Offshore software development: Definition, Pros and Cons & A-Z Guide

What is offshore software development?

Offshore software development (OSD) is the process of developing software solutions by hiring a software development team or company that is not based in the same nation. This model has gained popularity due to several factors, including the ability to concentrate on core business operations, access to a worldwide talent pool, and cost savings.

Pros and Cons of Offshore Development

Although offshore development has several benefits, it also has a unique set of difficulties. The benefits and drawbacks of developing software remotely are as follows:

Pros of offshore development

• Cost Savings: The ability to reduce costs is one of the main drivers of offshore development companies. Certain offshore sites have labor costs that are much cheaper than those in the client's home nation, enabling cost savings without sacrificing quality.
• Access to Global Talent Pool: Working offshore gives you access to a wide range of talented people, many of whom have specialized knowledge that is hard to come by locally. This may result in the creation of superior software solutions.
• Scalability: Depending on the needs of the project, offshore development offers the freedom to scale up or down the development team. Resource allocation can be done effectively thanks to this scalability.
• Faster Time-to-Market: By allowing for continuous development and quicker turnaround times, time zone differences can be an advantage. As teams from various time zones work on various stages of the development cycle, a project can advance around the clock.
• Prioritize Core Competencies: Companies can concentrate on their primary business operations and strategic objectives by outsourcing non-core tasks with offshore software development services

Cons of offshore development

• Communication Difficulties: Disparities in time zones, cultural norms, and language can all cause communication difficulties. To guarantee project alignment and prevent misunderstandings, effective communication becomes essential.
• Quality Issues: Occasionally, offshore development is linked to issues with the caliber of the work. The overall quality of the software product may be impacted by variations in development standards, coding conventions, and testing techniques.
• Risks to Intellectual Property and Security: Disclosure of private information to a third party is a part of offshore development. Concerns regarding intellectual property protection, confidentiality, and data security may arise. To reduce these risks, precise contracts and legal agreements are necessary.
• Dependency on External Factors: The offshore location's development process may be impacted by political unrest, shifting economic conditions, or other external factors. Businesses must evaluate the chosen offshore location's stability.
• Time Zone Difficulties: Although time zone differences can be advantageous, they can also present difficulties. To accommodate different time zones, careful planning may be necessary when scheduling meetings and ensuring real-time collaboration.
• Cultural differences: Misunderstandings and discrepancies in expectations can arise from differences in work cultures and business practices. Gaining a thorough grasp of cultural quirks is crucial for productive cooperation.

Offshore development has many advantages like the ability to access global talent pools and substantial cost savings; however, to guarantee project success, it is necessary to carefully assess any potential obstacles and put in place efficient management and communication plans.

A-Z Guide for Offshore Software Development

Many steps need to be taken to ensure the most effective deployment of offshore software development. This is the most comprehensive suggestion from us for you when cooperating with an offshore software development center:

Assessment and Planning

Determine whether offshore development is necessary in light of the demands of the project, the available funds, and the resources; analyze the project's scope, complexity, and timeline in great detail, make a thorough project plan that includes deliverables, deadlines, and key performance indicators.

Choosing a Vendor

Look into and find possible offshore development suppliers; take into account elements like reputation, experience, knowledge, references from clients, and cultural fit; evaluate their capabilities, do your homework by going to their facilities or holding virtual meetings.

Legal Aspects to Take into Account

Create thorough contracts that include project specifications, deadlines, completion dates, and terms of payment; verify that contracts have provisions for data security, intellectual property rights, and regulatory compliance. 

Communication Planning

Create a channel of communication that is both efficient and transparent between the client and the offshore team; establish communication protocols, such as timetables for meetings, formats for reports, and processes for handling escalation; make use of collaborative tools to ensure smooth communication.

Project Management

Establish strong project management procedures, possibly with the aid of agile approaches; find areas for improvement, schedule frequent project reviews, progress reports, and retrospective meetings.

Technology and Infrastructure

Ascertain that the development tools, hardware, software, and infrastructure required for the offshore team are available; create data security procedures and make sure cybersecurity best practices are followed.

Team Onboarding

Ensure that the offshore team has a seamless onboarding experience; give thorough instruction on the technologies, tools, and procedures related to the project, as well as the requirements.

Assurance of Quality

Tests and quality assurance should be given top priority during the whole development process; establish and carry out testing procedures, such as user acceptability, integration, and unit testing.

