Offshore Development Center (ODC): Definition, Types, Challenges, Benefits, Tips

What is this buzz around the offshore development center, or ODC, as they say! Enterprises are shifting their software projects to offshore development centers; hence, their in-house resources can focus on priorities.

Offshore Development Centers (ODCs) have emerged as a popular model for businesses seeking to leverage global talent and cost advantages in software development and IT services. This article provides an overview of ODCs, their benefits, considerations, and key aspects to help organizations make informed decisions.

Before we jump into the details, let’s understand what an offshore development center (ODC) is.

What is an Offshore Development Center (ODC)?

A dedicated team of software developers and IT professionals working in another location and at a different time is the Offshore Development Center (ODC). A lot of organizations create ODcs to outsource their software development needs or IT operations to an inexpensive location, reducing costs and exposure to skilled developers as well.

An offshore development company manages the whole team with up-to-date infrastructure and resource management for seamless operations. Startups, SMBs, and enterprises leverage offshore development centers to decrease time-to-market and boost project development.

The partner company in the offshore location is the one that offers the above-mentioned facilities and backs hiring, mentoring, and managing top-notch resources to get the best productivity.

Hope you’re now thoroughly familiar with offshore development centers and their basics. Let’s understand its deeper meaning and what’s attached to it.

How Does an Offshore Development Center Work?

We understand it’s tough, so we’ll explain it to you with an example. For example, there’s a US-based software development company that is taking first mover advantage by cutting software development time. Hiring dedicated offshore developers in India can help them speed up their software development process, as there’s a large talent pool at a much cheaper rate.

When they hire a dedicated offshore team of expert developers and IT professionals on a contractual basis, they can have the advantages of owning a bunch of talented and expert resources without committing for the long term. The team can easily scatter once the project is done.

You might be confused about how outsourcing is different from offshore development centers. Here’s how:

Difference Between Offshore Development Center and Outsourcing

ODC and outsourcing might sound similar, but in hindsight, they are very different in terms of their operating model. In outsourcing, you give out your whole software development project to a third-party vendor to develop. At an offshore software development center, you need to hire a team of offshore developers and IT professionals who work remotely for your project under your supervision.

Thus, opting for an offshore development center gives you better control over the fact that you’re supervising the project and its development process. Along with that, the team is simultaneously working in an offshore country for the same.

5 Benefits of Offshore Development Center

Offshore development centers offer many benefits such as cost savings, access to a global talent pool, faster time-to-market, scalability, and round-the-clock development. Explore the below advantages of offshore development for your business.

1. Budget-friendly software development

You can reduce software development costs by up to 60% when you hire offshore development services from a software development company. When you choose to set up an offshore development center in India, it can help you in a lot of ways. Some of them are:

• A major tech hub ranking among the top 10 countries for offshore IT projects.
• Has a huge talent pool for all the technologies.
• Low labor and infrastructure costs because of the low cost of living.
• Backed by government policies for the IT sector.

2. Adjustable Hours of Work

An offshore development center operating globally in different time zones makes sure that your software development project continues to develop even in your off-hours.

Your QA team, supported by an offshore development center, can seamlessly supervise and review tasks, providing valuable suggestions. This iterative loop enhances project efficiency, eliminating delays. The incorporation of an offshore development center brings additional benefits to your project speed and overall success.

3. Offshore Business Expansion

Going for an offshore software development center is a great move to establish and grow your software development company’s presence overseas. With the help of an ODC, you can have:

• A physical existence in an offshore sector at a minimum cost.
• A new customer base in the new market to localize your solutions.
• A brand identity among the local businesses.

4. Can Focus On The Core Business

One of the main benefits of opting for an offshore development center is that you can now focus on your core business, leaving the worry on partnered companies.

If you’re a Non-IT company, you should avoid investing so much time and energy in the knick-knacks of software development services. There are a lot of offshore software development centers that do this, including Zealous System.

