Offshore Software Development: 5 Advantages You Must Know

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Offshoring is a type of outsourcing where businesses ship projects to third-parties in a distant country. Having tremendous potential in lowering costs, it has been the go-to business model for companies in North America, Europe, and the Middle East for quite a while now.

Primarily, offshoring and outsourcing in general, have been used for IT and application development services. In the US alone, the outsourcing market generated $62 billion through IT services and software development in 2019.

As social restrictions increase due to Covid-19, it is becoming harder to run and maintain a physical workspace. Unsurprisingly, businesses are seeking ways to lower their spending without compromising on quality; something that offshore software development companies help you do easily.

In this article, we’ll discuss the key benefits of software development offshoring and why this model is the best way to counter challenges brought up by social restrictions.

Lower Costs

The best-known advantage of offshoring software development is its immense potential for cost-savings. You don’t need to hire a team of programmers, testers, UI/UX experts, and business analysts, and create a fully functional workspace for them.

This saves you from several potential costs, from buying/renting a workspace and equipment to employee management costs such as employee benefits, attendance management, and HR management.

At the same time, you can also avoid operational costs related to electricity, internet connectivity, and maintenance. Being able to access lower-cost labor is what pushes most businesses towards offshoring software development.

Many businesses, including several highly successful start-ups such as Skype, Slack, and Basecamp initially used offshoring to break into the market. Lower costs helped these businesses to launch their product on a tight budget and then scale services to improve it incrementally.

Some people are skeptical of offshoring and fear that the physical gap can affect the solution’s quality. However, in reality, an affordable team doesn’t come at the cost of quality, as long as you trust an experienced offshore software development company.

You must establish best practices that promote a sense of awareness and ownership between external and internal teams. The rules you set up help you govern your entire workforce and achieve better outcomes. Given that you can’t access your development team physically, following a solid plan will maximize cost-saving in offshoring.

Auto-Scaling the IT Team

Scaling IT services is always a challenge for IT companies. While this term is usually used for scaling hardware infrastructure, it is equally important for offshore application development, if not more. Your business requirements never remain the same.

Sometimes, you may need more qualified professionals to push your product to the next level. Your software team may need to grow with your product. However, for traditional teams, this is extremely difficult and time-consuming.

Companies must invest heavily in locating talent, testing and screening candidates, recruiting, and training them. Worse, if a team member leaves the company, you must restart the entire process to refill that position. You may have to hire several candidates to replace an experienced member.

Other times, your product might be mature enough that it becomes unnecessary to keep the same number of experts on your team. At this point, it’s better to switch roles within your team or to shrink it to a more operative level.

All this requires tedious IT management and is extremely difficult to master. An offshore software development company can solve this entirely by delegating this cobweb of problems to experienced and qualified professionals in their team.

They can help you develop a systemic vision of your product and allow you to scale outsourced talent much more effectively. On the way, you will also learn about trends in the industry and market, giving you valuable insight into efficient IT resource management.

Access to Specialized Skills

Software development companies are restricted to talent pools in their region. Recruiters and headhunters want to capture the best talent for their company, making competition even more fierce in an already limited talent pool.

This is where an offshore software development company can contribute significantly. Offshore application development companies help you expand your reach to all corners of the world. From Eastern Europe and Latin America to countries like India, China, the Philippines, and Pakistan, you can hire highly skilled developers at reasonable rates.

You can use professionals with specialized skills to cater to your specific needs. This can help you focus your resources on essential features and core functions, and leverage the expertise of the best in the world.

Shared Responsibility

Software is a volatile market. New features, technologies, and products crop up from time to time, some of which are significant enough to change market dynamics in a relatively short time. This is why businesses must be incredibly careful and apply their knowledge of risk management to the fullest.

Businesses who underestimate this may invest in features that will no longer be relevant. They may end up with products that fail to capture the market as expected. In contrast, when you outsource a software component, parties discuss the impact of your product and factors related to risk management.

Ultimately, they continue with features agreed upon by both parties, and the responsibility for the product is shared. As a result, mitigating and managing risks is more effectively handled as they handle everything collaboratively.

Respond to Needs as They Emerge

Even if you have a fully functional team at your side, sometimes, the workload can be too overwhelming for them. Offshoring can help your team to quickly respond to new needs so that the rest of your team can focus on core business functions. Done right, you can overcome short term challenges easily and match spikes in demand and tight deadlines toe-to-toe.

At the same time, you can also use an offshore development team to quickly put together prototypes, proof of concepts, as well as minimum viable products. Before the development cycle begins, these contributions can be crucial to collect feedback and refine your initial idea.

Hiring an offshore software development service can result in several advantages for your business. From access to highly-skilled professionals to benefits in scaling, team flexibility, and risk management, offshore software development contributes a lot more than just lower costs.

An experienced offshore app development company will give you access to the best talent from all corners of the world, enabling you to focus on your business’s main goals, and rise to the top of the market.