Each firm is exceptional in its functioning, aspects, overall performance, targets, and aims. With this specific identity arrives business-specific challenges which requires tailored software, applications, and websites to deal with the aggressive desires of the 21st-century organization. Tons of off-the-shelf software are nowadays offered but mostly they aren’t adequate to fulfill the explicit functional specifications of the business. Offshore software development company is outsourcing tasks to a third-party developer or software agency.
This issue becomes much trickier to tackle for entrepreneurs and beginners who have just started their enterprise and don’t have lots of tools to employ a full-time in-house tech expert. For them, the optimal choice is to outsource software to an IT development company which has a team of professional developers who are proficient to cater demands of unique businesses and industries.
Developers properly know the customized requirements of the customers and know how to add them and offer a custom-built software. From innovative software for huge organisations to basic internet websites for newbies, the programmers understand how to fulfil all. Transferring software creation to a third-party relieves much burden from the customers and they are able to focus more on the creative areas of their businesses.
Variants of outsourcing with regards to the geographical area of the vendor are the following:
Offshore outsourcing – When the office or location of your remote programmer/ growing company is far away from your indegenious corporation and there’s substantial period zone gap then its known as offshore outsourcing.
Nearshore outsourcing – It means that the geographical spot of the software developer/development company you have outsourced is pretty quite to your existing spot and there is a negligible time zone gap.
Onshore outsourcing – When the outsourcing company/developer is in the same nation, in which you are then it’s known as onshore outsourcing.
These terminologies are simply to clear the notion , whereas generally the term “offshore outsourcing” is used for the majority of sorts of development and work achieved by third-party.
Guidelines for Startups
1) Do Your Homework Before Hiring an Offshore Development Team
Selecting the best IT outsourcing company is not like trips to market where you randomly pick anything that’s easily available; it necessitates suitable exploration, knowledge, and evaluation of the offshore developers and offshore development companies considering the fact that thousands of freelancers are outside and each one claiming to be the ideal.
Before you pick any of them for your beneficial IT project, don’t run and evaluate the shortlisted developers/development companies; check their market value and go throughout the individual rankings of programmers, reviews composed on their profile, jump into the projects and history of your vendors and assess customer opinions on their social networking pages.
Gather information regarding their talent group and how much they’re productive in incorporating state-of-the-art technology and tools. Such tiny research can provide you a deep insight about how the IT development company or the group of developers will work, their approach towards their customers and how powerful their remedies are; these will show you the path to take the correct decision.
2) Learn About The Remote Cooperation Models
A few remote cooperation models come in practice in the tech market nowadays, but the most common encountered ones are, project outsourcing, devoted crew, and elongated team. Before you decide the one for your project, first evaluate the cost composition of each model and examine which model’s cost – to – quality ratio is best for your enterprise. Don’t eliminate the stereotype that high price guarantees high quality; several models simply charge you for the hours a developer spent while some actually pay for the idle period of their developers. So, research your options before taking a choice.
Project outsourcing – The most frequently occurring and the most widely used cooperation model is the project outsourcing; it’s a turnkey solution where the company, to which the job is outsourced, is solely accountable for software development. The customer organisation doesn’t need to seek in-house tech expertise for managing the development process because the outsourcing company will probably be taking care of all the features of the software creation.
Dedicated team – Usually offshore development companies offer devoted group services alongside project outsourcing. Devoted team model is important for those customers who are enthusiastic in long-term project cooperation because of the extensive workload. Here the vendor company is liable for controlling the technical staff which is necessary to finish the project and ensure 24/7 function cycle.
Extended team – Extended team is just a refined kind of the devoted team model. Inside this, the vendor company hires exclusive employees for your project according to your specific requirements and demands. In contrast to devoted team, extended team members aren’t the employees of the vendor or from their existing workforce, but they are hired specifically and solely for you.
3) Consider Different Types of Contracts
Various forms of contracts come in clinic nowadays for outsourcing, broadly research them and pick which one suits your project.
Time and Materials
Additionally known as T&M, it’s the popular used contract key in project outsourcing. Within this arrangement, the customer pays only for the hours which were actually allocated on the project.
Pros & Cons: T & M is one of the most elastic models; here the customer retains the hands and is absolutely free to replace features of the project, shift targets or adapt requirements if needed; even if he needs or feel the need of, he can block the growth process at any time or stage of development.
The drawback of this otherwise elastic model is that the customer has very little control over the price and funding of the project neither it can be predicted beforehand. Moreover, as the customer directs the outsourced project, sometimes the companies also charge for the “idle time” their developers spent waiting for the customers suggestion.
This arrangement version is effective for those who expect that their project’s conditions may vary during the evolution approach.
Fixed price, as its name identifies is really a single-sum deal and consented, the growth company is bound to finish the job in line with your customers demands in the agreed price and time. Even if they function beyond the deadline to finish the project, they won’t be paid for additional moment.