Just hire a team of offshore software developers who will develop the project from scratch under your supervision. In the meantime, you’ll have enough time to manage and focus on other priority tasks.

5. Less Delay in Implementation and Delivery

An offshore development center does have a team of expert and highly-skilled experts who can quickly code your ideas into reality, decreasing the time it takes to bring your digital product development services to the world.

Along with a larger pool of talent, an offshore software development center can also cater to different programming languages and platforms, allowing for a smooth and streamlined process.

Challenges of Working with an Offshore Development Center (ODC)

When you work with an offshore development center, you are bound to face some challenges as well. Here are those ODC Challenges:

Productivity and Performance Hurdles

Businesses often tend to face challenges such as expectation vs. reality when it comes to the performance of their hired offshore developers. This generally occurs when the skill sets don’t match the client’s requirements.

This causes delays in project deliveries and an increase in the time-to-market in business processes.

Solution

Right from screening to hiring a resource, transparency in hiring is the most crucial step. Selecting an offshore software development partner such as Zealous System can help you hire the right resource with the correct skillset.

Upon that, regular feedback and customer support can fix such issues.

Weak Communication

Lack of communication skills can take place under two circumstances:

• Less analytical skills
  In this case, the team is very efficient at communicating in the preferred language but not that smart at understanding the briefs or having analytical aptitude.
• Less language proficiency
  In this case, though the team is analytically sound, they might fall behind in communicating between the company and the offshore team. Thus, leading to miscommunication.

Solution

A rigorous selection process can solve this problem. This would ensure that a proper skill-based and analytical resource is hired and working on the project.

Along with that, it is preferable to choose an offshore software development center from an English-proficient country such as India, and if we are talking about India, who better than Zealous as an offshore development center for you.

Legal Challenges

Various factors like taxes, labor laws, policies, wage inflation, and much more are either directly or indirectly impacting the success of the offshore development center in the offshore location.

Solution

It is very essential to conduct an in-depth investigation about offshore locations’ taxes, labor laws, policies, wage inflation, IT policies, and much more. Here in India, we have one of the most favorable policies for the IT environment.

Infrastructure Challenges

Facilities such as round-the-clock power supply, good internet connectivity and high speed, and updated systems and technologies are very essential to making a fully functional offshore development center.

Lack of the same is one of the big reasons for the failure of an offshore development center (ODC).

Solution

Though there will always be some kind of challenge, businesses can avoid infrastructural challenges by investing in the correct location. Here’s a checklist to keep in mind:

• Uninterrupted Internet Speed & Connection
• Appropriate Calling Facilities for International Calls
• 24*7 Power Supply
• Updated Systems and Technologies

Time Zone Differences

One of the most common challenges that businesses face is time zone differences. Since both in-house and offshore teams operate in different time zones, it gets tough to coordinate. Miscommunication and delays in solving problems cause delays and impact the overall project.

Solution

Zealous, with an experience of 10+ years, has worked with clients from all over the world. If you ask us, we’ll summarize the solution in a few lines:

• Create a coordination space between both teams and plan all tasks and meetings in advance to streamline the collaboration.
• By following agile scrum, minute monitoring of the work done by the offshore teams gets eliminated, and others can be updated about all the upcoming tasks.
• A rotational shift or flexible work hours where both teams can collaborate smoothly, makes everything easy for everyone.

Along with the challenges that one faces while setting up an offshore development center (ODC), there are a lot of risks involved too. Let’s take a look at them:

Risks While Setting Up An Offshore Software Development Center

• Certainly, it is absolutely worth the risk. The benefits of setting up an ODC, outweigh those of others when it comes to lowering the volatility and uncertainty in the market. Here’s how:
• Cost savings in terms of infrastructure, employees, and their hiring
• Can easily adjust the size of the team as per the budget and project needs.
• It can be created for short-term projects, and once the project is done, you can disperse the team.

