How to Get the Most out of Offshore Software Outsourcing? & Best Practices

What is offshore software outsourcing? Hiring an offshore software development team to build applications, so how to get the most out of it? 

Digital transformation has changed today’s business landscapes, so enterprises need to adapt IT solutions for their business operations. SMEs and startups choose to outsource an offshore software outsourcing company for their business expansion for its benefits. 

Some organizations still feel hesitant to hire an offshore software development team since they think it is hard to manage remote teams. Large enterprises in the world such as IMB, Apple, etc have various remote development teams. The key to managing an offshore software development team is to find the right team to meet your specific needs and requirements. Therefore, how to get the most out of the offshore software outsourcing company & best practices? 

When is the right time to offshore software outsourcing? 

The cost of outsourcing offshore development teams is huge, so enterprises need to consider this carefully before hiring development teams. However, business owners might wonder when they need to hire an offshore software development company. 

Hire overseas developers: when we need to focus on essential tasks 

A software development process requires an intensive company resource. Thus, entrepreneurs have to allocate time and money to develop software products instead of concentrating on core business. An offshore software development team resolves non-core functions and technical-related tasks, thus, firms can focus more on mission-critical problems. 

A limited budget for software development projects 

Large companies have enough budget for custom software development projects, but SMEs and startups feel stuck in the thinking of a limited budget. In this situation, firms should hire an offshore software outsourcing company to get the job done with a feasible budget. Besides, offshore software outsourcing enables firms to work with the best offshore software development companies and experienced developers. 

A short time for business expansion 

Entering the market in a faster time is critical for your business in a modern competitive landscape since it provides firms a headshot start over other rivalries. If you want to shorten the business expansion process, leveraging an offshore software outsourcing company is an ideal option. Therefore, you can react faster to market changes and move the first step in the market. 

Get lagged on technologies and IT solutions 

As the software development industry has evolved rapidly, enterprises might get lagged behind innovative technologies. Therefore, it is high time to bring high-quality software developed by experienced developers. 

Offshore software outsourcing development: Tremendous benefits & possible risks 

Entrepreneurs may find it hard to trust a third party, which takes over their business operations. With its tremendous benefits, offshore software outsourcing services will be an ideal solution for businesses. Here are some benefits to your business growth and product launches. 

Cost-efficiency for business operations 

According to Deloitte Reports, cost-savings are one of the top priorities for entrepreneurs, especially during the global recession. An offshore software outsourcing company helps save the investment in IT infrastructure and saves time recruiting, hiring, and training staff. Thus, using offshore software outsourcing offers cost-efficiency for business owners. 

Access to experts and up-to-date tech news 

Another benefit of offshore software outsourcing is access to experts in various fields and technological news. Offshore software outsourcing enables firms to get access to a talent pool of developers. Hence, hiring offshore software development teams is the right way to go when your firm lacks tech stacks and has limited resources. 

Continuous support from offshore software development teams 

Any software product needs regular updates and continuous technical support. Hiring offshore development teams allows companies to get consistent support from experts. However, you should be aware of the possible risks while using offshore software outsourcing. 

The threat of data leakage 

Data leakage is one of the possible risks when companies farm out their business operations since security standards might vary by region and country. Thus, firms have to secure vulnerable data and prevent data breaches. Besides, enterprises ensure that the outsourcing contract has enough provisions for data security. 

Legal differences in various regions 

The differences in legal issues can be different among locations. Some enterprises do not recognize the legal differences and a confidentiality agreement. Therefore, it is essential to implement due diligence in researching relevant terms and conditions before using an offshore software outsourcing company. 

Communication issues 

Communication problems can happen in every job title due to the lack of physical communication, language and culture differences, and time zones. Firms can eliminate those problems by hiring an offshore software development company that can use English as a second language. 

Start Now: How to get the most out of offshore software outsourcing? 

Enterprises can feel hesitant to outsource an offshore software development team in different countries. It is true. There are some problems such as time zones, language barriers, cultural differences, and others hindering the software development process. Here are some suggestions that help firms get the most out of offshore software outsourcing. 

Find the right IT destination 

The first thing that comes to our mind is the inconvenience of working with an offshore software development team. You can choose a reliable offshore outsourcing software development company that meets your project requirements. 

