According to recent estimates, the global offshore software development market is growing at a compound annual rate of 10.13% from 2022 to 2030. The demand for this service is high, and losing its many promises can mean losing a competitive edge. In recent years offshore software development centers, also known as ODCs, have gained immense popularity. They allow any business to get cost-effective and high-quality solutions from the industry’s top professionals. How can you leverage the boundless potential of the ODCs? Keep reading to explore the reasons behind the increasing demand for offshore software development services. Here you will also find a step-by-step approach for establishing your own ODC, as well as valuable tips for successful operation.
Reasons to Open Offshore Software Development Center
Before diving into the actual guide, it’s essential to understand the driving factors behind the popularity of ODCs. Here are the most valuable reasons why companies opt for offshore software development services:
- Cost Savings: One of the main motivations for businesses to offshore their software development is the significant cost savings. After all, prices in some offshore locations, such as India, Eastern Europe, and Southeast Asia, are much lower than in the U.S. or Western Europe. The mentioned regions offer great talent pools at very competitive prices.
- Access to a Global Talent Pool: Offshore development centers provide access to specialists from different domains. This diversity brings additional flexibility and expands the company’s total technology expertise.
- Scalability: Offshore development centers can quickly scale up or down to meet your project’s demands. As a result, the business becomes much more agile and adaptive to the ever-changing tech industry trends and requirements.
- Faster Time-to-Market: Hard-working and experienced specialists from an offshore software development center tend to work fast. As a result, they can significantly accelerate your product development speed.
Step-by-Step Approach for Opening an Offshore Development Center
Now that you understand the benefits of establishing an offshore software development center, let’s dwell upon a practical side. Here is a step-by-step guide that will help you establish a reliable ODC in the short term.
1. Define your objectives and research the location
Before anything else, you need to clearly define your objectives, project requirements, and expected outcomes. Focus on both long-term goals and your current opportunities. Don’t forget to review your budget, target domain, and deadlines. Once you have all your requirements defined, select the right offshore location. Popular offshore destinations include India, Ukraine, the Philippines, and Mexico. Research IT markets in your potential offshore development countries. Approach this decision with full responsibility. Also, don’t forget to consult with legal experts and familiarize yourself with the local laws and regulations in your chosen offshore location.
2. Establish a legal entity
Once you have all legal issues clarified, set up a legal entity in your chosen offshore location. Set up a legal entity in the offshore location according to the results of your research. This entity can be a subsidiary or a branch office, depending on the legal framework of your chosen country. The entity will also take responsibility for employing local talent and handling legal and financial matters. Make sure to support it with skilled and experienced legal advisors.
3. Build your offshore development center
Create all the necessary infrastructure, such as office space, hardware, and software tools. You should create a convenient work environment to ensure your team’s efficiency and collaboration. The most important part is hiring talented professionals with the skills and expertise required for your project. If you have issues with finding the right talent for offshoring, rely on offshoring and nearshoring experts, such as Nearshorefriends.
4. Foster productive collaboration
Establish agile project management methodologies to oversee the development process. Regularly monitor progress, set milestones, and ensure quality reporting. You should also have well-established communication channels. We strongly recommend you use various CRMs, whether custom or open-source, to ensure efficient task management. Weekly or daily meetings are also essential for keeping your team in the right shape.
5. Ensure continuous growth
Once your offshore development center is established, be sure that your team keeps growing. Training programs, performance reviews, and constant employee feedback will come in handy. Surely, controlling all these processes by yourself may be very challenging. That’s why you should find people responsible for feedback and your team’s growth. Those should be skilled project managers or professional coaches. Much depends on your team’s structure and your ultimate project goals.
Tips on Developing an Offshore Software Development Center
Building a successful OSDC is not only about a step-by-step methodology. There are also certain tips and tricks that should never be overlooked. Be sure to follow these valuable tips:
- Select the right partner. If you lack experience in offshore development, consider partnering with an offshore software development company that has a proven track record.
- Consider cultural fit. Understand the cultural differences that may affect your offshore team’s work style and communication. You can build your team with regard to its members’ cultural proximity. Or, in the case of running a multicultural team, be sure to foster a culture of tolerance and mutual respect.
- Protect intellectual property by implementing robust security measures. Another important thing is signing legally binding contracts with your offshore team.
- Plan your team’s future growth and think about long-term opportunities. The key point is to ensure that your ODC can easily scale as your project requirements change.
Opening your own offshore software development center can be a strategic move. It will allow you to gain access to top-notch talent, reduce costs, and enhance your company’s global reach. Make sure to rely on the roadmap presented in this article. However, don’t hesitate to ask offshore software development companies for help when you encounter any challenges. Skilled professionals, like Nearshorefriends, will help you have all the valuable things covered. The right approach will help you build an ODC that drives innovation and competitiveness in the ever-evolving world of software development.