An Offshore Software Development Center (OSDC) is more than just a support team for your outsourced software project. You can create a full-fledged representative office that will allow you to reduce costs and gain a dominant position in the market.
Developers in Western Europe and North America are constantly increasing their hourly rates. That’s why software development is often outsourced to other countries, and creating an offshore software development center is a profitable alternative.
In essence, you gain access to a leading technical talent pool at more affordable rates. In addition, the brand will likely already have the infrastructure and operating systems identical to your own company.
The offshore software development market is projected to reach $283.5 billion by 2030, growing at a rate of 10.13% annually from 2022 to 2030.
9 Steps to Ensure Your Offshore Software Development Center’s Success
The six criteria that follow below are a checklist you should always take into account when creating an OSDC.
1. Define Clear Goals
Before you embark on this journey, be clear about why you are doing it. Understanding why you’re setting up an offshore development center will drive every decision you make. Your objectives may include:
- Cost benefits. Offshoring can reduce labor and infrastructure costs.
- Skill acquisition. Some regions may have specialized skills that are in short supply in your home country.
- Operational scalability. An offshore team can help scale your operations without making extensive changes to your primary location.
- Time zone advantages. 24/7 service or support may be possible with teams in different time zones.
2. Choosing the Right Location
Choosing the ideal country or city to establish an offshore development center is critical. Consider factors such as political stability, the local talent pool, infrastructure, time zone differences, cultural compatibility, and the cost of living.
Places such as Ukraine and Poland have become popular hubs due to their skilled workforce and cost advantages.
3. Define your Operating Model
Determine whether you want to establish a wholly owned subsidiary, partner with a local company, or work with a service provider. Each model has its pros and cons, so choose based on your company’s ability to take risks, budget, and long-term goals.
- Wholly owned subsidiary: You control everything but shoulder all of the risks.
- Joint venture: Share the responsibilities and risks with a local partner.
- Hire a service provider: This is a turnkey solution, but you may have less control.
4. Talent Acquisition and Retention
Attracting the right talent is critical. Work with local recruiters who know the market. Offer competitive salaries, training opportunities, and a positive work culture to encourage the best applicants.
And remember, retaining talent is just as important as recruiting, so consider perks and benefits that make your company an attractive place to work.
5. Implement Strong Project Management
With teams working across multiple locations, robust project management becomes critical. Use tools such as Jira, Trello, or Asana to track your progress.
Regular check-ins, clear communication channels, and defined roles can also help keep projects on track.
6. Establish Clear Communication Channels
Invest in communication tools such as Slack, Zoom, or Microsoft Teams. Set up regular meetings and keep time zone differences in mind. Clearly document processes and keep everyone informed at all times.
Open lines of communication bridge the physical distance:
- Schedule check-ins: Regular touch points can help prevent minor issues from becoming major problems.
- Written communication: Clear documentation ensures that no information or context is lost.
7. Monitor and Evaluate Performance
Evaluate the performance of your offshore center on a regular basis. Use KPIs to measure productivity, quality, and other relevant metrics. Feedback should be a two-way street; always listen to your offshore team’s concerns and make the necessary adjustments.
8. Scale Gradually
Start with a pilot or a small team. This will allow you to identify and address potential challenges before expanding further. As your confidence and understanding of the offshore environment grows, you can then scale your operations further.
9. Build long-term relationships
Try to treat your offshore development center as an integral part of your business, not just a cost-saving mechanism. Building strong relationships with local stakeholders, be they employees or partners, can greatly enhance the success and longevity of your offshore operations.
Remember, on OSDC isn’t just about short-term profits:
- It’s an investment in people. Take the time to understand and address the needs and concerns of your offshore team.
- Community engagement. Engage with the local community for smoother operations and a more positive brand image.
If you’ve decided to set up your own offshore software development center, Lvivity can help you create it from scratch. We are here to help you manage all legal, accounting, recruiting, and administrative matters, conduct thorough project management, and oversee the development progress and task execution from start to finish.
Lvivity is thrilled to be your leading, reliable technology partner. All you have to do is email us your requirements!