Pros & Cons: Biggest plus with the agreement is all that the customer is aware of the fee ahead and it won’t arrive as a bad surprise at the end of the undertaking , but all the same for this the customer requirements to be sure and clear about the specifications, needs, and outcomes of the project and should have properly conveyed them to the programmers before enrolling the deal.
This model isn’t elastic like T&M model and varies from the project’s scope or specifications, after the contract has been signed, will be charged additionally. The drawback of this model is that it’s very costly than other models because the vendors are well known of the issues of the development process and the resources it’ll need; therefore they mostly increase the cost up to 30% at the time of signing the contract to avoid risks in the future.
This can be actually a monthly-payment kind of model, in which the software creation provider tells you about the developers who’ll be involved in your job and the amount they monthly charge; you will have to pay the expense on monthly basis.
Pros & Cons: Unlike fixed-price agreement, there are no concealed pitfalls and charges in this agreement and the customer will pay for a month spent entirely on his job. The team of developers work exclusively for single customer and gives their best to the project.
An important pitfall of this model is that you have no idea whether the assigned crew of programmers is suitable for your job or not, in terms of their expertise. Sometimes, the owner doesn’t let you communicate with the developers and you have to convey your needs via the project manager which may cause miscommunication.
Cost+ is typically used in the elongated group model and in this contract, the customer merely pays monthly salaries to the programmers but also pay a fixed amount to the vendor for the services it gives which include office infrastructure, taxation, payroll, workstation and support staff.
Pros & Cons: Often referred as out-staffing, this model is effective because in this the customer holds the entire control of the development process; he interviews the programmers, hire those he finds best for the job and directly communicate with them without a middleman.
But so much control is dicey too because, in case of a tragedy, you can’t blame seller because the responsibility of time, cost, communication, and management depends entirely upon you.
Both Rate card and Cost+ contract models are efficient for those who want to control the funding of even long-term jobs which will need multiple changes with time.
4) Hire an In-House Technical Expert
Communicating with the offshore crew is fairly complicated and sometimes miscommunication halts your job or makes you pay more. So, if you don’t have much time to give to your remote development team or don’t have sound technical knowledge of the job then it’s better to hire a specialist project manager who’ll be responsible for communicating all the technical details to the offshore team and recording the upgrades regarding your job.
5) Establish an Efficient Development Process
Decide characteristics for your target group– Before minding the list of capabilities you need in your software, first, analyze the available software/website/application provided by your competitors. Figure out what’s lacking in them and what additional characteristics you can add to facilitate your clients , expand your target audience, consider their personalized desires and aim to provide a better solution to them as compared to your rivals in the market.
Identify your requirements – You should be magnificent in terms of technologies you need to use for your software; be clear about the specialists you require , e.g, a marketer, a web designer, developer, etc. Choose these before consulting the software development company or discuss your project with them and ask them to give you perfect solution accordingly.
Prepare your objectives – Be specific on your targets , this will help you in establishing priorities and handling job in a better mean. Furthermore to keep track of your victory and to up the determination level, set metrics which you are intending to accomplish.
Document the product roadmap – Always record the product roadmap, because when you do so and give the crew of programmers access to this roadmap, everyone will stay updated regarding altered aims and the changes job is going through; thus they will work in line with your aims in a better way.
Appoint the product owner – Make one person head of the merchandise to avoid confusion and miscommunication. This one man will carry on all the meetings and communications with stakeholders. He should have in-depth knowledge about your business and should be able to correlate your clients desires with the project development process.
Communication tools – Pay much attention to the communication tools you’ll be using to connect with your offshore team of developers. Decide beforehand which instant messaging and video-call platforms (Skype, Slack, Hangouts, Google, etc) you’ll be using and which task tracking service (Asana, Trello, Jira, InVision, GSuite, etc) should be availed.
Software development methodology (Agile) – Agile is one of the most effective software development methodologies. It’s ideal if you want to stay updated about the phases of development and remain in contact with the team on regular basis via meetings and artifacts.
6) Build Ties with Your Offshore Team
To repay the geographical distance between you and your remote programmers, start by building cordial ties with them and make them comfortable; this way they’ll work as one integral team in collaboration with your in-house team. Value your team and start by stating “same rules” for all developers (remote and local); this will make your remote team of developers feel respected. Provide your developers with a challenging environment, so that they’ll keep on learning and improving in the entire development process. Moreover, apart from arranging team building events, provide your developers an amicable space to discuss everyday topics too.
7) Give Priority To Communication
Communicate, converse, join– that’s your secret to success when dealing with an offshore development group. The language barrier is the major reason behind miscommunication especially with technical concepts and explanations of ideas; make sure that there is one common language between you and your remote development team to avoid glitches in communication. Make use of the latest messaging apps, these will make communication more efficient and ensure your round the clock availability (or in the pre-decided working hours) to answer queries of your offshore employees and to minimize misunderstandings.
8) Hire a Quality Assurance Engineer
Most beginners are short of funds and usually to manage the costs they skip hiring a Quality Assurance (QA) engineer believing that the developers are talented people and they’ll better check their work themselves. While, the fact is only a QA engineer knows how to test-check your product; he tests the code, figures out the bugs and make the development process more efficient.