Hence, all in all, establishing an offshore development center is a great move, especially if you intend to get faster delivery and that too within budget. Now, we’ll address the question of the hour: which is better, an offshore development center (ODC) or an in-house team.

Offshore Development Center vs. In-House Team?

It all depends on the nature of the project. When companies are looking to hire dedicated software developers, they either go for offshore software developers or hand projects over to someone from the internal team.

ODC is a remote location where companies outsource a team of IT professionals, while in-house consists of a team of professionals working physically in the same location as the company.

• While curating an offshore team, you’re free to choose the location that suits your budget and also provides you with the required resources. In in-house, you are bound to choose from the local market and pay as per their request.
• Hiring can be done within 2 weeks from the pre-verified talent pool. When it comes to in-house, HR and all other higher designated employees are also involved, making the process as lengthy as 60 days.
• The cost of hiring is comparatively low as your offshore development bears this cost, unlike in-house, where infrastructural costs are also included.
• You are free to choose how long the commitment is based on your project. In-house, you should always have a long-term commitment, as the employees are working on a payroll.
• You can always scale up and down, as you have to choose from the existing talent pool. Scaling in-house is very lengthy, as scaling means hiring new talent.
• You can always build a global presence with the help of an offshore development center, improving the brand image and attracting investors as well. While the in-house team doesn’t add anything to this contribution except that you hold offices globally.

Is Your Business Suitable For Offshore Development Center Services?

No matter how big or small your enterprise is, setting up an offshore development center is always a good choice. The benefits will prove the point:

• Global Footprint
• Skilled Experts Across All Technologies
• No Long-Term Commitment
• Easy Scaling Of The Team

Purpose Of An Offshore Development Center (ODC)

It is quite obvious that hiring an offshore development team for your software development needs boosts your business’s growth. In addition to this, it also provides:

• Top-notch project development at a much cheaper rate.
• Increase time-to-market for the project’s development.
• Expansion of business in new markets.
• Scaling of the team as per demand.

Now that we have learned all the basic aspects of setting up an offshore software development center, we’ll see how to actually set one up!

How to Set Up An Offshore Development Center

• Establish the project’s vision and scope of work, along with all the timestamps.
• Create a list of required technologies for the development of your project. Hence, this shortlists the location.
• Conduct thorough research about the offshore location, keeping factors like Geo-political scenarios, government policies, data security, and the cost of living in mind.
• Ensure that the offshore development company that you’re choosing has some prior experience in your domain along with a huge talent pool, a global presence, and social proof as well.
• Make the terms of commitment, as well as roles and responsibilities, crisp and clear.
• Draft a scrum and create work windows.

Related: How To Setup An Offshore Development Center In India?

Now, there are now three types of offshore software development center models. As a business, you need to choose one of them.

Types of Offshore Development Center Models

When it comes to offshore development centers, businesses can choose from various types of ODC models, including captive centers, BOT models, and dedicated development teams. Explore below different types offshore development center models.

Build-Operate-Transfer(BOT)

Team Size: 10+

Setup Time: Within 6–12 weeks

Duration: Permanent

This is used to create a fully functional business in a foreign market under your brand’s identity.

Build to Scale

Team Size: 10+

Setup Time: Within 6–12 weeks

Duration: 1 year

In this setup, you are allowed to set up a ODC team of professionals to work under your supervision.

Product Development

Team Size: 1-10

Setup Time: Within 2–3 weeks

Duration: 1 month to 1 year

With this service, you can scale your business by hiring offshore dedicated software developers for your existing projects.

Key Elements of an Offshore Development Center (ODC)

Following is the general composition of an offshore team, though there are no hard and fast rules about whether these key members need to be included.

