Developing a software product is definitely not a cakewalk.
You need to manage a lot of aspects including technical complexities of the software, resource requirements, budgets and at the same time cater to the ever-changing demands of the marketplace.
And all this need to be done keeping your budgets under control.
Instead of burning the midnight oil or hiring new software developers, offshore software development may be a solution to all your problems.
The advancement in technology and communication systems had made it possible for work to be outsourced anywhere in the world and every business can benefit from the expertise and technological knowledge that many offshore development companies provide.
This is what we will cover in this blog – all aspects of offshore software development including differences between offshore, nearshore and onshore, advantages and disadvantages of offshore software development, offshore software development rates and latest trends.
This will help you decide the best options available around you and how you can benefit from outsourcing some of your work.
Offshore Software development is outsourcing all or part of your software development activities to a partner who typically will work remotely and provide the services requested.
“Offshore” simply means that the remote work is done by an organization which is far from your shores or abroad.
There are other related terms that you may have heard of – onshore software development and near-shore software development.
You can easily understand this when you answer a simple question – how far the outsourcing partner is from your country?
Let’s now delve into what is onshore software development or nearshore software development and which one may be the right option for you.
Onshore Software Development is an outsourcing partner who operates much closer to your home i.e. you have a partner which is in the same country or maybe the same town.
Nearshore is not in the same country but a country close to your home country and offshore partner is far-off from your home country.
To put in simple words, if you are in the United Kingdom, then a partner in Latvia is a near shore for you.
If you are in the USA, a partner in Latvia is off-shore for you and if you are in Latvia and have a partner in Latvia, it is an onshore software development partner for you.
Choosing the right outsourcing partner is critical to the success of the product that you are developing.
Outsourcing the software development, which is in itself a very complex activity, to a wrong partner may lead to a bad product being delivered or many late deliveries.
It is important that you understand the pros and cons of all options available around you, be it offshore, nearshore or onshore to take a wise decision.
Offshore software development can turn out to be a very successful business association where both the partners benefit from the relationship.
Some of the key advantages of offshore software development are:
There is flip-side also to offshore custom software development and these need to be taken care of while you plan to go for an outsourcing partner.
However, all these potential disadvantages can be handled by signing an outsourcing partner of good repute and setting performance limits with them upfront.
Once you have decided that outsourcing is the way to go and have listed down the activities or functions that you would like an offshore software outsourcing company to work on, the next step is to choose the right partner.
This is critical to the success of the software that you are building. As pointed out earlier, one with a good reputation is always a safe bet.
Some of the key parameters on the basis of which you can evaluate a potential future outsourcing partner are given below.
You may go through the company’s website and explore the work done by them.
Evaluate their capability against the requirement that you have. You may also get in touch with some of their customers and get their testimonials on their work.
If you can get some sample of their work to evaluate, it can give you a very good view of the type and complexity of work they can handle.
Once you have contacted them, look at some of the behaviours of the personnel who interact with you.
You can get valuable clues through this interaction which points to the overall culture of the company and their work ethics.
A quick response and attention to details are a good indicator of the interest they have in the job and way they will respond to you in future.
It is important to understand the tools and technologies that the company offers.
This not only means software development tools but also the communication and project management tools they use.
Effective communication and project management is essential for the success of the relationship, as the time-zone differences and monitoring efforts can be considerably reduced if the tools are available and used effectively.
The financial aspects play an important part when you are outsourcing any work.
Evaluate the cost of the current operations and go for a partner who gives you the maximum value in terms of benefits gained and operational efficiency derived.
Focus on Value Over Development Rates as poor service provided in lieu of lower rates is not something which will be good for your business.
Lower rates may lead to short-term gains but may hamper your reputation in the long run.
Once an offshore software development company is chosen, there are going to be some hiccups at the beginning of the relationship.
You need to ensure that some of the disadvantages that come with offshore software development are handled well beforehand.
Some of the best practices that can help you sail through the journey smoothly establishing a long-term mutually beneficial relationship are:
For a successful association with the outsourcing partner, regular tracking of their activities is required. This can be done by having scheduled meetings to discuss project status and resolving any risks/issues that the partner may be facing.
Meetings scheduled at a mutually agreed time on a regular basis keeping in mind the time zone differences will help in controlling the project better without any surprises.
A defined set of SLAs also go a long way and helps in keeping the project on track at all times.
These metrics can be an easy tool to evaluate the performance of your partner and indicate their level of competence.
