Take the Lead with Offshore Software Product Development
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More chaptersOffshore software product development is only for large and rich enterprises.
Offshore is only cost-effective in the short term. In the long term, it will become expensive.
Offshore software development leads to security and product quality concerns, that’s not to mention the difficulty in communication due to the different time zones.
If you are interested in software development, you have probably heard some or all of these myths. Even though offshoring has been prevalent in the software industry, there still needs to be more clarity surrounding the term. This article aims to provide you with clear and concise information regarding the subject: What it really means, what its real advantages and disadvantages are, services that should be offshored, and the best way for you to estimate an offshore project cost.
Offshore Software Product Development Basics
What Does Offshore Software Development Mean?
Offshore Software Development is the process of using a remote-based software development team to develop software for your home country. Offshore software development is a business process outsourcing (completely or in part) in which the service provider is located overseas.
Offshore software development often means you are handling a project with an entire workflow to an IT vendor instead of a single freelancer. While a freelancer is great for a specific field or aspect of a project, the process of app development often requires certain key roles involving software developers, quality assurance engineers, and designers.
Other than offshore development, depending on your specific requirements, it helps to be aware of other categories of outsourcing, which are nearshore and onshore software outsourcing. You can take a look at our deep dive into the three different outsourcing methods to have a better picture of the current market.
What’s the Difference Between Offshore Development and Outsourcing?
Offshoring and outsourcing share the same idea of handling an entire project or part of the project to a third party (a vendor or freelancer).
The major difference, however, is the location. When you are outsourcing, it often means you hire a person or team in the same country. Offshore software development software services are located in another country. Your chosen offshore partner may own a business or continue to outsource the service to local vendors or independent contractors.
Pros and Cons of Offshore Software Development
Pros
Offshore outsourcing is prevalent in the software development industry due to its attractive benefits.
Cost Reduction
Cost savings are listed as the top goal for every outsourcing operation in the Deloitte Global Outsourcing Survey for 2020.
A major reason for the prevalence of offshoring is its affordable prices. The average rate of a junior developer in the United States is $105 to $111, while the rate for hiring developers with the same level of expertise from Asia only ranges from $25 to 42$.
In addition, the money spent on lengthy recruitment processes, onboarding, training, maintenance, and welfare can be used elsewhere. Hiring offshore developers typically costs less than maintaining an in-house team, especially in the long term.
With the technical expertise of offshore software development companies, you enjoy the best solutions instead of constantly testing to find one. Again, you can use the costs saved elsewhere while the development process is much more efficient.
Access to a Large Talent Pool
One of the many offshore development advantages is its global reach. Unlike traditional hiring methods, offshore software outsourcing gives you access to a massive international talent pool. Not only is the talent pool large (it is estimated that there are over 25 million software developers worldwide), but it also offers a range of diverse skill sets. You have access to some of the best software developers in building web apps, mobile apps, UI/ UX designs, and other kinds of custom software products.
Therefore, working with the right offshore software development company means enjoying meaningful insights and excellent action plans so you can quickly kickstart the project. Moreover, time to market is cut short, so you can quickly gain your market share and work on increasing the revenue.
Scalability and Flexibility
One of the offshore software development benefits cited often is scalability. Scalability is crucial no matter what company or sector. Having the ability to scale resources as needed means the organization has the ability to adjust to changing market conditions or workloads. Besides taking advantage of economies of scale, a scalable business can quickly ramp up production to meet demand.
This is especially helpful for small businesses that are growing fast. The company is given time and space to focus on core, value-driven business activities instead of stretching resources thin to work on tasks or projects that are outside of its core competencies.
Customizing Software Solutions in Specific Regions
Having offshore software developers on board allows you to better customize your software for a specific location. If the offshore team is local, you won’t have to worry about errors in focus, function, content, or translation that are often made by people who don’t know the language and culture of the region.
Cons
Despite its attractive benefits, there are limits to offshore development services. Below is a list of the top concerns.
Miscommunication
Inefficient communication leads to mistakes, delays, and an overall negative impact on the project’s timeline and budget. Miscommunication is especially common when the teams work in different time zones.
Therefore, both parties need to establish clear communication channels, points of contact, milestones, and so on. Make sure everyone is looped in on the updates to ensure the entire team is on the same page. Also, the offshore development team should provide its customers with excellent customer service and look for opportunities to collaborate as much as possible.