In recent years, the Asia-Pacific region is one of the rising IT destinations for offshore software outsourcing development. China, India, Vietnam, the Philippines, etc are one of the top outsourcing hubs in the region. A fluent command of English-speaking ability, a vast talent pool, and cost-efficiency make Vietnam a perfect IT destination for software development services. 

Work with a reliable offshore outsourcing software development company 

Once finding out the location, you need to choose the right offshore outsourcing software development company. Here is a list of steps that you can follow: 

• Create a list of IT vendors that offers service quality, expertise, and security standards and provisions. 
• Look out through reviews and what others say about that IT outsourcing company. You can see it on Clutch, Linkedin, Goodfirms, Websites, etc. 
• Check out which kinds of projects that they were working on before, tech stacks, and domain expertise. 
• Find an IT vendor offering the necessary infrastructure to make sure secure and effective working conditions for offshore development teams. 
• Check out that the IT vendor has a security policy and is compliant with international security standards such as HIPAA, PIC, ISO, etc. 
• Choose an offshore development team that understands your needs and shows interest in your project’s success. 

Apply the most suitable offshore software development outsourcing model 

You can choose the most suitable offshore software development model for your projects and your organizations. Here are some suggestions: 

• Extended team: hiring an offshore development team member to scale up your existing teams. You can use a fresh talent developer to reinforce the core team with an extended team model. 
• Managed team model: delegate your software development project to an experienced and skillful development team. 
• Custom software development model: handle your problems and solve your business needs with lucrative IT solutions. 

Choose the right pricing strategy & model 

Hiring an offshore software development team provides you with a feasible pricing model and strategy. Here are three main pricing strategies for your software development project: 

Fixed price strategy 

The pricing model fits small projects with clear timelines and requirements. An offshore software outsourcing development company gives you an exact price for the whole service. Firms need to pay a fixed price for you according to your requirements and agreements. 

Time and Material strategy

The price strategy allows firms to pay for the hours of work on the software development project. It suits large projects with scheduled timelines. Besides, firms pay an agreed cost per hour monthly. 

Dedicated development team strategy 

It is a transparent and monthly-based pricing model. The strategy depends on the size of development teams and administrative overheads. Firms need to pay fees for service providers’ and developers’ salaries. It is suitable for complex, long-term, and frequent-changed projects. 

Clarifying the offshore software development cost for your projects 

Choosing offshore software development outsourcing for your project helps firms save costs. However, the rate for offshore software outsourcing development services varies among regions. Here are some factors that impact the rate for offshore development teams: 

Region/Location of offshore development companies 

The costs of hiring a software developer directly link to the cost of living. The hourly software engineer rates in Asia-Pacific are lower compared to Europe, South America, the USA, etc.

Seniority levels 

In today’s job market, years of experience will make differences in salaries and compensation. Senior developers charge their services higher than freshers due to their related technologies and soft skills. 

The complexity of software development projects 

If you want to develop a complex and multi-functional project with various commands, you need to pay a hefty sum. Since the more complicated your IT solution is, the more people and more time will need to work on that project. 

The time frame for development periods 

If you need to penetrate your business to the market faster, requiring a large team and work hours is a must. Here are some facts and an estimate of how much it will cost you to hire an offshore software development team. 

• The price tag for offshore development in Asia is low to medium. For example, Indian coders charge $2 – $18/hour, whereas Vietnamese specialists charge around $3-$15 for the same work. 
• In Western countries, the rates can be varied by location. The average hourly rate of software developers in Ukraine is around $5 – $27/ hour. Besides, software developers in Poland get $9 – $ 29/per hour. 
• In Latin America, the average hourly rate for developers equals $4 – $17/hour. The leading IT outsourcing country here, Brazil, charges higher than Mexico. 

Wrapping Up 

Offshore software outsourcing has been an ideal solution for those who want to save costs. It helps firms make good financial conditions to look out for oversea experts in the software development aspect. To get the most out of offshore software outsourcing services, business owners carefully define projects, choose the right offshore partner, and make use of best practices to ensure work is transparent, and coordinate projects. If you want to know software development outsourcing: how to choose the right IT vendors for your business ideas, check it out here.