Risk Control

Determine the possible dangers of offshore development, such as unstable geopolitics or alterations to regulations; create a risk mitigation plan that covers the important issues and provides guidance on how to handle unforeseen difficulties.

Performance Metrics and Reporting

Establish key performance indicators (KPIs) to gauge the offshore development project's degree of success, and establish consistent reporting systems to monitor development, timeliness, and budget compliance.

Data security and confidentiality 

To safeguard sensitive data, put strong data security measures in place; make sure that data protection laws are followed and that clear procedures are established for managing sensitive information.

Evaluation of Performance and Suggestions

Review the client's and the offshore team's performance regularly as a tool for ongoing development, use feedback, and quickly resolve any issues raised.

By following these steps, your business can successfully negotiate the challenges of offshore software development and increase the likelihood of a fruitful working relationship with an offshore team. 

Top countries for offshore software development 

Here is our list of top offshore software development rates by country that you can refer to choose the best destination for your offshore: 

India

India is the biggest and most reputable country for outsourcing. It possesses a large pool of highly qualified IT specialists. Indian software development companies offer affordable prices for a large selection of software development services.

Some of the most reputable OSD companies in India include:

• Unified Infotech: One of the best companies that provides its clients with end-to-end solutions is Unified Infotech. This tech company has received numerous honors and awards for its exceptional work with numerous startups and SMEs. Unified Infotech is unique in that it can combine modern design thinking techniques with astute planning. 
• Spec India: Spec India is a well-known offshore software development company with thirty years of experience in the field. They provide customized services such as web and mobile application development, custom software development, BI and analytics solutions, automated testing and security, legacy software migration, engineering products art, and more. 
• Tatva Soft: For more than 20 years, Tatva Soft has provided its clients with solutions that are focused on achieving results. It employs more than 900 software specialists with expertise in.NET, Java, Node.js, PHP, Angular, React, mobile applications, and other technologies. Tatvasoft has offices throughout the world, including the US, UK, Canada, Australia, and India.

Vietnam

Vietnam is becoming a more competitive location for software outsourcing. The pool of talented developers that specialize in software development here is rapidly expanding. The main strength of offshore software development centers in Vietnam is affordable prices in comparison to many Western nations. In addition, the country has an ideal time zone for cooperation with different regions, making it a strategic location in Asia.

Here are some top choices for software offshore development in Vietnam:

• Rikkeisoft: Founded in 2012, Rikkeisoft is a tech company in Vietnam that specializes in IT outsourcing services and software development. Serving clients in the finance, healthcare, e-commerce, and other industries, Rikkeisoft employs a staff of highly qualified software engineers and IT specialists. Some of the critical services offered by Rikkeisoft include Custom Software Development, Web and Mobile Application Development, AI and Machine Learning, Blockchain Development, IT Consulting Services, Quality Assurance and Testing.
• SotaTek: Leading international technology company SotaTek specializes in cutting-edge IT services and software solutions. With its headquarters located in Hanoi, Vietnam, the company was founded in 2015 and has quickly grown throughout Asia, Europe, and North America. 
• Axalize: Axalize is an emerging software development firm in Vietnam whose mission is to offer top-notch offshore IT services and outsourcing that provide clients with quantifiable business value. Just founded in 2019, Axalize has already established a solid reputation thanks to the trust and selection of numerous significant partners in the EU, USA, Japan, and ASEAN markets.

Poland

The country is known for producing software of the highest caliber, knowledgeable and proficient labor force. The working style in Poland's offshore software development companies is compatible with the culture of Western Europe. In recent years, they are gaining recognition for completing intricate and creative projects.

These are the top offshore software development companies in Poland:

• Instinctools: a software and product development firm offering a global delivery model that is cross-functional and speeds up time to market while cutting development costs. The company has collaborated with over 300 businesses over more than 20 years in business, including Heinrich Schmid, Lition, IPwe, Bonnet, Autograph Authentic, etc.
• Lanars: Founded in 2016, Lanars is headquartered in Oslo, Norway. It’s a global software and hardware development company. Lanars develops websites, mobile apps, CRM and ERP systems, custom enterprise solutions, and the Internet of Things and Industrial Internet of Things. 
• Plavno: With over 15 years of experience and a highly skilled team of industry experts, Plavno is a leading software development house. Every phase of the product development process is covered by full-fledged teams of experts, including product management, analysis, design, development, testing, and continuing support.