If you will keep on going without a QA engineer, the bugs and technical glitches in the product will pile up and eventually you’ll have to spend more time and money to fix them.
Benefits of Offshore Software Development Services
- Cost and Budget
Outsourcing a remote crew of developers is much more economical than hiring an in-house team and as per demanding quotes , a remote developer will cost you 34% less than your local developer. That’s because mostly the offshore development companies and freelance software programmers are from developing countries like India, Ukraine, Indonesia, etc and therefore they’d cost you much less than your local developer. For example, the average cost of IT outsourcing in India is $18-50 / hour, whereas you’ll have to pay $25 – 250 / hour for similar service in the UK and USA. This is a great cost-effective choice for start-ups who are already running low on funding.
- Innovation and Quality
Innovation and quality would be the USP of offshore companies; they have groups of highly qualified professionals who are best in meeting your needs and ensuring top-notch final product. Training young professionals and making them as productive as an offshore developer is will be time-consuming or budget-consuming if you’re aiming to hire a mature practitioner.
- Qualified specialists
Outsourcing gives you a chance to seek the best pool of developers from across the globe. Within your restricted budget range you can get the best experienced and certified developers who are prepared to build up the product just in line with your desires.
- 24/7 Development Cycle
When you are managing with offshore developers, there is great probability that they will be residing in an entirely different time zone and naturally will have different working hours; this gap in local and remote working hours can be utilized to make sure 24/7 development cycle. The difference in local days of unique developers residing in different corners of the globe will aid in finishing the project in the least time.
- Can Focus on The Creative Aspects of The Business
By outsourcing the tough software programming task, you will have more time to spend on core business activities. For start-ups, it’s even more crucial because their business is taking baby steps and require full attention to grow. By sparing yourselves from the development process, you can pay your full attention to the business strategies, its creative aspects, management and implementation of novel ideas.
- Shared Responsibility
Risk direction to beginners from companies is dicier than it is for established businessmen, especially if the client company is a non-IT company. With outsourcing the risk management and its impact is shared between offshore developers and customers and offshore company will mitigate the risks in a better way because it’s part of their project.
- No Need for New Infrastructure
Apart from the minimal hiring cost of programmers, outsourcing is proficient in terms of lower operating expenses. You don’t need to rent an office to give working space for the developers, buy equipment and other necessities for software development. The offshore development company will look after all these and eventually will speed-up the development process.
Drawbacks of Availing Offshore Services
- Communication Barriers
Time-zone gap usually contributes to slower communication and organising meetings with the programmer will be quite complicated as you have to wait for the overlapping hours. Besides, sometimes it results in halting the job for the time being when the developer wants to ask an important question from the customer and have to wait for him to come online.
- Cultural Differences
Cultural barrier effects when the remote developer lives in entirely different continent than yours, for example, you are in the U.S and the developer is in Asia or UAE, contrary to the situation where the developer will be in Europe or Australia as they’ve almost relatable cultural realities to the U.S. Sometimes language difference create unnecessary barriers and it becomes difficult to properly convince your idea to the programmer.
Best Countries to Outsource Software Development
Following are the top-rated countries for outsourcing software development because of the elite technological services offered by these regions at aggressive prices.
Outsourcing IT-related projects to overseas development organisations is today’s truth; it’s a tried and tested successful model. Availing offshore software development services is trickier and fruitful at the same time. Beginners in the field should do their homework before signing an agreement; they need to be explicit in their needs and after extensively evaluating their shortlisted developers, they should select one. One incorrect decision will cost them a little amount of funding and a huge amount of time. With the help of a QA engineer and by developing an important development process, they can capitalize on the proficient pool of programmers living in different geographical areas across the globe.
Meta description: This tutorial shows the complete description about the offshore software development company and is a complete guide for startups.
- Offshore software development company
- Software Development
- Benefits and Risks of Outsourcing Software Development
- In-House or Outsourcing – Which is More Effective for Small and Large Businesses?
- Indian IT Outsourcing Market: Recent Updates
- Challenges in Software Development Projects
- IT Outsourcing Market in Baltic Countries
- Why Israeli Companies Outsource to Ukraine
- What You Should Know About IT Outsourcing in Czech Republic
- Bulgaria: Top IT Outsourcing Destination
- IT Outsourcing Trends in 2019
- IT Outsourcing Guide: Everything You Wanted To Know About Distant Software Development
- Top IT Outsourcing Destinations: the Philippines vs. Ukraine
- IT Outsourcing to Asia
The Ukrainian firms have headquarters in the country’s biggest cities — Kyiv, Lviv, Kharkiv, and Dnipro. They are GBKSOFT, SteelKiwi, Ciklum, Infopulse, Miratech, Softengi, ELEKS, Intellias, N-iX, Sigma Software, Program-Ace, SoftServe, and AMC Bridge.