Once you start a relationship with your client, it is important that you initiate cultural sensitization programs at both the sides.
This would ensure that you nip some of the people related issues in the bud. This should be followed as a practice with any new joiners in the teams.
Apart from communication tools, ensure project management tools are understood and used efficiently.
This will help you manage and monitor work with ease.
Sometimes you may want them to use your project management tools, if that is the case, make them comfortable by training the teams on the tools before they start the work.
A company which has a defined process approach is always easy to work with.
Define the requirements that you may have on the process side; make sure that the offshore teams understand the procedures that you want them to follow.
In case you need to ensure that the product you want to create, complies with the existing regulations, make sure that the regulations of the country that you are outsourcing does not have any limitation with that aspect.
Also, ensure that your outsourcing partner understands these regulations and provisions for them in the applications being developed.
For example, this could be data security-related requirements if you are dealing with personal data of users.
Offshore software development requires highly trained, experienced, and competent software developers.
Based on the availability of highly talented resources, certain geographical regions have become a hub of software development.
Some of the best offshore software development countries which have strong IT infrastructure and a highly talented pool of software developers are:
Eastern Europe has slowly established itself as a solid base for software outsourcing companies. Baltic region (Lithuania, Latvia and Estonia), Ukraine, Czech Republic, Belarus, Poland, Romania and Hungary have developed a strong IT infrastructure.
The region now boasts of some software development companies which provide custom software development and other services.
Software outsourcing is emerging in several Western European countries, including the United Kingdom, the Netherlands, Norway, France, Belgium, and Switzerland, with the United Kingdom leading the way with high quality and experienced resource availability.
India, Philippines, Vietnam, and China are countries which majorly provide high-end software development services.
These countries can provide higher cost-effectiveness because of the availability of high numbers of skilled and semi-skilled labour.
Philippines offers call centre outsourcing and have been doing this for years. Recently, the Philippines have taken steps to grow the IT development sector. Vietnam also offers very low rate labour but English fluency is a problem.
Africa is probably not at the top of the list when considering software outsourcing destinations. However, Kenya, Egypt, Morocco, Nigeria and South Africa are showing the potential of having their own IT industries.
Egypt has been long into outsourcing now and is a leading provider of IT services in Africa.
The rates of software developers vary based on the technologies they work on and their experience levels. Rates of offshore development vary in various regions and there are considerable differences within regions as well.
The rates given below represent the average rates (in U.S. dollars) for software developers working on moderately complex projects.
Software engineers specializing in specific areas or with niche skills may charge significantly higher, and less-qualified freelancers may charge much lesser than the rates given below.
There is a growing demand for offshore software development and many organizations are outsourcing to increase their functional capabilities in IT services.
Offshore software development can give high cost-effectiveness and provide highly customized solutions which can lead to success for both the organization and the outsourcing company.
Let’s have a look at some of the key trends of 2018 in offshore software development.
With the growing focus of many companies in data security, cybersecurity has become a hot area this year.
Data and information security is one trend which will go up substantially in the coming days. A small data violation can result in a big loss for many companies, so outsourcing partners who take care of this will definitely have an advantage over the ones who do not offer these services as part of application development.
Automation of some of the processes ensures improved productivity and enhanced performance at much lower rates. Many companies may opt for these technologies in the coming days.
The cloud technology is one growing trend that allows companies to share resources over the internet and can be provided with minimal management efforts.
The cloud systems allow higher working efficiency and innovative solutions can be delivered to the clients using cloud technology quickly.
There is a high number of freelancers and independent outsourcing companies working in remote locations which provide services in specialized areas.
The trend shows that outsourcing services for general work done by companies are on the rise and many companies are opting for it.
Automating the processes used by outsourcing companies using the latest software and other computer programs is enhancing the efficiency of these companies.
Benefits obtained are being passed on to the customer in form of better rates and higher quality.
This increases the operational efficiency of the organizations and they get better productivity while working with an outsourcing partner.
The upcoming outsourcing trends of 2018 indicate more companies opting for offshore software development.
Also, highly advanced technical know-how that can be leveraged from the offshore software development companies’ pool of talented resources gives organizations an edge over their competition.
The complexities that are involved in software development can be handled easily with the right offshore software development partner.
Outsourcing can give you financial and operational benefits both in the short and long term and lead the way to a successful and mutually beneficial relationship for many years to come.
Outsourcing your software development activities to an offshore software development company can turn out to be very rewarding if done in the right manner and with the right people.
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