4 Crucial Tips to Successfully Set Up an Offshore Development Center
Apr 05, 2022
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If you are a startup struggling with software development to create a project due to a lack of expert developers or a business that needs to improve its primary platform to account for sudden growth, then an offshore development center might be the answer you’ve been searching for.
There are numerous compelling reasons to do so, including the lower labor costs, easy taxation process, and access to skilled, professional tech talents.
Let’s look at what an offshore development center entails and how you can successfully set up one.
What is an Offshore Development Center?
Offshore development center (ODC) is a physical location established in a country, different from where the headquarters are present. It takes advantage of the wide pool of expert IT talent, low living costs, and unique business climate of the country it is set up in.
Though there are some risks of offshoring IT services, they are greatly outweighed by the benefits and reliability of in-house teams or outsourcing. While many people might think that outsourcing and offshoring are the same, they are actually two different concepts. The difference boils down to:
- When looking at the definitions of both words, “outsourcing” refers to obtaining services from a third-party company, while “offshoring” means getting services from a different country.
- Typically in IT outsourcing, the hired experts only stay for the project’s duration until it is complete and return to their employer after the project is over. On the other hand, in offshoring, the offshore development center becomes an integral part of the company, and all of the employees are your responsibility.
How to Establish an Offshore Development Center
Define Your Business Goals and Needs
You need to understand your business’s requirements and goals that you need to work towards to realize if an offshore development center is a good option for you to consider.
Let’s say you are about to set up a long-term project with a large scope where concepts and requirements might need constant changing, so you’ll require continuous technical support; in that case, ODC is the ideal strategy.
Find the Perfect Spot
After defining your plans and budget comes one of the most critical steps of the entire process: determining the location you want the center to operate in.
Some typical offshoring destinations involve East Europe, Asia, and Canada. Countries in Europe like Belarus, Poland, and Ukraine have become regional hubs for ODC setup. These regions are particularly known for their high technical expertise and the wide choice of software development providers.
Here are a few things to keep in mind when searching for a country to establish an OCD in:
- Language aptitude
- Technical abilities in particular sectors
- Labor and hourly rates
- Development of IT sector in the country
Pick a Reliable Partner
If you’ve decided the country you want to set up operations in, the next step is to choose a reliable vendor, though it isn’t as easy as it might appear. An offshoring partner will accompany you from the beginning of your project to its completion and even after that, so it is very important to do thorough research when finding a supplier.
Some critical factors to look out for are:
- Price and expenses
- Experience with ODC offices
- Technical expertise
- Reputation and credibility
- Communication efforts
Maintain Constant Communication
Finally, once you’ve established the offshore development center and begun operations, you might think it’s time to relax. Still, the process won’t be over until you set up good communications with the ODC office.
Building clear and regular communications with your ODC will lead to a strong, long-lasting relationship. Conducting routine meetings is important if you want to keep informed about the progress of the development project. It gives you the opportunity to report issues or communicate changes in the plan to ensure a streamlined process.