice. Create formal agreements and contracts to safeguard data security, intellectual property, and other important issues.

4. Choosing an Offshore Partner or Forming a Subsidiary: Select if you want to launch your own subsidiary or work with an established outsourcing provider. Consider factors like experience, track record, and cultural fit when assessing possible partners.

5. Infrastructure and Technology Setup: Ascertain that the offshore facility is equipped with the required office space, IT infrastructure, and communication devices. To enable smooth collaboration, set up secure networks and communication routes.

6. Form a Talented Team: Assemble and integrate proficient experts into the remote team. Orient and train the offshore team as needed to ensure they understand the objectives and workings of the parent company.

8. Governance and Project Management: To guarantee alignment with organizational objectives, put governance and project management procedures into place. Establish regular reporting procedures and define your key performance indicators (KPIs).

9. Protecting intellectual property and data security: To safeguard sensitive data, put strong data security measures in place. Define confidentiality agreements and intellectual property rights precisely.

10. Constant Monitoring and Improvement: Keep a close eye on key performance indicators and performance metrics. Evaluate the ODC's performance regularly and make necessary improvements.

These steps will help you create a successful offshore development center that will boost the expansion and competitiveness of your business. Just modify them to fit your unique organizational needs.

Best countries for Offshore Development Center

Vietnam

Vietnam's dynamic IT landscape can meet your specific project needs and long-term goals, whether you're looking for innovative solutions or cost-effective ones. Vietnam provides an alluring combination of low costs, a tech workforce with strong proficiency in English, and a dedication to technological advancements. 

Vietnam's information and communications technology (ICT) industry is one of the fastest-growing in the nation and has experienced significant growth in the last several years. In particular, Vietnam's IT outsourcing market is expected to reach $881.90M by 2027 and has seen an impressive annual growth rate of 13.31%. According to Kearny's Global Service Location Index, it is among the top 6 locations for IT outsourcing. 

High-caliber tech talent is a major factor in the offshore software development industry's rapid expansion. Vietnam boasts a workforce of 480,000 IT engineers who are highly skilled, flexible, and willing to learn. As such, the country's tech talent is a great option for businesses looking to foster innovation.

Here is some Top ODCs in Vietnam for you to refer to:

• FPT Software: The main subsidiary of the FPT Corporation, FPT Software Company Limited is a worldwide provider of IT services with its headquarters located in Hanoi, Vietnam. It is regarded as one of the largest software services firms in Vietnam, with over 42,000 workers and an annual revenue of US$1.87 billion.
• Axalize Inc.: Founded in 2019 with funding from Japan, Axalize Incorporated is an IT firm specializing in providing clients with IT systems development and consulting services. Axalize is an emerging name in the IT outsourcing industry in Vietnam, trusted and chosen by many large customers such as TOYOTA, SEKISHO, SetJapan, etc.
• TMA Solutions: Vietnamese software outsourcing firm TMA Solutions is situated in Ho Chi Minh City. For over 22 years, the company has provided clients all over the world with high-quality software and IT outsourcing. It has a sizable pool of more than 2500 engineers who have a track record of producing innovative solutions.

India

India has a well-established and developed IT sector with a remarkable track record of successful outsourcing projects. 

India stands out due to its profusion of IT experts; by 2022, there will be an estimated 12.25 million accounts on the GitHub platform alone. This astounding figure is indicative of the dynamic and flourishing IT tech community in the nation.

India is a desirable destination for outsourcing due in large part to its cost advantage. The nation's labor expenses are comparatively lower than those of many Western nations, which enables companies to make substantial cost savings on development.

Check out some best ODCs in India:

• eLuminous Technologies: Modern services are provided by the esteemed and well-known Indian offshore software development firm eLuminous Technologies. Since its establishment in 2002, this company has offered offshore development services all over the world. 
• Sapphire Software Solutions: This Indian offshoring business promises fully customizable digital solutions to satisfy expanding business requirements. The Sapphire team has produced top-notch software for customers worldwide. 
• ISHIR: Prominent offshore software development firm ISHIR is dedicated to assisting businesses in realizing the numerous benefits of outsourcing software development. ISHIR employs more than 150 specialists. Its global delivery centers are located in Noida, India, and its headquarters are in Dallas, Texas.

Philippines

An appealing location for software development is the nation's highly skilled and English-proficient workforce. The Philippines has one of the world's largest English-speaking talent pools, with two-thirds of the population speaking the language fluently.

The Philippines now has a solid foothold in the IT market thanks to the growth of the BPO sector. In this country, outsourcing is used for projects in robotics, cybersecurity, artificial intelligence, and DevOps.

Filipino developers and clients may find advantages in the strong support provided by the government and the US-friendly culture. The Tholons Services Globalization Index places the Philippines fifth out of the top 50 digital countries in 2019.

Here is the list of Top ODCs in the Philippines:

• Accenture Philippines: Offering a broad range of IT and business process outsourcing services, Accenture is a multinational corporation with a significant presence in the Philippines.
• IBM Global Process Services (IBM GBS): With a strong presence in the Philippines, IBM provides outsourcing and IT consultancy services.
• Sykes Philippines: Sykes is a top supplier of services for customer engagement and also provides development and IT support.

Conclusion

To sum up, this thorough manual acts as a road map for businesses starting the process of establishing an offshore development center (ODC). Through a focus on talent acquisition, legal compliance, strategic planning, and effective communication, the guide seeks to enable businesses to successfully navigate the complexities of offshore collaboration. A well-established ODC becomes more than just a strategic decision as businesses embrace the globalized landscape—it also catalyzes ongoing innovation, growth, and competitiveness in the ever-evolving fields of business and technology.