Different Cultures and Time Zones
There is a high possibility that the offshore development company of your choice is located in a different time zone. Sometimes, the time difference can go up to 10 hours, making it difficult to set up meetings or track the overall processes. This is even more of a challenge when your partners are spread out in various time zones working on various parts of the project.
Therefore, start by being aware of the time zone difference, then set up spreadsheets to keep both companies updated without the need to set up multiple meetings.
Another important thing to keep in mind is the cultural differences. This point could easily come as an afterthought. However, without proper research into your offshore development company culture, you might come off as rude and disrespectful. Be prepared and look into your partner’s cultural norms to create a favorable first impression.
Lack of Trust
Many firms are reluctant when it comes to outsourcing software development companies due to trust issues. It is easy for the mind to wander to the worst scenarios: missing deadlines, poor deliverable quality, leak of confidential information, and the list goes on. This is completely normal. Luckily, there are numerous ways to build trust.
You can start by going through the client’s testimony of the company, then establish clear timelines and milestones, conduct regular reviews, and set up communication protocols to address issues as soon as possible.
Project Management
Offshore software development outsourcing does pose challenges to project management. Even so, as long as you work out a clear goal, set clear expectations, and have effective communication, project management shouldn’t be a problem. If you are still wary of the subject, have your project manager check out our detailed guide on project management.
Offshore Software Development Services that Should Be Outsourced
Being aware of the pros and cons of certain services allows you to step into the journey with a lot more confidence. We want to further boost this confidence by helping you determine the top services to hire offshore developers. Outsourcing software development company is the answer if you are looking for:
Mobile or Web Development Services
Gone are the days of constantly looking for the newest and hottest technology in mobile or web apps. Your offshore software development team knows the newest cutting-edge technology and the most sought-after web functions to increase your online presence.
UI/UX Design
Don’t overlook the user interface (UI) and user experience (UX) when you outsource software development. With the help of professional designers, all you need to do is communicate your vision and expectation of a user-friendly interface and smooth UX.
Quality Assurance (QA) Services
To make sure your software works as intended, you need to have an experienced QA team examine it. First impressions are everything. Before launching your product, have a third party go over the project to fix bugs and point out weaknesses, and your product is guaranteed to impress its target audience.
Estimating Offshore Software Development Costs
What is the exact cost of an offshore software development project? Every project is unique, so it is difficult to provide an exact number. Even with a given range, it would still be difficult to estimate the budget without knowing the specifics.
However, there are some criteria that you can refer to when you need to estimate the cost of an offshore software development model.
- Project Scope: What is your project scope? What are the software’s key features and functionalities? Answering these two questions is crucial for you to work out the project timeline and cost estimation.
- Partner’s Experience: You should always look into your partner’s expertise and experiences. However, do expect a higher rate when you work with more experienced companies.
- Use Agile Development: Using agile development methods can help you get a better idea of how much offshore software development costs are going to be. Basically, Agile development breaks down your project into smaller, easier-to-manage tasks and breaks them down into short sprints.
- Cost of Communication Tools: Communication is key. Therefore, if necessary, consider investing in video conference tools, project management tools, or instant messaging tools.
- Cooperation Model: The cost will vary depending on the model you select—time and material, fixed fee, or dedicated team. Keep in mind that not all outsourcing firms provide all three, so be sure to check that as well.
- Make a List of Features: Work together with your team to come up with a list of “must have” and “nice to have” features for your software. You will have a clearer view of what the MVP looks like and how much it costs. You can also look for projects with similar natures for cost estimation.
As you have probably noticed by now, there are certain steps one needs to go through before the actual project. In many cases, the successful implementation of these steps can dictate the outcome of the subsequent offshore development process.
If you’re still not sure where to start with offshore outsourcing, why not start in Vietnam? It is a great place to start. Due to its stable economy, the government’s unwavering backing for entrepreneurship, and its proficient English speakers, Vietnam is seen as the promised land for offshoring.
Orient Software is one of Vietnam’s leading software development services companies. The team possesses extensive experience and prides itself as one of the top offshore development centers in the country. Contact us today to build your dream software while enjoying the numerous merits of offshore outsourcing.
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