• Account Manager: A connection who manages client relationships and makes sure timely delivery.
• Project Manager: Individual responsible right from planning to delivery or deployment at every stage of the project.
• Designers & Developers: A bunch of creatives who design, code, install, and test out the software.
• Test Engineers: A team that rigorously checks quality, functional, and non-functional requirements as well.
• Usability Engineers: Tech experts who assess the usability and user-friendliness of the software.
• Graphic Designers: Craft visual concepts based on your business’ USPs.
• Writers: Responsible for crafting instructions and content for the website/software.

Mistakes You Should Avoid while Setting Up Your Own ODC

There are a lot of businesses that fail due to the negligence of critical factors. Offshore development center can easily become a huge menace, if you are not careful:

• In planning your long-term goals
• Making resource costs your priority
• Neglecting the diverse environment at the workplace
• Fail to choose the correct offshore development partner
• Not setting up accurate communication tools and channels

Practices To Manage An Offshore Development Center, Correctly

Once you are done setting up an offshore development center for your software development company, its management will be a tough task. A great management cycle can ensure the success of your software development project. Leaving you some offshore development Center best practices to keep in mind while managing the same:

• Create a standard method to communicate.
• Supervise the documentation of all the ongoing work.
• Make the offshore developers feel inclusive.
• Draft scrum meetings on a regular basis so that you stay updated about ongoing work.

P.S. – You can also boost the success of your offshore software development center by partnering up with a trustworthy offshore development company. An offshore development company will help you fulfill your business needs in an accurate manner.

How to Choose the Right Offshore Software Development Company?

While setting up an offshore development center, you will face unlimited challenges regarding its management, risks, communication, legal aid, and many more. You can avoid all these by choosing an appropriate offshore development company for ODC.

Read ahead to learn how you can choose the best offshore development company from the list.

One-on-one meeting with the leadership team

Before choosing an ODC provider, you should have a meeting with their leadership team. Post this meeting, you will have a clear idea about their strengths, weaknesses, working style, and all the minute details that you need to be aware of.

Browse through the experience and the provided references

While you’re in the position of shortlisting an offshore development team, you must browse through their provided references and double-check their experiences as well. This also includes verifying their clientele, delivery rate, and brand name as well.

This will help you ensure that your project is in safe hands.

Transparency

Unrealistic deadlines and delivery rates are one of the red flags with offshore development companies, which have little to no idea how software development works.

Any experienced offshore development company will deliver premium-quality work while meeting the correct deadline. Along with that, you should conduct a thorough assessment of the provided information.

Why Choose Zealous System as your Offshore Development Center Partner?

Zealous System is a software development company that provides ODCs services and helps you set up your own offshore development center (ODC).

We believe that we have a large talent pool to assist you in all your software development needs.

Our goal is to help our clients tap into the wealth of talent available in offshore locations while also providing them with a high level of support and quality assurance. What makes us stand out.

Cost Savings: We work with top-tier talent in offshore locations where labor costs are lower, allowing us to offer competitive rates without sacrificing quality.

Scalability: Our offshore development center services are designed to be scalable to meet the changing needs of our clients.

Access to Top Talent: We work with some of the most talented developers, designers, and engineers in offshore locations.

Quality Assurance: We take quality assurance seriously and have implemented rigorous processes and procedures to ensure that the work we deliver is of the highest quality.

Flexibility: Whether you hire dedicated developers or simply need help with a specific project, we can tailor our services to your needs.

Agile Methodology: Our developers work in an autonomous mode, keeping an agile mindset while delivering top-notch work.

Setup your Offshore Software Development Center with Zealous

Setting up your offshore development center (ODC) with Zealous helps you achieve high-quality software solutions at a much cheaper rate.

Zealous System is a global software solutions provider that has been providing cutting-edge IT solutions to clients from various industries since its inception in 2008. Headquartered in Ahmedabad, India, Zealous System has a strong presence in the United States, Canada, and Europe, with a team of over 100 skilled professionals.

To know how we can assist you with your offshore software development center, drop us your query at info@zealousys.com, and we’ll revert to you in no time.